Long-term agreements underpin third fractionator at Pembina's
Redwater complex
CALGARY, May 12, 2014 /PRNewswire/ - Pembina Pipeline
Corporation ("Pembina" or the "Company") (TSX: PPL; NYSE: PBA)
announced today that it has reached binding commercial agreements
to proceed with constructing a new 55,000 barrel per day ("bpd")
propane-plus fractionator ("RFS III") at its existing Redwater fractionation and storage complex
("Redwater") and a new high vapour pressure ("HVP") pipeline
lateral that will extend the gathering potential of its Brazeau
Pipeline in the Willesden Green area of south-central Alberta.
RFS III, which is underpinned by long-term take-or-pay contracts
with multiple producers, is expected to cost approximately
$400 million (including associated
caverns and capital previously announced for the RFS III
pre-build). The facility will be the third fractionator at
Pembina's Redwater complex and
will leverage the design and engineering work completed for
Pembina's first and second fractionators ("RFS I" and "RFS II").
Pembina announced the RFS III pre-build on July 31, 2013, whereby the design of certain
facilities at RFS II were expanded in order to accommodate the
development of RFS III. This pre-build resulted from the Company's
confidence that there would be customer demand for additional
fractionation capacity at Redwater.
"We are excited to have secured the commercial agreements to
proceed with building a third fractionator," said Stuart Taylor, Pembina's Senior Vice President,
NGL and Natural Gas Facilities. "RFS III will provide our customers
with timely fractionation capacity along with efficient storage and
market access through our well-established facilities at
Redwater. Leveraging our existing
assets and using similar plant designs again demonstrates the value
of our integrated strategy."
Currently, RFS I has an operating capacity of 73,000 bpd. As
previously announced, RFS I is being debottlenecked to bring
capacity to approximately 82,000 bpd in the fourth quarter of 2015.
When combined with RFS II, which is expected to come into service
in the fourth quarter of 2015, the Company's fractionation capacity
is anticipated to nearly double to 155,000 bpd. With the addition
of RFS III, Pembina's fractionation capacity will total 210,000
bpd, making the Company's Redwater
complex the largest fractionation facility in Canada. Certain components of RFS III will be
upsized and the site will be designed to accommodate a de-ethanizer
tower in the future, should Pembina receive commercial support to
backstop such an expansion. With a de-ethanizer tower, capacity at
RFS III would reach 73,000 bpd and bring the total capacity at
Redwater to 228,000 bpd. Subject
to regulatory and environmental approval, Pembina expects RFS III
to be in-service in the third quarter of 2017.
In conjunction with building RFS III, Pembina also plans to
construct a new HVP pipeline lateral into the Willesden Green area
in south-central Alberta, at an
estimated cost of approximately $60
million. The project, which is underpinned by a long-term
take-or-pay contract, entails installing approximately 56
kilometres of new HVP pipeline, along with other associated
infrastructure. The new HVP pipeline will be connected to Pembina's
Brazeau Pipeline and will be capable of transporting ethane-plus
("C2+") natural gas liquids from the field for delivery
into the Fort Saskatchewan
area. Subject to regulatory and environmental approval,
Pembina expects the new C2+ lateral to be in-service in
mid-2015. As a result of the C2+ lateral, an additional
10,000 bpd of capacity will be under long-term contract for
fractionation at Pembina's Redwater complex.
"Projects like these support our continued focus on expanding
our fee-for-service business and integrated service offering, which
in turn help drive sustainable dividend growth - and ultimately
value for our shareholders - for many years to come," added Mr.
Taylor.
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", "expand", "would", "plans" and similar
expressions suggesting future events or future performance.
In particular, this document contains forward-looking
statements, pertaining to, without limitation, the following: the
planned capacity of the proposed RFS III; the anticipated capital
cost of RFS III; the expected in-service date of RFS III; the
ongoing utilization and expansions of and additions to Pembina's
business and asset base, growth and growth potential. 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: ongoing utilization and future expansion, development,
growth and performance of Pembina's business and asset base; future
demand for fractionation and transportation services; future levels
of oil and natural gas development; and 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
Image with caption: "Aerial of Pembina Pipeline Corporation's
Redwater fractionation facility.
(CNW Group/Pembina Pipeline Corporation)". Image available at:
http://photos.newswire.ca/images/download/20140512_C7953_PHOTO_EN_40217.jpg