Pembina Pipeline said that it will move ahead with a phase VIII expansion of its Peace pipeline system in the Canadian province of Alberta with an investment of around C$500m ($382.04m).
The latest expansion of the Peace Pipeline system is being taken up to meet incremental customer demand in the Montney area. This will be done by means of debottlenecking constraints, accessing downstream capacity, and further improving segregation of products on the system, said the Canadian midstream company.
The phase VIII expansion, which is backed by 10-year contracts with significant take-or-pay provisions, is targeted to be brought into operations in a phased manner, beginning from 2020 through the first half of 2022. The pipeline expansion will be based on receipt of regulatory and environmental approvals.
Pembina Pipeline president and CEO Mick Dilger said: “Our strategic footprint continues to provide opportunities to complete staged expansions, enabling us to deliver timely and reliable transportation service solutions for our customers.
“Our customers continue to recognize the favorable economics in the Deep Basin and Montney areas and like us are pursuing development with a long-term outlook. Further, they appreciate the new markets we are developing such as the Prince Rupert Export Terminal and the proposed PDH/PP facility.”
The latest expansion project will see addition of new 10 and 16inch pipelines in the Gordondale to La Glace corridor of Alberta along with six new pump stations or terminal upgrades between Gordondale and Fox Creek.
The phase VIII expansion of the Peace pipeline system will facilitate segregated pipeline service for ethane-plus and propane-plus natural gas liquid (NGL) mix from the central Montney area at Gordondale into the Edmonton region for market delivery.
Pembina Pipeline expects to allocate most of its investment on the expansion project between 2020 and 2021.
Pembina Pipeline senior vice president and pipelines chief operating officer Jason Wiun said” “The Phase VIII expansion is an exciting development as we are nearing our ultimate goal of achieving full product segregation along the entire Peace Pipeline system.
“When combined with the Phase VII expansion, we have signed approximately 160,000 barrels per day of incremental firm contracts.
Recently, Pembina Pipeline revealed its intentions to invest C$1.6bn ($1.19bn) in 2019 in various midstream projects and operations, with a significant part of it to be allocated for its pipelines division.