Stockwatch – Inter Pipeline To Invest $100m In Mid-Saskatchewan System Expansion

Stockwatch – Canadian energy infrastructure company Inter Pipeline Ltd (TSE:IPL, Mkt cap 10.52B, P/E – , Div/yield 0.11/3.95, EPS -0.22, Shares 322.13M) has unveiled plans to invest $100 million in the expansion of its Mid-Saskatchewan oil lines with the aim of adding 95,000 barrels per day of new capacity.

Stockwatch - Inter Pipeline plans invest $100 million expansion Mid-Saskatchewan oil lines

Stockwatch – Inter Pipeline Ltd plans to invest $100-M in the expansion of its Mid-Saskatchewan oil lines

The company, which operates regional pipeline systems in Western Canada, said it has sealed contracts with five oil producers that have agreed to ship oil on the lines for between four and ten years.

As part of the expansion project, Inter Pipeline will add 90 kilometres (56 miles) of new lines to its Saskatchewan system, including 50 kilometres of new mainline pipe and 40 kilometres of pipeline laterals, and related pumping and metering facilities. The first phase of the project is expected to become operational later this year and to be fully completed by the second quarter of 2015. Initially, the new mainlines will operate at less than 50% of capacity. This will be gradually increased as oil production rises.

Oil production in Saskatchewan has been growing at a rapid pace owing to an increase in drilling activity and the use of innovative well completion technologies in the area. Over the last two years, throughput volumes have doubled to more than 70,000 barrels per day and much of the Mid-Saskatchewan oil system has been operating at or near full capacity, Inter Pipeline said.

Inter Pipeline expects the project to fetch between $25 million and $30 million in incremental EBITDA a year.

The investment is Inter Pipeline’s most significant expansion of a conventional oil pipeline system, the company’s president and chief executive Christian Bayle commented. The expansion will help provide an efficient transportation solution for customers and flexibility to ensure growth in the future, he said.

Download Our Free Special Report – How to Hunt For Value Stocks. Michael Sprung will share with you 5 stocks set for long-term gains.

Is Your Stock Broker Acting in Your Best Interest? Read more here>>

Exchange Traded Funds Expose Investors to Unexpected Risks. Read more here>>

Investment Management – Risk vs. Return. Read more here>>

We believe that the success of a particular investment is always relative to the price you paid. Like to learn more? Please contact us here>>

The opinions expressed here are ours alone. They are provided for information purposes only and are not tailored to the needs of any particular individual or company, are not an endorsement, recommendation, or sponsorship of any entity or security, and do not constitute investment advice. We strongly recommend that you seek advice from a qualified investment advisor before making any investment decision.

Comments are closed.