On Tuesday, Pembina Pipeline Corporation announced that it has received approval from the Alberta Energy Resources Conservation Board to construct and operate two pipeline projects, which will link oilfields in Slave Lake to a processing and transportation hub near Edmonton.
The Nipisi Pipeline, which is expected to carry 100,000 barrels per day (bbls/d), is set to originate north of Slave Lake and run south of Judy Creek, where it will connect to an existing pipeline delivering product to Edmonton. The second pipeline, the Mitsue Pipeline, is designed to deliver 20,000 bbls/d of diluent from Whitecourt, Alberta to producers north of Slave Lake.
Pembina has announced that two founding customers, Canadian Natural Resources Limited and Cenovus Energy Inc., have contracted for 80% of the capacity of the Nipisi Pipeline and 50% of the capacity of the Mitsue Pipeline. Pembina Marketing Ltd. has contracted for the remainder.
Pembina has estimated that the projects will cost a combined total of $440 million. It also predicted that the pipelines will generate $45 million per annum in net operating income. Project construction will commence immediately, and the pipelines are expected to be fully operational by mid-2011.