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Williams Proposes NGL Pipe to Serve Alberta Oilsands Growth

Williams Thursday launched plans to build a 261-mile pipeline to transport natural gas liquids (NGL) and olefins from its extraction plant in Fort McMurray, AB, to its processing facility in Redwater, AB.

The Tulsa-based company now processes off-gas from Suncor Energy's oilsands facility in the Fort McMurray area, extracting the NGL and olefins for transport via the Suncor Oil Sands Pipe Line. The proposed 12-inch diameter pipeline, estimated to cost US$283 million, would provide additional capacity for Suncor liquids as well as NGL capacity for other area producers' off-gas.

"This new pipeline fits perfectly with Williams' midstream strategy of providing reliable, large-scale infrastructure in growing basins and positions us extremely well for future business from other producers in the area," said Williams midstream chief Alan Armstrong.

The pipeline, Armstrong said, would support ethane removal from oilsands off-gas, which in turn could decrease greenhouse gas (GHG) and sulfur dioxide (SO2) emissions. The pipe also could deliver feedstock to Alberta chemical companies, he said.

Pending Canadian regulatory approvals, construction is set to begin in 2010 with in-service estimated to be in April 2012. The pipeline initially would have a 43,000 b/d capacity for off-gas liquids, with the future capability to transport up to 125,000 b/d with additional pump station installation.

In support of the new pipeline, Suncor is dedicating 106 MMcf/d of off-gas, equal to about 15,000 b/d of production, with the potential to add more processing volumes at the Fort McMurray and Redwater facilities through 2032.

Companies in the Fort McMurray area that upgrade bitumen from the oilsands to synthetic crude currently produce off-gas containing around 90,000 b/d of NGL and olefins from oilsands production, Williams said. Most of these liquids now are burned as fuel, with higher associated GHG and SO2 emissions than would result from burning an equivalent amount of natural gas.

With the addition of more off-gas processing facilities, Williams noted that more of these liquids would be recovered and made available for transportation on the proposed pipeline.

"Based on announced upgrader expansion projects in the Fort McMurray area, these potential off-gas liquid volumes are expected to increase to 175,000 b/d within 10 years," said Williams.

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