TransCanada, Phoenix in $3-bn oil pipeline tie up

Canada's largest pipeline operator, TransCanada Corp, has joined hands with Phoenix Energy Holdings Ltd, a subsidiary of Chinese oil and gas giant PetroChina Co Ltd, to build the Grand Rapids pipeline project in northern Alberta.

The companies agreed to form a 50:50 joint venture for the proposed pipeline project, which is estimated to cost approximately $3 billion. It includes both a crude oil and a diluent line to be laid between the producing area northwest of Fort McMurray and Edmonton-Heartland region covering a length of around 500km.

The pipeline, when completed in early 2017, will have the capacity to transport up to 900,000 barrels per day of crude oil and 330,000 bpd of diluent.

TransCanada has agreed to operate the pipeline system and Phoenix, which is developing its Dover and MacKay river oil sands assets, will ship crude oil and diluent for the pipeline on a long-term basis.

The Grand Rapids pipeline system is aimed at further expanding TransCanada's liquids transportation capabilities in Alberta.

TransCanada's president and chief executive officer Russ Girling said, "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.