Long-term agreements underpin third fractionator at Pembina's Redwater
complex
CALGARY, May 12, 2014 /CNW/ - Pembina Pipeline Corporation ("Pembina" or
the "Company") (TSX: PPL; NYSE: PBA) announced today that it has
reached binding commercial agreements to proceed with constructing a
new 55,000 barrel per day ("bpd") propane-plus fractionator ("RFS III")
at its existing Redwater fractionation and storage complex ("Redwater")
and a new high vapour pressure ("HVP") pipeline lateral that will
extend the gathering potential of its Brazeau Pipeline in the Willesden
Green area of south-central Alberta.
RFS III, which is underpinned by long-term take-or-pay contracts with
multiple producers, is expected to cost approximately $400 million
(including associated caverns and capital previously announced for the
RFS III pre-build). The facility will be the third fractionator at
Pembina's Redwater complex and will leverage the design and engineering
work completed for Pembina's first and second fractionators ("RFS I"
and "RFS II"). Pembina announced the RFS III pre-build on July 31,
2013, whereby the design of certain facilities at RFS II were expanded
in order to accommodate the development of RFS III. This pre-build
resulted from the Company's confidence that there would be customer
demand for additional fractionation capacity at Redwater.
"We are excited to have secured the commercial agreements to proceed
with building a third fractionator," said Stuart Taylor, Pembina's
Senior Vice President, NGL and Natural Gas Facilities. "RFS III will
provide our customers with timely fractionation capacity along with
efficient storage and market access through our well-established
facilities at Redwater. Leveraging our existing assets and using
similar plant designs again demonstrates the value of our integrated
strategy."
Currently, RFS I has an operating capacity of 73,000 bpd. As previously
announced, RFS I is being debottlenecked to bring capacity to
approximately 82,000 bpd in the fourth quarter of 2015. When combined
with RFS II, which is expected to come into service in the fourth
quarter of 2015, the Company's fractionation capacity is anticipated to
nearly double to 155,000 bpd. With the addition of RFS III, Pembina's
fractionation capacity will total 210,000 bpd, making the Company's
Redwater complex the largest fractionation facility in Canada. Certain
components of RFS III will be upsized and the site will be designed to
accommodate a de-ethanizer tower in the future, should Pembina receive
commercial support to backstop such an expansion. With a de-ethanizer
tower, capacity at RFS III would reach 73,000 bpd and bring the total
capacity at Redwater to 228,000 bpd. Subject to regulatory and
environmental approval, Pembina expects RFS III to be in-service in the
third quarter of 2017.
In conjunction with building RFS III, Pembina also plans to construct a
new HVP pipeline lateral into the Willesden Green area in south-central
Alberta, at an estimated cost of approximately $60 million. The
project, which is underpinned by a long-term take-or-pay contract,
entails installing approximately 56 kilometres of new HVP pipeline, along with other associated
infrastructure. The new HVP pipeline will be connected to Pembina's
Brazeau Pipeline and will be capable of transporting ethane-plus ("C2+") natural gas liquids from the field for delivery into the Fort
Saskatchewan area. Subject to regulatory and environmental approval, Pembina expects the
new C2+ lateral to be in-service in mid-2015. As a result of the C2+ lateral, an additional 10,000 bpd of capacity will be under long-term
contract for fractionation at Pembina's Redwater complex.
"Projects like these support our continued focus on expanding our
fee-for-service business and integrated service offering, which in turn
help drive sustainable dividend growth - and ultimately value for our
shareholders - for many years to come," added Mr. Taylor.
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 60 years. Pembina owns and operates pipelines that
transport various hydrocarbon liquids including conventional and
synthetic crude oil, heavy oil and oil sands products, condensate
(diluent) and natural gas liquids produced in western Canada. The
Company also owns and operates 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
spans 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", "will",
"expand", "would", "plans" and similar expressions suggesting future
events or future performance.
In particular, this document contains forward-looking statements,
pertaining to, without limitation, the following: the planned capacity
of the proposed RFS III; the anticipated capital cost of RFS III; the
expected in-service date of RFS III; the ongoing utilization and
expansions of and additions to Pembina's business and asset base,
growth and growth potential. 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 transportation services; future levels of oil and natural gas
development; and potential revenue and cash flow enhancement; future
cash flows.
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
Image with caption: "Aerial of Pembina Pipeline Corporation's Redwater fractionation facility. (CNW Group/Pembina Pipeline Corporation)". Image available at: http://photos.newswire.ca/images/download/20140512_C7953_PHOTO_EN_40217.jpg
