December 23, 2013 [OPIS] - Kinder Morgan Energy Partners L.P. and Imperial Oil said on Friday that both companies have formed a 50-50 joint venture to build a crude oil rail-loading facility in Strathcona County, Alberta, called the Edmonton Rail Terminal.
The facility will be built on heavy industrial-zoned land approximately one-half kilometer southwest of Kinder Morgan’s Edmonton storage terminal, on land adjacent to Imperial’s Strathcona Refinery.
The Edmonton Rail Terminal is currently being designed as a crude oil loading terminal capable of loading one to three unit trains per day totaling 100,000 b/d at startup, with the potential to expand to approximately 210,000 b/d, and ultimately to 250,000 b/d.
The new rail terminal will be connected via pipeline to Kinder Morgan’s tank facility and will be capable of sourcing all crude streams handled by Kinder Morgan for delivery by rail to North American markets and refineries.
The rail terminal will be constructed and operated by Kinder Morgan and will connect to both Canadian National and Canadian Pacific mainlines.
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 additional transportation capacity will be used for current and future production from the Kearl Oil Sands project, including the expansion phase, which will come on stream in late 2015.
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.
Investment by the joint venture partners for the rail terminal will total approximately $170 million.
In addition, Kinder Morgan will invest approximately $100 million in pipeline connections and two new staging tanks to be constructed within the Kinder Morgan Edmonton storage facility.
Construction is now underway and completion is scheduled for December 2014.