TransCanada Corp. and Phoenix Energy Holdings agreed to develop a $3 billion pipeline project to ship crude from around Fort McMurray to Edmonton.

The companies will each own 50 percent of the proposed Grand Rapids Pipeline, which will be able to ship oil and diluent 500 kilometers from the oil-sands production area to cities where the crude is needed, according to a statement today.

The project is expected to be in service by 2017, subject to regulatory approvals, with capital spending between 2014 and 2017, according to the statement. The plan includes a 900,000 barrel-a-day crude pipeline, and a 330,000 barrel-a-day diluent line.

TransCanada will operate the system, and Phoenix has agreed to ship crude on it.