TransCanada’s Moves Ahead With Pipeline Plans

June 2013, Vol. 240, No. 6

A lack of pipeline capacity to the U.S. – Canada’s only export market – has pushed executives and government officials to propose alternative routes to both the east and west coasts of Canada.

As a result, TransCanada has announced plans for a pipeline and terminal facility in Alberta that will help link Canadian crude resources in the province to markets in eastern Canada and the U.S.

Company officials say they plan to build a 125-mile pipeline connecting Alberta’s Edmonton region to facilities in Hardisty, Alberta, and a terminal in the Heartland industrial area north of Edmonton. The facilities are part of TransCanada’s broader plans to ship more Alberta crude to Canada’s east coast.

The company said it has reached binding long-term shipping agreements to build, own and operate the proposed Alberta-based Heartland Pipeline and TC Terminals projects.
The proposed projects will include a 125-mile pipeline connecting the Edmonton region to facilities in Hardisty and a terminal facility in the Heartland area. TransCanada anticipates the pipeline could ultimately transport up to 900,000 bopd while the terminal is expected to have storage capacity for up to 1.9 MMbbls. The projects have a combined cost estimated at $900 million and are expected to come into service during the second half of 2015.

“With Alberta oil production projected to increase by almost 3 MMbpd over the next 15 years, it is important to have the right infrastructure in place to move these resources safely and reliably to market at the right time,” said Alex Pourbaix, TransCanada’s president of energy and oil pipelines. “These projects will help link Canadian crude oil resources in northern Alberta to markets in Eastern Canada and the United States.”
The company intends to file a regulatory application for the terminal shortly followed by a separate application for the pipeline in the fall.

In other news, TransCanada announced the Grand Rapids Pipeline project, a 310-mile pipeline to transport crude oil and diluent between the producing area northwest of Fort McMurray and the Edmonton/Heartland region.

TransCanada has entered into binding agreements with Phoenix Energy Holdings Limited to develop the project. TransCanada and Phoenix will each own 50% of the proposed $3 billion project that includes both a crude oil and a diluent line to transport volumes 500 km between the producing area and Edmonton/Heartland.

The Grand Rapids Pipeline system is expected to be in service by early 2017, subject to regulatory approvals, with capital spent from 2014-17. The system will have capacity to move up to 900,000 bpd of crude and 330,000 bpd of diluent. TransCanada will operate the system and Phoenix has entered a long-term commitment to ship crude oil and diluent on it. TransCanada expects to apply for regulatory approval shortly.

The project will be constructed, owned and operated by the Grand Rapids Pipeline Limited Partnership, which is jointly owned by Phoenix and a wholly-owned subsidiary of TransCanada Corporation.