TransCanada Corp said Monday it entered into binding agreements with Phoenix Energy Holdings Ltd. to develop a $3 billion pipeline project in Northern Alberta to move oil sands crude and large amounts of diluent.
The proposed Grand Rapids Pipeline project would have a capacity to move 900,000 b/d of crude and 330,000 b/d of diluent needed to dilute the heavy crude for shipping. TransCanada and Phoenix will each own 50% of the project.
TransCanada said it expects the project to further expand its liquids transportation capabilities and complement its deep operating experience in Alberta, adding that it recently announced the proposed Northern Courier Pipeline project, a 90-kilometer line to transport bitumen and diluent between the Fort Hills mine site and Voyageur Upgrader north of Fort McMurray in Alberta.
Slated to run 500 kilometers between the producing area northwest of Fort McMurray and the Edmonton/Heartland region, the Grand Rapids project’s route and design will be determined with input from Aboriginal and other stakeholders, TransCanada said. A regulatory filing is expected next year, and the target date for completing the project is sometime in 2017.
The project will be built, owned and operated by the Grand Rapids Pipeline Limited Partnership, which will be jointly owned by Phoenix and a TransCanada subsidiary.
Anticipating Alberta crude oil production to continue to grow, TransCanada CEO Russ Girling said “it’s critical to have the infrastructure in place to move oil to market from emerging developments west of the Athabasca River.”
Phoenix CEO Zhiming Li noted that the Athabasca region has become a “bottleneck” and his firm’s participation in the Grand Rapids project will help ongoing development of Dover and MacKay River oil sands assets that it holds. “Working with TransCanada to build a pipeline system in a timely fashion is crucial to implement our development strategy,” Li said.
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