To better serve our many subscribers that are working from home during this time, we are offering digital issues of North American Oil and Gas Pipelines. Please Subscribe to ensure delivery of future digital editions. Thank you and be well.

Pembina Increases Phase III Expansion Capacity, Secures Additional Volumes

1

Demand is causing Pembina Pipeline Corp. to expand its planned pipeline expansion in Alberta. In response to strong customer support, the company announced it will increase capacity on the Phase III Expansion project by constructing a 270-km, 16-in. diameter pipeline from Fox Creek to Namao, Alberta, and a 70-km, 12-in. diameter pipeline from Wapiti to Kakwa, Alberta.

Pembina Pipeline Corp. increases capacity of Phase III pipeline expansion and secures additional volumes (CNW Group/Pembina Pipeline Corp.). 

Pembina Pipeline Corp. increases capacity of Phase III pipeline expansion and secures additional volumes (CNW Group/Pembina Pipeline Corp.).

/*** Advertisement ***/

The 16-in. diameter pipeline will be built along the same right of way as the previously announced, proposed 24-in. diameter pipeline from Fox Creek to Namao. Pembina expects the two pipelines to initially have a combined capacity of 420,000 barrels per day (bpd) and an ultimate capacity of more than 680,000 bpd with the addition of midpoint pump stations. Since December 2013, the company has secured an additional 59,000 bpd under contract. With these commitments, total volumes under contract are approximately 289,000 bpd, or 69 percent of the initial combined capacity.

The proposed Wapiti to Kakwa Pipeline is intended to reduce bottlenecking on a portion of Pembina’s existing pipeline system. It is expected to have an initial capacity of approximately 95,000 bpd. By eliminating the bottleneck, it 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, the company 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 $435 million, bringing total estimated capital for the Phase III Expansion to $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 and 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.”

With the addition of the 16-in. diameter pipeline, Pembina will have four pipelines in the Fox Creek to Namao corridor with an ultimate capacity of more than 1 million bpd, added Pembina president and CEO Mick Dilger.

“This will allow us to transport four distinct hydrocarbons — propane-plus, ethane-plus, condensate and crude oil — each in its own segregated pipeline,” Dilger said. “This is great for Pembina and for our customers as we will be able to realize operational efficiencies, such as minimizing 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 optimize operations at these facilities.”

Subject to regulatory approval, Pembina expects the 16- 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 Sept. 2.

Share.

Copyright Benjamin Media 2018