Inter Pipeline completes main work on $1.8B expansion
Inter Pipeline Fund said Monday that major construction work has wrapped up on a $1.8-billion expansion to a pipeline that links a major oilsands project near Fort McMurray, Alta., to the Edmonton area.
The Calgary-based company said it has finished installing 467 kilometres of 42-inch diameter pipeline and 43 kilometres of 20-inch diameter pipeline.
The expansion is designed to increase diluted bitumen capacity on the Corridor pipeline system from 300,000 barrels per day to 465,000 barrels per day.
With the installation of additional pumping capacity, the company said the 42-inch diameter pipeline can be further expanded to about 1.4 million barrels per day to handle future production from the Fort McMurray region.
Inter Pipeline said the work was finished on schedule and about $100 million under budget.
"With the project mechanically complete, Inter Pipeline has materially eliminated its exposure to cost overrun risk," it said.
"We are extremely pleased to have delivered the core construction elements of this project on time, under budget and with an exceptional overall safety performance record," CEO David Fesyk said in a release.
"These accomplishments took place during a period of unprecedented industry activity, clearly underscoring the success of this large-scale energy infrastructure project," he said.
Inter Pipeline said remaining work includes minor remediation activities along the pipeline rights-of-way and the preparation of new facilities for oil delivery.
The system is expected to go into service in late 2010. Once in operation, it should generate about $185 million a year in earnings before interest, taxes, depreciation and amortization, the company said.
Units of Inter Pipeline closed down seven cents at $9.40 on the Toronto Stock Exchange.
With files from The Canadian Press