Pembina Pipeline Corp. will proceed with constructing and operating the first tranche under its previously announced 20-year system development and service agreement with Chevron Canada Ltd. covering more than 230,000 acres in the liquids-rich Kaybob region of the Duvernay formation in Alberta.
Chevron’s initial development program is expected to comprise 55,000 acres in East Kaybob. Under new service agreements Pembina will develop and construct:
• Raw product separation and water removal systems.
• A condensate stabilization facility with 30,000 b/d of raw inlet condensate handling capacity.
• A 100-MMcfd gas processing facility with 5,000 b/d of propane-plus liquids capacity to be referred to as Duvernay II—a replica of Pembina's 100-MMcfd Duvernay I facility.
• A 10-in. condensate pipeline lateral that will connect to the company’s Peace Pipeline system.
Duvernay II and the related infrastructure will be built at the company’s existing Duvernay complex near its Fox Creek terminal. Pembina expects the total capital cost to be $290 million with an expected in-service date of mid to late-2019, subject to regulatory and environmental approvals.
The facilities will have a 20-year contractual life and would be backstopped by a combination of fee-for-service and fixed-return arrangements. The service agreements include NGL and condensate transportation on Pembina’s Peace Pipeline system and NGL fractionation at the company’s Redwater fractionation complex.
Chevron overall has a net 70% operated interest in 330,000 acres in the Duvernay near Fox Creek, 260 km northwest of Edmonton.