Welcome!

News Feed Item

Inter Pipeline Announces $1.3 Billion Capital Expenditure Program for 2014

CALGARY, ALBERTA -- (Marketwired) -- 01/29/14 -- Inter Pipeline Ltd. ("Inter Pipeline") (TSX: IPL) announced today a $1.3 billion capital expenditure program for 2014, primarily directed towards the expansion of its oil pipeline systems. Rising customer demand for transportation capacity in the oil producing regions serviced by Inter Pipeline has driven $3.4 billion in capital investment since 2012. Organic growth projects are expected to account for about 97 percent of 2014's total expenditures, with modest sustaining capital requirements accounting for the remainder.

In 2014, the majority of capital expenditures will support the development of Inter Pipeline's oil sands transportation business where nearly $1.2 billion will be invested in new pipeline and facility construction projects. An additional $70 million has been allocated for new pipeline connection and capacity enhancement projects to meet growth in light and medium oil volumes within Inter Pipeline's conventional oil gathering business segment. Elsewhere, growth capital spending plans include approximately $10 million in each of Inter Pipeline's NGL extraction and bulk liquid storage businesses. Consistent with recent years, a total of $40 million has been allocated for sustaining capital projects in 2014.

Capital Expenditure Summary


                                                         2014           2013
(millions)                                           Forecast       Forecast
                                                   -------------------------
Organic Growth Capital
  Oil Sands Transportation(i)                          $1,180         $1,850
  Conventional Oil Pipelines                               70             15
  NGL Extraction(i)                                        10             30
  Bulk Liquid Storage                                      10             25
                                                   ----------     ----------
Total Organic Growth Capital                            1,270          1,920
Sustaining Capital                                         40             30
                                                   ----------     ----------
Total Capital                                          $1,310         $1,950
                                                   ----------     ----------
                                                   ----------     ----------

(i) Includes Inter Pipeline's 85% ownership interest in the Cold Lake
 pipeline system or 50% interest in the Empress V NGL extraction facility

Oil Sands Transportation

Inter Pipeline is continuing to advance its major integrated expansion program that commenced in 2013 on the Cold Lake and Polaris pipeline systems. This expansion program is primarily supported by 850,000 barrels per day ("b/d") of committed bitumen blend and diluent delivery capacity for three oil sands projects operated by the FCCL Partnership, a business venture between Cenovus Energy and ConocoPhillips. Total capital expenditures for this project are expected to be $2.9 billion. Of this amount, approximately $1.5 billion was incurred in 2013, approximately $1.1 billion is forecast to be spent in 2014, with the remainder scheduled for 2015 through 2017. Total expenditures are currently forecast to be 12 percent higher than previous project estimates. Higher projected costs are primarily the result of elevated labour expenses, project scope changes and the refinement of cost estimates. Inter Pipeline is not economically impacted by the majority of these cost increases since annual revenue payments made by FCCL are generally tied to actual capital costs incurred.

The FCCL integrated expansion program involves the construction of 840 kilometres (km) of pipeline and seven mainline pump stations. To the end of December 2013, approximately 400 km of pipeline have been installed and construction is underway on all seven stations. The project remains on schedule and certain capacity expansion elements are expected to be complete in mid 2014. As project phases enter commercial operation, Inter Pipeline will begin generating fixed annual payments under high quality, long-term ship-or-pay contracts with the FCCL Partnership.

In addition to the FCCL expansion project, Inter Pipeline expects to advance approximately $90 million of other organic growth projects on the Cold Lake pipeline system. These projects include a pipeline connection to a new unit train loading facility owned by Canexus Corporation and other system enhancement projects.

On the Polaris pipeline system, Inter Pipeline will spend roughly $40 million on several diluent delivery projects and pumping facility upgrades. Approximately $30 million will be incurred to expand product measurement facilities at the Lamont station for the Canexus unit train project and to expand mainline pumping stations to accommodate increased volumes for the Imperial Oil Kearl project. The remaining $10 million will be spent on other diluent delivery projects including a connection to Athabasca Oil Corporation's Hangingstone project.

Conventional Oil Pipelines

Inter Pipeline's conventional oil gathering systems continue to benefit from dramatically increased drilling activity and the application of new well completion technologies. This is creating a need for new investments in battery connection projects and pipeline capacity expansions.

As a result, capital investments in Inter Pipeline's conventional oil gathering segment are forecast to set a new record. Approximately $70 million will be spent in 2014 to enhance oil handling and transportation facilities on the Bow River, Central Alberta and Mid-Saskatchewan pipeline systems through new battery connection, facility upgrade, rail access and oil storage projects.

NGL Extraction

In the NGL extraction business segment, Inter Pipeline expects growth capital expenditures to be approximately $10 million in 2014. Investments will focus on several projects to further improve the recovery of ethane and propane-plus products extracted at Inter Pipeline's Cochrane and Empress straddle plants.

Bulk Liquid Storage

Inter Pipeline expects to spend approximately $10 million on organic growth capital projects in its bulk liquid storage segment in 2014. The majority of capital will be invested at terminals in the United Kingdom and Germany operated by Inter Pipeline's wholly owned subsidiary Simon Storage. Approximately $9 million will be spent on tank life extension projects and storage infrastructure to support new business opportunities.

Remaining investment will be incurred within Inter Pipeline's bulk liquid storage subsidiary in Denmark where dredging and mooring improvements will enable the handling and berthing of larger vessel sizes. New blending and mixing equipment will also be installed in several fuel oil tanks, improving the flexibility of storage operations.

Sustaining Capital

Inter Pipeline's sustaining capital forecast for 2014 is approximately $40 million, similar to that incurred in previous years.

In the European bulk liquid storage business, Inter Pipeline expects to spend about $13 million in sustaining capital. Expenditures will be spread across several terminals on jetty refurbishments, pump replacements and routine terminal upgrades.

Sustaining capital expenditures in Inter Pipeline's Canadian pipeline and NGL extraction business segments will total approximately $16 million.

Approximately $11 million will be spent on corporate sustaining capital initiatives, primarily associated with information technology, management information systems and asset management programs. These expenditures reflect Inter Pipeline's commitment to safe and reliable operations through the use of leading edge technologies.

Inter Pipeline Ltd.

Inter Pipeline is a major petroleum transportation, bulk liquid storage and natural gas liquids extraction business based in Calgary, Alberta, Canada. Inter Pipeline owns and operates energy infrastructure assets in western Canada and northern Europe. Additional information about Inter Pipeline can be found at www.interpipeline.com.

Inter Pipeline shares trade on the Toronto Stock Exchange under the symbol IPL.

Disclaimer

Certain information contained herein may constitute forward-looking statements that involve known and unknown risks, assumptions, uncertainties and other factors. Readers are cautioned not to place undue reliance on forward-looking statements, as such statements are not guarantees of future performance. Inter Pipeline in no manner represents that actual results, levels of activity and achievements will be the same in whole or in part as those set out in the forward-looking statements herein. Such information, although considered reasonable by Inter Pipeline at the time of preparation, may later prove to be incorrect and actual results may differ materially from those anticipated in the statements made. For this purpose, any statements that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements often contain terms such as "may", "will", "should", "anticipate", "expects" and similar expressions. Such assumptions, risks, uncertainties and other factors include, but are not limited to, assumptions, risks and uncertainties associated with: operations, such as loss of markets, regulatory matters, environmental matters, industry competition, potential delays and cost overruns of construction projects, including the Polaris and Cold Lake pipeline system projects, the status, credit risk and continued existence of customers having contracts with Inter Pipeline and its subsidiaries, and the ability to access sufficient capital from internal and external sources. You can find a discussion of those risks and uncertainties in Inter Pipeline's securities filings at www.sedar.com. The forward-looking statements contained in this news release are made as of the date of this document, and, except to the extent required by applicable securities laws and regulations, Inter Pipeline assumes no obligation to update or revise forward-looking statements made herein or otherwise, whether as a result of new information, future events, or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary note.

Effective September 1, 2013, Inter Pipeline completed an arrangement pursuant to which, among other things, the outstanding Class A units of Inter Pipeline Fund were converted into common shares of Inter Pipeline Ltd. This resulted in the conversion to a dividend paying corporation, Inter Pipeline Ltd., which continues as a successor issuer to Inter Pipeline Fund. Any references to Inter Pipeline prior to September 1, 2013 refers to Inter Pipeline Fund and its consolidated subsidiaries, and any references to Inter Pipeline subsequent to September 1, 2013 refers to Inter Pipeline Ltd. and its consolidated subsidiaries. Similarly, any references to common shares, shareholders or dividends used prior to September 1, 2013, refer to Class A units, unitholders and distributions of Inter Pipeline Fund, and any references to common shares, shareholders or dividends used subsequent to September 1, 2013 refer to common shares, shareholders and dividends of Inter Pipeline Ltd.

All dollar values are expressed in Canadian dollars unless otherwise noted.

Contacts:
Investor Relations: Inter Pipeline Ltd.
Jeremy Roberge
Vice President, Capital Markets
403-290-6015 or 1-866-716-7473
jroberge@interpipeline.com

Media Relations: Inter Pipeline Ltd.
Tony Mate
Director, Corporate and Investor Communications
403-290-6166
tmate@interpipeline.com
www.interpipeline.com

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
Virtualization over the past years has become a key strategy for IT to acquire multi-tenancy, increase utilization, develop elasticity and improve security. And virtual machines (VMs) are quickly becoming a main vehicle for developing and deploying applications. The introduction of containers seems to be bringing another and perhaps overlapped solution for achieving the same above-mentioned benefits. Are a container and a virtual machine fundamentally the same or different? And how? Is one techn...
SYS-CON Events announced today that Infranics will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Since 2000, Infranics has developed SysMaster Suite, which is required for the stable and efficient management of ICT infrastructure. The ICT management solution developed and provided by Infranics continues to add intelligence to the ICT infrastructure through the IMC (Infra Management Cycle) based on mathemat...
SYS-CON Events announced today that SD Times | BZ Media has been named “Media Sponsor” of SYS-CON's 20th International Cloud Expo, which will take place on June 6–8, 2017, at the Javits Center in New York City, NY. BZ Media LLC is a high-tech media company that produces technical conferences and expositions, and publishes a magazine, newsletters and websites in the software development, SharePoint, mobile development and commercial UAV markets.
Have you ever noticed how some IT people seem to lead successful, rewarding, and satisfying lives and careers, while others struggle? IT author and speaker Don Crawley uncovered the five principles that successful IT people use to build satisfying lives and careers and he shares them in this fast-paced, thought-provoking webinar. You'll learn the importance of striking a balance with technical skills and people skills, challenge your pre-existing ideas about IT customer service, and gain new in...
SYS-CON Events announced today that Telecom Reseller has been named “Media Sponsor” of SYS-CON's 20th International Cloud Expo, which will take place on June 6–8, 2017, at the Javits Center in New York City, NY. Telecom Reseller reports on Unified Communications, UCaaS, BPaaS for enterprise and SMBs. They report extensively on both customer premises based solutions such as IP-PBX as well as cloud based and hosted platforms.
"I think that everyone recognizes that for IoT to really realize its full potential and value that it is about creating ecosystems and marketplaces and that no single vendor is able to support what is required," explained Esmeralda Swartz, VP, Marketing Enterprise and Cloud at Ericsson, in this SYS-CON.tv interview at @ThingsExpo, held June 7-9, 2016, at the Javits Center in New York City, NY.
SYS-CON Events announced today that Cloudistics, an on-premises cloud computing company, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Cloudistics delivers a complete public cloud experience with composable on-premises infrastructures to medium and large enterprises. Its software-defined technology natively converges network, storage, compute, virtualization, and management into a ...
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).
SYS-CON Events announced today that Juniper Networks (NYSE: JNPR), an industry leader in automated, scalable and secure networks, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Juniper Networks challenges the status quo with products, solutions and services that transform the economics of networking. The company co-innovates with customers and partners to deliver automated, scalable and secure network...
Historically, some banking activities such as trading have been relying heavily on analytics and cutting edge algorithmic tools. The coming of age of powerful data analytics solutions combined with the development of intelligent algorithms have created new opportunities for financial institutions. In his session at 20th Cloud Expo, Sebastien Meunier, Head of Digital for North America at Chappuis Halder & Co., will discuss how these tools can be leveraged to develop a lasting competitive advanta...
SYS-CON Events announced today that Loom Systems will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Founded in 2015, Loom Systems delivers an advanced AI solution to predict and prevent problems in the digital business. Loom stands alone in the industry as an AI analysis platform requiring no prior math knowledge from operators, leveraging the existing staff to succeed in the digital era. With offices in S...
SYS-CON Events announced today that Interoute, owner-operator of one of Europe's largest networks and a global cloud services platform, has been named “Bronze Sponsor” of SYS-CON's 20th Cloud Expo, which will take place on June 6-8, 2017 at the Javits Center in New York, New York. Interoute is the owner-operator of one of Europe's largest networks and a global cloud services platform which encompasses 12 data centers, 14 virtual data centers and 31 colocation centers, with connections to 195 add...
SYS-CON Events announced today that HTBase will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. HTBase (Gartner 2016 Cool Vendor) delivers a Composable IT infrastructure solution architected for agility and increased efficiency. It turns compute, storage, and fabric into fluid pools of resources that are easily composed and re-composed to meet each application’s needs. With HTBase, companies can quickly prov...
SYS-CON Events announced today that CA Technologies has been named “Platinum Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY, and the 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. CA Technologies helps customers succeed in a future where every business – from apparel to energy – is being rewritten by software. From ...
What if you could build a web application that could support true web-scale traffic without having to ever provision or manage a single server? Sounds magical, and it is! In his session at 20th Cloud Expo, Chris Munns, Senior Developer Advocate for Serverless Applications at Amazon Web Services, will show how to build a serverless website that scales automatically using services like AWS Lambda, Amazon API Gateway, and Amazon S3. We will review several frameworks that can help you build serverle...