TRANSCANADA Corp and a unit of PetroChina Co Ltd agreed to develop a C$3 billion (US$3 billion) oil pipeline to ship crude from oil-sands projects in northern Alberta.

TransCanada and Phoenix Energy Holdings Ltd will each own 50 percent of the proposed Grand Rapids Pipeline, which will ship oil 500 kilometers from the Fort McMurray oil-sands production area to Edmonton, a statement said yesterday. The stake would be the largest taken by a Chinese firm in a Canadian pipeline, according to data compiled by Bloomberg News.

"This is the first major pipeline project to meet the needs of this fast-growing area," TransCanada CEO Russ Girling said in the statement.

The plan includes a 900,000 barrel-a-day crude pipeline, and a 330,000 barrel-a-day pipeline for diluent, fluids mixed with tar-like bitumen so it can flow through pipelines. The project is expected to be in service by 2017.