Canadian Natural Resources Limited Announces Pipeline Transportation Agreement For Horizon Oil Sands Project

abarrelfullabarrelfull wrote on 10 Jun 2015 10:59

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AUGUST 23, 2005

Canadian Natural Resources Limited (“Canadian Natural”) is pleased to announce that it has executed an agreement with Pembina Pipeline Corporation (“Pembina”), a wholly-owned subsidiary of Pembina Pipeline Income Fund, to provide pipeline transportation service for Canadian Natural’s Horizon Oil Sands Project (“Horizon Project”). “This agreement allows Canadian Natural to gain access to major sales pipelines out of Edmonton for our high quality Synthetic Crude Oil which will be produced at the Horizon Project while at the same time provide significant quality benefits associated with being the only shipper on the Horizon Pipeline.

Following an extensive review of greenfield and existing pipeline options for the Horizon Project, this agreement results in the most economically attractive option for Canadian Natural as it leverages existing infrastructure.” commented Réal Cusson, Senior Vice-President Marketing.

The Horizon Project, which is 100 percent owned and operated by Canadian Natural, is designed as a phased development and includes the open pit mining of bitumen combined with an on-site upgrader. Phase 1 production is planned to begin in the second half of 2008 at 110,000 bbl/d of 34 degrees API light, sweet synthetic crude oil (“SCO”). Phase 2 would increase production to 155,000 bbl/d of SCO in 2010. Phase 3 would further increase production to 232,000 bbl/d of SCO in 2012.

Pembina will complete the twinning of the existing Alberta Oil Sands Pipeline (“AOSPL”), resulting in two parallel pipelines, one of which will be dedicated to Canadian Natural. That pipeline, combined with a new pipeline constructed from the Horizon Project site down to the AOSPL Terminal (known collectively as the “Horizon Pipeline”) will provide crude oil transportation service for the Horizon Project.

The initial term of the agreement is 25 years, which will commence on the in-service date. In addition to having the option to renew the agreement for successive 10 year terms, Canadian Natural has the right to request incremental expansions of the Horizon Pipeline based upon applicable National Energy Board approved multipipeline economics.

The construction of the Horizon Pipeline is expected to begin in 2006 and will be fully operational by mid 2008
to coincide with first production at the Horizon Project.

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