Kerrobert, Calgary – Growing oil production Viking area around Kindersley had led to a new pipeline for Secure Energy Services Inc.
On Oct. 9 Secure Energy Services Inc. announced the light oil feeder pipeline system and receipt terminal in the Kindersley-Kerrobert region of Saskatchewan was completed on time and on budget and began commercial operations on October 1. Secure commenced construction of the Kerrobert Light Pipeline System in September of 2017 as part of the corporation's growth strategy to continually expand its midstream infrastructure by adding long-term contracted transportation and commercial related services in support of value creation for customers.
“The commissioning of the Kerrobert Light Pipeline System is an incredible milestone for Secure,” said Rene Amirault, chairman of the board, president and chief executive officer. “We're pleased to see the successful execution of a project of this magnitude from the planning phase to final completion and are excited for the continued growth and development of the corporation's midstream business. It is another example of how we strive to help our customers.”
The company said the Kerrobert Light Pipeline System provides a capital efficient transportation solution for Secure's customers operating in the region and has operational flexibility to accommodate production growth. The project was completed on time and on budget due to the dedication of Secure employees and contractors involved throughout all phases of the project, and the strong cooperation of various project stakeholders, including the local community, regulators and government agencies. Secure said the Kerrobert Light Pipeline System was designed and constructed using the highest level of environmental standards and is an exemplary model of Secure's commitment to safe and sustainable operations.
Allen Gransch, executive vice president, corporate development, explained to Pipeline News on Oct. 11, “With all the drilling and production coming out of the Viking, there was definitely a need for additional pipe capacity.”
“This line is a 10-inch line. Its capacity is up to 80,000 barrels per day.”
He noted they have two “anchor tenants” in the area.
The pipeline connects their Kindersley Full Service Terminal to Enbridge’s Kerrobert terminal, joining the Enbridge mainline at that point.
The Kindersley facility takes emulsion and treats it to meet pipeline specification, getting clean oil sent to the mainline and disposing of produced water down a disposal well. The facility had primarily received its emulsion by truck, but it now also has some pipe running into it, in addition to ongoing trucking.
The Kindersley facility had been pipe-connected to Kerrobert with a different company’s pipeline.
Gransch said the majority of the oil handled with this project is light oil. “It’s primarily Viking,” he added.
He noted there was a need for additional capacity in the area, as production volumes have continued to grow, even during the downturn. “They were still getting fairly good returns, and so, what you saw in Saskatchewan and Alberta was producers looking at where was their best returns in these plays, and they continued to drill,” he said.
“It’s a great project for Saskatchewan, for sure,” Gransch said.
The project was done in two phases, the first being the pipeline. The gathering pipeline system is an eight-inch diameter line stretching approximately 10 kilometres, terminating at Secure's existing Kindersley Full Service Terminal.
Additional facilities were tied in to this gathering line by way of small diameter, lateral pipelines. Each location will have a lease automatic custody transfer unit to facilitate measurement and quality control.
The terminal and second pipeline made up the second phase. It included a new terminal constructed southeast of Kerrobert which includes all infrastructure required for connection onto the Enbridge mainline.
Construction of a 10-inch diameter pipeline stretching 27 kilometres began by mid-October 2017. This pipeline initiated at a pump station constructed adjacent to Secure's existing Kindersley Full Service Terminal and terminates at the new Secure Kerrobert Terminal.
As part of the corporation's long-term growth strategy, Secure is expanding its midstream infrastructure by adding transportation and commercial related opportunities in an effort to provide additional services to its customers. The project supports its customers with ongoing operations in the Kindersley area of Saskatchewan.
In announcing the project in September 2017, Secure said it was pursuing the development of this greenfield project as a strategic partnership with key Viking light oil producers. Connection to the Enbridge mainline at Kerrobert as the downstream carrier will provide shippers access to eastern Canada and export markets.
The company said the project was a direct result of its customer focused approach of providing value-added services.
The initial announcement noted the feeder pipeline project included area dedication and contracted volume on both an annual and cumulative term basis over 10 years. The total project cost was estimated to be approximately $75 million, two thirds of which would have been incurred in 2017, with the remainder in 2018.
In addition to these facilities, Secure built a crude-by-rail transloading facility east of Kindersley in 2014. While it was dormant for some of the oil downturn, it is again in operation.