Pembina Pipeline Corp. announced that it has executed further agreements whereby the company will construct and operate the first tranche of infrastructure development under its previously announced 20-year infrastructure development and service agreement with Chevron Canada Ltd. The agreement includes over 230,000 acres of land dedication by Chevron in the liquids-rich Kaybob region of the Duvernay.
Under the service agreements, Pembina has been requested to develop and construct:
• raw product separation and water removal infrastructure;
• a condensate stabilization facility with approximately 30,000 barrels per day (bpd) of raw inlet condensate handling capacity;
• 100 million cubic feet per day gas processing facility with approximately 5,000 bpd of propane-plus liquids capacity (Duvernay II a replica of Pembina’s Duvernay I facility); and
• a 10-in. condensate pipeline lateral that will connect to the company’s Peace Pipeline system.
Duvernay II and the related infrastructure will be located at the Company’s existing Duvernay complex. Pembina expects the total capital cost to be approximately $290 million with an anticipated in-service date of mid to late 2019, subject to regulatory and environmental approvals. As per the terms of the Service Agreements, the facilities will have a 20-year contractual life and would be back-stopped by a combination of fee-for-service and fixed-return arrangements. Additionally, the Service Agreements include natural gas liquids (NGL) and condensate transportation on Pembina’s Peace Pipeline system and NGL fractionation at the Company’s Redwater Fractionation complex.
“We are excited to further support the growth of the world-class Duvernay resource play and begin building out our first tranche of infrastructure requested under the previously announced Agreement with Chevron,” said Jaret Sprott, Pembina’s vice president, Gas Services. “Pembina will leverage its template designs in order to safely and cost-effectively construct the facilities for our partner. We look forward to continuing to develop future Duvernay infrastructure needs over the long-term.”