Inter Pipeline Fund announces $1.5 billion capital expenditure program for 2013
Thursday, Jan 31, 2013

CALGARY, ALBERTA--(Marketwire - Jan. 30, 2013) - Inter Pipeline Fund ("Inter Pipeline") (TSX:IPL.UN) announced today its capital expenditure program for 2013. Inter Pipeline expects to spend approximately $1.5 billion in 2013 under its largest-ever annual capital investment plan. Organic growth projects are forecast to account for more than 95 per cent of the total, with the remainder being directed towards sustaining capital projects.

As outlined in 2012, Inter Pipeline is advancing several major expansion projects within its oil sands pipeline business segment. Nearly $1.4 billion will be directed towards new oil sands transportation infrastructure in 2013. Growth capital expenditures in other business segments include approximately $30 million in the NGL extraction business, $20 million in bulk liquid storage and $10 million in conventional oil pipelines. Consistent with last year, Inter Pipeline expects to spend $40 million on sustaining capital projects.

Oil Sands Transportation

Capital spending in 2013 will be dominated by expenditures related to Inter Pipeline's integrated expansion program on the Cold Lake and Polaris pipeline systems. This major expansion program involves the provision of approximately 850,000 barrels per day ("b/d") of committed bitumen blend and diluent delivery capacity for three oil sands projects operated by the FCCL Partnership, a business venture between Cenovus Energy and ConocoPhillips. Total capital expenditures are expected to be $2.2 billion over the next 3 years, of which $1.1 billion will be incurred in 2013.

The integrated expansion program will involve the construction of 840 kilometres of pipeline and seven mainline pump stations. New facilities will enter commercial service in phases commencing in 2014. As discrete construction projects are completed, Inter Pipeline will begin generating fixed annual payments under high quality ship-or-pay contracts with the FCCL Partnership. Definitive transportation agreements are expected to be executed in the first quarter of 2013.

During 2013, roughly $40 million will be invested to complete the installation of two quarter-point stations and existing station upgrades on the west leg of the Cold Lake pipeline system. This mainline expansion project will increase bitumen blend capacity from 535,000 b/d to 650,000 b/d and is expected to be operational in mid 2013.

Source: Marketwire 

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