Inter Pipeline to Provide Bitumen Blend Transportation to Canexus Rail Loading Facility
CALGARY, ALBERTA--(Marketwired - July 22, 2013) - Inter Pipeline Fund ("Inter Pipeline") (TSX:IPL.UN) announced today that it has entered into a binding agreement with Canexus Corporation ("Canexus") to transport bitumen blend to Canexus' unit train rail loading operations near Bruderheim, Alberta. Under the terms of the 10-year agreement, Inter Pipeline will provide Canexus with 100,000 barrels per day (b/d) of firm capacity on a new pipeline lateral from the Cold Lake pipeline system.
Canexus is undertaking a major expansion of its rail operations to enable loading of crude oil unit trains which will access both the Canadian Pacific and Canadian National Railway systems. Inter Pipeline will construct a 13-kilometre, 24-inch diameter pipeline lateral from the Cold Lake pipeline system to Inter Pipeline's Polaris pumping station near Lamont, Alberta. Bitumen blend will then be transferred to a Canexus owned pipeline for delivery to their Bruderheim rail loading facility. Total cost for the pipeline lateral and associated metering facility is approximately $50 million. The new lateral will have an ultimate throughput capacity of 320,000 b/d, enabling Inter Pipeline to pursue additional third party bitumen blend delivery opportunities in the region.
Construction of the new pipeline lateral and metering facility will commence in August, with an expected in-service date of mid-2014. This accretive investment will generate approximately $10 million per year in highly stable EBITDA over the life of the contract. The agreement with Canexus involves a take-or-pay volume commitment and all operating costs will be recovered on a flow through basis.
Inter Pipeline Fund
Inter Pipeline is a major petroleum transportation, natural gas liquids extraction, and bulk liquid storage business based in Calgary, Alberta, Canada. Structured as a publicly traded limited partnership, Inter Pipeline owns and operates energy infrastructure assets in western Canada, the United Kingdom, Denmark, Germany and Ireland. Additional information about Inter Pipeline can be found at www.interpipelinefund.com.
Inter Pipeline is a member of the S&P/TSX Composite Index. Class A Units trade on the Toronto Stock Exchange under the symbol IPL.UN.
Pursuant to Inter Pipeline's limited partnership agreement dated October 9, 1997, as amended, all unitholders are required to be residents of Canada. A copy of the limited partnership agreement can be found at www.interpipelinefund.com by selecting "Corporate Governance". If a unitholder is a non-resident of Canada ("Non-Eligible Unitholder"), he will not be considered to be a member of the partnership effective the date the Class A Units were acquired. Inter Pipeline requires all Non-Eligible Unitholders to dispose of their Class A Units in accordance with the limited partnership agreement.
In most cases, a unitholder with an address outside of Canada will be a Non-Eligible Unitholder.
Certain information contained herein may constitute forward-looking statements that involve risks and uncertainties. Forward-looking statements in this news release include, but are not limited to, timing and completion cost estimates for the Canexus connection project, and forward EBITDA estimates. Readers are cautioned not to place undue reliance on forward-looking statements. Such information, although considered reasonable by the General Partner of Inter Pipeline at the time of preparation, may later prove to be incorrect and actual results may differ materially from those anticipated in the statements made. For this purpose, any statements that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements often contain terms such as "may", "will", "should", "anticipate", "expects" and similar expressions. Such risks and uncertainties include, but are not limited to, risks associated with operations, such as loss of markets, regulatory matters, environmental risks, industry competition, potential delays and cost overruns of construction projects, and the ability to access sufficient capital from internal and external sources. You can find a discussion of those risks and uncertainties in Inter Pipeline's securities filings at www.sedar.com. The forward-looking statements contained in this news release are made as of the date of this document, and, except to the extent required by applicable securities laws and regulations, Inter Pipeline assumes no obligation to update or revise forward-looking statements made herein or otherwise, whether as a result of new information, future events, or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary note.
All dollar values are expressed in Canadian dollars unless otherwise noted.
Non-GAAP Financial Measures
Certain financial measures referred to in this news release, namely, "EBITDA" and "cash flow" are not measures recognized by GAAP. These non-GAAP financial measures do not have standardized meanings prescribed by GAAP and therefore may not be comparable to similar measures presented by other entities. Investors are cautioned that these non-GAAP financial measures should not be construed as alternatives to other measures of financial performance calculated in accordance with GAAP.
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