The expansion, which requires regulatory approvals, would follow and expand segments of Pembina's system flowing to Edmonton from northeastern British Columbia at Taylor, B.C.
The company said Monday it plans to begin consultations with First Nations and its public involvement early in the new year.
The project includes a new pipeline that will run 270 kilometres from Fox Creek, Alta., to Edmonton. It will initially be able to carry 320,000 barrels per day, rising to 500,000 barrels per day.
The pipeline will carry a combination of crude oil, condensates and natural gas liquids.
Pembina's 2014 capital spending budget will be increased by $200 million to $1.7 billion from $1.5 billion, but most of the project spending is expected to be during construction in 2015 and 2016.
It expects the expansion to go into service between late 2016 and mid 2017.