News Releases

Pembina Proceeds with Nipisi and Mitsue Pipeline Construction

    CALGARY, Aug. 12 /CNW/ - Pembina Pipeline Income Fund (TSX: PIF.UN)
announced that its wholly owned subsidiary Pembina Pipeline Corporation
("Pembina") is proceeding with the construction of two pipeline systems with
an estimated combined capital cost of $400 million. Pembina has entered into
transportation service agreements ("TSAs") with founding customers, Canadian
Natural Resources and EnCana Corporation (the "Shippers") on these two
pipeline systems, providing for committed revenue streams for an initial
10-year term from the in-service date, with extension rights.
    The first pipeline (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 second pipeline (the "Mitsue Pipeline") will consist of a combination
of newly constructed and existing 6 inch and 8 inch pipe and will provide
22,000 barrels per day ("bpd") of condensate transportation service for
product received at Whitecourt, Alberta and delivered to Utikuma, Alberta 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.
    Pembina, through its subsidiary Pembina Marketing Ltd., has contracted
for a portion of the pipeline capacity on both the Mitsue and the Nipisi
Pipelines and plans to construct a truck terminal and trim blending facility,
the Utikuma Terminal, to facilitate truck area receipts.
    All the facilities contemplated are expected to be in service in mid-2011
and are each expandable by approximately 50% of their current capacity,
primarily through the addition of pump stations.
    Pembina will commence public consultation immediately seeking feedback on
the proposed pipeline routing, traditional land use, environmental impacts and
other aspects of the project. Information gathered through this process will
be incorporated into project planning. Further, Pembina intends to work with
communities potentially impacted by the project to explore employment and
business opportunities associated with the construction, operation and ongoing
maintenance of the two pipelines and related facilities.
    Bob Michaleski, President and CEO of Pembina commented: "This project
represents another exciting step forward in the execution of our long range
development strategy. I believe the Nipisi and Mitsue Pipelines, by virtue of
their design, offer significant benefits to project stakeholders. Utilization
of under and un-utilized infrastructure reduces our operating footprint and
minimizes the impacts on communities, land and the environment. The use of
existing assets allows Pembina to offer customers dedicated service at
attractive commercial terms with lower project completion and execution risk.
The returns generated by this new service are expected to deliver value to
Unitholders in the form of a stable, long-term cash flow stream commencing in
    The Shippers have contracted for dedicated capacity totaling 80% of
available capacity on the Nipisi Pipeline and 50% on the Mitsue Pipeline.
Pembina Marketing Ltd. has contracted for the balance of available capacity on
these pipelines. The agreements provide Pembina with a fixed capital return
and allow for the full recovery of operating costs over the term of the
agreement. Based on Pembina's internal projections, the two pipelines are
estimated to contribute approximately $45 million in initial net operating
income per annum once operations commence.
    Pembina's Mick Dilger, Vice President of Business Development stated:
"The Nipisi Project is representative of the ongoing optimization and
build-out of our existing asset portfolio, a strategy that has allowed us to
achieve attractive project and Unitholder returns while offering competitively
priced services to our customers."

    Pembina Pipeline Income Fund (the "Fund") (TSX: PIF.UN, PIF.DB.B) is
among the leading issuers in the Canadian energy infrastructure trust sector.
Pembina's extensive network of conventional liquids feeder pipelines, and
growing presence in the oil sands, heavy oil and midstream sectors, provide an
integral service to the western Canadian energy industry. This balanced
portfolio of premium, long-life energy infrastructure assets supports the
stability and sustainability of the Fund. Information on the Pembina Pipeline
Income Fund is available on Pembina's website at www.pembina.com.

    Forward-Looking Information and Statements

    This document contains certain forward-looking statements that are based
on the Fund's current expectations, estimates, projections and assumptions in
light of its experience and its perception of historical trends. In
particular, this document contains forward-looking statements regarding: (i)
net operating income, which is based upon the assumptions that the pipeline
systems will be in service on time and on budget, that future tolls are
consistent with internal projections, that counterparties fulfill their
contract obligations in a timely manner, that there are no unforeseen events
preventing performance of contracts by Pembina, and that there are no
unforeseen material costs relating to the pipeline system; (ii) the
construction of the Mitsue and Nipisi Pipelines and the truck terminal and
trim blending facility; (iii) the in-service date of the Mitsue and Nipisi
Pipelines; and (iv) future cash flows. In some cases, forward-looking
statements and information can be identified by terminology such as "may",
"will", "should", "expects", "projects", "plans", "anticipates", "targets",
"believes", "strives", "estimates", "continue", "designed", "objective",
"maintain", "schedule", "endeavor" and similar expressions. The
forward-looking statements are not guarantees of future performance and are
subject to a number of known and unknown risks and uncertainties, including,
but not limited to: non-performance of the TSAs in accordance with their
terms; 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; the ability of Pembina to raise sufficient
capital to complete future projects and satisfy future commitments, including
the construction of the Nipisi and Mitsue Pipelines and the truck terminal and
trim blending facility; construction delays; labour and material shortages;
and certain other risks detailed from time to time in the Fund's public
disclosure documents. The Fund believes the expectations and material factors
and assumptions reflected in these forward-looking statements are reasonable
as of the date hereof, but no assurance can be given that these expectations,
factors and assumptions will prove to be correct. Undue reliance should not be
placed on these forward-looking statements as both known and unknown risks and
uncertainties, including those business risks stated above, 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. Accordingly, readers are cautioned that events or
circumstances could cause results to differ materially from those predicted,
forecasted or projected. Such forward-looking statements are expressly
qualified by the above statements. The Fund does not undertake any obligation
to publicly update or revise any forward-looking statements or information
contained herein, except as required by applicable laws. Management of the
Fund approved the financial outlook contained herein as of the date of this
press release. The purpose of the financial outlook contained herein is to
give the reader an indication of the value to Pembina of the Nipisi and Mitsue
Pipelines. Readers should be aware that the information contained in the
financial outlook contained herein may not be appropriate for other purposes.

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For further information: Darcy Zacharias, Manager, Corporate
Development, Pembina Pipeline Corporation, (403) 231-7500, 1-888-428-3222,
e-mail: investor-relations@pembina.com