Companies To Build Greenfield Pipeline In Alberta

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Pembina Pipeline Corporation has entered into an Engineering Support Agreement (ESA) for diluent and blended bitumen transportation services associated with enhanced oil recovery developments in northeast Alberta owned by KKD Oil Sands Partnership. KOSP is a partnership between Statoil Canada Ltd. and PTTEP Canada Ltd.
  Concurrent with the work under the ESA, Pembina and Statoil will proceed with negotiations to conclude long-term agreements for the construction of and transportation service on a new greenfield pipeline system – Cornerston Pipeine — and associated infrastructure.
  The Cornerstone Pipeline would transport diluent and blended bitumen between KOSP’s upstream developments and the Edmonton area, including diluent connectivity at Pembina’s Nexus Terminal.
  Under the ESA, Pembina and KOSP have jointly agreed to spend up to approximately $35 million to conduct preliminary engineering work and begin associated stakeholder consultation in support of KOSP’s transportation needs. Subject to reaching commercial agreements, as well as obtaining regulatory and environmental approvals thereafter, Pembina expects the Cornerstone Pipeline could be in-service in mid-2017.
  “Our preliminary capital cost estimate to undertake construction of a 200-mile, 12-inch diameter diluent and 24-inch diameter blended bitumen pipeline system is approximately $850 million,” said Pembina’s Michael Hantzsch, vice president, Oil Sands & Heavy Oil. “This size of pipe would allow us to phase-in expansions down the road with incremental capital. We also may consider up-sizing the pipelines to 20-inch and 30-inch, respectively, should the work conducted under the ESA indicate there are sufficient volumes.”