CALGARY, Alberta, September 10, 2014 /PRNewswire/ --
New volumes under contract support increasing capacity of
Pembina's previously announced Phase III Expansion; new 16"
diameter pipeline to be built
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 CDN$435 million, bringing total estimated capital
for the Phase III Expansion to CDN$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.
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
For further information:
Investor Inquiries:
Scott Burrows
Vice President, Capital Markets
+1-403-231-3156
+1-855-880-7404
e-mail: investor-relations@pembina.com
Media Inquiries:
Laura Lunt
Senior Manager, Regulatory, Environment
& External Relations
+1-403-231-7500