CALGARY, Oct. 9, 2014 /CNW/ - Pembina Pipeline Corporation ("Pembina" or
the "Company") (TSX: PPL; NYSE: PBA) today announced plans to proceed
with construction of the Canadian Diluent Hub ("CDH"), a large-scale
condensate and diluent terminal at its Heartland Terminal site near
Fort Saskatchewan, Alberta.
The initial phase of CDH development is estimated to cost $350 million
and will include 600,000 barrels of above ground storage, multiple
inbound and outbound pipeline connections, plus associated pumping and
metering facilities. In anticipation of future customer demand and as
part of an anticipated second phase of development, Pembina has also
completed detailed engineering studies for the construction of
additional rail facilities and underground cavern storage development.
The Canadian Diluent Hub is designed to augment Pembina's existing
diluent handling facilities in the Fort Saskatchewan area which
includes approximately 20,000 barrels per day ("bpd") of rail import
capacity, 500,000 barrels of underground diluent storage and
approximately 180,000 bpd of existing delivery capacity to third-party
diluent delivery pipelines. The proposed facilities are designed to
accommodate contracted diluent supply volumes from the Company's
previously announced field gas plant, pipeline and natural gas liquids
("NGL") fractionator expansions. The Company expects CDH to become a
new market hub for condensate and other diluents by offering customers:
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direct access to a growing and diverse diluent supply through Pembina
and third-party pipeline connections;
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a variety of condensate qualities, crude grades and synthetic crude oil;
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segregation infrastructure and flexibility to accommodate proprietary
and premium diluent blends;
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direct connectivity to third-party market terminals and pipelines that
supply and serve oil sands producers;
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marketing services to facilitate supply aggregation;
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above ground and cavern storage services; and
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access to rail import facilities and future export connections.
"We are excited to communicate our vision for the Canadian Diluent Hub,"
said Paul Murphy, Pembina's Senior Vice President, Pipeline & Crude Oil
Facilities. "As the terminus of Pembina's condensate pipeline for its
Peace system, the Heartland site is ideally-located adjacent to all
major diluent pipelines servicing the Athabasca oil sands producing
region. This development, combined with our existing asset base, will
allow us to provide our customers with a reliable and cost-competitive
supply of not only condensate, but other diluents such as light sweet
crude, synthetic crude oil and custom diluent blends. We expect CDH
will become the preferred point of access to satisfy growing diluent
demand in the Heartland area."
The concept for CDH evolved as an extension of Pembina's Nexus Terminal,
which includes Pembina's terminal assets in the Namao, Edmonton,
Redwater and Fort Saskatchewan areas of Alberta. The Company's
previously announced pipeline and NGL fractionation expansions will
provide customers with a dedicated condensate supply system. This
system, which originates in Northeast British Columbia and spans
throughout Northwest Alberta, directly links Pembina's NGL
fractionation supply to the Heartland area demand centre.
"Once we complete our pipeline system expansions and NGL fractionators,
we expect to be the largest domestic supply source for condensate in
Alberta," said Mr. Murphy. "The Canadian Diluent Hub is being driven by
increasing production volumes from the ongoing development of the
Montney and Duvernay formation resource plays in our service areas.
Production from these plays is fueling infrastructure development and
with our access to condensate, customers are keen to have us expand our
diluent service offerings. It is also being driven by customer support
to further develop the existing energy hub in the Alberta Industrial
Heartland, due to its proximity to oil sands and diluent pipelines and
associated terminals. CDH builds on the condensate services we already
offer and will create incremental solutions for our customers while
supporting long-term shareholder value."
Site preparation began in late-2013 and is on-going. Subject to further
regulatory and environmental approvals, Pembina anticipates phasing-in
incremental storage and pipeline connections to regional condensate
delivery systems in 2016 with a view to achieving full connectivity of
and service offerings at CDH in the second quarter of 2017.
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",
"potential", "estimate", "anticipate", "could", and similar expressions
suggesting future events or future performance.
In particular, this document contains forward-looking statements,
pertaining to, without limitation, the following: the ongoing
utilization and expansions of and additions to Pembina's business and
asset base, growth and growth potential; expected integration of CDH
with Pembina's existing and future infrastructure and Company strategy;
anticipated capital expenditures relating to CDH; planning,
construction, schedule, in-service date, activities and operations with
respect to CDH; Pembina's expectations around access to markets and
supply sources. 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: oil and gas
industry exploration and development activities; prevailing commodity
prices, interest rates and exchange rates; ongoing utilization and
future expansion, development, growth and performance of Pembina's
business and asset base; future demand for fractionation and
transportation services; that third parties will provide any necessary
support; that counterparties will comply with contracts in a timely
manner; 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
