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Canadian firm launches multibillion dollar pipeline expansion

01st August 2012

Inter Pipeline Fund announces its largest project to date, a USD 2.1bn expansion of its oil sands regional pipeline network

Canadian firm launches multibillion dollar pipeline expansion
Other pipeline firms such as Enbridge Inc and Pembina Pipeline Corp are undergoing an expansion of their own networks in northern Alberta, while TransCanada Corp recently announced it might move into the region

A major Canadian oil transportation firm announced on Tuesday its largest project to date, a multibillion dollar venture to expand its pipeline network, as competition heats up within the sector to carry higher volumes from the country’s oil sands.

 

Inter Pipeline Fund plans a USD 2.1bn expansion of its oil sands regional pipeline network to cater to increased production from oil sands projects operated by Cenovus Energy Inc in partnership with ConocoPhilips. Under the plan, the firm will both deliver diluent to the projects and carry bitumen to the market.

 

The move is a “major step forward” to create a “strong, integrated network of large diameter pipelines capable of providing… both bitumen blend and diluent service,” said Inter Pipeline CEO David Fasyk.

 

Canada's oil sands reserves constitute the third-largest recoverable crude deposits in the world.

 

Through the expansion of its Cold Lake and Polaris pipelines in northern Alberta, Inter Pipeline will add 840 km of new pipeline and seven new stations, a move which will increase total capacity by 820,000 barrels per day.

 

The agreement follows mounting competition within the energy transportation sector to carry increasing quantities of fuel from Canada’s oil sands.

 

Other pipeline firms such as Enbridge Inc and Pembina Pipeline Corp are undergoing an expansion of their own networks in northern Alberta, while TransCanada Corp recently announced it might move into the region.

 

However, pipeline expansion in Canada has raised concerns regarding the potential environmental impact of these projects. A rupture in Enbridge’s Line 14 pipeline caused a 1,200 barrels oil spill in Wisconsin on Friday, the latest environmental accident in a series over the past two years.

 

“It is sad for Canada's environmental record and global responsibility that the tar sands projects continue to expand,” Glada Lahn, Research Fellow in energy and development at Chatham House told OGT. “The record of oil spills from pipelines transporting the oil both in Canada and the US is appalling.”

 

“Extraction and transportation of Albertan syncrude emits over 3 times the greenhouse gases of US oil imports from the Middle East so there is also a serious question mark over how reliance on tar sands can be said to increase US security,” Lahn added.

 

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