TransCanada ups oil sands stake

TransCanada has sent out a clear message that it is not willing to sit back in hopes of obtaining U.S. government approval for its Keystone XL pipeline that has been stalled by environmental concerns.

The Calgary-based company and Phoenix Energy Holdings announced Oct. 29 they have formed a partnership to build a C$3 billion system in northern Alberta to handle growing oil sands production.

Each of the companies will own half of the Grand Rapids project which is expected to start shipments of crude oil and diluents for oil sands producers in 2017.

TransCanada Chief Executive Officer Russ Girling said it is critical to have infrastructure in place to move Alberta’s anticipated rise in crude production, especially west of the Athabasca River.

Phoenix Chief Executive Officer Zhiming Li said his company is committed to developing its oil sands assets at the Dover and MacKay River leases.

“Given that transportation in the Athabasca region (Alberta’s largest, most active oil sands deposit) has become a bottleneck, working with TransCanada to build a pipeline system in a timely fashion is crucial to implement our development strategy,” he said.

Li said the Grand Rapids project will be important to Phoenix and other potential producers “to monetize their huge resource.”

The pipeline will add to TransCanada’s oil sands portfolio, including its recently announced Northern Courier pipeline, a 55-mile system to carry bitumen and diluents between the Fort Hills mine site and the Voyageur upgrader near Fort McMurray.

—Gary Park