Pembina Pipeline to Move Forward With $115 Million Expansion

Pembina Pipeline (NYSE: PBA  ) has decided to move forward with its $115 million expansion of the pipeline corridor between Simonette and its Fox Creek, Alberta, terminal, Pembina announced today. 

Initially, Pembina said, the expansion will increase its daily delivery volume by an estimated 40,000 barrels of oil, natural gas, and condensate. Following completion of the corridor expansion, Pembina said it will have the capacity to transport "substantially all future volumes nominated through the Open Season process ..." The Open Season process determines the financial viability of a given pipeline by evaluating the interest levels of potential drillers.

The Simonette expansion requires Pembina to lay approximately 37 miles of 16-inch pipeline within its existing right-of-way, and will service producers in the Montney and Duvernay regions, according to Pembina. Once completed, the expansion will bring the total number of Pembina pipelines in the corridor to three.

Pembina President and COO Mick Dilger commented in a statement, "With our existing asset footprint and rights-of-way, we are happy to have the flexibility to phase-in solutions such as this to alleviate capacity constraints while we solidify the remainder of our development plans."

Upon receipt of environmental and regulatory approvals, Pembina said it expects to begin construction on the expansion this winter, and it should be ready for service in Q3 of 2014.

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