Putting the $350 million break fee to good use. The following is from an RBC update issued on June 15, 2021. It highlighted several projects that PPl could green light very soon. Below are four of these projects and the estimated cost.
The $350 million break fee could easily pay the entire cost for one of these projects or allow them to lauch all four projects using the $350 million to pay the first year costs for all and then paying the balance from cash flow in subsequent business years.
Below are the comments from RBC.on June 15'th.
Phase VIII faces a H2/21 decision. Pembina has not reactivated the Phase VIII expansion
at this time, noting that it expects to make a decision on its reactivation in H2/21. Pembina
continues to evaluate the project through discussions with its producing customers, but
noted that “customers continue to signal plans which will necessitate the incremental
capacity”. If the project is reactivated, the company expects a minimal impact to its 2021
capital program. The project has received all regulatory approvals, and initial contracts
supporting the project remain in place. Pembina previously estimated project costs of
$500 million, but anticipates that this estimate could decrease given cost improvements
and scope changes.
Prince Rupert Terminal Expansion remains deferred. Pembina continues to evaluate a
45,000 b/d expansion of its Prince Rupert Terminal, and expects to make a decision on the
project in the second half of 2021. The company previously highlighted an expected
project cost of $175 million, while stating that project engineering is “well advanced”. Of
note, the first phase of the terminal was recently placed into service, with seven vessels
having been loaded with total propane exports of nearly one million barrels to date.
Redwater fractionation expansion under consideration. Pembina noted that it is
accelerating its evaluation of a fourth propane-plus fractionation facility (RFS IV) at its
Redwater Complex based on high customer demand for fractionation and rail services. Its
estimated capital cost is $350 million.
Cochin Pipeline expansion under evaluation. The company is evaluating an option to
expand the Cochin Pipeline by up to 35,000 b/d (up from roughly 115,000 b/d of current
capacity) for a capital cost of roughly $100 million. It sees an opportunity to connect the
Aux Sable Channahon Facility to the Cochin Pipeline for approximately $40 million, which
it expects would improve shipper netbacks for condensate volumes produced at
Channahon that are currently being trucked or railed to market.