CALGARY – Enbridge Inc. says it has an agreement to build a 50-kilometre pipeline to serve the Hangingstone oilsands project, jointly owned by Japan Canada Oil Sands Ltd. and China’s CNOOC Ltd.
Pending regulatory approvals, the 12-inch lateral pipeline would connect Hangingstone to Enbridge’s regional system at Cheecham, Alta.
The agreement also provides for an optional eight-inch line to transport diluent to the project, Enbridge said in announcing the deal Thursday.
Financial terms were not disclosed.
JACOS and Nexen Energy ULC, a wholly owned subsidiary of Chinese government-owned China National Offshore Oil Corp., are partners in the project, which is operated by JACOS.
The newly constructed pipeline will have the capacity to transport 40,000 barrels per day of diluted bitumen produced at Hangingstone to the Enbridge terminal in Cheecham.
First oil from the project is expected in early 2016, with initial volumes of 18,000 bpd.
The initial term of the transportation agreement is 20 years, with JACOS and Nexen having the right to extend the agreement in successive five-year terms.
“Enbridge is pleased to enter into this agreement with JACOS and Nexen, which provides further confirmation of the sustainable growth in oilsands production,” said Stephen Wuori, Enbridge president for liquids pipelines and major projects.
“This project, the 10th to connect into our infrastructure in the Athabasca region, will contribute to our ongoing strategy of connecting new oilsands projects and expanding access for production growth from the region.”
Enbridge is Canada’s dominant oil shipper, with a vast network connecting markets across North America. It also has a natural gas distribution business and a growing renewable energy portfolio.