Pembina is a leading pipelinetransportation and midstreamservice provider, serving NorthAmerica for nearly 60 years.Our strategically located andintegrated energy infrastructureenables us to offer essentialservices for the energy industryacross the hydrocarbon valuechain. As a trusted member ofthe communities in which weoperate, we are committed tosafe, responsible and reliableoperations and to generatingvalue for our investors. FOLD business model o2 going the distance o4 message from the CEO o7 well-connected o8 business at-a-glance 1o conventional pipelines 12 gas services 14 oil sands & heavy oil 16 midstream 2o ursuing the Pembina promise p IBC corporate information
CORPORATE PROFILE 1 9% (1) CAGR in cash flow per share (2) 19.5% average compound annual return (2) $ 1.62 annual dividend per share $ 2 billion in dividends paid since inception(1)(2) (3) Compound annual growth rate (CAGR) Over the past ten years to December 31, 2011 As at August 1, 2012 $ 10 billion in total enterprise value (3)
FULLY INTEGRATED SERVICES Crude Oil Crude Oil Field Oil Production Crude Oil Connected Battery Pembina Nexus Terminal Truck Terminals e sat en Condensate nd Co NGL NGL NGL Gas Field Production Field Processing Field Extraction Plant Redwater Fractionator Gas Plant Truck Terminals Truck/Rail Sales Gas Pembina-owned Facilities/Pipelines Terminals/Rail Express Extraction Plant Gas Plants/Extraction Storage Marketing Distribution Sales Gas Fractionator Third Party Operations Pembina Liquids Pipelines Export Pipelines Pembina NGL Pipelines Third Party Gas/NGL Pipelines
Condensate/Diluents Diluted Bitumen Synthetic Crude Field Oil Sands and Heavy Oil Production Refineries Export Pipelines NGL Storage: Ethane, Propane, Butane, CondensateNGL NGL Marketing and Distribution: Petrochemical Companies, Refineries, Propane Retailers Sarnia Fractionator Sarnia/Corunna Storage: Ethane, Propane, Butane, Condensate Truck/Rail NGL Storage
2 PEMBINA PIPELINEAt Pembina Pipeline Corporationwe’re going the distanceBut What Does That Mean?To us, it means that every day Pembina’s team is hard at work,going the distance to ensure our pipeline network and energyinfrastructure meet the needs of our customers by processing,terminalling and transporting their products safely to key NorthAmerican markets. It means protecting the environment anddelivering on our commitments to our customers, shareholdersand community stakeholders. Within the communities in whichwe operate, it means doing all we can to be a good neighbourby giving back to those whose trust we’ve earned over theyears. And, it means leveraging the experience and expertisewe’ve gained over nearly 6o years as we continue to growour business responsibly. We have a long-range vision, andour goal as always is to be the operator, employer, partner,neighbour and investment of choice in North America’s energyinfrastructure sector – creating long-term, sustainable valuefor those who’ve come to expect it. At Pembina, we’re morethan pipelines, and we’re going the distance every day.
CORPORATE PROFILE 3“ t Pembina, we take pride in delivering on our commitments. We A know that our future success relies heavily on meeting or exceeding expectations today. That’s why we focus on how we get the job done—setting a high standard for safety, environmental responsibility and being a good corporate citizen.” Robert Michaleski, CEO
4 PEMBINA PIPELINEMessage from the ceo At the beginning of this publication, you learned what going the distance means to us at Pembina. It really boils down to delivering on our promises and working tirelessly to achieve our long-term objectives.Past Success; Bright Future Reaching further to buildWith every passing year, Pembina’s success gives sustainable valueus reason to be proud. Whether you measure our At Pembina, our teams are reaching further togrowth and success over the years in terms of find innovative ways to take advantage of thepipeline capacity, throughput, scope of services, unique position and characteristics of our assets.processing capacity, storage, number of offices, New ideas lead to greater value – that’s thecomplement of employees, share price, or total Pembina way.return, we clearly are not only a bigger companybut also a better company. The conventional oil and gas industry has experienced a resurgence over the past few yearsWith the closing of the acquisition of Provident on the heels of the development and applicationEnergy Ltd. (“Provident”) on April 2, 2012, of new drilling technology by producers. ThePembina has begun a new chapter as a much result: significant land sales and drilling activity inlarger, more financially flexible and diversified areas where Pembina already has an establishedcompany. In fact, we are now one of Canada’s presence with pipelines or other energylargest energy infrastructure companies with an infrastructure. This revitalization provides usenterprise value(1) of approximately $10 billion – a with an unprecedented opportunity to grow ourlong way from when we went public in 1997 with business while adding value for our customers.an enterprise value of $600 million. The scale Our assets are strategically located across someand scope of our high-quality assets combined of the most prolific liquids-rich natural gas andwith our integrated strategy position us well to conventional oil regions in the WCSB such as thecontinue delivering long-term and sustainable Deep Basin, Montney, Cardium, Swan Hills andgrowth for our shareholders – something that emerging Duvernay shale play.has always been a hallmark of our Company. Ourfuture has never looked brighter, which is a direct We continue to prove our ability to secure andresult of our past successes and our commitment deliver growth projects that provide long-term,to delivering on our promises. stable returns and our future plans are no different. Our customers want, and we provide, an integrated approach that expands across the hydrocarbon value chain. We are delivering on our commitments to safe and reliable operational Enterprise value is a non-GAAP measure, please see “Forward-Looking(1) Information and Non-GAAP Measures” on page IBC. performance, environmental responsibility and prudent financial management.
CORPORATE PROFILE 5Bright Future: Moving forward as We’re also very pleased that as of April 2, 2012,one of Canada’s largest energy we became listed on the New York Stock Exchange (“NYSE”) (under the symbol “PBA”).infrastructure companies We believe this dual listing provides us greaterWith assets along the majority of the hydrocarbon liquidity, and are excited to share our futurevalue chain, Pembina is a truly integrated energy successes with a broader range of investorsinfrastructure company with the scale and scope across North America.necessary to meet the growing needs of westernCanada’s, and North America’s, oil and gas Right people to execute our planindustry. It means a stronger balance sheet, more Through the years, we have broadened the rangerobust cash flow and the ability to strategically of services we are able to offer our customers andpursue larger, more complex growth projects. have strengthened Pembina’s value propositionWe enjoy the luxury of having more growth with an even more diversified business. Andprospects on our horizon than at any time in while our enterprise value, lines of businessPembina’s history. The opportunities ahead for and opportunities may have grown in size andus are evident in the roughly $4 billion in unrisked number over the years, our values remain thecapital projects we have laid out through to same and are based on mutual respect, integritythe end of 2015, and our ‘pipeline’ of projects and openness. At Pembina, we foster thesecontinues to expand as demand grows across values across all levels of the organization andall our business lines. We can only meet our recognize that having the best workforce is theobjectives by providing superior, safe and reliable single most important factor in ensuring superiorcustomer service, effectively and efficiently performance. We pride ourselves on creating aintegrating our assets, participating as members working environment where accountabilities areof the communities in which we operate rather clear, where strong performance is expected, andthan as visitors, and responsibly expanding our where results are recognized.operations with a focus on enhancing profitability. We now have well over 800 employeesPembina’s business model is also highly throughout North America and have come acustomer-driven – we partner with our customers long way since 1954 when our initial headcountto ensure they can connect supply to demand was 31. Together, this team continues to earnefficiently and effectively through all turns of the and maintain our social licence to operate bycommodity cycle. We take pride in Pembina’s strengthening Pembina’s relationships andtrack record as a safe, reliable and cost-effective reputation through the work they do each andservice provider. every day.Sharing in our success: Going the distance in the years ahead meansyield and growth more than just building on our solid track record. It means continuing to deliver on the promisesI’m very proud that since Pembina was first listed we have made to our valued customers,on the Toronto Stock Exchange (“TSX”) 15 years communities, stakeholders and shareholders –ago as an income trust, we’ve distributed over and I’m proud to say we have the assets and$2 billion to shareholders, or about $17.50 people necessary to deliver on these promisesper share, and our 10-year cumulative annual today and in the years to come.dividend growth rate is approximately fourpercent. We’ve provided an impressive totalreturn of just over 500 percent over the last tenyears to the end of 2011, far greater than the 98 Robert B. Michaleskipercent return that the SP TSX Composite Index Chief Executive Officerachieved over the same period. Pembina Pipeline Corporation
6 PEMBINA PIPELINE 1954 Pembina was founded 1997 Pembina went public 2010 converted from trust to corporation 11 average years of service per employee 800 full-time employees
CORPORATE PROFILE 7 Well connected I f we had to build them all over again, we’d locate our assets in the same places they reside today. Proximity to our customers: Integrated energy infrastructure assets that are strategically located near long-life, economic hydrocarbon reserves. Well-positioned for growth: Increased demand for all our services resulting from a resurgence of conventional plays due to technological advances. Solid business platform: Stable, low-risk, highly efficient asset base dominated by fee-for-service revenue. Map is for illustrative purpose only ALBERTA ATHABASCA OIL SANDS MONTNEY SLAVE POINT Younger Plant Fort McMurray SEAL Valleyview Fort St John PELICAN LAKE Grande Prairie Swan Hills SWAN HILLS Cutbank Complex DEEP Prince BASIN Saturn George Resthaven Redwater Whitecourt Drayton Valley Edmonton CARDIUM DUVERNAY Kamloops Calgary Empress Prince Fort McMurrayGeorge Gas Processing Plant Redwater Fractionator Edmonton Midstream Storage Facility Truck Terminal Calgary Rail Terminal Oil Sands and Heavy Oil Pipelines Conventional Pipelines Third Party Pipelines
8 PEMBINA PIPELINEOUR BUSINESSES at a GlanceConventional Oil Sands Pipelines Heavy OilPembina got its start in conventional pipelines Pembina plays an important and growing role inand has expanded this business to meet the supporting Alberta’s oil sands industry, transportinggrowing needs of producers in Alberta and synthetic crude oil from the Syncrude Canada Ltd.British Columbia (“BC”). Today, the Company and Canadian Natural Resources Ltd. oil sandsowns and operates 7,850 km of conventional operations near Fort McMurray, Alberta to marketspipelines which transport approximately half of near Edmonton. Pembina also services oil sandsAlberta’s conventional crude oil production, about producers operating southwest of Fort McMurraythirty percent of the NGL produced in western and heavy oil producers in the Peace River/SealCanada, and virtually all of the conventional oil region of Alberta by providing both diluent andand condensate produced in BC. This extensive diluted bitumen pipeline transportation. In all,network enables us to provide reliable, cost- Pembina has approximately 1,650 km of oil sandseffective service to our customers in the oil and pipelines with about 30 percent of the total take-natural gas producing regions of both provinces. away capacity from the Athabasca oil sands region at the end of 2011.
CORPORATE PROFILE 9Gas ServicesPembina’s growing natural gas gatheringand processing business includes the CutbankComplex, which comprises three sweet gasprocessing plants and a new ethane extractionfacility, as well as approximately 350 km of gasgathering pipelines. These assets are connecteddirectly to Pembina’s Peace Pipeline system andserve an active exploration and production area inthe WCSB. Pembina is expanding its gas servicesbusiness by constructing the Saturn and Resthavenenhanced NGL extraction facilities to meet thegrowing needs of producers in west central Alberta.Once these new facilities are complete, Pembina willhave approximately 900 MMcf/d of total processingcapacity net to Pembina.MidstreamPembina’s Midstream business is organized intotwo segments: crude oil and NGL. The crudeoil segment, which represents the Company’s“legacy” midstream operations, is situated at keysites across Pembina’s operations and comprisesa network of truck terminals as well as largeterminals at downstream hub locations whichinclude storage and pipeline connectivity.Pembina’s operations include NGL midstreamactivity, which comprises two large operatingsystems: Redwater West and Empress East.The Redwater West system includes theYounger extraction facility in BC; a 73,000 bpdfractionator, 6.3 mmbbls of cavern storageand terminalling facilities at Redwater, Alberta;and, third-party fractionation capacity in FortSaskatchewan, Alberta. The Empress EastNGL system includes a 2.1 bcf/d interest in thestraddle plants at Empress, Alberta; and, 20,000bpd of fractionation capacity as well as 6.4mmbbls of cavern storage in Sarnia, Ontario.By providing integrated services along thehydrocarbon value chain, this business hasincreased the range of services Pembina is ableto provide its customers. The Midstream businessalso contributes throughput to the Company’sConventional Pipelines business, and providesessential downstream services that support ourGas Services business.
10 PEMBINA PIPELINECONventional pipelinesOverview• eatures approximately F • ransports 50% T • verlays key resource O 7,850 km of strategically of the crude oil plays in Alberta and located and well- produced in Alberta BC, including Cardium, maintained crude oil and 30% of the NGL Montney, Swan Hills, and NGL gathering produced in western and Duvernay pipelines Canada with over 600 receipt points ALBERTA Fort Fort St. John McMurray Taylor Dunvegan Valleyview Grande Swan Hills Prairie Whitecourt Fort Saskatchewan Drayton Valley Edmonton Caroline Calgary Kamloops NEBC/Western System Peace System Drayton Valley System Liquids Gathering System (LGS) Northern SystemMap is for illustrativepurpose only Swan Hills System Bonnie Glen System (50% Operated) Brazeau NGL System
CORPORATE PROFILE 11Market Opportunities HIGHLIGHTSThrough the use of new technology, many producers • aily throughput growth to 413.9 mbpd Din western Canada are increasing production in 2011 and 450.4 mbpd in the first halffrom mature reservoirs and are seeking additionaltransportation capacity to move product to market. of 2012 evidences increased drillingPembina proactively works with our existing and and production in the WCSB.potential customers to support their growing needsand enters into contractual arrangements for • apital of approximately $70 million Ccommitted volumes that support our expansion plans. invested in 2011 enables Pembina to• n 2012 and 2013, Pembina plans to invest $30 I offer increased capacity on its Drayton million to upgrade two existing pump stations on Valley and Peace Pipeline systems in our Peace Pipeline that will increase crude and the Edson, Alberta area. condensate capacity by approximately 26 percent from 155 mbpd to 195 mbpd. • apital budget of $210 million planned CThe Cardium is one of the most prospective of for 2012, with the majority allocated towestern Canada’s unconventional or “tight” oil plays. expanding the NGL throughput capacityDrilling for oil in the Cardium formation rebounded on two of Pembina’s major pipelinein 2009 when horizontal drilling and multi-stage systems and tying in the Company’sfracturing technology increased the oil recovery factor. Resthaven and Saturn gas plants.• embina has expanded its Drayton Valley mainline P which serves Cardium producers, increasing pipeline capacity and projected throughput on that system by 50 mbpd from approximately 140 mbpd to 190 Key Strengths mbpd as of August 2012. Location: Pembina has been growing its extensive network of conventionalConventional Pipelines is also benefiting fromincreased liquids-rich natural gas drilling in many pipelines which overlay key plays thatplays, including: the Alberta Deep Basin, Cardium, feature substantial growth productionDuvernay and Montney. profiles across Alberta and BC,• embina is progressing plans to expand the NGL P including the Cardium, Montney, Swan throughput capacity on our Peace and Northern Hills and Duvernay plays. Today, our pipelines (together the “Northern NGL System”) pipelines serve the same plays that are by approximately 50 mbpd (the “NGL Expansion”) experiencing a resurgence as a result of to accommodate increased customer demand following strong drilling results and increased field new and improved technology. liquids extraction by area producers. The $100 million NGL Expansion is underpinned by long-term Asset Integrity Operational agreements with customers. Pembina expects to Excellence: Pembina is the leading bring 17 mbpd of the NGL Expansion into service service provider in these areas by the end of 2012 and the remaining 35 mbpd by and operates safe, reliable and the end of 2013. Once complete, the proposed NGL Expansion is expected to increase capacity on the well-maintained assets. We direct Northern NGL System by 45 percent to 167 mbpd. approximately 40% of Pembina’s annual operating expenses to our asset• nce complete, Pembina will tie in our new Saturn O and Resthaven facilities to Pembina’s existing integrity program. pipeline infrastructure. These projects could add in excess of 25 mbpd of liquids for transportation on Pembina’s Northern NGL System.
12 PEMBINA PIPELINE GAS SERVICES Overview • Ownership in three • ncludes natural I • ntegrates with Pembina’s I Pembina pipeline- gas gathering and Conventional Pipelines connected sweet gas processing capacity and Midstream businesses processing plants and of 410 MMcf/d gross and assets one enhanced liquids (355 MMcf/d net), extraction facility where enhanced liquids • enerates fee-for-service G we capture liquids-rich extraction capacity of revenue through gathering gas supply from north 205 MMcf/d and 350 km and extraction western Alberta and of associated gathering north eastern BC system pipelines • onstructing two C new enhanced liquids extraction facilities Musreau Cutbank Gas Plant Gas Plant ALBERTA Younger Kakwa Gas Plant Taylor Fort McMurray Resthaven Gas Plant Cutbank Redwater Complex Resthaven Saturn Edmonton Fox Creek Pump Station Kamloops Calgary EmpressVancouver Saturn Gas Processing Plant Gas Plant Map is for illustrative Redwater Fractionator purpose only Pembina Pipelines Pembina Gas Services Pipelines Proposed Gas Services Pipelines
CORPORATE PROFILE 13Market Opportunities HIGHLIGHTS• atural gas is an abundant resource in North N • rocessed 244.5 MMcf/d in 2011 and P America, and specifically in the WCSB. It is the 275 MMcf/d in the first half of 2012. cleanest burning fossil fuel and represents an affordable and readily available source of energy. • ompleted a 50 MMcf/d shallow cut C• he liquids contained in natural gas (known as T expansion and a 205 MMcf/d enhanced “NGL”) are valuable due to their greater heating liquids extraction expansion of the capabilities and alternate uses when compared Musreau gas plant in August 2012. to ‘dry’ natural gas, and their price is often benchmarked against that of crude oil. This means • lans include capital spending of P producers are keen to extract the highest possible value and produce NGL. This is positive for approximately $235 million in 2012 with Pembina; we’re able to process the gas, extract the $200 million being directed towards the liquids and then transport them on our pipelines for Saturn and Resthaven enhanced liquids storage and fractionation at Redwater. extraction facilities.• he component parts of the raw gas stream T include: ethane, propane, butane and condensate. – aturn is expected to be in-service S The higher the liquids content and the higher the during the fourth quarter of 2013 and proportion of “heavier” liquids, the more valuable the Resthaven is expected to be in-service raw gas stream. in the first quarter of 2014. We anticipate• he “heaviest” gas liquid, condensate, is used to T that these projects could add a dilute bitumen and heavy oil so it can flow through combined net 330 MMcf/d of enhanced pipelines. As a result, as producers increase their liquids extraction capacity and up to production of oil sands and heavy oil, there is a growing demand for condensate. This benefits 26.5 mbpd of liquids extraction, which Pembina as we’re able to transport condensate from will be transported to market using new the field to the Peace River/Seal heavy oil region of and existing Pembina pipeline assets. Alberta via our Mitsue Pipeline. Once diluted, we are then able to ship the product back down to key markets on our Nipisi Pipeline – another example of Pembina’s vertical integration strategy at work. Key Strengths Location: When Pembina’s Gasspotlight on Services team was first established in 2009 through the acquisition of ourTwo resurging plays Cutbank Complex, it was a naturalPembina’s Gas Services assets are in the vicinity of extension of our business. The Cutbanktwo of Alberta’s most exciting resource plays. Complex was already connected to• lberta’s Deep Basin has enormous gas-in-place A our Peace Pipeline, so we had working from over a dozen productive geological zones, and knowledge of and saw opportunities its development remains profitable at relatively low to maximize these assets. natural gas prices, especially as new technologies make deeper and tighter oil and gas targets more Relationships with customers: accessible and economic. Today, our Gas Services team works with• he Duvernay shale has sparked intense industry T industry-leading producers, providing interest with current technologies beginning to them with the infrastructure and operating unlock extremely low-permeability or “tight” shale, its enormous resource-in-place of liquids-rich natural support they need so they can do what gas, as well as encouraging initial well results. they do best – cost effectively grow their resource production.
14 PEMBINA PIPELINEOil Sands Heavy OilOverview• eatures 1,650 km of pipeline F • Agreements underlying Pembina’s and approximately 900 mbpd of Oil Sands Heavy Oil assets are contracted capacity to serve the effectively tied to the long life of Athabasca oil sands and the heavy the oil sands and heavy oil reserves oil region near Peace River, Alberta serviced by this business CNRL Horizon Syncrude Fort McMurray Cheecham Pelican Terminal Heavy Oil Scotford Refinery Edmonton Syncrude Pipeline Horizon Pipeline Cheecham Lateral Nipisi Pipeline Mitsue Pipeline Peace PipelineMap is for illustrativepurpose only
CORPORATE PROFILE 15Market Opportunities HIGHLIGHTS• he oil sands are a vast resource. The petroleum T With the completion of Pembina’s Nipisi contained in the sands, referred to as bitumen, is and Mitsue pipelines, which we brought extremely thick and must be diluted or upgraded before it can be transported via pipeline. For on-stream in June and July of 2011, our Pembina, this creates opportunities to provide total oil sands and heavy oil capacity take-away capacity from the oil sands and heavy grew from 775 mbpd at the end of 2010 oil producing areas of Alberta as well as to bring to approximately 900 mbpd by the end of condensate or other diluents closer to the source of production. 2011. This allows Pembina to meet the growing needs of industry producers with• n this business, we stand to grow with our I both condensate and takeaway capacity. customers as they execute on their plans to increase production due to the expansion rights The Mitsue Pipeline delivers condensate we have built into certain agreements. north to the heavy oil producing region of Peace River/Seal and the Nipisi Pipeline brings the diluted bitumen back down to the Edmonton area hub for furtherspotlight on transport to refineries for processing.Oil Sands Heavy Oil AssetsSyncrude Pipeline • Contracted capacity: 389 mbpd Key Strengths • Contract type: Cost of Service • xperience in developing, safely E • Initial contract term: 25+ years constructing and operating large-scale • Shippers: Syncrude Partnership capital projects.Horizon Pipeline • ccess to assets and right-of-ways to A • Contracted capacity: 250 mbpd facilitate future expansion. • Contract type: Fixed Return • trong relationships with communities S • Initial contract term: 25+ years and customers. • Shipper: Canadian Natural Resources Ltd. • onsultation experience with CNipisi and Mitsue Pipelines stakeholders and a vast knowledge of • Contracted capacity: 122 mbpd the regulatory environment, enabling • Contract type: Fixed Return us to get larger projects off the ground • Initial contract term: 10+ years quicker and more efficiently. • Shippers: Canadian Natural Resources and Cenovus Energy Inc. • ccess to key diluent markets through A our other businesses.Cheecham Lateral Pipeline • Contracted capacity: 136 mbpd • Contract type: Fixed Return • Initial contract term: 25+ years • Shippers: Conoco, Total, Nexen, CNOOC
16 PEMBINA PIPELINE Midstream Overview PEMBINA’S MIDSTREAM BUSINESS IS ORGANIZED INTO TWO Segments: • he crude oil segment, which represents the T • The NGL segment, which includes two large Company’s legacy midstream operations, operating systems: Redwater West and is situated at key sites across Pembina’s Empress East. operations and comprises a network of liquids truck terminals and larger-scale terminalling o The Redwater West NGL system includes at downstream hub locations which includes the Younger extraction and fractionation storage and pipeline connectivity. facility in BC; a 73,000 bpd fractionator, 6.3 mmbbls of cavern storage and o his includes the Pembina Nexus Terminal T terminalling facilities at Redwater, Alberta; (“PNT”), which connects key infrastructure and, third party fractionation capacity in in the Edmonton – Fort Saskatchewan – Fort Saskatchewan, Alberta. Namao, Alberta area via pipelines to other Pembina infrastructure as well as refineries o he Empress East NGL system includes T and downstream terminals. PNT enables a 2.1 bcf/d interest in the straddle plants Pembina to create tailored products and at Empress, Alberta, and 20,000 bpd of services for customers while facilitating fractionation capacity as well as 6.4 mmbbls growth opportunities for the Company’s of cavern storage in Sarnia, Ontario. other businesses. Prince Fort McMurrayGeorge Edmonton Calgary Superior Sarnia Marysville Chicago Conway Lynchburg
CORPORATE PROFILE 17 North Saskatchewan River Redwater Fractionator Shell Scotford Ft. Sask. Ethane StorageGas Processing Plant NamaoRedwater FractionatorMidstream HubMidstream Storage FacilityTruck TerminalRail TerminalMidstream Operations Clover Bar Edmonton TerminalOther Pembina PipelinesThird Party Pipelines ALBERTA Parcel A Fort Younger Plant McMurray Valleyview Fort St John Grande Prairie Swan Hills Cutbank Complex Prince Saturn George Resthaven Redwater Whitecourt Drayton Valley Edmonton Pembina Nexus Terminal Kamloops Calgary Empress Vancouver Map is for illustrative purpose only
18 PEMBINA PIPELINEMarket Opportunities• idstream is well-positioned to grow its service offering. This business has built a solid foundation of M assets which allow for increased flexibility in responding to changing market conditions.CRUDE OIL MIDSTREAM EMPRESS EAST NGL SYSTEM• embina’s crude oil midstream team is working P • Most efficient plant at Empress. to expand our presence in the full-service truck terminal business, provide new services and bility to extract condensate at •A expand existing facilities. Empress for use as a diluent in Alberta heavy oil production.• ull-service terminals, or “FSTs”, focus on F emulsion treating (separating oil from impurities Access via the Enbridge Pipeline to • to meet shipping quality requirements), central Canadian NGL markets. produced water handling and water disposal. • Growing storage and terminalling o 2013, we expect to have an FST on stream In opportunities at Corunna from emerging to serve customers west of Drayton Valley. eastern Canadian shale plays.Opportunities: Opportunities:• rowing volumes of conventional and heavy oil G • Location of the Corunna facility near Sarnia, production in Alberta, coupled with downstream Ontario is ideal to enhance storage and take-away constraints, has created potential terminalling service offering for customers opportunities for Pembina. in the region. o With the industry’s need for additional REDWATER WEST NGL SYSTEM storage capacity and the growth in rail as a means to transport various energy products, • ocated to capture oil sands, gas liquids and L Pembina is considering being able to provide other emerging growth opportunities. these enhanced services at PNT. • Low-cost expansion capabilities with ample • rowth in heavy oil production is creating G room to grow. strong demand for creative solutions to • Large-scale, sulphur capable producer’s diluent needs. ethane-plus fractionator. o Connected to a variety of diluent sources • Largest NGL rail yard in Canada. via both pipeline and rail, and near diluent manufacturing, PNT is positioned to be Opportunities: the service provider of choice. This could help to underpin new heavy oil pipeline • Increased liquids-rich natural gas drilling projects. As well, Pembina is able to blend provides increased supply for the entire customized diluents. Redwater West system.• efiners are looking for consistent and R • Hydrocarbon storage demand continues to sometimes unique blends of crude oil. grow, facilitating further cavern development at the Redwater site. Pembina is continuing o Investments in blending capacity at to develop fee-for-service storage caverns at Pembina’s terminals allow us to optimize Redwater, with one expected to come into the cost-benefit of crude oil blends and service in the fourth quarter of 2012. tailor product to the specific requests of customers. • Pembina expanded the fractionation capacity at Redwater by approximately 8,000 bpd in 2012 at an estimated cost of $15 million. To meet the growing needs of producers in • the region, Pembina has initiated development of and is currently soliciting customer support for a new 70 mbpd ethane-plus fractionator at the Redwater site.
CORPORATE PROFILE 19Key StrengthsYears of experience and significantintellectual capital in the oil and gasindustry: Pembina’s Midstream team’sexperience and expertise provides us withthe ability to take advantage of uniqueopportunities that leverage our assetsand market conditions.Service offering: Pembina is able toprovide a “one-stop-shop” for customerswith truck and full service terminals, railloading and off-loading, trucking servicesand storage. These allow for customizedservices, giving Pembina a clearcompetitive advantage.Storage capacity: With Pembina’sabundant storage capacity, Midstreamhas the ability to provide a necessarybuffer between hydrocarbon productionand consumption, allowing producers tostore inventory to accommodate outagesand to capitalize on seasonal pricedifferentials that may develop over thecourse of a year.Fractionation capacity: Fractionationrefers to the process of usingtemperature and pressure to separatethe NGL mix into individual specificationproducts including ethane, propane,butane and condensate. The Redwaterfractionator has several significantadvantages, including the ability toprocess high sulphur NGL, and is oneof only two fractionation facilities in theFort Saskatchewan area capable ofprocessing ethane-plus. These uniquecharacteristics provide Pembina withaccess to a broad array of NGL streams.
20 PEMBINA PIPELINEPURSUING THE PEMBINA PROMISEPembina is committed to going the distance and achievingexcellence in every aspect of our business, from how we design,construct and operate our pipelines and facilities to how weinteract with employees, customers and community neighbours.SAFETY ENVIRONMENTTo Pembina, being a responsible operator in our corporate culture. We reinforce ourmeans doing the right things to protect the commitment to excellence in SES in our dailyhealth and safety of people and the environment operations through regular safety meetings,– and constantly looking for ways to improve. extensive contractor screening, rigorous projectOur Safety, Environment Security (“SES”) inspection, review of potential hazards, andmanagement system is a cornerstone of ensuring our assets and practices meet orPembina’s success and is deeply embedded exceed industry best practices.
CORPORATE PROFILE 21Working towards zero On a regular basis, our field representatives,accidents, injuries and SES personnel and management teams review all incidents that do happen, allowing us toenvironmental incidents understand the root cause and implementPembina believes that all accidents, injuries and corrective and/or preventative measures.incidents are preventable. That’s why we won’t We continue to work towards leading typesstop until we reach our goal of zero workplace of safety metrics to be more proactive inincidents. To achieve this, we have a combination incident prevention.of loss management policies, programs andprocedures (which include our emergency Driving our way to zeroresponse plans) and an incident reporting and Each year, Pembina employees drive millions oftracking system. kilometres to manage and monitor our pipeline rights-of-way. To minimize the number of motorArming ourselves with the vehicle incidents we experience, Pembina hasknowledge to improve established an extensive program aimed atTracking health, safety and environmental making sure our drivers operate safely.statistics is just as important as measuring Part of this program includes training. Anyoperating and financial performance. It’s a key Pembina employee expected to drive onpart of our operations and allows us to see how Company time is required to participate inwe’re doing and where we need to improve. Collision Avoidance training every three years.Specifically, it gives us a benchmark to measure This helps make sure our employees understandagainst in future years, it helps us analyze our and can apply techniques to avoid an accidentcurrent results, and it gives us the information wherever possible. As of March 31, 2012, 344we need to identify potential opportunities employees have participated in this training,for improvement. representing 96% of employees identified as Company drivers.Pembina records each and every ‘close call’. This allows us to make sure we knowwhat we’re doing right and what can be learned, and then transfer that knowledge toothers on the team. We can then establish corrective actions to make sure an incidentdoesn’t happen next time. In 2o11, Pembina recorded 534 close call incidents.In rural areas, encounters with wildlife are major causes of motor vehicle incidents.As a result, Pembina enhanced its driving policy. Now, any Pembina employee drivingin rural areas on Company-related business must reduce their speed by 1o km/hourfrom the posted speed limit between dusk and dawn.
22 PEMBINA PIPELINEENVIRONMENTAL STEWARDSHIPTo deliver on our commitment of being a project design and operations. By developingresponsible operator, Pembina employs an and adhering to these plans, we are able toEnvironmental Management System (“EMS”). reduce the potential for adverse effects onThis allows us to minimize the impact our the environment.operations have on the natural environment. PREVENTION IS KEYGrowing Responsibly To mitigate potential environmental risks atBefore beginning any new growth project, our operating facilities, we’ve also installedPembina conducts environmental studies and groundwater monitoring wells where required.impact assessments to better understand the We use the annual monitoring from these sites topotential effects a proposed project may have on map trends, gain early indications of potential soil/the soil, land, air, plants, wildlife and watersheds. groundwater impact, and identify appropriate orWe then develop detailed plans in consultation necessary remedial actions.with the local regulatory authorities, First Nations,Métis, landowners and other stakeholders to To measure the effectiveness of our EMSminimize our environmental footprint. programs, Pembina also conducts regular audits and inspections. At least one of Pembina’sBy working closely with our stakeholders to operating areas is subject to a third-partyidentify potential risks or areas of concern, environmental audit every year, with each districtwe’re better able to integrate that input into our being revisited at least once every five years.EMERGENCY PREPAREDNESSPembina knows that maintaining our license employees are always prepared in the event of anto operate means being ready to respond in emergency. As well, we continually update thesethe unfortunate event of an incident. Giving ERPs to ensure they are in line with the latestour employees the skills they need to respond regulatory requirements and include updatedrapidly and safely to incidents through tabletop asset, landowner, resident and stakeholder data.and full-scale exercises allows us to minimizeany potential impact to the communities in Further, Pembina owns a substantial inventorywhich we operate, to the environment, and of spill response equipment that is strategicallyto our customers. located throughout our operations. We are also an active member of the industry-wide WesternPembina’s loss management program includes Canadian Spill Services (“WCSS”) Co-Op, givingcomprehensive Emergency Response Plans us full access to Co-Op response equipment(“ERPs”) that set out specific procedures and the opportunity to participate in emergencyand responsibilities for our staff to ensure response exercises with other WCSS members.“Being the industry neighbour of choice means taking care of the communities in which we operate. We invest heavily in tools and technologies that help ensure the safety of our operations, and we provide our employees with ongoing training so they can respond quickly to protect the safety of the public, our employees and the environment should an incident occur. ” Mick Dilger, President and Chief Operating Officer
CORPORATE PROFILE 23Minimizing our environmental footprint:Pembina is committed to ensuring our pipelines and facilities are designed,constructed and operated in a safe and environmentally responsible manner.For the pipeline components of our two new gas processing and enhancedliquids extraction facilities, the Saturn and Resthaven gas plants, we willuse existing rights-of-way wherever possible. This will help us minimize thepotential environmental impact of construction while having the addedbenefit of reducing our costs.
24 PEMBINA PIPELINERELIABLE ANDRESPONSIBLE OPERATIONSPembina has provided safe and reliable pipeline As Pembina’s operations grow, managing ourand energy infrastructure services to the oil and assets safely and efficiently continues to be ourgas industry for nearly six decades. We’re proud overarching imperative. We have enhanced andof our track record and continue to build on that optimized our Pembina Specifications, Standardsfoundation of success. and Project Management Guidelines for all our facilities. This involves continually reviewing ourAt the heart of our operations is Pembina’s operations, which includes pipelines, processingEdmonton Control Centre, where we employ plants, pump stations, storage facilities, productcustomized SCADA (Supervisory Control and terminals, and transportation hubs, to ensure weData Acquisition) technology to monitor pipeline meet or exceed all regulatory codes as well asflow and operating conditions remotely. Operators design and operating specifications.oversee the SCADA system and associated leakdetection software 24-hours a day, 365 daysper year. These technologies allow Pembinato proactively identify potential issues on ourpipelines and facilities at an early stage so wecan employ early mitigation measures.
CORPORATE PROFILE 25At Pembina, reliability is more than just a word:In 2o11, there was flash flooding in north eastern BC as a result of heavy rain. Asa precautionary measure and to ensure the ongoing safety of the communitieswhere we operate, Pembina shut down our Western System pipeline for15 days. During this time, we monitored the line by air, land and through ourEdmonton Control Centre, and conducted integrity inspections of the linebefore restarting operations. In situations like this, where there is a threat tothe safe and reliable operations of our infrastructure, we put safety and theenvironment ahead of all else.OUR TEAMWe know that having the right people in place veterans passing their knowledge on to newis critical to our ability to go the distance for all employees who, in turn, bring new ideas andour stakeholders. Pembina is among the largest enthusiasm that will shape the next generation ofenergy infrastructure companies in North America, our corporate success.and we take pride in being one of the best. At Pembina, it’s not just about getting theWe have a proven track record of recruiting, job done; it’s also about how we get the jobmentoring and retaining a highly skilled workforce. done. Our work is guided by a values-basedWe emphasize leadership development at all approach that calls for employees to set alevels in our organization and we have created a high standard for how we interact with ourworking environment where accountabilities are colleagues, our customers and our communities.clear, strong performance is expected and results Safety, operational reliability and environmentalare recognized. responsibility are important attributes at Pembina and, of course, we demand that business isPembina boasts many experienced staff – the always conducted in a way that is respectful.average length of service for employees is 11years. We place great emphasis on Pembina“ very business is run by people and at Pembina, our employees are E our best asset. Their commitment to the safe and reliable operations of our business, their provision of quality services for our customers, their execution of our strategy and their own personal development is integral to Pembina’s past and ongoing success.” Debbie Sulkers, Vice President, Corporate Services
26 PEMBINA PIPELINEAs part of our Nipisi and Mitsue Pipeline project, Pembina established a programto train individuals from some of the neighbouring First Nations communities toconduct environmental impact assessments. This program was a great success,helping build capacity within communities near our operations while demonstratingPembina’s commitment to finding opportunities for them in our current and futurepotential work.COMMUNITY ANDABORIGINAL RELATIONSAt Pembina, building long-term relationships We seek to keep the communication lines openbased on mutual trust with communities is a over the full operating life of our assets to ensuretop priority. Part of building that trust is making all stakeholders remain informed about oursure we understand regional issues so we can activities and feel comfortable in contacting usanticipate and manage the social impacts of about any concerns.our operations on local communities. Over theyears, that strategy has served us well; we’ve Because Pembina’s operations are locateddeveloped a reputation for honesty, transparency on or near First Nations and Métis lands, ourand treating our Aboriginal communities and local commitment to consultation with these audiencesstakeholders with respect. is important. Pembina takes special pride in the positive relationships we have developed inConsultation that counts these communities. Building mutually beneficial relationships with Aboriginal communities helpsBefore a project begins, Pembina is in the field us understand the importance of the area’sconsulting with Aboriginal and local communities, traditional knowledge and culture while exploringlandowners and other stakeholders affected opportunities to collaborate on communityby the proposed development. Our aim: to projects relating to health, education, training,learn about their needs and expectations, and employment and business development.to address potential concerns. We know thateffective engagement requires open, two-waycommunication and we employ a number of tools– including open houses, one-on-one discussionsand community meetings – to identify and resolveissues and find solutions.
CORPORATE PROFILE 27COMMUNITY INVESTMENTCommunities throughout Pembina’s operations Our community investment program alsoput their trust in our Company and allow us encourages our employees to give back to theto operate in their backyards. Through our communities where they live, work and play.community investment program, we honour this Through our involvement in United Way and ourrelationship and give back to the communities Employee Matching Gift Program, we help ourwhere we operate and help ensure they have employees support the organizations that arethe programs and infrastructure necessary to meaningful to them. The result of these effortsremain vibrant. is a community investment program that is a source of great pride at Pembina. For example,Pembina’s investment decisions are based in 2012, Pembina set a new record by raisingon our understanding of the unique needs over $1 million including employee contributionsand characteristics of each community. As a and the Company’s match for the United Waysresult of our consultation efforts, we focus our in our operating communities. By volunteeringcommunity investment initiatives on supporting with United Way funded agencies, and throughorganizations that advance education, preserve donations and events such as silent auctions,and protect the environment, foster wellness raffles and food sales, Pembina employees haveand build community. shown what’s possible when you work together towards a common goal.
28 PEMBINA PIPELINEPembina provides annual funding to organizations such as STARS AirAmbulance, Alberta Eco-Trust, and various local community gatheringspaces, to name a few. In 2o11, Pembina embarked on a new relationshipwith the RiverWatch Institute of Alberta. This province-wide programhelps connect young people with the science relevant to their localrivers so they can better understand aquatic health. By partnering witheducational initiatives that are directed at environmental awareness,Pembina is helping ensure programs are offered in our communities andstudent user-fees remain affordable.
CORPORATE INFORMATIONForward-Looking Information and HEAD OFFICENon-GAAP Measures Pembina Pipeline CorporationThis profile contains forward-looking statements Suite 3800, 525 – 8th Avenue S.W.and information that are based on Pembina’s Calgary, Alberta T2P 1G1current expectations, estimates, projectionsand assumptions in light of its experience andits perception of historical trends. Actual results AUDITORSmay differ materially from those expressed orimplied by the forward-looking information. This KPMG LLPprofile also refers to certain financial measures Chartered Accountantsthat are not defined by Canadian generallyaccepted accounting principles (GAAP). For more Calgary, Albertainformation, about these non-GAAP measuresand the forward-looking information, please referto Pembina’s various financial reports and public TRUSTEE, REGISTRARfilings available at www.pembina.com and on TRANSFER AGENTPembina’s online profile at SEDAR and EDGAR. Computershare Trust Company of CanadaAll financial information is in Canadian dollars. Suite 600, 530 - 8th Avenue S.W. Calgary, Alberta T2P 3S8 1-800-564-6253COMMON ABBREVIATIONSThe following is a list of abbreviations that may beused in this document: STOCK EXCHANGE Pembina Pipeline CorporationBC British Columbia TSX listing symbols for:bpd barrels per day Common shares: PPLmbpd thousands of barrels per day 5.75% convertible debentures:boe barrels of oil equivalent PPL.DB.C, PPL.DB.E, PPL.DB.Fmboe thousands of barrels of oil equivalent NYSE listing symbol for:NGL natural gas liquids Common shares: PBAMMcf millions of cubic feetMMcf/d millions of cubic feet per day MAKE A CONNECTION WITH US:bcf/d billions of cubic feet per day Main: 403-231-7500km kilometre Toll Free: 1-888-428-3222U.S. United States Email: firstname.lastname@example.org WCSB Western Canadian Sedimentary Basin email@example.comTSX Toronto Stock Exchange Website: www.pembina.comNYSE New York Stock Exchange Printed in October 2012 Reliable | Trusted | ResponsibleDesigned by bmir Bryan Mills Iradesso Committed to being the operator, employer,www.bmir.com partner, neighbour and investment of choice in North America’s energy infrastructure sector
3800, 525 - 8th Avenue S.W.Calgary, Alberta T2P 1G1