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Pembina Pipeline Corporation Announces $460 Million Of New Capital Projects

Long-term agreements underpin third fractionator at Pembina's Redwater complex

CALGARY, May 12, 2014 /PRNewswire/ - Pembina Pipeline Corporation ("Pembina" or the "Company") (TSX: PPL; NYSE: PBA) announced today that it has reached binding commercial agreements to proceed with constructing a new 55,000 barrel per day ("bpd") propane-plus fractionator ("RFS III") at its existing Redwater fractionation and storage complex ("Redwater") and a new high vapour pressure ("HVP") pipeline lateral that will extend the gathering potential of its Brazeau Pipeline in the Willesden Green area of south-central Alberta.

RFS III, which is underpinned by long-term take-or-pay contracts with multiple producers, is expected to cost approximately $400 million (including associated caverns and capital previously announced for the RFS III pre-build). The facility will be the third fractionator at Pembina's Redwater complex and will leverage the design and engineering work completed for Pembina's first and second fractionators ("RFS I" and "RFS II"). Pembina announced the RFS III pre-build on July 31, 2013, whereby the design of certain facilities at RFS II were expanded in order to accommodate the development of RFS III. This pre-build resulted from the Company's confidence that there would be customer demand for additional fractionation capacity at Redwater.

"We are excited to have secured the commercial agreements to proceed with building a third fractionator," said Stuart Taylor, Pembina's Senior Vice President, NGL and Natural Gas Facilities. "RFS III will provide our customers with timely fractionation capacity along with efficient storage and market access through our well-established facilities at Redwater. Leveraging our existing assets and using similar plant designs again demonstrates the value of our integrated strategy."

Currently, RFS I has an operating capacity of 73,000 bpd. As previously announced, RFS I is being debottlenecked to bring capacity to approximately 82,000 bpd in the fourth quarter of 2015. When combined with RFS II, which is expected to come into service in the fourth quarter of 2015, the Company's fractionation capacity is anticipated to nearly double to 155,000 bpd. With the addition of RFS III, Pembina's fractionation capacity will total 210,000 bpd, making the Company's Redwater complex the largest fractionation facility in Canada. Certain components of RFS III will be upsized and the site will be designed to accommodate a de-ethanizer tower in the future, should Pembina receive commercial support to backstop such an expansion. With a de-ethanizer tower, capacity at RFS III would reach 73,000 bpd and bring the total capacity at Redwater to 228,000 bpd. Subject to regulatory and environmental approval, Pembina expects RFS III to be in-service in the third quarter of 2017.

In conjunction with building RFS III, Pembina also plans to construct a new HVP pipeline lateral into the Willesden Green area in south-central Alberta, at an estimated cost of approximately $60 million. The project, which is underpinned by a long-term take-or-pay contract, entails installing approximately 56 kilometres of new HVP pipeline, along with other associated infrastructure. The new HVP pipeline will be connected to Pembina's Brazeau Pipeline and will be capable of transporting ethane-plus ("C 2+") natural gas liquids from the field for delivery into the Fort Saskatchewan area . Subject to regulatory and environmental approval, Pembina expects the new C 2+ lateral to be in-service in mid-2015. As a result of the C 2+ lateral, an additional 10,000 bpd of capacity will be under long-term contract for fractionation at Pembina's Redwater complex.

"Projects like these support our continued focus on expanding our fee-for-service business and integrated service offering, which in turn help drive sustainable dividend growth - and ultimately value for our shareholders - for many years to come," added Mr. Taylor.

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