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Inter Pipeline earmarks most of its 2018 growth capital for C$3.5B NGL project

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Inter Pipeline earmarks most of its 2018 growth capital for C$3.5B NGL project

Inter Pipeline Ltd. is devoting the majority of its 2018 growth capital campaign to engineering and construction at its recently announced C$3.5 billion Heartland petrochemical complex.

Of the $900 million CapEx program announced Dec. 20, approximately C$820 million is earmarked for growth initiatives, including C$670 million for natural gas liquids processing.

The Alberta petrochemical facility, which was sanctioned Dec. 18, will convert propane into 525,000 tonnes per year of polypropylene, a plastic used in manufacturing.

The $80 million of the CapEx program not devoted to growth projects will be invested in sustaining capital projects. Those smaller investments will be directed at improving connectivity of oil sands transportation and conventional oil pipeline assets, NGL processing facility expansions and European storage operations.

Funding for the CapEx program will be sourced through a combination of capacity available under Inter Pipeline's $1.5 billion committed credit facility, undistributed cash flow from operations, the periodic issuance of new term debt and revenue from existing dividend reinvestment programs.