Capital Markets | Capital Expenditure | Corporate Strategy | Capital Expenditure - 2021

Inter Pipeline Talks 2021 Spending Plans; $1.0 Billion Budget

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   |    Thursday,December 10,2020

Inter Pipeline Ltd. reported its 2021 capital plans.

2021 Plans

Capital Budget: $1.0 billion (approximately $930 million, or 93%, of total capital expenditures will be for organic growth initiatives, with the remainder invested in sustaining capital projects)

• NGL Processing Segment: $860 million

• Oil Sands Transport / Conventional Pipelines: $45 million

• Liquid Storage: $10 million

• Sustaining Capital: $70 million

Investment by Project

NGL Processing Segment

Capital investment is primarily focused on the final stages of construction of the Heartland Petrochemical Complex (HPC). In 2021, approximately $800 million is expected to be invested in this project, with final installation of equipment and processing systems at the propane dehydrogenation (PDH) and polypropylene (PP) facilities scheduled for completion by year end. Specifically, the PDH facility is expected to be substantially mechanically complete by May 2021 with commissioning and operational readiness work planned for the remainder of the year. The PP plant is expected to be mechanically complete by the end of 2021. Start-up for the integrated complex is planned for early 2022.

An additional $60 million will be invested to support the development of other small capital growth projects in the NGL processing segment, including the completion of storage cavern work at the Redwater Olefinic Fractionator and certain control systems upgrades.

Oil Sands Transportation & Conventional Oil Pipelines

For 2021, approximately $45 million is planned for overall investment across the pipeline transportation systems. Inter Pipeline’s oil sands transportation business will receive approximately $25 million in 2021 with a focus on improving operating efficiencies for the Cold Lake, Polaris and Corridor pipeline systems.

Approximately $20 million will be directed to Inter Pipeline’s conventional oil pipeline business, which will support optimization of Hardisty South on the Bow River system and includes additional enhancement measures on the Viking Connector and Stettler expansion projects. The Viking Connector was placed into service on April 1, 2020 and is a 75km pipeline connecting Inter Pipeline’s Throne Station on the Bow River pipeline system to the Central Alberta pipeline system in the Stettler area.

Bulk Liquid Storage

Inter Pipeline is planning to spend approximately $10 million in 2021 at our storage facilities in Sweden and Denmark on several small efficiency projects.

Sustaining Capital

Inter Pipeline expects to invest approximately $70 million in sustaining capital expenditures in 2021. Approximately $45 million is allocated to NGL processing and includes scheduled maintenance and turnaround activities at the Redwater Olefinic Fractionator, Pioneer I and II offgas plants, which are expected to occur during the second quarter of 2021. The remaining $25 million will be allocated to a variety of smaller enhancement projects across our pipeline transportation businesses and bulk liquid storage assets.

Financing

In the current challenging market environment, it is important to continue to maintain financial flexibility and liquidity to fund our business plan. As at November 30, 2020, Inter Pipeline’s $2.5 billion of committed revolving credit facilities were undrawn. Funding for Inter Pipeline’s 2021 capital program is expected to be provided through a combination of undistributed cash flow from operations and available credit capacity.