CALGARY, Alberta (Reuters) - Enbridge Inc, Canada’s No. 2 pipeline company, said on Monday it will spend C$1.2 billion ($1.2 billion) to twin its Athabasca regional pipeline, which serves oil sands projects in northern Alberta.
Enbridge will build a new 450,000 barrel per day pipeline along the same right of way as its existing Athabasca line, which is currently being expanded carry 570,000 bpd.
The new line, to be built so it can be boosted to handle as much as 800,000 bpd, will run 345 kilometers (215 miles) from Kirby Lake to the storage hub at Hardisty, Alberta, to serve burgeoning production from the Kirby region, about 275 kilometers (170 miles) northeast of Edmonton. Construction is expected to be complete in early 2015.
Canadian Natural Resources Ltd, Cenovus Energy Inc, Devon Energy Corp and others are expanding thermal oil sands projects - where steam is pumped in the ground to liquefy tarry bitumen - in the region.
The tar sands of northern Alberta are the world’s third largest oil reserve. Production from the region is expected to rise to 2.1 million bpd by 2015 from about 1.5 million bpd currently, with much of the growth slated to come from thermal projects rather than expensive, large-scale oil sands mines.
Though the expansion is subject to regulatory approval, Enbridge spokeswoman Gina Jordan said in an email that construction is expected to begin in late 2013 or early 2014 and that the company’s customers are expected to have sufficient supply to fill the new line.
Including its plans to twin the Athabasca line, Enbridge has committed C$3.6 billion to expanding its regional oil sands pipeline system to handle rising production.
Enbridge shares were down 32 Canadian cents at C$31.53 early on Monday afternoon on the Toronto Stock Exchange.
Reporting by Scott Haggett and Maneesha Tiwari; editing by Peter Galloway