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February 2006

Vol. 11, No. 9 Week of February 26, 2006

Kinder Morgan withdraws from pipeline

Gary Park

Kinder Morgan Canada has pulled out of a proposed condensate import pipeline from Kitimat, British Columbia, to Edmonton, leaving Pembina Pipeline Income Fund to proceed alone with its C$1 billion project.

A final decision for Pembina will require shippers committing to contracts of greater than 10 years for the 100,000 barrel per day system, which is going head-to-head with a similar venture by Enbridge.

Pembina Chief Executive Officer Bob Michaleski said the economics were less appealing to Kinder because his company was utilizing existing infrastructure.

“This project makes a lot of sense for us and we are going to carry on,” he told a conference call.

In the end it may make sense to include a financial partner, but the primary focus will be on signing up customers who need condensate as diluent to thin Alberta’s heavy oil production, improving its flow through pipelines.






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