October 29, 2012
TransCanada, Chinese firm partner for pipeline
By Bill Kaufmann, Calgary Sun
CALGARY -- TransCanada Pipelines is partnering with a Chinese state energy firm to construct a $3 billion pipeline from Alberta's oilsands.
The Calgary-based firm announced Monday it would split ownership of the proposed Grand Rapids Pipeline with Phoenix Energy Holdings Ltd. that would transport crude from the oilsands 500 km to terminals in the Edmonton region.
If approved, it would provide a much-needed link to servicing the western oilsands region, TransCanada spokesman Grady Semmens said.
It would also presumably enable development of Chinese holdings in the oilsands, partly explaining why Phoenix, a subsidiary of PetroChina, is a pipeline partner, Semmens said.
"They have new projects in the MacKay River area and Dover long-term agreements," Semmens said.
Increased Chinese involvement in Canada's oilpatch and an impending trade agreement with Beijing have raised fears over threats to Canada's sovereignty.
TransCanada would be 100% operators of the new dual line, designed to pipe natural gas-based diluent north to be blended with oilsands bitumen so it moves more efficiently.
Grand Rapids would have a daily capacity of 900,000 barrels out of an area that's currently less-than-passable, Phoenix president Zhiming Li said.
"Given that transportation in the Athabasca region has become a bottleneck, working with TransCanada to build a pipeline system in a timely fashion is crucial to implementing our development strategy," he said in a statement.
Another 330,000 barrels of diluent will transported daily as well.
The pipeline would also be key to doubling of the current oilsands production foreseen over the next two decades, Semmens said.
"There's lot of potential new opportunity in the next 20 years," he said.
It's hoped regulatory approval will be granted next year with completion of the pipeline in 2017.
For TransCanada, Grand Rapids is almost a new frontier, Semmens added.
"It's only the second pipeline we've announced in the oilsands region," he said.
TransCanada is still awaiting Washington's go-ahead for the northern U.S. leg of its Keystone XL pipeline which has met stiff resistance on environmental and economic grounds.