A new partnership has been formed to develop underground crude oil storage facilities in east-central Alberta.
Calgary-based energy distributor Enbridge Inc. and oil and gas service firm CCS Inc. announced a memorandum of understanding last week to develop four existing caverns at Hardisty.
The caverns have the capacity to store three million barrels of crude, and are on property acquired by CCS last year. The caverns are supported by a surface facility which includes 250,000 barrels of conventional buffer tankage and 1,500 metres of connecting pipelines.
“Our partnership will provide an important component of the infrastructure required to support the continued development of Alberta’s crude oil resources,” said J. Richard Bird, Enbridge vice-president, transportation north.
“The property which CCS brings to the partnership is ideally located to be economically connected to our Hardisty Terminal, which is strategically located at the junction of our main line system and the major feeder lines from the Athabasca oil sands, including our own Athabasca pipeline.”
The partnership intends to provide crude oil storage services through long-term, fee-based contracts with third parties.
“By developing this opportunity with Enbridge at the Canadian heavy crude oil hub, our customers will have new marketing and operational options with this unique storage project,” said CCS president David Werklund.
“No service company in Canada today offers underground cavern storage services for crude oil storage.”
Enbridge is currently preparing an application to the Alberta Energy and Utilities Board (EUB) for the new buffer tank construction and interconnecting pipeline, which will be filed in July.
Pending EUB approval, construction is expected to start this fall with completion expected by next summer.
