Canadian liquids pipelines mark progress

IPL

Energy Inc., Calgary, will spend $875 million (Canadian) to expand its crude oil export pipeline system by 35% during the next 4 years.

The company revealed plans for a four-stage, 520,000 b/d expansion of its Alberta-Chicago system.

IPL also has restored full capacity to its crude oil pipeline system after it was crippled by a severe winter storm.

In other Canadian liquids pipeline action, Alberta Energy Co. Ltd. (AEC), Calgary, plans a new line to move more than 100,000 b/d of synthetic crude from Alberta's oilsands to Hardisty or Cold Lake, Alta., and export pipeline connections.

Meanwhile, Express Pipeline Ltd. said Canadian crude is now moving through the Platte Pipeline from Casper, Wyo., to refineries at Wood River, Ill. The Hardisty-Casper segment of the 170,000 b/d Express line began shipping oil early in March.

IPL project

The IPL project is in addition to a 120,000 b/d expansion completed in 1996 and a 170,000 b/d expansion scheduled for completion in late 1998.

The four-stage expansion plan is based on a survey of how much new oil producers expect to come on stream by 2005. IPL said each phase will be tied to production growth that has consistently exceeded projections for the past decade.

The first stage would add 120,000 b/d of capacity at a cost of $100 million, to start up in 1999. The second would add 80,000 b/d at a cost of $175 million, to come on line in 2000. The third, $500 million phase would add 250,000 b/d after 2001.

Of the total investment, about $650 million would be spent in Canada by IPL and the balance on the U.S. segment of the system, operated by Lakehead Pipe Line Partners LP, Duluth, Minn. IPL unit Lakehead Pipe Line Co. Inc. is general partner of and holds an 18% interest in the limited partnership.

Most of the additional crude production to be dedicated to the expansion is expected to come from planned $6 billion expansion of Alberta's oilsands and heavy oil deposits.

The program complements the $170 million expansion of the IPL/Lakehead system, completed in 1996, and the $540 million expansion still to come.

In additon, IPL also plans to apply to the National Energy Board to install heaters and modify pumps on the Canadian mainline system at a cost of $10 million. This project will enable shippers to cut the volume of diluent used to transport heavy oil, resulting in significant savings.

IPL restoration

A blizzard and ice storm that hit early this month brought down power lines in Manitoba, North Dakota, and northern Minnesota. The storm knocked out three pumping stations on the IPL system.

Shippers estimated a volume of as much as 900,000 b/d shipped on the line was affected. The IPL system ships as much as 1.8 million b/d to refiners in the U.S. Midwest and eastern Canada and was shipping 1.4 million b/d when the storm hit.

To keep refiners supplied, IPL continued pumping south of the shutdown until it ran out of crude. North of the shutdown, oil was pumped until storage tanks were full.

Oilsands line

AEC said it could file an application this summer with the Alberta Energy and Utility Board for its new oilsands pipeline. AEC already operates a line that moves 200,000 b/d of synthetic crude from the Syncrude Canada Ltd. oilsands plant in northern Alberta to Edmonton. It also is expanding its pipeline system to serve heavy oil production at Cold Lake in eastern Alberta.

Suncor Inc., Calgary, disclosed plans last December to build a $250 million pipeline from its oilsands plant in the Fort McMurray region to pipeline terminals at Hardisty.