Pembina shelves pipeline linked to stalled Canadian oil sands project

Thu Sep 25, 2014 5:19pm EDT
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Sept 25 (Reuters) - Pembina Pipeline Corp said on Thursday it has stopped work on a pipeline linked to Statoil's Corner oil sands project in Alberta, which the Norwegian energy firm has put off for at least three years due to rising costs.

Statoil said earlier that it decided to delay construction of the project because inflation was pushing up the cost of labor and materials, while tightness in pipeline space to the U.S. market was pushing down the price of its oil.

Pembina said that it will retain the rights to use engineering related to the Cornerstone pipeline, which would have linked the northern Alberta oil sands project to its Nexus terminal in Edmonton, for its other commercial agreements.

"While we are disappointed about the Cornerstone pipeline not proceeding at this time we have approximately C$6 billion ($5.4 billion) of committed projects underway and another C$1.7 billion of projects we are looking to commercially secure," Pembina chief executive Mick Dilger said in a statement.

Shares of the Calgary-based company closed down 2 percent at C$47.62 on Thursday on the Toronto Stock Exchange. (1 US dollar = 1.1108 Canadian dollar) (Reporting by Julie Gordon; editing by Andrew Hay)