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Pembina Pipeline on the move
Gary Park For Petroleum News
With the spotlight concentrated so intensely on TransCanada, Enbridge and Kinder Morgan, Pembina Pipeline has mostly operated in the shadows since it started public trading 17 years ago as a Canadian carrier of energy commodities.
Over 60 years it has evolved to the point where it is claiming a spot in the major leagues, with a market capitalization of C$12.7 billion, and shares trading in a range of C$29 to C$41 over the last year.
Pembina has just posted revenues of C$5.03 billion in 2013, compared with C$3.43 billion in 2012.
It has built an extensive network of pipelines to move conventional crude and oil sands production in Western Canada, plus a number of midstream operations, and has a slate of nine growth projects.
It controls almost 5,000 miles of conventional pipelines carrying 50 percent of Alberta’s conventional crude and 30 percent of natural gas liquids in Western Canada, plus almost 1,000 miles of pipelines in the oil sands region.
Large project planned And it is on the verge of what Chief Executive Officer Mick Dilger told analysts in February will be a “transformative event for Pembina” — the largest capital project the company has undertaken.
It expects to submit a regulatory application later this year in Alberta to spend C$2 billion adding 345 miles to its Peace Pipeline system that he said is underpinned by 10 years of take-or-pay contracts with 30 customers.
The connection from Taylor in northeastern British Columbia to Edmonton is targeted for an in-service date of no later than mid-2017, shipping conventional crude, condensate and gas liquids.
Major focus Fox Creek to Edmonton The major focus is on a 170-mile, 24-inch-diameter line from Fox Creek in west-central Alberta to Edmonton with initial capacity of 320,000 barrels per day, with ultimate capacity of more than 500,000 bpd.
The company said it has commitments in place for 230,000 bpd of the Peace expansion and Dilger said he hopes the remaining 90,000 bpd will be locked up by this fall, serving oil and gas producers in the Montney play that straddles the British Columbia-Alberta border and Alberta’s Duvernay and Deep basin plays.
He said Pembina is also making progress on its planned Cornerstone Pipeline in partnership with Statoil Canada.
Cost estimates for that project have been raised to C$1 billion from C$850 million because of the project scope being refined.
Dilger said the in-service date is now set at late 2015, noting that Statoil “doesn’t want the project to slip.”
The twin pipelines of Cornerstone will cover almost 200 miles and carry diluents or diluted bitumen serving Statoil’s Leismer and Corner oil sands projects that are each targeted at 40,000 bpd.
On the crude by rail front, he said that only 6 percent of the fleet leased by Pembina are tanker cars that need modification under the new U.S. safety rules, noting that is “not a material concern” to his company.
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