(All financial figures are approximate and in Canadian dollars
unless otherwise noted.)
CALGARY, Nov. 28, 2012 /CNW/ - Pembina Pipeline
Corporation ("Pembina" or the "Company") (TSX: PPL; NYSE: PBA)
announced that its Board of Directors has approved a capital
spending budget of approximately $965
million for 2013. This is approximately 75 percent higher
than Pembina's 2012 capital budget and represents the largest in
the Company's history.
"2013 will mark the third consecutive year that Pembina has
increased its capital program, again setting a record for the size
of our investment," said Bob
Michaleski, Chief Executive Officer. "This impressive
capital spending plan is directly aligned with our goal of
continuing to provide long-term value to our shareholders, with the
vast majority of our 2013 investments being targeted towards
fee-for-service projects. Our focus in the next year will be to
progress our current suite of projects and bring in the next phase
of Pembina's growth opportunities while maintaining a strong
balance sheet and increasing our cash flow per share."
A substantial portion - $240
million, or about 25 percent - of the 2013 capital spend
will be directed towards completing the construction of the
Company's Saturn and Resthaven enhanced liquids extraction
facilities along with the associated pipelines. These projects will
provide extraction of natural gas liquids ("NGL") in the field for
producers located in west central Alberta.
Pembina also plans to direct $210
million, or 22 percent of its 2013 capital budget towards
the expansion of its crude oil, condensate and NGL pipelines. These
expansion projects will allow Pembina to continue to meet the
growing needs of producers, which has resulted from new technology
being deployed and increased activity in the Western Canadian
Sedimentary Basin.
Pembina's 2013 capital spending plan reflects strong growth
opportunities that expand on existing operations in each of its
four businesses and is expected to continue to drive shareholder
value in the coming years.
2013 Capital Spending Highlights By Business
Pembina's 2013 capital spending plan is expected to be allocated
as follows:
Conventional Pipelines |
|
($ millions) |
2013 Budget |
Peace Crude & Condensate Expansion - Phase
1 |
20 |
Peace Crude & Condensate Expansion - Phase
2 |
70 |
NGL System Expansion - Phase 1 |
50 |
NGL System Expansion - Phase 2 |
70 |
Saturn and Resthaven Liquids Pipelines |
55 |
Other Tie-Ins and Upgrades |
90 |
Total |
355 |
- To support growing crude oil and condensate production in its
operating areas, Pembina plans to increase capacity on its Peace
System in two phases. The Phase 1 LVP Expansion involves expanding
the crude oil and condensate capacity on Pembina's Peace Pipeline
system by an additional 40,000 bpd to reach 195,000 bpd by the end
of 2013. Pembina expects Phase 2 to add an additional 55,000 bpd of
capacity by mid to late 2014. Once complete, the expansions will
increase capacity on the Peace Pipeline by 61 percent to 250,000
bpd. These expansions will accommodate increasing crude oil and
condensate volumes resulting from continued delineation by
producers of the crude and condensate-rich areas of the
Montney resource play in the
Dawson Creek, Grande Prairie and Kaybob/Fox Creek areas as well as initial development
of the condensate-rich Duvernay
resource play in the Kaybob area.
- The Phase 1 NGL Expansion will expand capacity on Pembina's
Peace and Northern NGL Pipeline systems by an additional 52,000 bpd
to reach 167,000 bpd by the end of 2013. Pembina expects Phase 2 to
add an additional 53,000 bpd of capacity by mid-2015. Once
complete, the expansions will increase capacity on Pembina's
Northern NGL System by 91 percent to 220,000 bpd. These expansions
will provide increased transportation capacity for producer
activity focused on NGL development, which continues to be strong
in the Deep Basin Cretaceous, Montney and Duvernay resource plays.
The $140 million of capital in
2013 associated with the Phase 2 pipeline expansions detailed
above, while approved by Pembina's Board of Directors, is
contingent on customer commitments to proceed as well as customary
regulatory and environmental approvals.
Pembina's Conventional Pipelines business also has plans for
several other new connections and upgrades in 2013 totaling
approximately $90 million.
Gas Services |
|
($ millions) |
2013 Budget |
Saturn Deep Cut Facility |
90 |
Resthaven |
95 |
Cutbank Complex Upgrades |
25 |
Other |
5 |
Total |
215 |
Pembina plans to allocate approximately $185 million of its capital budget toward the
construction of the Company's Saturn and Resthaven enhanced liquids
extraction facilities within its Gas Services business.
- The Saturn facility is a new, 200 MMcf/d deep cut facility in
the Wild River/Berland River area in
the liquids rich foothills area of west central Alberta. The Company expects Saturn to be in
service in the fourth quarter of 2013.
- The Resthaven facility is a new, 200 MMcf/d (130 MMcf/d net to
Pembina) deep cut facility in the Resthaven area in the liquids
rich foothills area of west central Alberta. The Company expects Resthaven to be
in service in the first quarter of 2014.
At Pembina's existing Cutbank Complex, several projects totaling
$25 million have been budgeted to
handle increased demand for processing and compression in the area
and to increase throughput through the facility.
Oil Sands & Heavy Oil |
|
($ millions) |
2013 Budget |
Nipisi and Mitsue Pipelines - Pump Stations and
Connectivity |
25 |
Other |
20 |
Total |
45 |
Pembina's expenditures in its Oil Sand & Heavy Oil business
will be directed to increasing capacity on, and the connectivity
of, the Nipisi and Mitsue pipelines.
The Company is currently building pump stations to increase
throughput capacity on both the Nipisi and Mitsue pipelines and
expects:
- The additional pump station for the Nipisi pipeline will
increase system capacity from 93,000 bpd to 105,000 bpd by the end
of the second quarter of 2013; and
- The additional pump station for the Mitsue pipeline will
increase system capacity from 18,000 bpd to 22,000 bpd by the end
of the third quarter of 2013.
Another project priority includes the construction of a new
delivery interconnection facility to transfer crude oil from the
Nipisi pipeline to a terminal near Edmonton, Alberta for Nipisi shippers. The
connection is expected to be in place by mid-2013 for which Pembina
will earn a fee for the service.
The Company is also directing capital to progress work on
numerous opportunities within this business.
Midstream |
|
($ millions) |
2013 Budget |
Crude Oil Midstream |
|
|
Pembina Nexus Terminal |
75 |
|
Full-Service Terminals |
40 |
|
Other |
15 |
Total Crude Oil Midstream |
130 |
NGL Midstream |
|
Redwater West: |
|
|
Cavern and Storage Development |
90 |
|
Terminalling and Connectivity |
35 |
|
Other |
45 |
Empress East |
45 |
Total NGL Midstream |
215 |
Total |
345 |
Pembina will continue to focus its capital spending on
initiatives that expand its current service offerings and enhance
the interconnectivity of the infrastructure it accesses.
Specifically, in 2013 the Company will focus on expansion of the
Pembina Nexus Terminal ("PNT") and its full-service terminal
network. Plans include the build-out of additional storage at PNT
and establishing a pipeline connection between PNT and its
Redwater site in Fort Saskatchewan. In addition, Pembina
expects to be able to bring two new full-service terminals into
service in 2013 and will begin construction on an additional three
full-service terminals during the year.
The majority of capital expenditures in the NGL Midstream
business for 2013 will be directed towards providing third-party
storage and terminalling solutions as well as developing caverns at
Pembina's Redwater fractionation
facility. Pembina expects that three third party fee-for-service
caverns at Redwater will come into
service in the first half of 2013. Empress East capital projects
are also focused on third-party storage solutions including an
expansion at Cromer as well as
brine pond and storage development at Corunna.
Should sufficient customer support be received, capital of
approximately $15 million will be
allocated in 2013 to ordering long-lead equipment for a new 73,000
bpd fracationator at Pembina's Redwater site.
Other Capital Expenditures:
The remainder of Pembina's 2013 capital budget will be used to
complete a variety of corporate-wide projects, primarily allowing
for system and technology upgrades.
Financing
The Company plans to finance its 2013 capital expenditures
through cash flow from operating activities, undrawn credit
facilities, its Premium Dividend™ and Dividend Reinvestment Plan,
public or private debt, and public equity.
Investor Day Presentation and Webcast
Pembina will hold an Investor Day on Tuesday, December 4, 2012 at One King West Hotel
in Toronto, Ontario.
Parties interested in attending the event please RSVP to
rsvp@pembina.com. A live webcast will begin at 8:30 a.m. EST. To register for the webcast please
click the following link
http://event.on24.com/r.htm?e=543882&s=1&k=BD494E58874527F19D5F6A47CF038284.
The webcast and presentation will be accessible and available for
replay through Pembina's website www.pembina.com under Investor
Centre, Presentations & Events.
About Pembina
Calgary-based Pembina Pipeline
Corporation is a leading transportation and midstream service
provider that has been serving North
America's energy industry for nearly 60 years. Pembina owns
and operates: pipelines that transport conventional and
synthetic crude oil and natural gas liquids produced in western
Canada; oil sands and heavy oil
pipelines; gas gathering and processing facilities; and, an oil and
natural gas liquids infrastructure and logistics business. With
facilities strategically located in western Canada and in natural gas liquids markets in
eastern Canada and the U.S.,
Pembina also offers a full spectrum of midstream and marketing
services that span across its operations. Pembina's integrated
assets and commercial operations enable it to offer services needed
by the energy sector along the hydrocarbon value chain.
Pembina is a trusted member of the communities in which it
operates and is committed to generating value for its investors by
running its businesses in a safe, environmentally responsible
manner that is respectful of community stakeholders.
Pembina provides monthly cash dividends to its shareholders.
Pembina's common shares and convertible debentures are traded on
the Toronto Stock Exchange under
the symbols PPL, PPL.DB.C, PPL.DB.E and PPL.DB.F respectively.
Pembina's common shares are traded on the New York Stock Exchange
under the symbol PBA.
Forward-Looking Statements & Information
This document contains certain forward-looking statements and
information (collectively, "forward-looking statements") within the
meaning of the "safe harbor" provisions of applicable securities
legislation that are based on Pembina's current expectations,
estimates, projections and assumptions in light of its experience
and its perception of historical trends. In some cases,
forward-looking statements can be identified by terminology such as
"plans", "targets", "expects", "proposes", "projects", "will",
"estimates", "intends", "anticipates", "develop", "could",
"potential" and similar expressions suggesting future events or
future performance.
In particular, this document contains forward-looking
statements, including certain financial outlook, pertaining to,
without limitation, the following: Pembina's corporate strategy;
the construction schedule and commissioning of the Saturn and
Resthaven enhanced liquids extraction facilities and associated
pipelines; the construction schedule and planned capacity of the
Peace Pipeline crude and condensate expansion projects; the
construction schedule and planned capacity of the Peace and
Northern Pipeline NGL expansion projects; the construction schedule
and planned capacity increases of the Nipisi and Mitsue pipelines
as a result of the addition of pump stations; the proposed
full-service truck terminals; additional storage at PNT and the
connection between PNT and the Redwater site; the development of caverns at
the Redwater fractionator
facility; the addition of storage and terminalling solutions at
Redwater, Cromer and Corunna; the ongoing utilization and
expansions of and additions to Pembina's business and asset base,
growth and growth potential; expectations regarding future demand
for transportation services; expectations regarding supply and
demand factors and pricing for oil and natural gas; potential
revenue and cash flow enhancement; and future cash flows,
maintenance and operating margins. These forward-looking statements
and information are being made by Pembina based on certain
assumptions that Pembina has made in respect thereof as at the date
of this document including those discussed below.
With respect to forward-looking statements contained in this
document, Pembina has made assumptions regarding, among other
things: ongoing utilization and future expansion, development,
growth and performance of Pembina's business and asset base; future
demand for transportation services; future levels of oil and
natural gas development in proximity to Pembina's pipelines and
other assets (which could be affected by, among other things,
possible changes to applicable royalty and tax regimes); the amount
of future liabilities related to environmental incidents; the
availability of coverage under Pembina's insurance policies
(including in respect of Pembina's business interruption insurance
policy); future acquisitions, growth and growth potential in
Pembina's operations; potential revenue and cash flow enhancement;
future cash flows; maintenance of operating margins; additional
throughput potential on additional connections and other
initiatives on the Conventional Pipelines systems; expected project
start-up and construction dates; future dividends and taxation of
dividends; future financing capability and sources; and negative
credit rating adjustments.
Although Pembina believes the expectations and material
factors and assumptions reflected in these forward-looking
statements are reasonable as of the date hereof, there can be no
assurance that these expectations, factors and assumptions will
prove to be correct. Readers are cautioned that events or
circumstances could cause results to differ materially from those
predicted, forecasted or projected. By their nature,
forward-looking statements involve numerous assumptions, known and
unknown risks and uncertainties that contribute to the possibility
that the predictions, forecasts, projections and other
forward-looking statements will not occur, which may cause actual
performance and financial results in future periods to differ
materially from any projections of future performance or results
expressed or implied by such forward-looking statements and
information.
None of the forward-looking statements described above are
guarantees of future performance and are subject to a number of
known and unknown risks and uncertainties, including, but not
limited to: the impact of competitive entities and pricing;
reliance on key industry partners, alliances and agreements; the
strength and operations of the oil and natural gas production
industry and related commodity prices; the continuation or
completion of third- party projects; regulatory environment and
inability to obtain required regulatory approvals; tax laws and
treatment; fluctuations in operating results; lower than
anticipated results of operations and accretion from Pembina's
business initiatives; reduced amounts of cash available for
dividends to shareholders; the ability of Pembina to raise
sufficient capital (or to raise capital on favourable terms) to
complete future projects and satisfy future commitments, including
the construction and commissioning of the Saturn and Resthaven
enhanced liquids extraction facilities and associated pipelines,
the Peace Pipeline crude and condensate expansions, the Peace and
Northern Pipeline NGL expansions, the proposed full service truck
terminals; the addition of pump stations on the Nipisi and Mitsue
pipelines; and the development of additional caverns at
Redwater; the addition of storage
and terminalling solutions at Redwater, Cromer and Corunna; construction costs on these projects;
construction delays; labour and material shortages; and certain
other risks detailed from time to time in Pembina's public
disclosure documents available at www.sedar.com. Readers are
cautioned that this list of risk factors should not be construed as
exhaustive.
The forward-looking statements contained in this document
speak only as of the date of this document. Pembina does not
undertake any obligation to publicly update or revise any
forward-looking statements or information contained herein, except
as required by applicable laws. The forward-looking statements
contained in this document are expressly qualified by this
cautionary statement.
SOURCE Pembina Pipeline Corporation