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TransCanada and Phoenix prepare Grand Rapids Pipeline execution

PetroChina to unlock Athabasca oil sand reserves

2B1st_Project_Smart_Explorer_Sales_Pursuit_ToolThe Canadian specialist TransCanada and China Petroleum National Corporation (CNPC or PetroChina) subsidiary Phoenix Energy Holdings (Phoenix) are preparing the execution of the Grand Rapids Pipeline Project to unlock the underdeveloped oil sands reserves lying in Athabasca northeastern Alberta, Canada.

With this Grand Rapids Pipeline Project, TransCanada and PetroChina intend to link the oil sands reserves standing in the north of Fort McMurray with Edmonton existing infrastructures.

To support this $3 billion capital expenditure project, TransCanada and PetroChina established in 2012 a 50/50 joint venture named Grand Rapids Pipeline GP Limited (Grand Rapids GP).

PetroChina_MacKay_River_and_Dover_Oil_sand_projectsPetroChina is represented in this Grand Rapids GP joint venture through its subsidiary Phoenix, a Canadian company bought from the Royal Dutch Shell in 2011.

Through Phoenix, it is the first time in Canada that a Chinese company is taking a role in pipelines construction and operation.

The reason of this unique investment relies in the large working interests accumulated by PetroChina in the MacKay River and Dover Projects acquired from Athabasca Oil Corporation (Athabasca).

In sharing the operator role with TransCanada, PetroChina expects this Grand Rapids Pipeline project to be designed and executed in time well aligned with its oil sands upstream projects.

At the end of the construction, PetroChina may sell its interests to TransCanada as sole operator.

TransCanada and PetroChina started the Grand Rapids Pipeline project feasibility study in summer 2012 and filled the regulatory application to the Energy Resources Conservation Board (ERCB) in spring 2013.

TransCanada and Phoenix Grand Rapids GP application is now in the hands of the Alberta Energy Regulator (AER).

Grand Rapids project to include eight pumping stations

According to this feasibility study, the Grand Rapids Pipeline project is a comprehensive transportation system dedicated to the ultra heavy crude oil such as produced from the Alberta oil sands.

Since the Alberta oil sands cannot be transported in its normal state, it is mixed with diluent.

This diluent is added to the oil at Fort McMurray, then separated from the oil and collected at the arrival in Edmonton.

This process works fine but it gives two constraints:

TransCanada_PetroChina_Phoenix_Grand_Rapids_Pipeline_Project_Map – The volume of diluent transported in the pipeline reduces in the same quantity the volume of oil to go through, thus it increases the size and costs of the pipeline accordingly.

 – The diluent collected in Edmonton must be sent back to Fort McMurray to be mixed again, thus is requires an addition pipeline to carry the diluent back to the pumping stations.

With these constraints, the Grand Rapids Pipeline System will be supported by 500 kilometers pipelines including :

 – Blended bitumen and diluent pipeline from north of Fort McMurray down to Edmonton

 – Diluent pipeline from Edmonton back to Fort McMurray

 – Eight pumping stations

 – Four tank farms

 – Two loading and unloading terminals

The blended bitumen pipeline running south should have a capacity of 900,000 barrels per day (b/d) while the pipeline streaming north should carry back 330,000 b/d of diluent. 

The pumping stations should use 6500HP pumps for the blended bitumen and 3500HP pumps for the diluent.

The tank farms will have storage capacities of:

 – 350,000 barrels of blended oil and diluent

 – 150,000 barrels of diluent

The loading and unloading terminals will have a capacity of 15,000 b/d.

With the Grand Rapids Pipeline Project, TransCanada and PetroChina‘s subsidiary Phoenix plan to start execution on summer 2014 to debottleneck the Athabasca oil reserves by 2017.

For more information and data about oil and gas and petrochemical projects go to Project Smart Explorer

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