CALGARY - Pembina Pipeline Corp. is expanding two of its pipeline systems as oil and gas drilling activity in northwestern Alberta and northeastern British Columbia heats up.
The Calgary-based company (TSX:PPL) is spending a total of $545 million to expand its crude oil and natural gas liquids systems by a collective 108,000 barrels per day, plus another $125 million to connect customers to the expanded pipelines.
"With the amount of development of crude oil and NGL-rich resource plays we're seeing by producers near our pipelines in the Western Canadian Sedimentary Basin, there is a strong demand for this next phase of our growth strategy," said chief operating officer Mick Dilger.
Pembina's Peace crude oil system will be expanded by 55,000 barrels per day by late 2014. That's on top of a previously announced 40,000-barrel-per-day expansion to come in service next year.
Meanwhile, the 53,000-barrel-per-day expansion to Pembina's Northern NGL system is set to come into service by early to mid-2015.
That system, too, had already been undergoing an expansion to add 52,000 barrels per day of capacity by the end of 2013.
Once the expansions are complete, the Peace pipeline will be able to ship 250,000 barrels per day and the NGL system will have a capacity of 220,000 barrels per day.
The projects involve adding and upgrading pump stations, as well as reconfiguring and building new pipe.
Also Tuesday, Pembina reported third-quarter profits of $30.7 million, or 11 cents per share, versus $30.1 million, or 18 cents per share a year earlier.
The per share amount decreased due to the 116.5 million shares Pembina issued to acquire Provident Energy in a $3.2-billion deal earlier this year.
Pembina's revenues for the quarter grew to $815.3 million, up from $300.6 million.
"Pembina delivered steady operational and financial results this quarter and we continued to make substantial progress on a number of capital projects across our business," said CEO Bob Michaleski.
"Our integration with Provident is essentially complete with only a few remaining items on the information systems front, which we expect to wrap up by year-end.
"Moving forward, I'm confident we have the financial resources, human capital, and strategic focus to further our pursuit of fee-for-service opportunities, which we expect will continue adding long-term shareholder value."
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10. Oil And Gas Accounts For 4.8 Per Cent Of GDP
The oil and gas industries accounted for around $65 billion of economic activity in Canada annually in recent years, or slightly less than 5 per cent of GDP. Source: <a href="http://www.ceri.ca/docs/2010-10-05CERIOilandGasReport.pdf" target="_hplink">Canada Energy Research Institute</a>
9. Oil Exports Have Grown Tenfold Since 1980
Canada exported some 12,000 cubic metres of oil per day in 1980. By 2010, that number had grown to 112,000 cubic metres daily. Source: <a href="http://membernet.capp.ca/SHB/Sheet.asp?SectionID=9&SheetID=224" target="_hplink">Canadian Association of Petroleum Producers</a>
8. Refining Didn't Grow At All As Exports Boomed
Canada refined 300,000 cubic metres daily in 1980; in 2010, that number was slightly down, to 291,000, even though exports of oil had grown tenfold in that time. Source: <a href="http://membernet.capp.ca/SHB/Sheet.asp?SectionID=7&SheetID=104" target="_hplink">Canadian Association of Petroleum Producers</a>
7. 97 Per Cent Of Oil Exports Go To The U.S.
Despite talk by the federal government that it wants to open Asian markets to Canadian oil, the vast majority of exports still go to the United States -- 97 per cent as of 2009. Source: <a href="http://www.nrcan.gc.ca/statistics-facts/energy/895" target="_hplink">Natural Resources Canada</a>
6. Canada Has World's 2nd-Largest Proven Oil Reserves
Canada's proven reserves of 175 billion barrels of oil -- the vast majority of it trapped in the oil sands -- is the second-largest oil stash in the world, after Saudi Arabia's 267 billion. Source: <a href="http://www.ogj.com/index.html" target="_hplink">Oil & Gas Journal</a>
5. Two-Thirds Of Oil Sands Bitumen Goes To U.S.
One-third of Canada's oil sands bitumen stays in the country, and is refined into gasoline, heating oil and diesel. Source: <a href="http://www.nrcan.gc.ca/statistics-facts/energy/895" target="_hplink">Natural Resources Canada</a>
4. Alberta Is Two-Thirds Of The Industry
Despite its reputation as the undisputed centre of Canada's oil industry, Alberta accounts for only two-thirds of energy production. British Columbia and Saskatchewan are the second and third-largest producers. Source: <a href="http://www.nrcan.gc.ca/statistics-facts/energy/895" target="_hplink">Natural Resources Canada</a>
3. Alberta Will Reap $1.2 Trillion From Oil Sands
Alberta' government <a href="http://www.huffingtonpost.ca/2012/03/27/alberta-oil-sands-royalties-ceri_n_1382640.html" target="_hplink">will reap $1.2 trillion in royalties from the oil sands over the next 35 years</a>, according to the Canadian Energy Research Institute.
2. Canadian Oil Consumption Has Stayed Flat
Thanks to improvements in energy efficiency, and a weakening of the country's manufacturing base, oil consumption in Canada has had virtually no net change in 30 years. Consumption went from 287,000 cubic metres daily in 1980 to 260,000 cubic metres daily in 2010. Source: Source: <a href="http://membernet.capp.ca/SHB/Sheet.asp?SectionID=6&SheetID=99" target="_hplink">Canadian Association of Petroleum Producers</a>
1. 250,000 Jobs.. Plus Many More?
The National Energy Board says oil and gas employs 257,000 people in Canada, not including gas station employees. And the Canadian Association of Petroleum Producers says the oil sands alone <a href="http://www.capp.ca/aboutUs/mediaCentre/NewsReleases/Pages/OilsandsaCanadianjobcreator.aspx" target="_hplink">will grow from 75,000 jobs to 905,000 jobs by 2035</a> -- assuming, of course, the price of oil holds up.