Inter Pipeline Fund to Increase Ethane Production at Empress V Plant
CALGARY, ALBERTA, October 17, 2006: Inter Pipeline Fund (Inter Pipeline) (TSX: IPL.UN) announced today that it will invest in a $36 million capital project to increase ethane production at the Empress V natural gas liquids extraction plant. Upon completion, facility enhancements at the Empress V plant will allow the extraction of approximately 7,000 barrels per day of additional ethane. Incremental production will be sold to Dow Chemical Canada Inc. (Dow) under a long term sales agreement.
Inter Pipeline owns 50% of the Empress V plant, which is located in south eastern Alberta near the Saskatchewan border.
"Through this investment, we expect to increase ethane production at the Empress V plant by approximately 45%," commented David Fesyk, President and Chief Executive Officer of Inter Pipeline Fund. "The addition of low cost ethane supply also supports the Province of Alberta's recently announced Incremental Ethane Extraction Policy."
Dow Chemical Canada President Jeff Johnston said the Empress V project is part of Dow's long-term strategy for its Alberta operations. "Dow continues to make commitments to support the long-term viability of our petrochemical assets in this province," he said. "Having affordable, available sources of ethane in Alberta is critical to our business success and this project helps us meet that need."
As part of Alberta's integrated energy vision, the province introduced the Incremental Ethane Extraction Policy in late September. The policy is designed to increase ethane supply and promote the long term sustainability of Alberta’s petrochemical industry.
Empress V Facility
Enhancements
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Planned investments at the Empress V plant include the installation of a new process tower, an additional heat exchanger unit and related plant modifications. Following the completion of detailed engineering, construction is expected to commence in early 2007. Initial production of incremental ethane volumes is anticipated during the second quarter of 2008.
The Empress V plant has capacity to process up to 1.1 billion cubic feet of natural gas per day. The plant currently produces approximately 26,000 barrels per day of natural gas liquids, consisting of 15,000 barrels per day of ethane and 11,000 barrels per day of propane plus. |
Contract-Based
Cash Flow |
Incremental ethane production at the Empress V plant will be sold to Dow through a 10 year extension to an existing sales agreement. Under the agreement, Inter Pipeline receives a base fee for each barrel of ethane produced, plus an adjustment for variable operating costs.
Inter Pipeline expects to invest $18 million, or 50% of the capital required to complete the facility enhancements at the Empress V plant. The project will be accretive to Inter Pipeline's unitholders, generating roughly $0.01 per unit annually to funds from operations.
Funding for Inter Pipeline’s share of the capital costs will be provided from existing cash flow and bank credit facilities. |
Inter Pipeline
Fund |
Inter Pipeline is a major petroleum transportation, bulk liquid storage and natural gas liquids extraction business based in Calgary, Alberta, Canada. Structured as a publicly traded limited partnership, Inter Pipeline owns and operates energy infrastructure assets in western Canada, the United Kingdom, Germany and Ireland.
Inter Pipeline is a member of the S&P/TSX Composite Index. Class A Units trade on the Toronto Stock Exchange under the symbol IPL.UN. |
Eligible
Investors
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| Only persons who are residents of Canada, or if partnerships, are Canadian partnerships, in each case for purposes of the Income Tax Act (Canada) are entitled to purchase and own Class A Units and debentures of Inter Pipeline. |
Disclaimer
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Certain information contained herein may constitute forward-looking statements that involve risks and uncertainties. Readers are cautioned not to place undue reliance on forward-looking statements. Such information, although considered reasonable by the General Partner of Inter Pipeline at the time of preparation, may later prove to be incorrect and actual results may differ materially from those anticipated in the statements made. For this purpose, any statements that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements often contain terms such as "may", "will", "should", "anticipate", "expects" and similar expressions. Such risks and uncertainties include, but are not limited to, risks associated with operations, such as loss of markets, regulatory matters, environmental risks, industry competition and the ability to access sufficient capital from internal and external sources. You can find a discussion of those risks and uncertainties in Inter Pipeline’s securities filings at www.sedar.com. Except to the extent required by applicable securities laws and regulations, Inter Pipeline assumes no obligation to update or revise forward-looking statements made herein or otherwise, whether as a result of new information, future events, or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary note.
All dollar values are expressed in Canadian dollars unless otherwise noted. |
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