Pembina Pipeline Corporation Announces Moving Forward with $250 Million Phase 2 Crude Oil and Condensate Pipeline Expansion

abarrelfull wrote on 14 Feb 2013 11:36
Tags: canada crude n-america oil peace pembina pipeline

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Pembina Pipeline Corporation ("Pembina" or the "Company") (TSX: PPL; NYSE: PBA) announced that it has reached its contractual threshold to proceed with its previously announced plans to significantly expand its crude oil and condensate throughput capacity on its Peace Pipeline by 55,000 barrels per day ("bpd") (the "Phase 2 LVP Expansion").

The crude oil and condensate (low vapor pressure, or "LVP") portion of the Peace Pipeline is currently operating at capacity. Pembina is working to complete its previously announced Phase 1 LVP Expansion, which will expand crude oil and condensate capacity on this system by an additional 40,000 bpd to reach 195,000 bpd by October of 2013.

The Phase 2 LVP Expansion is expected to accommodate increased producer crude oil and condensate volumes arising from strong drilling results in the Dawson Creek, Grande Prairie and Kaybob/Fox Creek areas of Alberta. Pembina expects the total cost of Phase 2 LVP Expansion to be approximately $250 million (including the mainline expansion and tie-ins). Subject to obtaining regulatory and environmental approvals, Pembina anticipates being able to bring the expansion into service by late-2014. Once complete, this expansion will increase capacity on the Peace Pipeline to 250,000 bpd. The Phase 2 LVP Expansion is underpinned by long-term fee-for-service agreements with area producers. The combination of Phase 1 and Phase 2 LVP Expansions will increase capacity by 61 percent from current levels.

"This next phase of our growth strategy evidences the strength of our existing asset base and integrated service offering" said Mick Dilger, Pembina's President and Chief Operating Officer. "The Phase 2 LVP Expansion will allow us to enhance the services we provide customers by easing potential capacity constraints in the near future. Further, this project will increase our fee-for-service, secured cash flow stream, thereby adding value to our shareholders."

The Phase 2 LVP Expansion will require Pembina to install five new pump stations, upgrade six existing pump stations, and add additional operational storage. As well, Pembina will reconfigure existing pipelines and build a total of 10 km of new pipeline from Gordondale to Spirit River.

The Company's crude oil, condensate and natural gas liquids ("NGL") expansions are being undertaken to help provide adequate transportation capacity to support western Canada's growing energy industry. Pembina is committed to providing all customers with safe, reliable and efficient transportation and related energy services. With customer support having been obtained for the expansions discussed herein, Pembina is progressing front end engineering on a Phase 3 crude oil, condensate and NGL pipeline expansion from Taylor, British Columbia to the Edmonton/Fort Saskatchewan areas of Alberta.

• Pembina Pipeline Corporation Announces Moving Forward with $250 Million Phase 2 Crude Oil and Condensate Pipeline Expansion

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