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Reuters: UPDATE 1-Inter says cash flow unaffected by Scotford fire

Thu Dec 6, 2007 5:16pm GMT

CALGARY, Alberta, Dec 6 (Reuters) – Cash flow from Inter Pipeline Fund’s (IPL_u.TO: Quote, Profile, Research) Corridor pipeline, which ships bitumen to an upgrader near Edmonton from the Athabasca Oil Sands Project in northern Alberta, will not be affected by a November fire at the upgrader, the company said on Thursday.

The Nov. 19 fire forced the operator of the Scotford upgrader, Royal Dutch Shell Plc (RDSa.L: Quote, Profile, Research), to shut the facility and run the adjacent refinery at reduced rates. The upgrader remains off line.

Inter, which bought the pipeline earlier this year, said cash flow is protected by a 25-year, cost-of-service contract and is not dependent on throughput volumes.

Inter also said it plans capital spending of C$977 million ($965 million) in 2008, the largest amount in its history. It will spend C$964 million of that on growth projects.

The biggest outlay — C$844 million — is earmarked for the Corridor expansion project, which will eventually cost C$1.8 billion, the company said.

The line is being expanded to carry 465,000 barrels of blended bitumen from the Athabasca project, up from 300,000. More than half the new pipe has been installed, Inter said.

Inter Pipeline units were unchanged at C$9.61 on the Toronto Stock Exchange.

($1=$1.01 Canadian) (Reporting by Jeffrey Jones; Editing by Rob Wilson)

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