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Gold/Mining/Energy : Oil Sands and Related Stocks -- Ignore unavailable to you. Want to Upgrade?

To: Bart Hoenes who wrote (1990)	8/23/2005 5:07:49 PM
From: David Culver	Respond to of 25575

Pembina Pipeline Income Fund Symbol PIF.UN Shares Issued 109,761,620 Close 2005-08-23 C$ 14.91 Recent Sedar Documents Pembina to provide Cdn National with pipeline service 2005-08-23 17:01 ET - News Release An anonymous director reports Pembina Pipeline, a wholly owned subsidiary of Pembina Pipeline Income Fund, has executed an agreement with Canadian Natural Resources Ltd. to provide dedicated pipeline transportation service from Canadian Natural's Horizon oil sands project located 70 kilometres north of Fort McMurray, Alta., to Edmonton, Alta. The Horizon project, which is 100 per cent owned and operated by Canadian Natural, is designed as a phased development and includes the open-pit mining of bitumen combined with an on-site upgrader. Phase 1 production is planned to begin in the second half of 2008 at 110,000 barrels per day of 34-degree API light, sweet synthetic crude oil (SCO). Phase 2 would increase production to 155,000 barrels per day of SCO in 2010. Phase 3 would further increase production to 232,000 barrels per day of SCO in 2012. Pembina will complete the twinning of its Alberta oil sands pipeline (AOSPL) by constructing 129 kilometres of 24-inch and 30-inch pipeline loops, resulting in two parallel commercially segregated and operationally distinct pipelines. A new 48.2-kilometre 20-inch pipeline (Northern extension) from the Horizon project to the AOSPL terminal, together with the existing AOSPL 22-inch pipeline (collectively the Horizon pipeline) will provide dedicated transportation service to Canadian Natural's Horizon project. Total cost to complete the AOSPL looping and to construct the Northern extension pipeline and related facilities is approximately $290-million. Construction is expected to commence in early 2006 and the Horizon pipeline will be fully operational and available for service by July, 2008. The 24-inch/30-inch pipeline will remain dedicated for service to Syncrude. On completion of this project, Pembina will have committed capacity to transport 640,000 barrels per day of synthetic crude oil produced from oil sands. This agreement establishes Pembina as a dominant participant in the region and positions the company to capture ancillary opportunities for further investment in oil-sand-related energy infrastructure. Canadian Natural will have exclusive use of the Horizon pipeline and Pembina will have the exclusive right to construct expansions of or extensions to the Horizon pipeline at multipipeline economics. The transportation services will be for an initial minimum term of 25 years, which commences on the in-service date. The contracted revenue requirement includes provision for a fixed return on invested capital and full recovery of operating costs. Pembina will receive a fixed stream of cash flow that is independent of pipeline usage over the duration of contract. Robert B. Michaleski, Pembina's president and chief executive officer, commented: "Pembina is delighted to broaden our presence in the oil sands region and to be working in a long-term partnership with Canadian Natural in the development of this key long-life energy asset. By expanding the capacity of our existing oil sands infrastructure, and realizing the economies inherent therein, we are able to offer Canadian Natural dedicated pipeline transportation service at a competitive rate while achieving attractive, long-term returns for our owners. At the in-service date, the cash flow contribution of this asset is projected to generate approximately 10-per-cent accretion to existing cash flow and will provide solid support for unitholder distributions well into the future. The agreement with Canadian Natural contemplates that formal documentation, comprising a construction support agreement and a transportation agreement, be executed by the end of the third quarter of 2005. The agreements may be terminated by Canadian Natural, prior to commencement of construction, should capital or operating costs, pursuant to detailed engineering, significantly exceed current estimates. Pembina is confident such costs will be within the specified range, having recently completed a major expansion of the AOSPL system. We seek Safe Harbor. Top Print this Page