During 2013, roughly $40 million will be invested to complete the installation of two quarter-point stations and existing station upgrades on the west leg of the Cold Lake pipeline system. This mainline expansion project will increase bitumen blend capacity from 535,000 b/d to 650,000 b/d and is expected to be operational in mid 2013.
On the Polaris system, Inter Pipeline will spend roughly $16 million to complete new diluent delivery connections to Suncor's Athabasca oil sands operations and the Sunrise project operated by Husky.
Inter Pipeline's current oil sands development programs will result in surplus capacity which will be available for future business. In 2013, Inter Pipeline plans to spend $170 million to provide transportation service to a third party. This amount has been backstopped through a capital funding arrangement, with no resulting financial exposure to Inter Pipeline.
In the NGL extraction business segment, Inter Pipeline expects growth capital investments to total $30 million in 2013. Approximately $25 million will be spent at the Cochrane NGL extraction facility on a project to reduce the sulphur content of propane-plus products. This project, which is expected to cost $53 million in total, will ensure continued access to premium-priced product markets. The installation of new liquids sweetening facilities is expected to be complete in late 2013.
Remaining growth capital will be spent on various efficiency improvement projects at the Cochrane and Empress NGL extraction facilities.
Bulk Liquid Storage
Inter Pipeline expects to spend approximately $20 million on organic growth capital projects in the bulk liquid storage segment in 2013. Roughly half of this amount will be incurred at Simon Storage terminals in the United Kingdom and Germany, with remaining expenditures incurred within the Inter Terminals subsidiary in Denmark.
In the United Kingdom and Germany, approximately $10 million will be incurred on tank refurbishments, equipment upgrade projects and new fuel additive facilities. In Denmark, approximately $9 million will be incurred to acquire an additional fuel oil storage tank from DONG Energy at the Ensted terminal. Approximately $1 million will be invested in new product blending equipment to enhance services available to storage customers.
Conventional Oil Pipelines
In the conventional oil pipelines segment, approximately $10 million will be spent to enhance oil handling and transportation facilities on the Bow River, Central Alberta and Mid Saskatchewan pipeline systems. Various new battery connection, facility upgrade, rail access and storage projects are planned in 2013.
Inter Pipeline's conventional oil gathering systems continue to benefit from increased drilling activity and the application of new well completion technologies.
Inter Pipeline's sustaining capital forecast for 2013 is approximately $40 million, similar to that incurred in 2012.
In the bulk liquid storage business, Inter Pipeline expects to spend about $18 million in sustaining capital. Expenditures will be spread across several terminals in Europe on tank repair projects and the upgrade of ship docking infrastructure. In addition, a number of automation and mechanical enhancement projects are planned to improve terminal operations and ensure compliance with new legislative requirements.
Sustaining capital expenditures in the NGL extraction segment are forecast at approximately $7 million for 2013. Major expenditures include replacement of a heat exchanger and office building upgrades at the Cochrane NGL extraction plant.
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