CALGARY—Pembina Pipeline Corp. is proceeding with construction on a new 55,000 barrel per day propane-plus fractionator at its existing Redwater fractionation and storage complex along with an associated pipeline at an estimated cost of $460 million.
RFS III, which is underpinned by long-term take-or-pay contracts with multiple producers, will be the third fractionator at Pembina’s Redwater complex and will leverage the design and engineering work completed for Pembina’s first and second fractionators—facilities that process mixed natural gas liquids into their constituent parts such as ethane, propane and butane.
The estimated cost of the fractionator, including associated caverns and previously announced pre-build expenses, is $400 million.
“We are excited to have secured the commercial agreements to proceed with building a third fractionator,” Stuart Taylor, senior vice-president for NGL and natural gas facilities, said in a statement announcing the project.
“RFS III will provide our customers with timely fractionation capacity along with efficient storage and market access through our well-established facilities at Redwater. Leveraging our existing assets and using similar plant designs again demonstrates the value of our integrated strategy.”
In conjunction with building RFS III, Pembina also plans to construct a new high vapour pressure pipeline lateral into the Willesden Green area in south-central Alberta at an estimated cost of $60 million.
The project involves installing some 56 kilometres of new HVP pipeline along with other associated infrastructure that will be connected to Pembina’s Brazeau Pipeline.
It will be capable of transporting ethane-plus natural gas liquids from the field for delivery into the Fort Saskatchewan, Alta., area.
Subject to regulatory and environmental approval, Pembina expects the new pipeline to be in service in mid-2015.
Calgary-based Pembina operates pipelines that transport conventional and synthetic crude oil, heavy oil and oilsands products, condensate and natural gas liquids produced in Western Canada.
It also owns and operates gas gathering and processing facilities and an oil and natural gas liquids infrastructure and logistics business and offers a full spectrum of midstream and marketing services.