Pembina Pipeline Places $2.8 Billion of Integrated Assets in Service

Pembina Pipeline has placed about $2.8 billion of integrated capital projects into service, including its Phase III pipeline expansion and two connected major delivery points: the company’s third fractionator at Redwater (RFS III) and its Canadian Diluent Hub (CDH), the company said.

The Phase III Expansion, which is underpinned by long-term contracts with take-or-pay commitments, was placed into service on June 30, on time and under budget. The Phase III Expansion program, which was initiated in 2013, included installing over 900 km of new pipeline primarily along the Company’s existing Peace and Northern system rights-of-way, as well as upgrading and adding new mainline pump stations.

Initial work for the Phase III Expansion included debottlenecking segments of existing pipeline systems from Taylor, British Columbia to Gordondale, Alberta and adding a new pipeline from Wapiti to Fox Creek, Alberta to allow increased volumes upstream of Pembina’s Fox Creek tie-in point. In support of handling the increased product, 420,000 bpd of incremental capacity was added in the Fox Creek-to-Namao corridor of through the construction of two pipelines: a 16-inch and a 24-inch diameter pipeline, each spanning 290 km.

With the Phase III Expansion now complete, Pembina has four pipelines between Fox Creek and Namao, allowing the company to transport four distinct hydrocarbons – ethane-plus, propane-plus, condensate and crude oil – each in its own segregated pipeline, plus upstream capacity to handle higher volumes driven by the development of the Montney, Duvernay and Deep Basin resource plays.

In aggregate, Pembina now has over 850,000 bpd of combined capacity between its Peace and Northern Pipeline systems which connect into the delivery point at Namao. Given continued customer demand, the Company recently announced that it secured contracts to add an additional 180,000 bpd of capacity via the addition of two pump stations on the new 24-inch pipeline between Fox Creek and Namao through its Phase IV Expansion.

It also is working on the Phase V Expansion, which entails looping its pipeline between Lator and Fox Creek to provide additional upstream capacity. Beyond these expansions, which are expected to be placed into service in late 2018, Pembina is able to increase capacity on the 24- and 16-inch pipelines in the Fox Creek to Namao corridor by another 250,000 bpd through additional pump stations, which would bring total capacity into the Namao hub to almost 1.3 MMbpd.

PeRFS III

In conjunction with the Phase III Expansion, RFS III was also placed into service June 30, ahead of schedule and under budget. Backstopped by long-term, take-or-pay contracts, RFS III added 55,000 bpd of additional propane-plus fractionation capacity and leveraged the designs of Pembina’s first and second fractionators. Pembina’s Redwater complex now has an aggregate fractionation capacity of 210,000 bpd – the largest in the Canadian energy infrastructure sector.

“Based on our customers’ volume projections supporting the Phase III Expansion, we secured contracts to build RFS III so that pipeline and fractionation capacity would be better aligned within the Fort Saskatchewan area,” said Stuart Taylor, Pembina senior vice president, NGL and Natural Gas Facilities. “Along with increased fractionation capacity with RFS III, our Redwater complex provides customers with efficient storage and market access through our well-established facilities at Redwater and our new Canadian Diluent Hub.”

CDH

Also aligned with the in-service of the Phase III Expansion and RFS III, on June 30, Pembina placed additional condensate connections at CDH into service on time and under budget. CDH, which operates commercially as a fee-based hub, provides direct connectivity for growing condensate volumes transported on Pembina’s pipeline systems and offers diluent services for oil sands customers.

Currently, the facility’s pipelines are capable of delivering 400,000 bpd of condensate to regional third-party diluent pipelines, with connections to the Access, Cold Lake, Fort Saskatchewan (FSPL) and Polaris pipelines. By the end of 2017, CDH is also expected to have additional third-party connections as well as 500,000 bbls of above ground storage in operation.

Several additional factors supported the development of CDH, including its Alberta Industrial Heartland location, which is proximal to oil sands and diluent pipelines, as well as associated terminals. Development in this location enabled Pembina to avoid costly and congested construction in the greater Edmonton area, the company said.

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