Pembina increases capacity of Phase III Pipeline Expansion

Pembina Pipeline Corporation announced that due to strong customer demand, it plans to expand its previously announced Phase III pipeline expansions by constructing a new 16 in. diameter pipeline from Fox Creek, Alberta into Namao, Alberta and a new 12 in. diameter pipeline from Wapiti, Alberta into Kakwa, Alberta (the "Wapiti to Kakwa Pipeline").

The 16 in. diameter pipeline will span approximately 270 km in length and be built in the same right-of-way as the proposed 24 in. diameter pipeline from Fox Creek to Namao. Pembina expects the two pipelines to initially have a combined capacity of 420 000 bpd and an ultimate capacity of over 680 000 bpd with the addition of midpoint pump stations. Since December 2013, Pembina has secured an additional 59 000 bpd under contract. With these commitments, total volumes under contract are approximately 289 000 bpd, or 69% of the initial combined capacity.

The proposed Wapiti to Kakwa Pipeline is intended to debottleneck a portion of Pembina's existing pipeline system. It will be approximately 70 km in length and is expected to have an initial capacity of approximately 95 000 bpd. This debottleneck will ultimately allow product to be delivered into the Company's core segment of the Phase III Expansion between Fox Creek and Namao. As part of this project, Pembina also plans to build two new pump stations. Subject to regulatory approval, Pembina expects the Wapiti to Kakwa Pipeline to be in-service in late-2016 to mid-2017, consistent with the timing of the initial expansion.

Combined, Pembina expects to incur additional capital expenditures for the additional 16 in. diameter pipeline and the Wapiti to Kakwa Pipeline of approximately US$ 435 million, bringing total estimated capital for the Phase III Expansion to US$ 2.44 billion.

Pembina continues to see interest in the Phase III Expansion, as evidenced by these new volumes," said Paul Murphy, Pembina's Senior Vice President of Pipeline & Crude Oil Facilities. "We are in ongoing discussions with our customers to ensure their transportation needs are addressed as early on in the development of this expansion as possible. As a result of the pipelines approved today, we will be in a position to support their existing and future growth plans."

Mick Dilger, Pembina's President and Chief Executive Officer added, "With the 16 in. diameter pipeline, Pembina will have four pipelines in the Fox Creek to Namao corridor with an ultimate capacity of over 1 million bpd. This will allow us to transport four distinct hydrocarbons - propane-plus, ethane-plus, condensate and crude oil - each in its own segregated pipeline. This is great for Pembina and for our customers as we will be able to realise operational efficiencies, such as minimising or eliminating batch interface between the products and streamlining storage requirements. In addition, we will be able to provide a ratable flow of propane-plus and ethane-plus into industry fractionators, including our Redwater fractionator, which will help to optimise operations at these facilities."

Subject to regulatory approval, Pembina expects the 16 in. and 24 in. diameter pipelines to be in-service between late-2016 and mid-2017. Pembina submitted its regulatory application for both pipelines from Fox Creek to Namao on September 2, 2014.

Pembina will provide information updates during the development of these assets and, if approved, during implementation so that stakeholders, communities, Aboriginal communities and other groups or individuals with interests in the area are informed of the Company's activities. Pembina has a strong reputation for constructing and operating facilities which meet or exceed safety and environmental protection regulations and guidelines, and the Company is committed to responsible development throughout the life of these and all of its projects.

Adapted from press release by Hannah Priestley-Eaton

Read the article online at: https://www.worldpipelines.com/business-news/11092014/pembina-increases-capacity-of-phase-iii-pipeline-expansion-and-secures-additional-volumes/