Pembina Completes Nipisi And Mitsue Pipelines

August 2011, Vol. 238 No. 8

Pembina Pipeline Corp. completed construction and has initiated start-up of its Nipisi heavy oil pipeline, Nipisi Pipeline, and Mitsue diluent pipeline, Mitsue Pipeline, which will service the Pelican Lake and Peace River heavy oil regions of Alberta.

The Nipisi Pipeline is a 90-km heavy oil pipeline with a design capacity of 100,000 bpd that will transport diluted heavy oil from north of Slave Lake to Pembina’s existing pipeline south of Swan Hills and on to Edmonton, Alberta for further transport or processing.

The Mitsue Pipeline will transport condensate from various sources in north western Alberta to heavy oil producers operating north of Slave Lake, Alberta for use by producers to dilute heavy oil prior to transport. The pipeline consists of a combination of 135 km of new and 120 km of existing infrastructure, and has a design capacity of 22,000 bpd.

The Nipisi and Mitsue pipelines are underpinned by long-term agreements which contain a minimum primary term of 10 years from the in-service date and are extendible thereafter.

Pembina estimates that the total capital cost of the Nipisi and Mitsue Pipelines will be $400 million, down from Pembina’s previous estimate of $440 million. The Nipisi and Mitsue pipelines are expected to contribute annual operating margin of $40 million once commissioning has been completed.