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Pembina Pipeline approves development of $460m midstream projects in Canada

Pembina Pipeline has approved the development of two new capital projects, which are valued about C$590m ($459.5m) in total, in Canada.

The two projects include C$270m ($210.3m) Prince Rupert liquefied petroleum gas (LPG) export terminal as well as the C$320m ($249.2m) North Central Liquids Hub, which supports operations for the Cutbank Ridge Partnership (CRP) within the Montney formation.

Planned to be built on Watson Island, British Columbia, the Prince Rupert terminal will have permitted LPG capacity of approximately 25,000 barrels per day.

Pembina'sRedwater fractionation complex will be a primary source for LNG supply to the Prince Rupert Terminal.

The project is scheduled for commissioning in mid-2020, subject to Pembina receiving necessary regulatory and environmental approvals. It is expected to create up to 200 construction jobs.

Pembina NGL & Natural Gas Facilities senior vice-president Stuart Taylor said: "Advancing the Prince Rupert Terminal, alongside continuing to progress our proposed integrated propylene and polypropylene production facility, is a meaningful step towards our strategy of providing new market solutions for our customers – helping to add incremental value to western Canadian hydrocarbons and ultimately increasing producer netbacks.”

Expected to enter service in late 2018, the North Central Liquids Hub is 54% owned by Pembina's midstream limited partnership while the remaining stake is held by Kohlberg Kravis Roberts & Co. (Midstream Partnership).

Meanwhile, Pembina announced its plans to invest approximately C$540m ($420.6m) in its conventional pipelines business as well as $260m ($202.5m) in midstream business in next year as part of its overall C$1.3bn ($1.01bn) capital spending plan for 2018.

In 2018, the firm plans to allocate $175m ($136.3m) in gas services business, $20m ($15.5m) in oil sands and heavy oil business, as well as approximately $170m ($132.4m) to new facilities within its joint venture partnerships, among others.

Pembina senior vice president and CFO Scott Burrows said: "2018 will be an active year for us, as we focus on realizing the expected Veresen acquisition synergies, completing the remaining assets under construction as well as progressing our newly announced capital projects.

“Combined, these efforts are expected to deliver our target 2018 adjusted EBITDA of $2.55 to $2.75bn ($2.1bn) of which greater than 85% is expected to be generated from fee-based assets.”