Pembina Places $650M of New Assets in Service

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Pembina Pipeline Corp. has commissioned several key growth projects within its Gas Services and Conventional Pipeline businesses, placing approximately $650 million assets into service.

“I am proud of the work Pembina employees have done to commission such large scale energy infrastructure projects,” said Mick Dilger, Pembina’s president and CEO. “I am also very pleased to advise that a large portion of these projects were placed into service on-time and under budget. Further, and most importantly, was the exemplary safety record that was maintained across all of these projects from construction through to commissioning.”

In addition to commissioning these new assets, Pembina also provided an update on other key growth projects on-going across its business in a Sept. 2 statement.

Gas Services

Pembina’s Gas Services business successfully commissioned 260 million cubic feet per day (MMcf/d) of new processing capacity and pipeline infrastructure in Alberta and Saskatchewan for a combined capital investment of approximately $320 million, which represents a 7 percent savings versus the original project budget.

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In late August, Pembina safely commissioned its Saturn II facility, a 200 MMcf/d ‘twin’ of the company’s existing Saturn I Facility,ahead of schedule and under budget. The natural gas liquids (NGL) volumes produced at Saturn II will be transported on Pembina’s Peace Pipeline system and will be fractionated at Pembina’s Redwater facility.

Pembina’s Saskatchewan Ethane Extraction plant (SEEP) was commissioned in late August. SEEP was acquired as part of the Vantage Pipeline acquisition, which closed in October 2014. This facility has a deep cut processing capacity of 60 MMcf/d and ethane plus fractionation capabilities which supports up to approximately 4,500 barrels per day (bpd) of ethane extraction. The ethane volumes produced at SEEP will be transported under a long-term, fee-for-service agreement on Pembina’s Vantage Pipeline.

Additionally, Pembina placed into service the gathering pipeline associated with the 100 MMcf/d Resthaven Expansion project. This project consisted of a 12-in. diameter 28-km pipeline with capacity to deliver 100 MMcf/d that will connect a customer’s condensate recovery plant into Pembina’s Resthaven facility. In advance of the expected in-service of the Resthaven Expansion, this newly commissioned pipeline will be able to provide additional gas volumes for Pembina’s existing Resthaven facility. Construction of the Resthaven Expansion is under way and is expected be in service by mid-2016. Once the Resthaven Expansion is complete, the facility’s gross gas processing capacity will increase to 300 MMcf/d.

With the Saturn II and SEEP facilities in service, Pembina’s Gas Services capacity has increased 26 percent from 1,003 MMcf/d to 1,263 MMcf/d.

“This additional capacity supports Pembina in becoming one of Canada’s largest third party gas processors,” said Jaret Sprott, Pembina vice president of gas services. “These plants provide increased exposure to attractive Western Canadian Sedimentary Basin multi-zone geology and represents Pembina’s entry into Saskatchewan’s prolific Bakken resource play.”

Conventional Pipelines

At the beginning of September, Pembina commissioned the high vapor pressure (HVP) or NGL portion of the Peace and Northern Phase II pipeline expansion and expects to have the pipeline fully commissioned by the end of 2015. In conjunction with the low vapor pressure (LVP) or crude oil and condensate portion of the expansion that was placed into service in April, the Peace and Northern Phase II pipeline expansion is now in service.

In aggregate, the Phase II Expansion and all associated laterals represents an approximately $670 million of capital investment, of which approximately $330 million is attributable to the Phase II HVP project and approximately $340 million is attributable to the Phase II LVP project.

The Phase II Expansion is underpinned by 5 to 10 year contracts with substantial take-or-pay commitments from approximately 40 customers. The Phase II Expansion is expected to increase Peace and Northern systems’ capacity by 108,000 bpd in aggregate. As a result of commissioning the Phase II Expansion, total capacity in Pembina’s Conventional Pipeline business will increase by 15 percent to approximately 830,000 bpd.

“These expansions provide much needed hydrocarbon liquids transportation capacity for the Western Canadian Sedimentary Basin,” said Jason Wiun, Pembina vice president of conventional pipelines. “Pembina is well positioned to support future production growth through our existing asset base and through our committed growth projects that have significant embedded expansion potential.”

Project Updates

In the coming months, Pembina will be commissioning a number of projects in its NGL Midstream business. Early in 2016, Pembina plans to commission the twin of its existing 73,000 bpd ethane plus fractionator (RFS II).

Also in early 2016, a small scale debottlenecking initiative to modestly increase propane plus throughput capacity at Pembina’s existing Redwater Fractionator is expected to be commissioned.

Finally, at Pembina’s Corunna site, construction and commissioning of new brine pond, storage, rail and truck infrastructure is under way, the new assets are expected to be phased into service through the remainder of 2015 and early 2016.

Pembina also provided an update for the regulatory process associated with the $220 million expansion to pipeline infrastructure in northeast British Columbia, NEBC Expansion Project.

On Aug. 26, the company withdrew its application for an expedited environmental review by the British Columbia Environmental Assessment Office (B.C.E.A.O). Pembina’s application was withdrawn to ensure that all First Nations and public concerns are identified and fulsomely addressed. Pembina intends to file a project application with the B.C.E.A.O in late 2015 and will be proceeding with preparing an environmental assessment certificate through the provincial environmental assessment process, both of which will help support the project moving forward successfully. The anticipated schedule for the NEBC Expansion Project remains unchanged with an expected in-service date of the fourth quarter 2017, subject to regulatory and environmental approvals.

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