Pembina Pipeline Corporation Positions for Future Growth Through Acquisition of Land and Facilities in Alberta's Industrial Hear

abarrelfullabarrelfull wrote on 05 Sep 2013 07:38
Tags: canada n-america pembina pipeline

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Pembina Pipeline Corporation ("Pembina" or the "Company") (TSX: PPL; NYSE: PBA) announced today that it has acquired a site in the Alberta Industrial Heartland for approximately $20 million featuring a well-designed existing rail system and utility infrastructure to support the future development of rail, terminalling and storage facilities (the "Heartland Hub"). The Heartland Hub is a further build-out of Pembina's larger Nexus terminal ("PNT"), servicing crude oil and diluent customers for terminalling, storage and rail.

The Heartland Hub will be a receipt and delivery terminal designed to capture opportunities to expand services for Pembina's customers. The site is in close proximity to major oil sands pipeline rights-of-way, existing crude oil and petrochemical infrastructure and Pembina's Redwater site. It is expected to provide interconnectivity via pipeline and rail to downstream refining markets and enable Pembina to offer upstream and downstream customers access to merchant storage and other complementary midstream services.

Key features of the acquisition include:

232 acres of well-developed industrial land;
in excess of 5,000 linear feet of rail track, currently serviced by CN Rail;
160 acres of adjacent, existing Pembina lands, which can be developed for future merchant storage and rail expansions;
1,280 acres of Pembina salt rights in close proximity to support future cavern development; and
the ability to access over four million barrels per day of existing and future oil sands and conventional crude oil supply through various current and potential pipeline interconnection(s).
The Heartland Hub is an integral part of the broader PNT which interconnects Pembina's terminalling infrastructure located in the Edmonton, Redwater and Fort Saskatchewan areas. PNT provides unparalleled access to the diverse crude oil grades produced in western Canada. In addition, it is connected to condensate (diluent) transported on third-party as well as Pembina pipeline systems, including imported pipeline and rail supplies. The access and connectivity of PNT provides the broadest array of crude oil and diluent services available to Pembina's customer base.

At the same time, Pembina has entered into a multi-year agreement with a major North American refiner for the provision of services to load crude oil railcars within the existing infrastructure at PNT. This service will commence immediately. The agreement provides up to 40,000 barrels per day of various crude grades, and capitalizes on the full service offering of pipeline, storage and rail infrastructure at PNT.

"Pembina's purchase of this property in the Heartland area and our agreement with a major North American refiner demonstrates the growing demand for terminalling services and the business model being built-out by Pembina's Midstream business. PNT's location and connections to take-away pipeline infrastructure and its ability to offer enhanced crude oil and diluent services allow us continue to provide customers an attractive and expanding suite of services and midstream capabilities" said Bob Jones, Pembina's Vice President, Midstream. "We're also excited about the benefits to our other businesses: true to our vertical integration strategy, we see synergies between the midstream services which will be available at PNT and our Conventional Pipelines, Gas Services, and Oil Sands & Heavy Oil businesses."

The acquisition of the Heartland Hub was funded by Pembina's existing credit facilities.

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