CALGARY, June 27, 2013 /CNW/ - Pembina Pipeline Corporation ("Pembina"
or the "Company") (TSX: PPL; NYSE: PBA) announced today that it has
entered into an Engineering Support Agreement ("ESA") for diluent and
blended bitumen transportation services associated with enhanced oil
recovery developments in northeast Alberta owned by KKD Oil Sands
Partnership ("KOSP"). KOSP is a partnership between Statoil Canada Ltd.
("Statoil"), as managing partner, and PTTEP Canada Ltd.
Concurrent with the work under the ESA, Pembina and Statoil will proceed
with negotiations to conclude long-term agreements for the construction
of and transportation service on a new greenfield pipeline system and
associated infrastructure (the "CornerstonePipeline"). The Cornerstone Pipeline would transport diluent and blended
bitumen between KOSP's upstream developments and the Edmonton area,
including diluent connectivity at Pembina's Nexus Terminal ("PNT"). PNT
interconnects Pembina's various terminalling infrastructure located in
the Edmonton, Redwater and Fort Saskatchewan areas. It provides
unparalleled access to the diverse crude oil grades produced in western
Canada. In addition, it is connected to condensate grades transported
on third-party and Pembina pipeline systems, including imported
pipeline supplies. The access and connectivity of PNT provides the
broadest array of diluent and diluent services available to Pembina's
oil sands customers.
"This marks an important step forward in Pembina's oil sands and heavy
oil transportation business," said Bob Michaleski, Pembina's Chief
Executive Officer. "We continue to increase our access to diluent
sources, both in the Edmonton, Alberta area via our Midstream business
and through expansions of our Gas Services assets and Conventional
Pipeline systems. This, combined with our ongoing major pipeline system
construction experience, puts us in a strong position to support KOSP's
oil sands development. The ESA allows us to lay the groundwork for a
substantial infrastructure expansion, which, should it proceed, will
provide Pembina with an exciting new oil sands platform that will
generate long-term shareholder value."
Under the ESA, Pembina and KOSP have jointly agreed to spend up to
approximately $35 million to conduct preliminary engineering work and
begin associated stakeholder consultation in support of KOSP's
transportation needs. At the conclusion of the work contemplated under
the ESA, Pembina expects to be in a position to file the necessary
applications to proceed with constructing the Cornerstone Pipeline.
Subject to reaching commercial agreements, as well as obtaining
regulatory and environmental approvals thereafter, Pembina expects the
Cornerstone Pipeline could be in-service in mid-2017.
"Our preliminary capital cost estimate to undertake construction of a
320 kilometre 12" diluent and 24" blended bitumen pipeline system is
approximately $850 million," said Michael Hantzsch, Vice President, Oil
Sands & Heavy Oil. "This size of pipe would allow us to phase-in
expansions down the road with incremental capital. We also may consider
up-sizing the pipelines to 20" and 30", respectively, should the work
conducted under the ESA indicate there are sufficient volumes."
The Cornerstone Pipeline will be connected to KOSP's Cheecham Terminal
and Pembina Midstream Limited Partnership ("PMLP"), a subsidiary of the
Company, is expected to be a 50-percent shipper on the diluent pipeline
alongside KOSP. The shippers on the pipeline system will have exclusive
use of the terminal, enabling Pembina to offer additional value-added
third-party services, including much needed new sources of condensate
and synthetic crude oil diluent for use by area producers, as well as a
number of options for blended product. PMLP will be working with
regional customers to develop and contract for terminalling services,
which will include diluent supply and blended bitumen transportation
out of the area.
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
and diluent 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.
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 "expects", "will",
"estimate", "expand", "would", "could", "possible" 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 business objectives; the planned capacity and
routing of the proposed Cornerstone Pipeline; the expected cost of the
preliminary engineering work and stakeholder consultation; the
anticipated capital cost of the Cornerstone Pipeline; the expected
in-service date of the Cornerstone Pipeline; the ability of Pembina to
offer and contract for terminalling services at KOSP's Cheecham
Terminal; 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; and
expectations regarding supply and demand factors and pricing for oil
and natural gas. 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; potential
revenue and cash flow enhancement; future cash flows; and the ability
of the parties to agree on binding commercial arrangements in respect
of the Cornerstone Pipeline and terminalling arrangements at KOSP's
Cheecham Terminal.
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.
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.
All financial figures are in Canadian dollars, unless otherwise noted.
Pembina Pipeline® is a registered trademark of Pembina Pipeline
Corporation.
SOURCE: Pembina Pipeline Corporation
<p> </p> <p> Investor Inquiries:<br/> Scott Burrows<br/> Vice President, Corporate Development & Investor Relations<br/> (403) 231-3156<br/> 1-855-880-7404<br/> e-mail: <a href="mailto:investor-relations@pembina.com">investor-relations@pembina.com</a> </p> <p> or </p> <p> Media Inquiries:<br/> Shawn Davis<br/> Manager, Communications & Public Affairs<br/> (403) 691-7654<br/> e-mail: <a href="mailto:sdavis@pembina.com">sdavis@pembina.com</a> </p>