Pembina Pipeline Corporation announced that it will provide terminalling services for the North West Redwater Partnership (North West) with respect to North West’s planned Sturgeon Refinery. The company also announced that it has entered into agreements to construct a new pipeline lateral in the Karr area of Alberta (the Karr Lateral) to service growing production from the Montney resource play.
The terminalling services will be provided by Pembina to North West under a 30-year fixed return agreement and a 10-year natural gas liquids (NGL) mix purchase and sale agreement related to the third fractionator Pembina is constructing at its Redwater site.
Pembina expects a capital investment of USD 180M will be required to construct the terminalling facilities. The facilities include truck and rail loading, storage, as well as handling and processing equipment for a variety of products delivered from North West. The facilities are expected to be in service mid-2017.
The company expects the Karr Lateral to cost USD 55M and have a capacity of approximately 30,000 barrels per day. The Karr Lateral is underpinned by long-term, fee-for-service agreements, which include substantial take-or-pay commitments from several of Pembina’s customers. A portion of the volume under contract on the Karr Lateral will be incremental to Pembina’s previously disclosed committed volumes.