Pembina To Build Two Pipelines Valued At $444 Million

March 2010 Vol. 237 No. 3

Pembina Pipeline Corp. has announced a spending plan for 2010 of $240 million that places a priority on expanding its oil sands and heavy oil business.

Approximately $152 million, or about 60% of Pembina’s 2010 capital budget, is allocated for construction of the Nipisi and Mitsue pipeline projects.

The Nipisi Pipeline will consist of a combination of newly constructed and existing 16-inch and 20-inch pipe and will provide 100,000 bpd of blended heavy oil transportation service for product received at Utikuma, Alberta and delivered to Edmonton, Alberta. The Nipisi Pipeline will use existing pipeline capacity between Judy Creek, Alberta and Edmonton.

The Mitsue Pipeline will consist of a combination of newly constructed and existing 6-inch and 8-inch pipe and will provide 22,000 bpd of condensate transport service for product received at Whitecourt, Alberta and delivered to Utikuma for use as a diluent for heavy oil. The receipt point of the Mitsue Pipeline is connected to Pembina’s existing Peace pipeline system at Whitecourt.

Regulatory decisions relating are anticipated by September and construction will begin as soon as practical once approvals have been granted. Approximately 80% of the project engineering is complete and Pembina is on schedule to complete the projects in mid-2011. The two pipelines, estimated to cost $440 million combined, remain on budget and to date the company has entered into procurement agreements that have generated certainty for about 60% of the cost estimate. As of Dec. 31, Pembina has spent $76 million on the projects.