Pembina advances third fractionator project at Redwater complex

This story was corrected Apr. 22, 2015, to reflect Canadian dollars.

Pembina Pipeline Corp. has reached binding commercial agreements to proceed with constructing a 55,000 b/d propane-plus fractionator (RFS III) at its Redwater fractionation and storage complex, along with a high-vapor pressure (HVP) pipeline lateral that will extend the gathering potential of its Brazeau pipeline in the Willesden Green area of south-central Alberta.

Pembina said RFS III, which is underpinned by long-term take-or-pay contracts with multiple producers, is expected to cost $400 million (Can.), including associated caverns and capital previously announced for the RFS III prebuild.

The facility will be the third fractionator at Pembina’s Redwater complex and will leverage the design and engineering work completed for Pembina’s RFS I and RFS II—its first and second fractionators.

Pembina reported the RFS III prebuild on July 31, 2013, whereby the design of certain facilities at RFS II were expanded to accommodate the development of RFS III. The company said the prebuild resulted from its confidence that there would be customer demand for additional fractionation capacity at Redwater.

Currently, RFS I has an operating capacity of 73,000 b/d. RFS I is being debottlenecked to bring capacity to 82,000 b/d in fourth-quarter 2015. When combined with RFS II, which is expected to come into service in fourth-quarter 2015, the company’s fractionation capacity is anticipated to double to 155,000 b/d.

With the addition of RFS III, Pembina’s fractionation capacity will total 210,000 b/d, making the company’s Redwater complex the largest fractionation facility in Canada. Certain components of RFS III will be upsized and the site will be designed to accommodate a de-ethanizer tower in the future, should Pembina receive commercial support to backstop such an expansion. With a de-ethanizer tower, capacity at RFS III would reach 73,000 b/d and bring the total capacity at Redwater to 228,000 b/d. Pembina expects RFS III to be in-service in third-quarter 2017.

In conjunction with building RFS III, Pembina also plans to construct an HVP pipeline lateral into the Willesden Green area in south-central Alberta, at an estimated cost of $60 million (Can.). The company said the project, which is underpinned by a long-term take-or-pay contract, entails installing 56 km of HVP pipeline, along with other associated infrastructure.

The HVP pipeline will be connected to Pembina’s Brazeau Pipeline and will be capable of transporting ethane-plus natural gas liquids from the field for delivery into the Fort Saskatchewan area. Subject to regulatory and environmental approval, Pembina expects the lateral to be in-service in mid-2015. As a result of the lateral, an additional 10,000 b/d of capacity will be under long-term contract for fractionation at Pembina's Redwater complex.