CALGARY, April 11, 2016 /CNW/ – Pembina Pipeline Corporation (“Pembina” or “the Company”) (TSX: PPL; NYSE: PBA) is pleased to announce a joint feasibility study with the Petrochemical Industries Company K.S.C. (“PIC”), a subsidiary of the Kuwait Petroleum Corporation, for the evaluation of a world-scale combined propane dehydrogenation (“PDH”) and polypropylene upgrading facility in Alberta (the “Project”).
This Project represents an opportunity to develop crucial new market demand for propane in the Province of Alberta. Over the past decade, approximately 85 percent of Alberta’s propane production has been exported across North America. Developing Alberta based, value-add infrastructure will increase local propane demand benefitting Alberta’s oil and gas producers, as well as the Province, by increasing regional economic activity and tax base. The Project could consume approximately 35,000 barrels per day (“bpd”) of propane and produce up to 800,000 metric tonnes per year of polypropylene.
The polypropylene would be transported in a pellet form to markets across North America and internationally. Polypropylene is one of the world’s most commonly used polymers, traditional uses include automobile plastics, medical supplies, home appliances, transparent containers as well as numerous other applications.
With access to the largest supply of propane in the Western Canadian Sedimentary Basin, Pembina is ideally suited to facilitate the development of this Project. Once the construction of Pembina’s remaining third fractionator is complete, Pembina will have over 200,000 bpd of fractionation capacity and will control approximately 60,000 bpd of propane supply in the Fort Saskatchewan area, as well as additional supply originating from Empress, Alberta.
Pembina and PIC will undertake a detailed technical, financial and commercial study to confirm if the development of the Project is economically feasible and aligns with each party’s respective investment criteria. This study is expected to take approximately six months, followed by Pembina and PIC approval to proceed to Front End Engineering Design. The final investment decision is expected to be made by the middle of 2017. Subject to regulatory, environmental and Pembina’s Board of Directors’ approval, the Project is expected to be in service by 2020.
“This Project potentially builds on both Pembina’s position as the largest supplier to Alberta’s existing petrochemical industry, as well as being one of Canada’s leading energy infrastructure companies,” said Mick Dilger, Pembina’s President and Chief Executive Officer. “Developing this Project represents another natural extension of our natural gas liquids value chain and is a logical step for additional seamless integration with our existing asset base.”
“PIC is very excited to be evaluating the feasibility of the Project,” said Mohammed Abdullatif Al-Farhoud, PIC’s Chief Executive Officer. “Alberta represents a very attractive market to develop large-scale petrochemical infrastructure, as it is supported by long-term feedstock security, a supportive local government and complements the existing asset base of a number of PIC’s and related companies operating in Alberta. Moreover, this opportunity further supports PIC’s continued efforts in expanding its business portfolio globally. PIC is always in search for exceptional investment and partnership opportunities, especially in the promising regions with advantageous feedstock and market.”
Calgary-based Pembina Pipeline Corporation is a leading transportation and midstream service provider that has been serving North America’s energy industry for over 60 years. Pembina owns and operates an integrated system of pipelines that transport various products derived from natural gas and hydrocarbon liquids produced in Western Canada and North Dakota. The Company also owns and operates gas gathering and processing facilities and an oil and natural gas liquids infrastructure and logistics business. Pembina’s integrated assets and commercial operations along the entire hydrocarbon value chain allow it to offer a full spectrum of midstream and marketing services to the energy sector. Pembina is committed to working with its community and aboriginal neighbours, while providing value for investors in a safe, environmentally responsible manner. This balanced approach to operating ensures the trust Pembina builds among all of its stakeholders is sustainable over the long-term. Pembina’s common shares trade on the Toronto and New York stock exchanges under PPL and PBA, respectively, with investment grade credit rating of BBB by both Standard & Poor’s and DBRS. For more information, visit www.pembina.com.
PIC is a subsidiary of Kuwait Petroleum Corporation and a producer of ammonia, urea fertilizer and polypropylene in Kuwait. In addition PIC is a joint venture partner with others in Kuwait involved in the production of Ethylene, Polyethylene , Ethylene Glycol , Styrene Monomer, Para-xylene, Benzene. PIC is a joint venture partner with others outside of Kuwait involved in the production of Ammonia, Methanol, Ethylene Glycol, and Polyethylene Terephthalate . PIC has been operating in Alberta since 2004 through various investments including those in the petrochemical industry. Additionally, PIC’s parent company, Kuwait Petroleum Company, is owned by the State of Kuwait, who currently has a sovereign credit rating of Aa2 by Moody’s and AA by Standard & Poor’s.