September 28, 2017 / 4:04 PM / 2 months ago

Pembina ups capacity on planned western Canada oil pipeline

CALGARY, Alberta (Reuters) - Pembina Pipeline Corp PPL.TO is boosting capacity on its Phase V pipeline expansion project in western Canada in response to demand from customers in the Montney and Deep Basin oil fields, the company said on Thursday.

Calgary-based Pembina said it will add 45,000 barrels per day of capacity to the planned pipeline, meaning it will be able to carry 305,000 bpd of crude oil and condensate between Lator and Fox Creek, central Alberta.

The extra capacity, which includes adding storage tanks and a new pump station, will add C$135 million ($108.32 million) to the cost of the project, taking it to C$385 million in total.

The Montney, spanning northern Alberta and British Columbia, is Canada’s biggest shale oil field and has been growing output despite a prolonged downturn in oil prices that has weighed on profits in Canada’s oil sands, which make up most of the country’s production.

Pembina announced the Phase V expansion in April and since then customers have committed to an extra 30,000 bpd of capacity, underlining the strong demand for space.

There is ongoing fierce opposition to new pipelines exporting crude from the oil sands but expansions to western Canada’s regional pipeline system tend to proceed without widespread protest from environmental or indigenous groups.

Pembina said in April it has already received environmental and regulatory approval for Phase V and the pipeline is expected to start operating in late 2018.

Reporting by Nia Williams; Editing by Phil Berlowitz

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