Transcanada set for new pipeline
$660M deal firm’s first foray into oilsands
TransCanada Corp. has been selected to build a $660 million pipeline connecting two long-delayed oilsands projects, the Fort Hills bitumenmineto SuncorEnergy’s Voyageur upgrader, the company said Wednesday.
The Northern Courier pipeline will be TransCanada’s first foray into the increasingly competitive oilsands infrastructure arena, and the company is remaining mum on the outlook of rising costs and tight labour market.
“Obviously this is early, but we will always look at any development opportunity,” said spokesman Shawn Howard. “It’s the market that drives these projects.”
The pipeline would connect the proposed 190,000 barrel per day Fort Hills bitumen mine, located 90 kilometres north of Fort McMurray, with Suncor Energy and TotalE&P Canada’s proposed Voyageur upgrader.
TransCanada’s announcement was the second this week trumpeting pipeline development in Alberta’s oilsands.
On Tuesday, Inter Pipeline Fund announced a $2.1 billion expansion to its Cold Lake bitumen and Polaris diluent lines in response to expected additional bitumen production from Cenovus Energy and ConocoPhillips Foster Creek, Christina Lake and Narrows Lake thermal projects.
TransCanada is to file regulatory applications on Northern Courier later this year.
Construction of the 90-kilometre pipeline will hinge on sanctioning by partners of the two projects, a prospect operator and majority stakeholder Suncor said likely be delayed beyond a tentative target of mid 2013.
“We are heavily involved in these profit improvement reviews at the moment and the indications are that some of these projects are moving backwards, not forwards.” chief executive Steve Williams said. The joint projects carry an estimated $20 billion price tag.
The Fort Hills project was shelved in 2008 by then-operator Petro-Canada when costs spun out of control and the global recession took hold.
Total bought into the project in 2010, upping its 20 per cent stake to 39 per cent last year, with mining giant Teck Resources limited continuing to hold a 20 per cent interest.
Transcanada welcomed the opportunity to participate directly in the oilsands. The energy and pipeline company, which runs Canada’s largest natural gas pipeline network, has been transporting synthetic crude from Alberta storage terminal Hardisty to refiners in the U.S. Midwest since 2010 on its Keystone pipeline.
“We appreciate the confidence placed in us to build, own and operate the Northern Courier Pipeline,” said Russ Girling, Transcanada chief executive. Transcanada shares gained 28 cents to close at $45.95 on the Toronto Stock Exchange Wednesday.