oilweek.com: Inter Pipeline Fund says Cold Lake ventue to connect Shell Canada oilsands project (Inter-Pipeline)

May 7, 2007 

CALGARY (CP) _ Inter Pipeline Fund (TSX:IPL.UN) says its Cold Lake Pipeline Limited Partnership will invest $11 million to expand shipping capacity to handle oil from Shell Canada‘s Orion oilsands project in east central Alberta.

The Calgary company said Monday the new pipeline and related infrastructure will transport about 13,500 barrels a day of blended bitumen from the first phase of the Shell Canada Orion project.

Under a long term shipping agreement, Shell Canada has the option to transport up to 30,000 barrels a day through the phased expansion of the Orion project.

We are pleased to introduce Shell Canada as a new shipper on the Cold Lake Pipeline system,‘‘ said David Fesyk, president and chief executive of Inter Pipeline Fund. “Shell Canada is a high quality, senior producer and we look forward to meeting their long term transportation needs.‘‘

Inter Pipeline owns 85 per cent of the Cold Lake Pipeline, which ships about 325,000 barrels a day of oilsands heavy oil. Other shippers on the line are Imperial Oil (TSX:IMO), Canadian Natural Resources (TSX:CNQ) and EnCana (TSX:ECA).

In expanding the system, Inter Pipeline plans two new five-kilometre pipelines and associated pump and measurement equipment between the Orion project and the Cold Lake Pipeline system near Bonnyville in east central Alberta. Construction is expected to be completed by the third quarter of this year.

Inter Pipeline will pay nearly $9.4 million of the project‘s cost, proportionate to its 85 per cent ownership interest in the Cold Lake Pipeline partnership.

Inter Pipeline said it expects to initially generate minimum annual EBITDA, or earnings before interest taxes, depreciation and amortization, of about $1.8 million because of the new business. Beginning in mid 2011, minimum annual EBITDA will increase to about $3 million.

The project is expected to boost cash available to Inter Pipeline‘s unitholders by about one cent a unit a year, the company said.

In early trading Monday on the TSX, Inter Pipeline units fell four cents to $9.64.

Inter Pipeline is a major oil transportation, bulk liquid storage and natural gas liquids extraction company with operations in western Canada, the United Kingdom, Germany and Ireland.

INDEX: BUSINESS OIL&GAS CP Command News is one of many services from The Canadian Press, Canada’s No. 1 Source for News.   
 
Copyright © 2007 JuneWarren Publishing Ltd.

This website and sisters royaldutchshellgroup.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.