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Pembina Pipeline Corporation To Expand Its NGL And Crude And Condensate Pipeline Transportation Capacity

Stocks in this article: PBA PPL

CALGARY, Nov. 6, 2012 /PRNewswire/ - Pembina Pipeline Corporation ("Pembina") (TSX: PPL; NYSE: PBA) today announced plans to significantly expand its natural gas liquids ("NGL") and crude oil and condensate throughput capacity on its Peace and Northern Pipeline Systems by an additional 108,000 barrels per day ("bpd").

These expansions are expected to accommodate increased volumes associated with higher customer demand due to strong drilling results and increased field liquids extraction by area producers. The total cost of the projects is anticipated to be approximately $545 million plus approximately $125 million of additional capital to tie in producers to both the expanded systems. Expansion plans include increasing capacity on Pembina's Peace Pipeline System by 55,000 bpd by mid to late-2014 and its Northern NGL System by 53,000 bpd by early to mid-2015.

"With the amount of development of crude oil and NGL-rich resource plays we're seeing by producers near our pipelines in the Western Canadian Sedimentary Basin, there is a strong demand for this next phase of our growth strategy," said Mick Dilger, Pembina's President and Chief Operating Officer. "Our pipeline expansions will allow us to enhance the services we provide customers while adding value to our shareholders. This expansion is directly aligned with our goal of meeting our customers' needs through a truly integrated approach across the value chain."

Pembina is currently in the process of completing Phase 1 of an NGL expansion of 52,000 bpd (the "Phase 1 NGL Expansion"), which was announced in November, 2011, and Phase 1 of a crude oil and condensate expansion on the Peace Pipeline System of 40,000 bpd ("Phase 1 LVP Expansion"), which was announced in December, 2011.

Northern NGL Expansion

As a result of increased producer activities in the Dawson Creek, Grande Prairie and Kaybob/ Fox Creek areas, Pembina plans to further expand its Northern NGL System (the "Phase 2 NGL Expansion").  The Phase 2 NGL Expansion will require Pembina to install four new pump stations, upgrade three existing pump stations, and add additional operational storage. As well, Pembina will reconfigure existing pipelines and build a total of 94km of new pipeline: 50km of pipeline from Judy Creek to Whitecourt; 32km of pipeline from Namao to Fort Saskatchewan; and 12km of pipeline from Doe Creek to Spirit River.

Pembina expects the Phase 2 NGL Expansion to cost approximately $330 million and is subject to reaching commercial arrangements with its customers and receipt of regulatory approval. The Phase 2 NGL Expansion is expected to add an additional 53,000 bpd of capacity and can be brought into service in early to mid-2015. Once complete, the proposed Phase 2 NGL Expansion will increase capacity on Pembina's Northern NGL System by 32 percent to 220,000 bpd.

Previously, On November 9, 2011 Pembina announced the Phase 1 NGL Expansion, expanding capacity on its Peace and Northern NGL Pipeline Systems by an additional 52,000 bpd to reach 167,000 bpd by the end of 2013. To date, Pembina has successfully entered into commercial arrangements for the expanded capacity, received regulatory approval and commenced construction of this project.

Peace Crude Oil and Condensate Expansion

As a result of increased producer activities in the Dawson Creek, Grande Prairie and Kaybob/ Fox Creek areas, Pembina's plans also include further expanding its Peace Pipeline System's crude oil and condensate capacity (the "Phase 2 LVP Expansion").  The Phase 2 LVP Expansion will require Pembina to install five new pump stations, upgrade six existing pump stations, and add additional operational storage. As well, Pembina will reconfigure existing pipelines and build a total of 10 km of new pipeline from Gordondale to Spirit River.

Pembina expects the Phase 2 LVP Expansion to cost approximately $215 million and is subject to reaching commercial arrangements with its customers and receipt of regulatory approvals. The Phase 2 LVP Expansion is expected to add an additional 55,000 bpd of capacity and can be brought into service in mid to late-2014. Once complete, the proposed Phase 2 LVP Expansion will increase capacity on the Peace Pipeline by 28 percent to 250,000 bpd.

Previously, on December 1, 2011, Pembina announced the Phase 1 LVP Expansion, expanding its crude oil and condensate capacity on its Peace Pipeline System by an additional 40,000 bpd to reach 195,000 bpd by the end of 2013. Since the announcement Pembina has received regulatory approval and commenced construction of the project.

Upon completion of the Phase 1 and 2 NGL Expansions Pembina will have increased its capacity by approximately 105,000 bpd or 91% and on completion on the Phase 1 and 2 LVP Expansions Pembina will have increased its capacity by 95,000 bpd or 61%.

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