​Inter Pipeline spending $82M on ‘important’ infrastructure addition in East Shale Duvernay

Image: Inter Pipeline

In another sign that activity is on the rise in Alberta’s East Duvernay Shale Play, Inter Pipeline has announced a new $82 million investment in area infrastructure.

The company announced last week it will build an expansion to its Stettler Crude Oil Terminal to service growing light oil production in the region. This will include construction of two 130,000-barrel crude oil storage tanks and “a major truck unloading expansion.”

The facility is located on Inter Pipeline’s Central Alberta Pipeline (CAPL) system. It is approximately 50 miles to the east and north from the main East Shale Duvernay activity areas so far, according to analysts with Peters & Co.

Although Inter Pipeline has not disclosed details on the contracts involved, Peters & Co. said the project appears to have “a very attractive return,” with a 20 percent return on capital – approximately double what most large infrastructure projects are done at.

“This project will be an important addition for producers in the play as it will reduce transportation costs,” analysts Tyler Reardon and Jeff Martin wrote in a research note.