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Pembina to export propane from Oregon, access Bakken resource

Seperate deals total more than $1 billion.

September 3, 2014   by The Canadian Press

CALGARY — Pembina Pipeline Corp. has announced separate deals totalling more than US$1 billion that will enable it to export propane from the US West Coast and also get access to North Dakota’s prolific Bakken formation.

In one of the deals, the Calgary-based company inked an agreement with the Port of Portland, Ore., to develop a 37,000-barrel-per-day propane export facility with a price tag of US$500 million and an expected in-service date of early 2018.

Tankers would travel about 180 kilometres from the port to the Pacific Ocean via the Columbia River, which provides deepwater access. Land is available to install storage, piping and marine infrastructure.

It’s one of several proposals on the drawing board to help connect Canadian natural gas, and products made from it, to lucrative Asian markets via the West Coast.

Also, Pembina said it is buying a 700-kilometre pipeline system that originates in North Dakota that will give it access to natural gas liquids from the US state’s North Bakken formation.

The US$650-million transaction with private equity firm Riverstone Holdings LLC also includes an interest in a Saskatchewan extraction plant for ethane, a liquid byproduct of natural gas production.

Pembina says the Vantage pipeline system links a growing supply of ethane from North Dakota to the petrochemical market in Alberta.

The fee-for-service pipeline, terminating near Empress, Alta., is expected to have an ultimate capacity of about 60,000 barrels per day, up from its current 40,000, Pembina said.

“We have watched the development of these assets with great interest as they represent an excellent opportunity to expand our footprint into one of the most promising hydrocarbon plays in North America and, as such, the transaction is a low-risk, logical step out for Pembina,” said Dilger.

Pembina said the transaction is expected to add to cash flow per share in 2016.

The deal includes Mistral Midstream Inc.’s interest in the Saskatchewan ethane extraction plant, which will connect to the Vantage pipeline system.

The deal is subject to regulatory approvals, including from the National Energy Board and the Canada Transportation Act. It is expected to close in the fourth quarter of 2014.

Pembina owns and operates pipelines that transport various hydrocarbon liquids including conventional and synthetic crude oil, heavy oil and oil sands products, condensate and natural gas liquids produced in Western Canada.

© 2014 The Canadian Press


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