Inter Pipeline has received commercial support for the construction of a $100 million pipeline connection between its Bow River and Central Alberta pipeline systems.
The new pipeline, called the Viking Connector, will link various grades of light crude oil from the Viking and Mannville formations in east-central Alberta to the Edmonton market hub.
The $100 million investment is the second phase of a multi-phased development programme for the Central Alberta pipeline system. This phase includes the construction of 75 kilometres of eight-inch diameter pipeline that will connect Inter Pipeline's Throne Station on the Bow River pipeline system to the Central Alberta pipeline system in the Stettler area.
Christian Bayle, president and CEO of Inter Pipeline, says: 'The Viking Connector enables us to cost effectively leverage our extensive regional pipeline network and provide customers with superior market access. Producers in the Alberta Viking and surrounding plays are currently limited to pipelines services to the Hardisty hub or costly trucking alternatives. This connection will provide economical access to the Edmonton market hub, which historically has been a premium market for Alberta light oil products, a clear benefit for producers.'
Additionally, the company will complete upgrades to the Throne Station, which includes reconfiguring existing tank storage and expanding truck offloading capacity. Construction will begin immediately and is expected to be completed in the first half of 2020.
Once complete, Inter Pipeline forecasts throughput volume of 10,000 to 15,000 barrels per day on the Viking Connector, with one third of forecast shipments currently secured for a 10-year term. Additional term transportation agreements are under negotiation and contracted commitment levels may rise by the in-service date.
Phase one of the Central Alberta development programme includes the conversion of the pipeline system to multi-product batch operation, and construction of additional truck offloading and tank storage capacity at the Stettler Station. Batch operations began in mid-2018 and an additional 10,000 barrels per day of truck unloading capacity is expected to enter service in the fall of 2019. Two new 130,000-barrel storage tanks, the final component of phase one, are expected to be complete by the spring of 2020. Further phases may be required over the next several years to support additional production growth.