Inter Pipeline Ltd. executes binding commercial agreements supporting a $100 million expansion of its Mid-Saskatchewan pipeline system. In aggregate, the new agreements are expected to generate approximately $25 million to $30 million in incremental EBITDA on an annual basis. Five oil producers have entered into ship or pay contracts to backstop the project with terms ranging from 4 to 10 years. Inter Pipeline expects the expansion to enter commercial service in phases beginning in late 2014 with the project fully completed by the second quarter of 2015.
With increased drilling activity and the application of new well completion technologies, oil production in the area serviced by the Mid-Saskatchewan pipeline has grown rapidly. Throughput volumes have doubled to over 70,000 barrels per day (b/d) over the last two years with much of the Mid-Saskatchewan system operating at or near full capacity.