Capital Expenditure Summary |
2020 Forecast |
||
(millions) |
|||
Growth Capital |
|||
NGL Processing |
$980 |
||
Conventional Oil Pipelines |
45 |
||
Oil Sands Transportation |
30 |
||
Bulk Liquid Storage |
40 |
||
Corporate |
20 |
||
Total Growth Capital |
$1,115 |
||
Sustaining Capital |
80 |
||
Total Capital |
$1,195 |
NGL Processing
Capital investment within the NGL processing business segment is primarily focused on progressing construction of the Heartland Petrochemical Complex. In 2020, approximately $935 million is expected to be invested in this project, with a focus on advancing mechanical construction of the polypropylene plant and completing the final stages of construction of the propane dehydrogenation facility.
Additionally, approximately $45 million will be invested to support the continued development of other growth projects in the NGL processing franchise, including on-going work on a new storage cavern at the Redwater Olefinic Fractionator and debottlenecking activities at the Pioneer II offgas extraction facility.
Conventional Oil Pipelines & Oil Sands Transportation
Inter Pipeline plans to invest approximately $75 million across its pipeline transportation systems in 2020.
Within conventional oil pipelines, the focus is on the multi-phased expansion of the Central Alberta pipeline system. Approximately $35 million will be invested to complete the first two phases of this expansion program by the spring of 2020. This includes construction of two new 130,000 barrel storage tanks at Inter Pipeline’s crude terminal near Stettler, Alberta and the completion of the Viking Connector project. The Viking Connector is a 75-kilometer pipeline that will connect Inter Pipeline’s Throne Station on the Bow River pipeline system to the Central Alberta pipeline system in the Stettler area. This project is expected to add an additional 10,000 to 15,000 b/d of throughput volume to the Central Alberta system.
Approximately $30 million is targeted for investment in Inter Pipeline’s oil sands transportation business over the next year with a focus on improving operating efficiencies. The remaining $10 million will be directed towards developing several smaller growth projects across the pipeline systems.
Bulk Liquid Storage
Inter Pipeline is planning to spend approximately $40 million in 2020 to meet increased demand for storage at certain European facilities. Several smaller enhancements and efficiency projects will also be completed at facilities located in the United Kingdom, Sweden and Germany, and Amsterdam.
The majority of capital associated with the bulk liquid storage assets will be invested if the business is retained following the completion of a previously announced sales process.
Sustaining Capital
Inter Pipeline expects to invest approximately $80 million in sustaining capital expenditures in 2020. Approximately $40 million will be directed toward replacement of process equipment and infrastructure such as control room upgrades and a water pipeline replacement project at the Cochrane extraction plant. A further $30 million will be allocated to ongoing upgrades and efficiencies to the bulk liquid storage assets, with the remaining $10 million spent on a variety of smaller projects across our pipeline transportation businesses.
Financing
Inter Pipeline continues to maintain a strong balance sheet with significant liquidity available on its committed revolving credit facility. Funding for Inter Pipeline’s 2020 capital program is expected to be provided through a combination of undistributed cash flow from operations, capacity available under its existing $1.5 billion revolving credit facility, the periodic issuance of new term debt and proceeds from existing dividend re-investment programs.
About Inter Pipeline Ltd.
Inter Pipeline is a major petroleum transportation, natural gas liquids processing, and bulk liquid storage business based in Calgary, Alberta, Canada. Inter Pipeline owns and operates energy infrastructure assets in western Canada and Europe. Inter Pipeline is a member of the S&P/TSX 60 Index and its common shares trade on the Toronto Stock Exchange under the symbol IPL. www.interpipeline.com
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