Enbridge Inc. plans $1.2 billion twinning of Athabasca pipeline in Alberta

Enbridge Inc. is planning to invest $1.2 billion for an ambitious construction project that will twin the southern section of the Athabasca Pipeline from Kirby Lake, Alberta, to the crude oil hub at Hardisty, Alberta.

staff writer

“Based on our recent construction experience, we expect to create about 545 person years of employment in building the twinning project,” said Stephen J. Wuori, Enbridge president, liquids pipelines.

“As we move through construction, those crews will be purchasing goods and services, as well as housing and food from local retailers.

Once in operation, the pipeline will generate significant tax revenues for communities along the right-of-way.”

The section of pipeline will include about 345 kilometres of 36-inch pipeline, largely within the existing Athabasca Pipeline right-of-way.

The new line will increase capacity by about 450,000 barrels per day (bbl/d) and is designed to accommodate demand for additional capacity in the Kirby oilsands area.

Canadian Natural Resources Ltd. started construction late last year on a new $1.25 billion oilsands project at Kirby, near Lac La Biche, in the Regional Municipality of Wood Buffalo.

Kirby Phase 1, which is scheduled for completion in 2013, is expected to produce about 40,000 bbl/d.

The Kirby development will be expanded to include three phases and produce between 70,000 and 100,000 bbl/d.

In early 2010, Devon and BP entered a joint venture to develop the Pike oilsands project, which is formerly known as the Kirby project. Devon acquired a 50 per cent stake in BP’s Kirby oilsands interests for $500 million and is committed to fund an additional $150 million of capital costs to develop the project.

In anticipation of this growth, Athabasca pipeline expansion is being built with the potential to increase capacity by 800,000 bbl/d.

The existing Athabasca pipeline, which has already undergone several recent upgrades, has a maximum capacity of 570,000 barrels per day.

In September 2010, Enbridge Inc. made a decision to invest $185 million on the expansion of the Athabasca Pipeline to accommodate oilsands production by Cenovous near Fort McMurray.

Phase C of the Christina Lake project is expected to increase production by 40,000 barrels a day, when it is completed in 2011.

The Christina Lake project involved the construction of a new terminal called Sunday Creek, near Enbridge Athabasca’s Christina Lake station, with two new 375,000-bbl bitumen blend tanks and all associated piping, manifolds and pumps.

The new facilities also included the construction of a 26-km, 762-mm (30-inch) diameter, pipeline from Sunday Creek Terminal to Kirby Lake Terminal, running adjacent to Enbridge’s existing pipeline.

The additional facilities, which will cost $250 million, are designed to accommodate the current and planned future expansions of the Christina Lake project.

Phase D at Christina Lake, which will also produce 40,000 barrels a day, is well underway.

Cenovus received approval earlier this year from the Alberta Energy Resources Conservation Board (ERCB) to start construction on three expansion phases (E, F and G) of 40,000 barrels per day (bbls/d). When this major expansion is completed in 2017, production capacity at Christina Lake should reach 218,000 bbls/d.

Twinning our Athabasca system south of Kirby represents a highly efficient solution to the needs we are seeing for additional long-haul and short-haul capacity into Hardisty, leveraging off the advantages of our existing asset base and right-of-way,” said Wuori.

While anchored by the needs of our current connected projects, it is readily expandable to accommodate new projects which are also expected to require pipeline capacity beginning mid-decade. This project is a significant part of our overall plan to provide capacity for rapidly growing production from the Kirby area as well as from growth projects further north in the Athabasca region.”

When existing Kirby area volumes are switched to the new 36-inch line from the existing 30-inch line, the existing line will accommodate additional long-haul volumes that are further upstream on the Athabasca System.