Inter Pipeline Fund to provide diluent transportation for Suncor Energy
Tuesday, Dec 11, 2012Inter Pipeline Fund ("Inter Pipeline") (TSX:IPL.UN) is pleased to announce it has entered into a binding agreement to transport diluent to Suncor Energy Inc.'s oil sands operations. Under the terms of this 5-year ship or pay agreement, Inter Pipeline will provide Suncor with 10,000 barrels per day (b/d) of committed capacity on its Polaris pipeline system.
Diluent will be transported from receipt points in the Edmonton area to Inter Pipeline's Sunrise metering station located northeast of Fort McMurray utilizing the 12-inch diameter Polaris mainline that entered commercial service in August of this year. Inter Pipeline will construct a new $8 million metering facility adjacent to the Sunrise delivery site to handle the Suncor volumes. Diluent deliveries will then be transferred from the Polaris pipeline to a local distribution pipeline owned by Suncor.
Construction will commence in late 2012 and the new facilities are expected to enter service by May 2013. This accretive transportation agreement will generate approximately $10 million per year in EBITDA that will remain constant over the life of the contract. All operating costs will be recovered on a flow through basis.
"We are pleased to add Canada's largest energy company to our list of high quality shippers on the Polaris pipeline system," stated David Fesyk, President and CEO of Inter Pipeline. "This agreement further establishes Polaris as the leading diluent distribution system to Alberta's oil sands industry."
Inter Pipeline Fund
Inter Pipeline is a major petroleum transportation, natural gas liquids extraction, and bulk liquid storage business based in Calgary, Alberta, Canada. Structured as a publicly traded limited partnership, Inter Pipeline owns and operates energy infrastructure assets in western Canada, the United Kingdom, Denmark, Germany and Ireland. Additional information about Inter Pipeline can be found at www.interpipelinefund.com.
Inter Pipeline is a member of the S&P/TSX Composite Index. Class A Units trade on the Toronto Stock Exchange under the symbol IPL.UN.
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