Inter Pipeline Fund Announces 2007 Capital Expenditure Program and December 2006 Cash Distribution
CALGARY, ALBERTA, December 12, 2006: Inter Pipeline Fund (Inter Pipeline) (TSX: IPL.UN) announced today that it plans to invest approximately $82 million in organic growth capital projects in 2007. Inter Pipeline's organic growth projects provide some of the highest economic returns on investment and have contributed to the strong performance of Inter Pipeline's four energy infrastructure business segments. Sustaining capital expenditures for 2007 are estimated at approximately $12 million.
Inter Pipeline also announced today the declaration of a cash distribution of $0.07 per unit for December 2006. This distribution will be paid on or about January 15th to unitholders of record on December 29, 2006. Inter Pipeline has declared $0.80 per unit in total cash distributions to unitholders in 2006. The monthly cash distribution rate of $0.07 per unit is subject to periodic review by the Board of Directors of Inter Pipeline’s General Partner. The 2006 tax allocation between taxable income and return of capital is expected to be available in March 2007.
| Capital
Expenditure
Summary |
| CAD $million |
2007 |
2006 |
| Growth Capital |
|
|
| Oil Sands Transportation |
$30 |
$16 |
| Bulk Liquid Storage |
27 |
16 |
| NGL Extraction |
15 |
10 |
Conventional Oil Pipelines |
10 |
15 |
| Total Growth Capital |
82 |
57 |
| Sustaining Capital |
12 |
13 |
| Total Capital |
$94 |
$70 |
|
|
|
|
Oil Sands Transportation |
Inter Pipeline expects to spend approximately $30 million of growth capital on the Cold Lake pipeline system in 2007 to prepare for increased oil sands production by the three founding shippers, Imperial Oil, EnCana and Canadian Natural Resources. A number of capacity expansion projects are scheduled for the Cold Lake pipeline in 2007, including the installation of pump stations on the south mainline from the Cold Lake region to Hardisty, Alberta, expansion of blending facilities and diluent line pump expansions.
“The Cold Lake pipeline system is poised to begin a new phase of strong organic growth that will lead to increased cash flow for our unitholders and solidify Inter Pipeline’s position as a leader in pipeline transportation of Alberta’s oil sands production,” commented David Fesyk, President and Chief Executive Officer. “With the addition of the new pump stations on the south leg, the Cold Lake pipeline system will be cost effectively expanded from its current capacity of 435,000 barrels per day (b/d) to over 560,000 b/d by the end of 2008.” |
Bulk Liquid
Storage |
| In 2007, Inter Pipeline expects to invest approximately $27 million on organic growth projects in its bulk liquids storage business. An important project in 2007, accounting for approximately $13 million, involves the refurbishment and construction of storage facilities at the Immingham West terminal to handle and store products associated with biodiesel for a second biodiesel plant to be constructed by Greenergy Biofuels Ltd. (Greenergy). This is the second major biodiesel project that Simon Storage Limited, Inter Pipeline’s wholly-owned international subsidiary, has undertaken with Greenergy. The first project was announced by Inter Pipeline in November 2005, and is expected to be operational in Q1 2007. Biodiesel production from the second facility is expected during the second half of 2007. |
NGL
Extraction |
| Inter Pipeline’s natural gas liquids extraction business is expected to spend $15 million in 2007 on organic capital projects. The capital is directed toward the previously announced projects at Empress V and Cochrane extraction plants. The majority of the facility enhancements at Empress V will take place in 2007, with approximately 7,000 b/d of incremental ethane volumes anticipated by mid 2008. The Cochrane Ethane Recovery Project will be in the engineering and regulatory approval stage during 2007. Other smaller capital opportunities are designed to enhance liquids recovery and improve operating efficiencies at the Cochrane and Empress facilities. |
Conventional Oil
Pipelines
|
| Within the conventional oil pipeline business segment, Inter Pipeline estimates an organic growth capital program of $10 million in 2007. Major initiatives in 2007 include third party pipeline interconnections and expansion of additional gathering 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
|
| 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
|
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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