CALGARY, May 21, 2015 /CNW/ - Pembina Pipeline Corporation
("Pembina" or "the Company") (TSX: PPL; NYSE: PBA) announced that
it will provide terminalling services for the North West Redwater
Partnership ("North West") with respect to North West's planned
refinery (the "Sturgeon Refinery").
Separately, the Company also announced that it has entered into
agreements to construct a new pipeline lateral in the Karr area of
Alberta (the "Karr Lateral") to
service growing production from the Montney resource play.
Terminalling Services for Sturgeon Refinery
"Pembina is very excited to be
involved in this world class project," said Mick Dilger, Pembina's President and Chief Executive
Officer. "The Sturgeon Refinery will be the first refinery to be
built in Canada in 30 years
and will add significant value to Alberta's bitumen resources in a responsible
and sustainable manner."
The terminalling services will be provided by Pembina to North West under a 30-year fixed
return agreement and a 10-year natural gas liquids ("NGL") mix
purchase and sale agreement related to the third fractionator
Pembina is constructing at its
Redwater site.
Robert Lock, Pembina's Vice President, Midstream – NGL,
commented: "We are developing the facilities associated with the
terminalling services at our existing Redwater site, once again demonstrating the
value we are able to provide customers by leveraging our integrated
suite of assets. Further, the long-term, contracted nature of the
terminalling services to be provided by Pembina in support of the Sturgeon Refinery
will be beneficial to our shareholders as they will add to our
growing fee-for-service-based, low-risk cash flow stream."
Pembina expects a capital
investment of $180 million will be
required to construct the terminalling facilities. The facilities
include truck and rail loading, storage, as well as handling and
processing equipment for a variety of products delivered from North
West. Subject to regulatory and environmental approvals, the
facilities are expected to be in service mid-2017. Previously,
North West had entered into agreements for terminalling services
with Provident Energy Ltd., which was acquired by Pembina on April 2,
2012. Since that time, the development of the project has
progressed and changes have been included in the project's scope.
The $180 million of expected capital
is included in Pembina's
previously disclosed suite of projects totalling $5.9 billion.
New Pipeline Lateral
The Company expects the Karr Lateral to cost $55 million and have a capacity of approximately
30,000 barrels per day. The Karr Lateral is underpinned by
long-term, fee-for-service agreements, which include substantial
take-or-pay commitments from several of Pembina's customers. A portion of the volume
under contract on the Karr Lateral will be incremental to
Pembina's previously disclosed
committed volumes. The Karr Lateral will flow from legal land
description 01-28-65-03 west of the 6th meridian to
Pembina's terminal in the Lator
area of northwest Alberta where
several companies are developing significant Montney acreage. Subject to regulatory and
environmental approvals, Pembina
expects the Karr Lateral to be in-service in early-2016.
"The Karr Lateral will allow our customers operating in this
attractive area of the Montney to
access our Phase III pipeline expansion and ultimately get their
production to market," said Jason
Wiun, Pembina's Vice
President, Conventional Pipelines. "This lateral is one of many
that Pembina is working on as part
of the Phase III expansion which will provide pipeline
transportation service for producers in areas of the Western
Canadian Sedimentary Basin where more expensive and logistically
challenging options such as trucking or rail are the only
alternatives. These projects demonstrate that Pembina can continue to generate significant
capital investments through the delivery of safe, reliable and cost
effective pipeline options."
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 over 60 years. Pembina owns and operates an integrated system
of pipelines that transport various hydrocarbon liquids including
conventional and synthetic crude oil, heavy oil and oil sands
products, condensate (diluent) and NGL produced in western
Canada and ethane produced in
North Dakota. The Company also
owns and operates gas gathering and processing facilities and an
oil and NGL infrastructure and logistics business. With facilities
strategically located in western Canada and in NGL 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.
Forward-Looking Statements & Information
This document contains certain forward-looking statements and
information (collectively, "forward-looking statements") 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 pertaining to, without limitation, the following: the
terminalling services including the anticipated benefits of the
terminalling services to Pembina;
the anticipated capital expenditures related to the terminalling
services; the pipeline lateral including the anticipated capital
expenditures and expected utilization related to the pipeline
lateral; and 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 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 to realize the anticipated benefits of the
terminalling services and the pipeline lateral; 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.
Pembina Pipeline® is a registered trademark of
Pembina Pipeline Corporation.
SOURCE Pembina Pipeline Corporation