TransCanada to build 500-km Northern Alberta crude-diluent system

TransCanada Corp. has agreed with Phoenix Energy Holdings Ltd. to develop the Grand Rapids Pipeline project in Northern Alberta. TransCanada and Phoenix will each own 50% of the proposed $3-billion pipeline, which will transport 900,000 b/d of oil and 330,000 b/d of diluent roughly 500 km between northwest of Fort McMurray and the Edmonton-Heartland region.

TransCanada expects the Grand Rapids Pipeline system enter service early-2017, subject to regulatory approvals. TransCanada will operate the system and Phoenix has entered a long-term commitment to ship crude oil and diluent on it.

Phoenix described the project as part of relieving transportation bottlenecks in the Athabasca region as it develops its Dover and MacKay River oil sands assets through multiple phases. Phoenix is an affiliate of PetroChina Investment (Hong Kong) Ltd. PetroChina became 100% owner of what was formerly Athabasca Oil Sands Corp.’s MacKay River project earlier this year, buying the 40% stake it did not already own (OGJ Online, Jan. 5, 2012).

TransCanada said the Grand Rapids Pipeline system would expand its liquids transportation capabilities in the region. The company recently announced the Northern Courier Pipeline project, a 90-km system to transport bitumen and diluent between the Fort Hills mine site and the Voyageur Upgrader north of Fort McMurray, Alta. (OGJ Online, Aug. 1, 2012).

TransCanada expects to apply for regulatory approval for the project in 2013. Grand Rapids will be constructed, owned, and operated by Grand Rapids Pipeline LP, jointly owned by Phoenix and a wholly-owned subsidiary of TransCanada.

Contact Christopher E. Smith at chriss@ogjonline.com.

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