JOC ARCHIVES

January 29, 2014

Oil giants sign Alberta terminal deal

Kinder Morgan Energy Partners and Imperial Oil have entered into a 50-50 joint venture to build a crude oil rail-loading facility in Strathcona County, Alberta.

“This facility underlines the importance of our expanding Edmonton terminal hub and adds to our growing crude by rail terminal network,” said Bill Henderson, vice-president for Kinder Morgan Canada Terminals.

“The Edmonton Rail Terminal will provide much needed near-term delivery capacity for Canadian producers and a strategic bridge to Trans Mountain’s major pipeline expansion, currently projected to be in-service in late 2017.”

The Edmonton Rail Terminal will be built on heavy industrial-zoned land about one-half kilometre southwest of Kinder Morgan’s Edmonton storage terminal, which is on land adjacent to Imperial’s Strathcona Refinery.

Investment by the joint venture partners for the rail terminal will total about $170 million.

In addition, Kinder Morgan will invest about $100 million in pipeline connections and two new staging tanks to be constructed within the Kinder Morgan Edmonton storage facility.

The facility is currently being designed as a crude oil loading terminal, which is capable of loading one to three unit trains per day totaling 100,000 barrels per day at startup.

It will have the potential to expand to about 210,000 barrels per day, and ultimately to 250,000 barrels per day.

Imperial Oil will be the base load customer and has subscribed for the start-up capacity through a long-term contract.

The partners are now actively marketing possible expansion capacity to potential third-party customers.

The rail terminal will be constructed and operated by Kinder Morgan and will connect to both Canadian National and Canadian Pacific mainlines.

The new rail terminal will be connected via pipeline to Kinder Morgan’s tank facility.

It will be capable of sourcing all crude streams handled by Kinder Morgan for delivery by rail to North American markets and refineries

For example, the additional transportation capacity will be used for current and future production from the Kearl Oilsands project.

The work includes the expansion phase, which will come on stream in late 2015.

Construction of the rail terminal is underway and completion is scheduled for December 2014.

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