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Plains All American Pipeline lands Alberta oil line
Plains All American Pipeline is buying a key crude oil line in northern Alberta, gaining access to markets in the U.S. Midwest, the Pacific Coast and two Edmonton refineries.
It is acquiring Rainbow Pipe Line Co. — owned by Imperial Oil, ExxonMobil and Royal Dutch Shell — for C$540 million and paying an additional C$120 million for 1.1 million barrels of crude already in the line.
The assets include 480 miles of 20-inch and 24-inch diameter pipe covering 485 miles from Zama to Edmonton and 138 miles of gathering pipelines which collect oil from 50 oil batteries along the pipeline corridor.
Capacity 200,000 barrels per day Rainbow has capacity of 200,000 barrels per day and has average throughput of 190,000 bpd.
Plains, whose largest shareholder is Microsoft billionaire Paul Allen, views the system as an “excellent complement to our existing asset base in Canada and the Rockies,” said Chief Executive Officer Greg Armstrong.
He said Rainbow will be “substantially” integrated into Plain’s existing operations once the deal is concluded in June.
The Rainbow mainline is a continuation of Enbridge’s pipeline from Norman Wells in the Central Mackenzie Valley of the Northwest Territories.
It also carries oil from the Pace River and Athabasca oil sands regions, where Plains expects to benefit from the rapid expansion of heavy oil output.
—Gary Park
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