MEG’s Hub and Spoke marketing strategy connects our northern Alberta production base to current and emerging markets in North America and beyond.
The strategy begins with the Access Pipeline. Access minimizes transportation costs and delivers our blend to the Edmonton hub - the launch point to current and developing markets. Access also provides a direct connection to our operations for the transport of diluent.
MEG's 900,000 barrel storage facility is directly tied to Christina Lake through the Access Pipeline and offers many strategic marketing advantages. Stonefell provides the flexibility to absorb short-term market interruptions and capitalize when market conditions are more favourable. This benefit also applies to the purchase of diluent.
Long-term capacity on pipelines and flexible options for rail and barging on the U.S. Inland Waterway provide the spokes to reach high-value markets.
MEG has secured capacity on a number of existing and planned pipelines that can deliver our crude to various markets across North America and position us to reach further to global markets. Through our long-term commitment on the Flanagan-Seaway line that will grow over time with our growing production, which came into service in late 2014, we are able to access higher prices on the U.S. Gulf Coast. Moving our product by pipe continues to be the most efficient and reliable method of transportation, adding significant value to our overall marketing strategy.
MEG's well-head to unit train loading capability via pipeline, with infrastructure connections across the continent, is a key spoke in MEG's Hub and Spoke strategy. This proprietary connection offers many distinct advantages for MEG: increased efficiencies for moving, loading and delivering our products by rail, better access to diluent supplies shipped to the Edmonton area by rail and reduced transportation costs from well-head to rail.
Barge transportation provides another spoke to move our product to the U.S. Gulf Coast. MEG has leased barges that are available for use as needed with volumes that can be ramped up or down in response to varying market conditions or pipeline supply disruptions.