Pembina Pipeline Corporation to Expand its NGL Pipeline Transportation Capacity

abarrelfullabarrelfull wrote on 12 Nov 2011 12:19
Tags: canada ngl pembina pipeline


Pembina Pipeline Corporation ("Pembina") (TSX: PPL) today announced plans to expand its natural gas liquids ("NGL") throughput capacity on its Peace and Northern Pipelines (together the "Northern NGL System") by 55,000 barrels per day ("bpd") (the "NGL Expansion") to accommodate increased customer demand resulting from strong drilling results and increased field liquids extraction by area producers.

The NGL Expansion will require Pembina to install five new pump stations and upgrade five existing pump stations, which Pembina expects to cost approximately $100 million and is subject to reaching long-term commercial arrangements with its customers and receipt of regulatory approval. Pembina expects 20,000 bpd of the NGL Expansion can be brought into service by the end of 2012 and the remaining 35,000 bpd by the end of 2013.

Pembina's Northern NGL System is strategically located across some of the most prolific liquids rich natural gas production areas in the Western Canadian Sedimentary Basin and serves producers in the Deep Basin, Montney, Cardium and emerging Duvernay Shale plays. Currently, the Northern NGL System's capacity is 115,000 bpd with average daily volumes of approximately 88,000 bpd. Using its existing infrastructure, Pembina expects to end 2011 with throughput on the Northern NGL System of approximately 100,000 bpd due to higher volumes resulting from the commissioning of Pembina's Edson pipeline expansion and the Musreau Deep Cut Facility. Once completed the proposed NGL Expansion will increase capacity on the Northern NGL System by 48 percent to 170,000 bpd.

Pembina has existing long-term contracts in place for a portion of the capacity on its Northern NGL System. During the third quarter of 2011, Pembina began consulting with its customers and has since entered into several new long-term firm service incentive arrangements for additional capacity on the system. Combined, the existing and new contracts have secured 55 percent of the 170,000 bpd capacity. Pembina continues to consult with its customers in order to increase the volumes under long-term, firm service incentive contracts to underpin the NGL Expansion

"Pembina's growth strategy is designed to take advantage of the increased activity by producers in key plays in the Western Canadian Sedimentary Basin and enhance the services we provide customers while adding value to our shareholders," said Mick Dilger, Pembina's Chief Operating Officer. "Together with our recent announcements to increase our NGL processing capacity through our Gas Services business, today's announcement is really about meeting the requirements of shippers with a truly integrated approach throughout the value chain."

Pembina's plans for the NGL Expansion can be completed very cost-effectively by upgrading and modifying existing infrastructure where possible and will reduce environmental and community impact by using existing right-of-ways.


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