Inter Pipeline Announces Completion of Cold Lake and Polaris Pipeline Expansion Projects

CALGARY, ALBERTA--(Marketwired - Jan. 28, 2015) - Inter Pipeline Ltd. ("Inter Pipeline") (TSX:IPL) is pleased to announce that it has completed construction activity on two major expansion projects on its Cold Lake and Polaris pipeline systems. These projects will provide transportation service to the Foster Creek and Christina Lake oil sands projects owned by the FCCL Partnership ("FCCL"), a business venture between Cenovus Energy and ConocoPhillips. As a result, Inter Pipeline will begin generating incremental EBITDA of approximately $165 million per year.

"We are extremely pleased with the execution of these major construction projects, representing a combined investment of $3.0 billion," commented Christian Bayle, Inter Pipeline's President and Chief Executive Officer. "They were completed on-schedule with an outstanding safety record during an extremely active construction window in our industry."

FCCL Expansion Projects

Pursuant to an agreement announced in July 2012, Inter Pipeline commenced work on an integrated, phased expansion of its Cold Lake and Polaris pipeline systems. In aggregate, Inter Pipeline will construct 840 kilometres of pipeline and seven pump stations to provide transportation service to FCCL's Foster Creek, Christina Lake and Narrows Lake oil sands developments. FCCL has committed to 850,000 barrels per day ("b/d") of bitumen blend and diluent capacity under a 20-year ship-or-pay agreement.

With the commissioning of infrastructure related to the Foster Creek and Christina Lake expansions, Inter Pipeline has completed approximately 90% of planned construction work. In 2016 and 2017, Inter Pipeline expects to invest an additional $290 million to provide transportation service to FCCL's Narrows Lake oil sands development.

Strong Incremental EBITDA

Ultimately, Inter Pipeline expects to generate up to approximately $330 million in long-term EBITDA per year from the integrated expansion of its Cold Lake and Polaris pipeline systems. In July 2014, Inter Pipeline began generating annual EBITDA of approximately $90 million upon completion of diluent delivery infrastructure to the Foster Creek and Christina Lake developments. The commissioning of bitumen blend and diluent infrastructure announced today will add an incremental $165 million in annual EBITDA. Following construction of bitumen blend and diluent facilities for the Narrows Lake project, Inter Pipeline expects to generate a further $40 million per year in incremental EBITDA. Finally, subject to other certain contractual conditions being met post completion of the Narrows Lake connection, Inter Pipeline expects to generate an additional $35 million in annual EBITDA over the long-term.