Pembina Signs Development Support Agreement With Prospective Condensate Pipeline Shippers
CALGARY, Apr 18, 2006 (Canada NewsWire via COMTEX News Network) -- Pembina Pipeline Corporation ("Pembina"), a wholly-owned subsidiary of Pembina Pipeline Income Fund (TSX: PIF.UN), announced it has entered into a Development Support Agreement ("DSA") for a Condensate Project (the "Project") with a syndicate of Shippers (the "Shippers"). The Project, launched in mid-2005, is to be operated by Pembina and involves the establishment of a marine terminal in Kitimat, British Columbia, construction of a proposed pipeline and related facilities capable of transporting 100,000 barrels per day of imported condensate from Kitimat, British Columbia for delivery to Summit Lake (near Prince George, British Columbia) and conversion of certain of Pembina's existing network of provincial and inter-provincial pipelines downstream of Summit Lake. By entering into the DSA, Shippers have provided adequate financial support for progressing through the next phase of development.
Preliminary design and engineering for the Project, which indicate a total required capital investment by Pembina of roughly $1 billion in aggregate, is complete. Under the terms of the DSA, Shippers will finance the costs required to advance detailed engineering, preliminary environmental assessment, stakeholder consultation and regulatory activities, and the development of definitive Construction and Pipeline Transportation Agreements ("Agreements"). The Agreements, which would include firm capacity commitments, subject to certain conditions including receipt of all required regulatory permits and approvals, are expected to be executed during the third quarter of 2006.
Pembina's Mick Dilger, Vice President of Business Development, has worked closely with the Shippers in the development of the Project. He commented, "Pembina is uniquely positioned, by virtue of the ability to utilize its extensive ownership and operations of existing energy infrastructure along the Project's proposed routing, to offer compelling value to Shippers and Pembina unitholders. By significantly reducing the requirement for new construction and operations Pembina is striving to be the first to provide a diluent import service, with a target in-service date of April 1, 2009, on attractive commercial terms and with a competitively lower completion and operating cost risk profile. This Project represents another positive step toward enhancing the level of service for our customers and is indicative of our continued efforts to provide services to the rapidly expanding oil-sands producing region of Alberta."
Pembina Pipeline Income Fund (TSX: PIF.UN, PIF.DB.A, 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 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 the company's website at www.pembina.com.
This document contains forward-looking statements that involve risks and uncertainties. Such information, although considered reasonable by Pembina at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated in the statements made. For this purpose, any statements that are contained herein that are not statements of historical fact may be forward-looking statements. Such risks and uncertainties include, but are not limited to risks associated with operations, loss of market, regulatory matters, environmental risks, industry competition, pipeline design and construction, and ability to access sufficient capital from internal and external sources.
SOURCE: Pembina Pipeline Income Fund
D. James Watkinson, Vice President, General Counsel and Secretary, Pembina Pipeline
Corporation, (403) 231-7500, 1-888-428-3222, e-mail: [email protected];
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