New volumes under contract support increasing capacity of Pembina's
previously announced Phase III Expansion; new 16" diameter pipeline to
be built
CALGARY, Sept. 10, 2014 /CNW/ - Pembina Pipeline Corporation ("Pembina"
or "the Company") (TSX: PPL; NYSE: PBA) announced that due to strong
customer demand, it plans to expand its previously announced Phase III
pipeline expansions (the "Phase III Expansion") by constructing a new
16" diameter pipeline from Fox Creek, Alberta into Namao, Alberta and a
new 12" diameter pipeline from Wapiti, Alberta into Kakwa, Alberta (the
"Wapiti to Kakwa Pipeline").
The 16" diameter pipeline will span approximately 270 kilometres ("km")
in length and be built in the same right-of-way as the proposed 24"
diameter pipeline from Fox Creek to Namao. Pembina expects the two
pipelines to initially have a combined capacity of 420,000 barrels per
day ("bpd") and an ultimate capacity of over 680,000 bpd with the
addition of midpoint pump stations. Since December 2013, Pembina has
secured an additional 59,000 bpd under contract. With these
commitments, total volumes under contract are approximately 289,000
bpd, or 69 percent of the initial combined capacity.
The proposed Wapiti to Kakwa Pipeline is intended to debottleneck a
portion of Pembina's existing pipeline system. It will be approximately
70 km in length and is expected to have an initial capacity of
approximately 95,000 bpd. This debottleneck will ultimately allow
product to be delivered into the Company's core segment of the Phase
III Expansion between Fox Creek and Namao. As part of this project,
Pembina also plans to build two new pump stations. Subject to
regulatory approval, Pembina expects the Wapiti to Kakwa Pipeline to be
in-service in late-2016 to mid-2017, consistent with the timing of the
initial expansion.
Combined, Pembina expects to incur additional capital expenditures for
the additional 16" diameter pipeline and the Wapiti to Kakwa Pipeline
of approximately $435 million, bringing total estimated capital for the
Phase III Expansion to $2.44 billion.
"Pembina continues to see interest in the Phase III Expansion, as
evidenced by these new volumes," said Paul Murphy, Pembina's Senior
Vice President of Pipeline & Crude Oil Facilities. "We are in ongoing
discussions with our customers to ensure their transportation needs are
addressed as early on in the development of this expansion as possible.
As a result of the pipelines approved today, we will be in a position
to support their existing and future growth plans."
Mick Dilger, Pembina's President and Chief Executive Officer added,
"With the 16" diameter pipeline, Pembina will have four pipelines in
the Fox Creek to Namao corridor with an ultimate capacity of over
1,000,000 bpd. This will allow us to transport four distinct
hydrocarbons - propane-plus, ethane-plus, condensate and crude oil -
each in its own segregated pipeline. This is great for Pembina and for
our customers as we will be able to realize operational efficiencies,
such as minimizing or eliminating batch interface between the products
and streamlining storage requirements. In addition, we will be able to
provide a ratable flow of propane-plus and ethane-plus into industry
fractionators, including our Redwater fractionator, which will help to
optimize operations at these facilities."
Subject to regulatory approval, Pembina expects the 16" and 24" diameter
pipelines to be in-service between late-2016 and mid-2017. Pembina
submitted its regulatory application for both pipelines from Fox Creek
to Namao on September 2, 2014.
Pembina will provide information updates during the development of these
assets and, if approved, during implementation so that stakeholders,
communities, Aboriginal communities and other groups or individuals
with interests in the area are informed of the Company's activities.
Pembina has a strong reputation for constructing and operating
facilities which meet or exceed safety and environmental protection
regulations and guidelines, and the Company is committed to responsible
development throughout the life of these and all of its projects.
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.
Forward-Looking Statements & Information
In particular, this document contains forward-looking statements,
pertaining to, without limitation, the following: Pembina's corporate
strategy; planning, construction, capital expenditure estimates,
schedules, expected capacity, incremental volumes, in service dates,
and operations with respect to the Phase III Expansion and related
infrastructure; expectations regarding future demand for transportation
services; expectations regarding supply and demand factors; anticipated
transportation strategies and services; and anticipated corporate
efficiencies and synergies. 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: that
counterparties will comply with contracts in a timely manner; that
there are no unforeseen events preventing the performance of contracts
or the completion of the Phase III Expansion or any of its related
infrastructure; that Pembina will obtain required regulatory approvals
on a timely basis; maintenance of operating margins; anticipated
changes in interest rates, foreign currency exchange, inflation rates
and commodity prices; ongoing utilization and future expansion,
development, growth and performance of Pembina's business and asset
base; future demand for transportation services; future levels of oil
and natural gas development in proximity to Pembina's pipelines and
other assets (which could be affected by, among other things, possible
changes to applicable royalty and tax regimes); the amount of future
liabilities related to environmental incidents; additional throughput
potential on additional connections and other initiatives on the
Conventional Pipelines systems; expected Phase III Expansion and
related infrastructure start-up and construction dates; and future
financing capability and sources.
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.
The actual results of Pembina could differ materially from those
anticipated in these forward-looking statements as a result of material
risk factors including, but not limited to: the regulatory environment
and decisions, and the inability to obtain required regulatory
approvals; the impact of competitive entities and pricing; reliance on
key relationships 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;
non-performance or default by counterparties to agreements which
Pembina or one or more of its affiliates has entered into in respect of
its business; actions by governmental or regulatory authorities
including changes in tax laws and treatment, changes in royalty rates
or increased environmental regulation; fluctuations in operating
results; unexpected increases in capital costs for the Phase III
Expansion or related infrastructure; adverse general economic and
market conditions in Canada, North America and elsewhere, including
changes in interest rates, foreign currency exchange rates, inflation
rates and commodity prices; lower than anticipated results of
operations and accretion from Pembina's business initiatives; and the
ability of Pembina to raise sufficient capital (or to raise capital on
favourable terms) to complete future projects and satisfy future
commitments.
These factors should not be construed as exhaustive. Unless required by
law, Pembina does not undertake any obligation to publicly update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise. Any forward-looking statements
contained herein are expressly qualified by this cautionary statement.
Pembina Pipeline® is a registered trademark of Pembina Pipeline
Corporation.
SOURCE Pembina Pipeline Corporation
Image with caption: "Pembina Pipeline Corporation Increases Capacity of Phase III Pipeline Expansion and Secures Additional Volumes (CNW Group/Pembina Pipeline Corporation)". Image available at: http://photos.newswire.ca/images/download/20140910_C8899_PHOTO_EN_42737.jpg
