Content
Strategy
The Saskatchewan System operates its pipelines and supporting assets with the objective of providing reliable, cost-effective transportation solutions for its customers. The Saskatchewan System is focused on addressing the increased crude oil production and growing demand for pipeline capacity in the areas served by its systems through expansion and development initiatives. Transportation by pipeline is generally more cost effective than other alternatives and, as a result, the Saskatchewan System is currently pursuing further expansion of its facilities to meet the growing demand for its services. Growth from recently completed and planned system expansions is expected to increase distributable cash flow from this segment.
Saskatchewan System Capacity Expansion
The Westspur expansion project was completed on time and was put in service in June 2008 at a total cost of $33.3 million. This expansion increased capacity on the Westspur System by 34% for all Westspur crude oil and NGL lines into Cromer, Manitoba.
The Fund expects to begin construction on Phase II of the Saskatchewan System Capacity Expansion in 2009. This expansion consists of four separate projects that will reduce capacity constraints at a variety of locations. Collectively, the projects will increase capacity across the system by approximately 129,000 bpd at an estimated cost of approximately $100 million.
The Weyburn System Looping project includes upgrades to the Weyburn terminal pumps, piping and meter facilities. The Saskatchewan Benson Expansion project includes modifications to the Benson terminal, a line reversal between the Benson terminal and the Midale Feeder line, pump upgrades near Gapview, Saskatchewan, and installation of new pipe. The Westspur Bryant to Steelman Expansion project consists of the installation of new pipe from the Bryant station to Steelman, Saskatchewan, and the Westspur/NGL Conversion project involves the installation of new pipe from Steelman to Wilmar, Saskatchewan, and the transfer of an idle line from the Saskatchewan Gathering System to the Westspur System, which will allow for relocation of NGLs from the BP Steelman Gas Plant to the NGL line at Alida, Saskatchewan.
The regulatory applications for the Weyburn System Looping and the Saskatchewan Benson Expansion are expected to be prepared and submitted in the second quarter of 2009. The regulatory applications for the Westspur projects are targeted for filing in the fourth quarter of 2009. Shippers and producers on the Saskatchewan System were consulted, and a majority are supportive of these projects. Completion of the four capacity expansion projects is expected by the third quarter of 2010.