CALGARY, Nov. 5, 2015 /CNW/ - Pembina Pipeline Corporation
("Pembina" or the "Company") (TSX: PPL; NYSE: PBA) announced today
that it plans to construct, own and operate a new 100 million cubic
feet per day ("MMcf/d") shallow cut gas plant ("Duvernay I" or "the
Facility"), in close proximity to Pembina's Fox Creek Terminal. The expected
capital cost for this project, including supporting infrastructure,
is expected to be approximately $125
million.
Duvernay I, which is underpinned by a long-term agreement with a
large and diversified investment grade oil and gas producer,
involves the construction of a new 100 MMcf/d shallow cut gas
processing facility and incremental pipeline lateral capital.
Pembina expects Duvernay I to have
natural gas liquids ("NGL") extraction capacity of approximately
5,500 barrels per day ("bpd"), subject to gas compositions. Similar
to the Company's other gas processing facilities, the agreement for
Duvernay I is take-or-pay in nature and will provide flow-through
of operating expenses. Subject to regulatory and environmental
approval, Pembina anticipates
bringing Duvernay I in service in the second half of 2017.
"Pembina is very excited to be
able to support the growth of the world class Duvernay resource play through the
construction of the Facility, which represents the first
large-scale gas processing plant to be developed specifically for
the Duvernay," said Stuart Taylor, Pembina's Senior Vice President of NGL and
Natural Gas Facilities. "In-spite of uncertainty in commodity
markets, Pembina's customers
continue to remain committed to the development of the Western
Canadian Sedimentary Basin."
Duvernay I demonstrates the value of Pembina's integrated value chain service
offering and creates a platform for growth in the Duvernay. NGL production from the Facility
will be transported on Pembina's
Peace Pipeline system under a long-term, take-or-pay agreement.
These incremental volumes serve to further enhance Pembina's Peace Phase III expansion project,
which is expected to provide 420,000 bpd of incremental liquids
transportation capacity from Fox
Creek to Namao (subject to
regulatory approval). Additionally, an agreement for NGL
fractionation at Pembina's
Redwater Fractionation complex was executed.
The design of the Duvernay I plant closely resembles that of
Pembina's two recent 100 MMcf/d
shallow cut gas plants at its Cutbank Complex ("Musreau II" and
"Musreau III"). Musreau II was completed ahead of schedule and on
budget and Musreau III is expected to be completed ahead of
schedule and under budget by mid-2016. "These encouraging results
and expectations demonstrate the value of Pembina's proven 'assembly line' approach to
project development," said Jaret
Sprott, Pembina's Vice
President, Gas Services. "I am confident, based on our proven
track-record of project development, that we will be able to
deliver another successful project."
"In total, once Duvernay I is complete, Pembina's Gas Services business will have
approximately 1.6 billion cubic feet per day of gas processing
capacity and will produce over 75,000 bpd of NGLs for
transportation on our Conventional Pipelines," said Mr. Sprott. "We
are happy to be adding another long-term, contracted asset to our
portfolio that will feed into our integrated businesses. Repeatable
projects like this benefit both our customers and shareholders and
continue to support sustainable returns."
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 over 60 years. Pembina owns and operates pipelines that
transport various hydrocarbon liquids including conventional and
synthetic crude oil, heavy oil and oil sands products, condensate
(diluent) and natural gas liquids produced in western Canada and ethane produced in North Dakota. The Company also owns and
operates 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 spans 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.
Forward-Looking Information and Statements
This document contains certain forward-looking statements and
information (collectively, "forward-looking statements") 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 "expects", "will", "would", "plans", "anticipates",
"schedule", and similar expressions suggesting future events
or future performance.
In particular, this document contains forward-looking
statements, pertaining to, without limitation, the following:
Pembina's corporate strategy;
planning, capital expenditure estimates, schedules, expected
capacity, incremental volumes, in-service dates, processing,
transportation, fractionation, and services commitments and
contracts and operations with respect to Company projects; the
ongoing utilization and expansions of and additions to Pembina's business and asset base, growth and
growth potential; the development and expected timing of new
business initiatives and growth opportunities and the benefits
thereof.
The forward-looking statements are based on certain assumptions
that Pembina has made in respect
thereof as at the date of this news release regarding, among other
things, oil and gas industry exploration and development activity
levels and the geographic region of such activity; ongoing
utilization and future expansion, development, growth and
performance of Pembina's business
and asset base; future demand for processing, fractionation and
pipeline transportation services; prevailing commodity prices and
exchange rates and the ability of Pembina to maintain current credit ratings;
future operating costs; geotechnical and integrity costs; that any
required commercial agreements can be reached; that all required
regulatory and environmental approvals can be obtained on the
necessary terms in a timely manner; that counterparties will comply
with contracts in a timely manner; that there are no unforeseen
material costs relating to the facilities which are not recoverable
from customers; interest and tax rates; prevailing regulatory, tax
and environmental laws and regulations; maintenance of operating
margins; the amount of future liabilities relating to environmental
incidents; and the availability of coverage under Pembina's insurance policies (including in
respect of Pembina's business
interruption insurance policy).
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. These forward-looking
statements are not guarantees of future performance and are subject
to a number of known and unknown risks and uncertainties including,
but not limited to: the regulatory environment and the ability to
obtain required regulatory and environmental approvals; the impact
of competitive entities and pricing; labour and material shortages;
strength and operations of the oil and natural gas production
industry and related commodity prices; non-performance or default
by counterparties to agreements which Pembina or one or more of its affiliates has
entered into in respect of its business; actions by governmental or
regulatory authorities including changes in tax laws and treatment,
changes in royalty rates or increased environmental regulation;
fluctuations in operating results; adverse general economic and
market conditions in Canada,
North America and elsewhere,
including changes in interest rates, foreign currency exchange
rates and commodity prices; and certain other risks detailed from
time to time in Pembina's public
disclosure documents available at www.sedar.com. This list of risk
factors should not be construed as exhaustive.
Readers are cautioned that events or circumstances could cause
results to differ materially from those predicted, forecasted or
projected. 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 contained
herein, except as required by applicable laws. The forward-looking
statements contained in this document are expressly qualified by
this cautionary statement.
All financial figures are in Canadian dollars, unless otherwise
noted.
SOURCE Pembina Pipeline Corporation