Inter Pipeline, based in Calgary, Alberta, Canada, says it is exploring the potential sale of its European bulk liquid storage business, and that it recently received commercial support for the construction of a $100 million pipeline connection between its Bow River and Central Alberta pipeline systems.
If the petroleum transportation and bulk liquid storage company completes the sale of its European bulk storage, it plans to use the proceeds to reduce outstanding debt and finance its capital expenditure program, including the Heartland Petrochemical Complex, Inter Pipeline said.
“Inter Terminals is a high-quality business with outstanding management and staff,” said Christian Bayle, president and chief executive officer of Inter Pipeline. “It has made an important contribution to the success and growth of Inter Pipeline over the past 14 years. Our decision to explore alternatives is consistent with Inter Pipeline’s practice of making prudent long-term portfolio management decisions, particularly in light of our organic growth initiatives.”
Inter Terminals is one of the largest independent bulk liquid storage businesses in Europe, Inter Pipeline claimed, with operations in the United Kingdom, Denmark, Sweden, Germany, Netherlands and Ireland, and approximately 37 million barrels of storage capacity across 23 terminals that are “long-life infrastructure assets” strategically located near established global market hubs, product delivery channels, refineries and chemical production facilities.
The company said Inter Terminals will continue to operate as usual, and no definitive timeline to complete the process has been established.
Inter Pipeline’s new pipeline, called the Viking Connector, will link various grades of light crude oil from the Viking and Mannville formations in east-central Alberta to the Edmonton market hub.
“The Viking Connector enables us to cost-effectively leverage our extensive regional pipeline network and provide customers with superior market access,” Bayle said. “Producers in the Alberta Viking and surrounding plays are currently limited to pipeline services to the Hardisty hub or costly trucking alternatives. This connection will provide economical access to the Edmonton market hub, which historically has been a premium market for Alberta light oil products, a clear benefit for producers.”
The investment includes a reconfiguration of existing tank storage and expanded truck offloading capacity at Inter Pipeline’s Throne Station, the company said. Construction is expected to be completed in the first half of 2020.
Phase one of the company’s Central Alberta development program, which commenced in late 2017, includes construction of additional truck offloading and tank storage capacity at Stettler Station. Batch operations began in mid-2018 and an additional 10,000 b/d of truck unloading capacity is expected to enter service in the fall of 2019.
Two new 130,000 barrels storage tanks, the final component of phase one, are expected to be complete by the spring of 2020.