Pembina to invest $65 million at its Redwater site to build a new
hydrocarbon storage cavern and to advance potential third fractionator
CALGARY, July 31, 2013 /PRNewswire/ - Pembina Pipeline Corporation ("Pembina"
or the "Company") (TSX: PPL; NYSE: PBA) announced today that it has
entered into long-term cost-of-service agreements with NOVA Chemicals
Corporation ("NOVA") for the use of an underground storage cavern
currently in development at Pembina's Redwater fractionation and
storage site ("Redwater"), along with associated infrastructure. In
addition, Pembina plans to spend approximately $25 million to upsize
certain facilities associated with its second fractionator ("RFS II")
to accommodate the future development of a third fractionator ("RFS
III") at Redwater.
Long-term Storage Agreements
"We are excited to continue our relationship with NOVA by providing them
with additional storage solutions," said Bob Lock, Pembina's Vice
President, NGL Midstream. "These arrangements represent another example
of the Company's ability to leverage our land and infrastructure at
Redwater and grow the contracted, fee-for-service component of our
business."
The cavern will provide approximately 500,000 barrels of storage, with
an expected on-stream date in mid-to-late 2015. Pembina expects the
total capital cost of the cavern and associated infrastructure to be
approximately $40 million.
Pembina's cavern development program at Redwater is a key part of the
Company's growth strategy in the greater Fort Saskatchewan, Alberta
area.
Development at Redwater
As fractionation capacity in the Western Canadian Sedimentary Basin
("WCSB") is forecasted to remain tight in the coming years, Pembina is
continuing to develop its Redwater site with both the construction of
RFS II and today's announcement around the expansion of certain
associated facilities to accommodate the future development of RFS III.
The pre-development work for RFS III is estimated to cost approximately
$25 million.
"Currently, RFS III is in the preliminary engineering phase and we have
not yet entered into commercial agreements," said Mr. Lock. "However,
with the high level of activity in the WCSB, we are confident there is
strong market demand to support a third fractionator at our site. With
this in mind, we are taking the opportunity while constructing RFS II
to cost-effectively expand site infrastructure to accommodate further
expansion. RFS III would provide our customers with timely
fractionation capacity along with efficient storage and market access
through our well-established facilities at Redwater."
Pembina's existing ethane-plus fractionator at Redwater, RFS I, has an
operating capacity of 73,000 barrels per day ("bpd"). With the addition
of RFS II, which is expected to come into service in the fourth quarter
of 2015, the Company's ethane-plus fractionation capacity will double
to 146,000 bpd. Should RFS III proceed, the facility would further
leverage engineering and design work completed for RFS I and RFS II.
About Pembina
Calgary-based Pembina Pipeline Corporation is a leading transportation
and midstream service provider that has been serving North America's
energy industry for nearly 60 years. Pembina owns and operates:
pipelines that transport conventional and synthetic crude oil and
natural gas liquids produced in western Canada; oil sands and heavy oil
and diluent pipelines; gas gathering and processing facilities; and, an
oil and natural gas liquids infrastructure and logistics business. With
facilities strategically located in western Canada and in natural gas
liquids markets in eastern Canada and the U.S., Pembina also offers a
full spectrum of midstream and marketing services that span across its
operations. Pembina's integrated assets and commercial operations
enable it to offer services needed by the energy sector along the
hydrocarbon value chain.
Pembina is a trusted member of the communities in which it operates and
is committed to generating value for its investors by running its
businesses in a safe, environmentally responsible manner that is
respectful of community stakeholders.
Forward-Looking Statements & Information
This document contains certain forward-looking statements and
information (collectively, "forward-looking statements") within the
meaning of the "safe harbor" provisions of applicable securities
legislation that are based on Pembina's current expectations,
estimates, projections and assumptions in light of its experience and
its perception of historical trends. In some cases, forward-looking
statements can be identified by terminology such as "expects",
"forecasts", "plans", "indicates", "potential", "will", "estimate",
"expand", "would", "possible" and similar expressions suggesting future
events or future performance.
In particular, this document contains forward-looking statements,
including certain financial outlook, pertaining to, without limitation,
the following: Pembina's business objectives; the planned capacity of
the underground storage cavern and RFS II; the anticipated capital cost
of the underground storage cavern; the expected in-service date of the
underground storage cavern and RFS II; the expected cost of the
pre-development work for RFS III; the ongoing utilization and
expansions of and additions to Pembina's business and asset base,
growth and growth potential; expectations regarding future demand for
fractionation and storage services; and expectations regarding supply
and demand factors and pricing for oil and natural gas. These
forward-looking statements and information are being made by Pembina
based on certain assumptions that Pembina has made in respect thereof
as at the date of this document including those discussed below.
With respect to forward-looking statements contained in this document,
Pembina has made assumptions regarding, among other things: ongoing
utilization and future expansion, development, growth and performance
of Pembina's business and asset base; future demand for fractionation
and storage services; future levels of oil and natural gas development;
potential revenue and cash flow enhancement; future cash flows; and the
ability of the parties to agree on binding commercial arrangements for
RFS III.
Although Pembina believes the expectations and material factors and
assumptions reflected in these forward-looking statements are
reasonable as of the date hereof, there can be no assurance that these
expectations, factors and assumptions will prove to be correct. Readers
are cautioned that events or circumstances could cause results to
differ materially from those predicted, forecasted or projected. By
their nature, forward-looking statements involve numerous assumptions,
known and unknown risks and uncertainties that contribute to the
possibility that the predictions, forecasts, projections and other
forward-looking statements will not occur, which may cause actual
performance and financial results in future periods to differ
materially from any projections of future performance or results
expressed or implied by such forward-looking statements and
information.
None of the forward-looking statements described above are guarantees of
future performance and are subject to a number of known and unknown
risks and uncertainties, including, but not limited to: the impact of
competitive entities and pricing; reliance on key industry partners,
alliances and agreements; the strength and operations of the oil and
natural gas production industry and related commodity prices; the
continuation or completion of third- party projects; regulatory
environment and inability to obtain required regulatory approvals; tax
laws and treatment; fluctuations in operating results; lower than
anticipated results of operations and accretion from Pembina's business
initiatives; reduced amounts of cash available for dividends to
shareholders; the ability of Pembina to raise sufficient capital (or to
raise capital on favourable terms) to complete future projects and
satisfy future commitments.
The forward-looking statements contained in this document speak only as
of the date of this document. Pembina does not undertake any obligation
to publicly update or revise any forward-looking statements or
information contained herein, except as required by applicable laws.
The forward-looking statements contained in this document are expressly
qualified by this cautionary statement.
All financial figures are in Canadian dollars, unless otherwise noted.
Pembina Pipeline® is a registered trademark of Pembina Pipeline
Corporation.
SOURCE Pembina Pipeline Corporation