Pipeline okayed for Alberta blended bitumen

Laricina Energy Ltd., Calgary, has received approval from the Energy Resources Conservation Board of Alberta for its Stony Mountain Pipeline (SMP) in the western Athabasca oil sands region.

The project will be able to carry 200,000 b/d of blended bitumen through a 187-km, 24-in. pipeline from Saleski, where Laricina has a thermal pilot project, to Cheecham south of Fort McMurray. Cheecham is becoming a pipeline hub (OGJ Online, Jan. 25, 2013).

The project also will have a 12-in. diluent return line with capacity of 70,000 b/d. A tank farm about 2 km northeast of the Saleski pilot also is planned.

“The SMP is the first regional pipeline in west Athabasca servicing the emerging Grand Rapids and Grosmont plays,” said Glen Schmidt, Laricina president and chief executive officer. “Bitumen production volumes from in situ oil sands projects in the area are expected to increase in the near to midterm. A permanent transportation solution beyond trucking and rail will be required to continue to develop the region efficiently and economically.”

Laricina expects to start up the blend line in mid-to-late 2015 as Saleski Phase 1 commercial production begins. The company expects to receive diluent by truck until the diluent return line enters service about a year later.

An extension is possible to connect Laricina’s Germain thermal project at start-up of a second phase there. Production from the first phase of the Germain project is expected to start later this year.

Laricina is considering what it described as “a range of commercial structures, agreements, and financing sources” for the pipeline, which it estimates requires initial capital of $600-650 million (Can.).