Pembina partnership seeks to buy Trans Mountain pipeline

July 5, 2021

Pembina Pipeline Corp. has formed Chinook Pathways Partnership with the Western Indigenous Pipeline Group to pursue ownership of the Trans Mountain crude oil pipeline. The company also reactivated its Phase IX Peace Pipeline Expansion (Phase IX).

Chinook Pathways is an Indigenous-led partnership working to organize First Nation communities to pursue ownership of Trans Mountain following completion of its expansion (TMX). Trans Mountain is owned by the Canadian government, which is increasing its capacity to 890,000 b/d from 300,000 b/d. The project is expected to complete late-2022 despite work being halted until the Aug. 20, 2021, completion of the current bird-nesting season (OGJ Online, Apr. 27, 2021).

Mick Dilger, Pembina’s president and chief executive officer, commented, “For Pembina, the formation of Chinook Pathways is an important step in the process of evaluating an asset which we have previously and consistently indicated is a good strategic fit - under the right circumstances.” Dilger said that Pembina would continue to build the consortium while TMX is being completed, “and take it from there.”

Pembina earlier this month partnered with the Haisla Nation in developing the 3-million tonne/year floating Cedar LNG plant in Kitimat, BC. The partners intend to take FID second-half 2023 (OGJ Online, June 9, 2021).

Phase IX of the NGL and condensate Peace Pipeline will add capacity connecting northwest Alberta with Gordondale, Alta., to accommodate increased Montney shale activity in northeast British Columbia. The expansion will include new 6- and 16-in. OD pipelines debottlenecking the corridor north of Gordondale as well as upgrades at one pump station. Phase IX will also convert existing pipelines, which are batching, to single-product lines, furthering Pembina’s goal of full product segregation across the Peace Pipeline system. Phase IX also now includes a pump station, in the Wapiti-to-Kakwa corridor, that is partially complete and was once part of Phase VII. This pump station will help accommodate increased and sustained demand for NGL service, also due to increased Montney activity.

The Phase IX expansion is supported by 10-year contracts, with predominantly investment grade counterparties, including significant take-or-pay provisions. The project, which would be part of increasing system capacity by as much as 200,000 b/d to a total of 1.3-million b/d, has a revised estimated cost of $120 million, which reflects the addition of the Wapiti-to-Kakwa corridor pump station, offset by cost savings. Phase IX is anticipated to be placed in service second-half 2022, subject to regulatory and environmental approvals.

Pembina’s Phase VIII Expansion between Gordondale and La Glace, BC, remains deferred despite having received all regulatory approvals. Pembina expects to make a reactivation decision on the project second-half 2021.