TransCanada to build $900 million Alberta oil pipeline, terminal

President and Chief Executive of TransCanada Russ Girling addresses shareholders during the company's annual general meeting in Calgary, Alberta, April 26, 2013. REUTERS/Todd Korol

(Reuters) - TransCanada Corp TRP.TO, Canada's No. 2 pipeline company, said it would spend an estimated $900 million to build and operate a 200-km (125-mile) oil pipeline and storage terminal to handle growing crude production in Alberta.

TransCanada said on Thursday it had reached long-term shipping agreements to build the Heartland Pipeline to link the Edmonton region to facilities in Hardisty, Alberta, as well as the terminal in the Heartland industrial area north of Edmonton.

The projects are expected to come into service in the second half of 2015, TransCanada said.

The company said it expects the pipeline ultimately to transport up to 900,000 barrels per day of crude oil. The terminal is expected to have storage capacity for up to 1.9 million barrels.

Alberta oil production is projected to increase by almost 3 million barrels per day over the next 15 years, TransCanada said.

Oil and gas companies are scrambling to build infrastructure to transport growing crude oil supplies from the landlocked province of Alberta.

Delayed pipeline projects and excess supply mean Alberta’s heavy crude has often been selling at a deep discount to world prices, although the price gap has narrowed recently.

TransCanada currently operates 24,200 km (15,000 miles) of natural gas pipelines across Alberta and 3,500 km (2,150 miles) of crude oil pipelines through its Keystone Pipeline network.

Reporting by Swetha Gopinath in Bangalore; Editing by Joyjeet Das