Kinder Morgan Energy Partners L.P. and Imperial Oil have entered into a 50-50 joint venture to build a crude oil rail-loading facility in Strathcona County, Alberta, called the Edmonton Rail Terminal.
The facility will be built on heavy industrial-zoned land approximately one-half kilometer (0.3 miles) southwest of Kinder Morgan’s Edmonton storage terminal, on land adjacent to Imperial’s Strathcona Refinery. The Edmonton Rail Terminal is currently being designed as a crude oil loading terminal capable of loading one to three unit trains per day totaling 100,000 barrels per day at startup, with the potential to expand to approximately 210,000 barrels per day, and ultimately to 250,000 barrels per day.
The new rail terminal will be connected via pipeline to Kinder Morgan’s tank facility and will be capable of sourcing all crude streams handled by Kinder Morgan for delivery by rail to North American markets and refineries. The rail terminal will be constructed and operated by Kinder Morgan and will connect to both Canadian National and Canadian Pacific mainlines.
“This facility underlines the importance of our expanding Edmonton terminal hub and adds to our growing crude by rail terminal network,” said Bill Henderson, vice-president for Kinder Morgan Canada Terminals. “The facility will be built with state-of-the-art technology and will incorporate extensive safety and environmental protection features, and will be manned with trained personnel around the clock.”
The Edmonton Rail Terminal will play an important role in improving access to markets for oil sands production, said Rich Kruger, chairman, president and chief executive of Imperial Oil.
“The terminal will deliver additional infrastructure and options required for our distribution network and help maintain the value of Canadian crude,” said Kruger. “Accessing new and existing markets is critical for our continued growth and responsible development of Canada’s oil sands. The additional transportation capacity will be used for current and future production from the Kearl Oil Sands project, including the expansion phase, which will come on stream in late 2015.”
Imperial Oil will be the base load customer and has subscribed for the start-up capacity through a long-term contract. The partners are now actively marketing possible expansion capacity to potential third-party customers. Investment by the joint venture partners for the rail terminal will total approximately $170 million. In addition, Kinder Morgan will invest approximately $100 million in pipeline connections and two new staging tanks to be constructed within the Kinder Morgan Edmonton storage facility. Construction is now underway and completion is scheduled for December 2014.