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Pembina Pipeline Corporation To Proceed With $1 Billion Expansion Of NGL Infrastructure

RFS II

With RFS II, Pembina will essentially be twinning the Company's existing Redwater Fractionator to address a portion of the anticipated shortfall in fractionation capacity within the Fort Saskatchewan, Alberta area. Subject to regulatory and environmental approvals, Pembina expects RFS II to be in-service late in the fourth quarter of 2015 at an estimated cost of $415 million.

Under the agreements signed with producers, Pembina will receive committed take-or-pay operating margin for an initial 10-year term from the in-service date. Contracts for 97% of the operating capacity have been secured. Ethane produced at RFS II will be sold under a long-term arrangement with NOVA Chemicals Corporation ("NOVA Chemicals").

"We are pleased to continue our relationship with Pembina through this arrangement," said Grant Thomson, President, Olefins & Feedstock for NOVA Chemicals. "The new fractionator is much needed and will enable more value-adding activity to occur within the Province. As the ethane supply from RFS II is based on field sources, it also supports further diversification of our feedstock sources, and positions NOVA Chemicals well for future growth."

With the acquisition of Provident Energy Ltd. ("Provident") in April, 2012, Pembina entered into the fractionation business and was able to offer a fully integrated NGL service to its customers, from wellhead to the consumer gate. At the time, the Company announced plans to expand fractionation capacity at its Redwater site to support increasing demand. "The opportunity to develop RFS II was a key driver in our acquisition of Provident," said Mick Dilger, Pembina's President and Chief Operating Officer.

Phase II NGL Pipeline Capacity Expansion

To support increasing NGL volumes, Pembina is proceeding with its proposed Phase II NGL pipeline capacity expansion on its Peace/Northern NGL System. The Company is currently completing the Phase I expansion, which will increase NGL capacity on the Peace/Northern NGL System by 45 percent to 167,000 bpd by October 2013. The Phase II NGL Expansion will increase capacity from 167,000 bpd to 220,000 bpd. In total, the Phase I and II expansions are expected to increase NGL transportation capacity by 90 percent. Subject to obtaining regulatory and environmental approvals, Pembina expects this expansion to cost approximately $415 million (including mainline and tie-in capital) and to be complete in early to mid-2015.

In addition, subject to regulatory and environmental approvals, Pembina will be constructing a new approximately 30 kilometre lateral into the Ferrier region to tie a third-party's facility into Pembina's Brazeau Pipeline System.

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