TransCanada, Chinese firm form pipeline partnership – by Lauren Krugel (Toronto Star – October 30, 2012)

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

The Canadian Press – CALGARY—TransCanada Corp. has entered a partnership with a Chinese-owned company to build a new $3-billion oilsands pipeline in Northern Alberta, pushing further into a business that has traditionally been dominated by rival pipeline giant Enbridge Inc.

TransCanada and Phoenix Energy Holdings Ltd., a unit of state-owned China National Petroleum Corp., would each own half of the Grand Rapids project, which would carry up to 900,000 barrels of crude per day along with 330,000 barrels per day of diluent, which helps thick oilsands bitumen to flow through pipelines.

The pipeline would run about 500 kilometres between an emerging oilsands area northwest of Fort McMurray, Alta., to the industrial heartland near Edmonton. It’s expected to be in service by early 2017.

“As Alberta crude oil production continues to grow, it’s critical to have the infrastructure in place to move oil to market from emerging developments west of the Athabasca River,” said TransCanada CEO Russ Girling in a release. “This is the first major pipeline project to meet the needs of this fast-growing area.”

TransCanada will operate the system and Phoenix has committed to ship both crude from its Dover and MacKay River oilsands projects and diluent through it.

“Given that transportation in the Athabasca region has become a bottleneck, working with TransCanada to build a pipeline system in a timely fashion is crucial to implement our development strategy,” said Phoenix CEO Zhiming Li.

“This transportation solution will be important to Phoenix and other potential producers in this area to monetize their huge resources.”

In 2009, Athabasca Oil Corp. sold a 60 per cent interest in its MacKay River and Dover oilsands leases to CNPC. Earlier this year, Athabasca exercised its option to sell the rest of MacKay River, making that project the first in the oilsands to be fully controlled by a Chinese company.

The Dover project is expected to obtain regulatory approval early next year and, once it does, there will be an identical divestiture option.

In August, TransCanada announced it had been selected to build the Northern Courier pipeline — a $660-million project to connect crude from the yet to be developed Fort Hills oilsands mine to the Voyageur upgrader, where the oilsands bitumen will be processed into a type of crude refineries can handle.

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