Canada’s Pipeline Transportation System 2016

Express Pipeline Limited Partnership’s Express Pipeline

Table 9.1.1: Express Pipeline Limited Partnership’s Express Pipeline
Commodity and NEB Group Crude Oil
(Group 2)
Average Operating capacity 44 500 m³/d
(280 Mb/d)
Average utilization 2015 78%
Primary receipt points Hardisty, AB
Primary delivery points Casper, WY
Net-book value of PP&E 2014 $148 million
Abandonment Cost Estimate and Collection PeriodNote a $44.3 million;
40 years

Overview

The Express Pipeline (Express) transports light, medium, and heavy crude oil from western Canada to refiners in the U.S. Rockies region. At Casper, WY Express connects with the Platte Pipeline, which transports crude oil to refineries in Kansas and Illinois. Express Pipeline Limited Partnership owns and operates the Canadian portion of Express, and is regulated by the NEB. The U.S. portion is owned and operated by Express Pipeline LLC and is regulated by the U.S. Federal Energy Regulatory Commission (FERC).

Map – Express Pipeline

Source: NEB

Text version of this map

This map provides an overview of the Express Pipeline System.

Key Developments

In March 2013, Spectra Energy Corp. (Spectra) acquired Express-Platte Pipeline System for $1.49 billion from a partnership of Kinder Morgan, Borealis Infrastructure and the Ontario Teachers’ Pension Plan.

Through a 2013 open season, contracted commitments on Express were increased from 18 900 m³/d (119 Mb/d) to 35 800 m³/d (225 Mb/d). These contracts cover 80% of the design capacity and have an average term of approximately ten years.

In May 2015, FERC approved an expansion of Express U.S. pipeline capacity from 39 700 m³/d (250 Mb/b) to 43 100 m³/d (271 Mb/d). The target in-service-date for the expansion is Q4 2016.

Utilization

Figure 9.1.1 illustrates throughput and capacity on Express. Throughput averaged about 31 000 m³/d (196 Mb/d) in 2014. In 2015, throughput averaged 34 700 m³/d (219 Mb/d).

Figure 9.1.1: Express Throughput vs. Capacity

Figure 9.1.1: Express Throughput vs. Capacity

Sources: Express, NEB

Text version of this graphic

This bar chart shows throughput and capacity for the Express Pipeline between 2010 and 2015. Capacity in 2015 was 44.5 10³m³/d (280 Mb/d). Throughput averaged 34.7 10³m³/d (219 Mb/d) in 2015, compared to 31 10³m³/d (196 Mb/d) in 2014.

Tolls

Figure 9.1.2 shows that the Express benchmark toll (uncommitted toll for Light Petroleum from Hardisty to the U.S. border) moved roughly in-line with the GDP deflator (normalized) between 2010-15. Express’ tolls are regulated on a complaint basis.

Figure 9.1.2: Express Benchmark Toll

Figure 9.1.2: Express Benchmark Toll

Source: NEB

Text version of this graphic

This graph shows the Express benchmark toll as a solid red line and the GDP deflator as a black dashed line. The graph shows a steady slight increase in tolls from $3.63 in 2010 to approximately $4.00 in 2015.

Financial

Increased utilization rates and continued depreciation of debt have led to higher revenues and stronger coverage ratios. Credit ratings remain investment grade. After Spectra purchased Express in 2013, $203 million of goodwill was removed from its balance sheet, which is reflected in the partners’ equity.

Table 9.1.2: Express Pipeline Limited Partnership – Yearly
Express Pipeline Limited Partnership 2010 2011 2012 2013 2014 2015
Revenues (millions)Note a $47.7 $51.6 $55.97 $61.2 $70.8 $92.1
Net Income (millions) $10.2 $9.2 $17.1 $13.2 $20.1 $30.1
Partner’s Equity (millions) $287.2 $296.4 $296.7 $96.9 $101.6 $98.6
Interest and Fixed-Charges Coverage RatioNote b 3.11 4.23 6.29 8.66 11.38 16.7
Cash Flow-to-Total Debt and Equivalents Ratio 24.9% 34.9% 51.2% 70.3% 95.1% 139.0%
DBRS Credit Rating A (low) A (low) A (low) A (low) A (low) A (low)
Moody’s Credit Rating Baa1 Baa1 Baa1 Baa1 Baa1 Baa1
Photos: left: A pump jack silhouetted against the setting sun; centre: The grey valves and wheels of a pump station on clear day; right: Folded hands hold a pen on a board room table in a large meeting room.

 

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