Inter Pipeline Fund (IPL-U) will spend C$2.1 billion ($2.1 billion) to expand its Cold Lake and Polaris pipeline systems to handle increased production from Canadian oil-sands projects jointly owned by Cenovus Energy Inc. (CVE) and ConocoPhillips.
The expansion includes about 840 kilometers (522 miles) of new pipeline to reach the Foster Creek, Christina Lake and Narrows Lake developments, Calgary-based Inter Pipeline said in a statement today. The new lines to Christina Lake and Foster Creek are expected to begin operating in mid-2014 and the Narrows Lake facilities will begin in mid-2016.
The systems will increase the shipping capacity from the projects by 1.25 million barrels a day and provide a diluting agent to help allow the bitumen, a tar-like substance, to be transported via pipeline. The two existing Polaris and Cold Lake lines stretch north and east of Edmonton, Alberta.
Oil-sands production will increase 44 percent to 2.3 million barrels a day in 2015 from 1.6 million barrels last year, the Canadian Association of Petroleum Producers said on June 5.
Cenovus, based in Calgary, operates the FCCL Partnership in Alberta under a 50/50 joint-venture agreement with Houston-based ConocoPhillips. (COP:US)
(Inter Pipeline will hold a conference call on the expansion at 1:30 p.m. New York time, accessible by dialing 1-866-226-1792 or +1-416-340-2216.)
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