CALGARY, Alberta, Feb. 10, 2015 /PRNewswire/ -- Pembina Pipeline
Corporation ("Pembina" or "the
Company") (TSX: PPL; NYSE: PBA) announced that it has entered into
agreements to expand the Vantage pipeline system ("Vantage") (the
"Vantage Expansion") for an estimated capital cost of $85 million.
The Vantage Expansion entails increasing Vantage's mainline
capacity from 40,000 barrels per day ("bpd") to approximately
68,000 bpd through the addition of mainline pump stations and the
construction of a new 80 kilometre ("km"), 8-inch gathering
lateral.
The Vantage mainline expansion is supported by a long-term,
fee-for-service agreement, with a substantial take-or-pay
component, and the gathering lateral is underpinned by a fixed
return on invested capital agreement. Subject to regulatory and
environmental approvals, the Vantage Expansion is expected to be
in-service in early 2016.
Once the Vantage Expansion is in-service, Pembina expects that the overall system,
including base capacity, expansion capacity and volumes from the
Company's Saskatchewan Ethane Extraction Plant will result in an
EBITDA range of $75 million to $110
million per year, with the base of the range representing
consolidated take-or-pay volumes.
"This expansion has been a priority for us since acquiring
Vantage in September 2014, and we are
very pleased to see it come to fruition" said Mick Dilger, Pembina's President and Chief Executive
Officer. "It supports our strategy to grow our
fee-for-service-based cash flow stream, improves the accretion of
the Vantage acquisition and will provide long-term shareholder
value."
Vantage is a recently constructed, approximately 700 km high
vapour pressure pipeline that links a growing supply of ethane from
the prolific North Dakota Bakken play to the petrochemical market
in Alberta. It originates from a
large-scale gas plant in Tioga, North
Dakota extending northwest, through Saskatchewan and terminating near Empress, Alberta, where it is connected to the
Alberta Ethane Gathering System pipeline.
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.
All financial figures are in Canadian dollars, using a CND/US
dollar exchange rate of 0.8275.
Non-GAAP and Additional GAAP Measures
In this news release, Pembina refers to earnings before interest,
taxes, depreciation and amortization ("EBITDA"). EBITDA is a non-
GAAP financial measure is calculated as results from operating
activities plus share of profit (loss) from equity accounted
investees (before tax, depreciation and amortization) plus
depreciation and amortization (included in operations and general
and administrative expense) and unrealized gains or losses on
commodity-related derivative financial instruments. EBITDA does not
have a standardized meaning prescribed by IFRS and is therefore
unlikely to be comparable to similar measures presented by other
companies. Pembina's management
believes that EBITDA provides useful information to investors as it
is an important indicator of the Company's ability to generate
liquidity through cash flow from operating activities, and EBITDA
is also used by investors and analysts for assessing financial
performance and for the purpose of valuing an issuer, including
calculating financial and leverage ratios. Management uses EBITDA
to set objectives and as a key performance indicator of the
Company's success.
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" and similar expressions suggesting future events or future
performance.
In particular, this document contains forward-looking
statements, including certain financial outlook, pertaining to,
without limitation, the following: the Vantage Expansion including
the anticipated benefits of the Vantage Expansion to Pembina; the planned capacity of the Vantage
Expansion; the anticipated capital expenditures related to the
Vantage Expansion; the expected in-service date of the Vantage
Expansion; the ongoing utilization and expansions of and additions
to Pembina's business and asset
base, growth and growth potential; and potential revenue and cash
flows. 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: the ability of the
parties to satisfy the conditions of the Vantage Expansion in a
timely manner; 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.
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 failure of the parties to satisfy the conditions to
the Vantage Expansion, including required regulatory approvals, in
a timely manner, or at all; the failure to realize the anticipated
benefits of the the Vantage Expansion; fluctuations in CND/US
dollar exchange rates; 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; tax laws and treatment;
fluctuations in operating results; lower than anticipated results
of operations and accretion from Pembina's business initiatives; 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. Readers are
cautioned that management of Pembina approved the financial outlook
contained herein as of the date of this press release. The purpose
of the financial outlook contained herein is to give the reader an
indication of the value to Pembina
of the Vantage Expansion. Readers should be aware that the
information contained in the financial outlook contained herein may
not be appropriate for other purposes.
Pembina Pipeline® is a registered trademark of Pembina
Pipeline Corporation.
For further information:
Investor Inquiries:
Scott Burrows
Vice President, Finance & Chief Financial Officer
+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