January 7, 2012 [OPIS] - Calgary-based Keyera Corp. is in the process of entering into a joint venture with a subsidiary of Enbridge Inc. to build a rail and truck terminal and long-haul pipeline to provide diluent to producers in the Athabasca oil sands region of Alberta.
The proposed South Cheecham Rail and Truck Terminal would be located near the Enbridge Cheecham Terminal southeast of Ft. McMurray, Alberta. It would receive diluent or solvent railcars for delivery to the oil sands and load diluted bitumen for delivery to refineries.
The proposed Norlite Pipeline would begin in the Stonefell area, just north of Ft. Saskatchewan, and deliver diluent to Athabasca oil sands producers. Norlite is intended to link with Keyera’s Ft. Saskatchewan Condensate System, providing shippers with access to Keyera’s diluent supply points as well as its storage and transportation infrastructure in Edmonton/Ft. Saskatchewan.
Keyera has entered into a memorandum of understanding with the Enbridge subsidiary and interest is being solicited from bitumen producers in the region. Diluent, such as condensate, decreases the viscosity of heavy bitumen and allows it to flow through pipelines.
Construction of the terminal is expected to begin in the second half of 2012, assuming sufficient commitment is received, in order to provide delivery solutions for producers before the pipeline is built. Land is being cleared in the meantime, with a target to be operational by mid-year 2013. Meantime, Norlite could be operational in 2015.
Enbridge and Keyera would have ownership interests of 70% and 30%, respectively, in the pipeline. Enbridge will be the operator. The terminal ownership will be split evenly, with Keyera as operator.
