Pembina Pipeline Corp. Places Approximately $2.8 Billion of Integrated Assets into Service

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Pembina Pipeline Corp. announced that it has placed approximately $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).

“At the outset of these projects, we committed to constructing large-scale, multiyear-build assets on time and on budget, and I’m proud to say that we’ve successfully delivered on that promise, with the overall portfolio coming in under budget by approximately 8 percent and either on time or ahead of schedule,” said Mick Dilger, Pembina’s president and chief executive officer.

Phase III Expansion

The Phase III Expansion, which is underpinned by long-term contracts with take-or-pay commitments, was placed into service on June 30, 2017 on time and under budget from the $2.44 billion expected capital.

The entire 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 accommodate increased volumes upstream of Pembina’s Fox Creek tie-in point.

In support of handling the increased product, 420,000 barrels per day (bpd) of incremental capacity was added in the Fox Creek to Namao corridor of Alberta through the construction of two pipelines: a 16- and a 24-in. diameter pipeline, each spanning approximately 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.

“Placing our Phase III Expansion into service is an exciting milestone for Pembina as we’ve now successfully completed the largest capital project in our history,” said Paul Murphy, Pembina’s senior vice president, Pipeline and Crude Oil Facilities. “Our customers will benefit from the newly increased capacity, as our pipelines were previously under apportionment, and they will also realize enhanced service offerings and operational efficiencies from being able to flow segregated product in separate pipelines. In addition, we will be able to provide a ratable flow of ethane-plus and propane-plus into both Pembina and third-party fractionators in the Fort Saskatchewan region, which will help to optimize operations at these facilities.”

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 in. pipeline between Fox Creek and Namao through its Phase IV Expansion, subject to regulatory and environmental approval. 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 in. 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 million bpd.

“Looking back only a few years ago when our extensive growth plans were in their infancy, to the transformation of where our company is today, I commend all of the hard work and dedication of our teams who worked tirelessly to achieve such extraordinary results in bringing our growth plans successfully into fruition – all while maintaining our outstanding safety record,” Dilger said. “I am also very proud of the relationships and trust we have built over this timeframe with the communities, stakeholders, customers and First Nations and Métis in the areas where we operate and look forward to continuing to foster these relationships in the future.”

For more specifics about the Redwater fractionator and the Canadian Diluent Hub, read the complete press release here.

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