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Pembina Pipeline strikes billion-dollar energy deals

Pembina's Valleyview truck and tank station, south of Valleyview, Alta.

Pembina Pipeline Corp.

Pembina Pipeline Corp. has struck a deal to build a West Coast propane export terminal in Portland, Oregon and is also tapping into the prolific North Dakota Bakken play with the acquisition of an ethane pipeline.

Calgary-based Pembina said on Tuesday it plans to develop a 37,000-barrel-per-day export facility in Portland's port at a cost of about $500-million (U.S.).

The company also says it is positioning itself for future natural-gas liquids opportunities by acquiring the 700-kilometre, 40,000-barrel-a-day Vantage ethane pipeline and a stake in a Saskatchewan extraction plant for a total of about $650-million.

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Vantage originates in Tioga, North Dakota and terminates near Empress, Alta.

The Portland export terminal project is part of a larger strategy by Canadian energy companies to ship Alberta propane to Asia as the oil patch seeks new international markets to make up for slipping U.S. demand.

"Pembina is eager to progress the Project under the terms of the Terminal Agreement to bring our plans for a significant investment in the Portland area to fruition, allowing us to provide an exciting opportunity for our shareholders and a market solution for our customers," said Pembina vice-president of business development Andrew Gruszecki.

The facility is expected to enter service in early 2018, the company said.

The new terminal should provide growing Canadian propane supply with access to major global markets, Pembina said.

The Portland port is situated along the Columbia and Willamette rivers, with the Columbia providing deep-water access to the Pacific Ocean, about 180 kilometres downstream.

Pembina said in a separate news release Tuesday that the Vantage ethane pipeline being acquired from Riverstone Holdings LLC provides long-term, fee-for-service cash flow and strategic access to the expanding North Dakota Bakken play.

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"We have watched the development of these assets with great interest as they represent an excellent opportunity to expand our footprint into one of the most promising hydrocarbon plays in North America and, as such, the Transaction is a low-risk, logical step-out for Pembina," company president and chief executive officer Mike Dilger said.

As part of the Vantage transaction, Pembina is also acquirinig Mistral Midstream Inc.'s interest in the Saskatchewan Ethane Extraction Plant, a development-stage, 60-million-cubic-feet-per-day deep cut gas processing facility, as well as pipeline infrastructure currently under construction.

The plant has a long-term ethane sales agreement and a long-term, fee-for-service processing agreement, Pembina said; the facility is expected to produce about 4,500 barrels per day and will connect into Vantage.

Additional capital expenditures of about $100-million are anticipated before the end of 2015 in order to complete construction of the ethane extraction plant and the associated gathering and delivery infrastructure, Pembina said.

"With these assets, we'll be making a low-risk entry into the prolific Bakken play in Saskatchewan and we'll be adding another fee-for-service gas plant to our portfolio," Pembina senior vice-president for NGL and natural gas facilities Stuart Taylor said.

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