Inter Pipeline Fund signs transportation agreement with Canadian Natural Resources

Inter Pipeline Fund has signed a long-term agreement with Canadian Natural Resources (CNR) to transport diluent and bitumen blend for the Kirby South oil sands project.

CNR will supply around 63,000 barrels a day (b/d) of bitumen blend and 18,000 b/d of diluents to the project, which begins in August.

The transportation of bitumen blend will take place through a new 20km, 16in-diameter pipeline lateral from CNR’s production site to Inter Pipeline’s Winefred Junction.

The lateral connects to the newly constructed 30in pipeline to transport bitumen blend from three regional oil sands projects owned by FCCL, a business venture of Cenovus and ConocoPhillips.

In March, Inter Pipeline said it had executed approximately $2.6bn definitive transportation agreements to expand Cold Lake and Polaris systems, in order to support three oil sands projects.

The company has constructed approximately $95m worth pipeline and associated facilities to connect the Kirby South production site with the Cold Lake pipeline system.

The company also constructed around 20km of new 10in pipeline from Winefred Junction to the Kirby South site to provide diluent transportation services.

Inter Pipeline president and CEO David Fesyk said: “This is a highly accretive investment which complements our current expansion activities in the Cold Lake region. Our long-term, integrated expansion plans are unfolding as we anticipated.”

Kirby South is a large-scale in-situ oil extraction project, which will use steam-assisted gravity drainage technology to recover subsurface bitumen.

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Image: Inter Pipeline Fund will transport diluent and bitumen blend to the Kirby South oil sands project. Photo: courtesy of Frank K.