Parallel Lines – The Diluent Trail Across Canada – Part 5 – Inter Pipeline and Plains Canada Midstream

With Western Canadian oil sands bitumen output increasing rapidly, producers need more diluent to blend with their production so that it can flow to market in pipelines. That means delivering diluent to remote locations as far as 250 miles northwest of Edmonton. Smaller oil sands projects typically get their diluent delivered by rail or truck but pipeline infrastructure is being built out for larger projects as their production comes online. Inter Pipeline (IPL) diluent delivery volumes on their Polaris pipeline at the end of 2013 were just 20 Mb/d. By 2017 that volume could be to 1.2 MMb/d. Today we detail IPL and Plains build out plans.

This series reviews infrastructure delivering increasing quantities of diluent to production locations in Western Canada. The first episode (see The Diluent Trail Across Canada – Introduction) provided an overview of current and expected demand for diluent range materials for use by oil producers in the Western Canadian Sedimentary Basin (WCSB). Total Canadian demand for diluent in 2014 is expected to average 380 Mb/d – meaning that with 160 Mb/d of local supply about 220 Mb/d will be imported – mostly from the U.S. By 2019 total Canadian diluent demand is expected to increase to 685 Mb/d and some of that will be supplied by imports from the U.S. Episode Two covered the Southern Lights and Cochin pipeline diluent routes from the U.S. to Western Canada that deliver the majority of those imported supplies today. In Episode 3 we looked at the diluent distribution network in the two Edmonton hubs of Sherwood Park and Fort Saskatchewan, operated by Enbridge and Keyera respectively. Diluent distributed through pipelines and storage in these two hubs is comingled and has to meet the Enbridge CRW specification. In Episode 4 we looked at plans by midstream pipeline company Pembina to build a Canadian Diluent hub at Fort Saskatchewan fed primarily by growing local supplies from their Western Canadian gathering and processing system. This time we detail diluent pipelines out from Edmonton to the oil sands production regions operated by Inter Pipeline and Plains Canadian Midstream.

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Inter Pipeline

Formed in 1997, Inter Pipeline (IPL) is an energy transportation, storage and natural gas liquids extraction company based in Calgary, Alberta. IPL owns and operates an extensive network of conventional crude, oil sands crude and natural gas liquids (NGL) pipelines in Western Canada. The company has three major oil sands pipeline systems running between Edmonton, Hardisty and the Fort McMurray production regions (see map in Figure #1). Two of the three oil sands pipelines – the Cold Lake and Corridor systems, transport crude from production regions to Edmonton and Hardisty from where it is shipped to markets in eastern Canada and the U.S. The Corridor pipeline delivers upgraded synthetic crude oil from the Athabasca Oil Sands Project (AOSP) and the Cold Lake system delivers bitumen blended with diluent (dilbit) from the Cold Lake production region. IPL’s third oil sands pipeline is dedicated to carrying condensate from Edmonton to the Cold Lake production region to be used as diluent for blended dilbit. This12-inch Polaris pipeline began operating as a stand-alone diluent transportation system in 2012. By the end of 2013, the Polaris pipeline system transported approximately 20 Mb/d of diluent supplied via the Keyera and Enbridge Fort Saskatchewan Condensate System that we described in Episode 3 – all conforming to the Enbridge CRW condensate specification.

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