Federally Regulated Canadian Pipeline Retirement
Information for Canadian Landowners
Pipelines are a safe and efficient means of transporting large quantities of crude oil and natural gas liquids over land. Canadians rely on natural gas and products made from crude oil to meet energy needs each and every day – to drive our cars, fly planes and to heat homes and businesses. In Canada, Pembina owns and operates pipelines efficiently and safely.
Beginning in 2008, the National Energy Board (“NEB”) initiated the Land Matters Consultation Initiative. Part of this initiative dealt with the financial issues relating to pipeline abandonment. An important area considered by the NEB was the optimal way to ensure funds are available when it’s time to retire a pipeline system. In response to this issue, the NEB has directed the companies it regulates to begin setting aside money starting in January 2015 that one day will be used to pay for the retirement of their NEB-regulated pipelines in Canada.
Further Information on the Land Matters Consultation Initiative is available to the public by visiting the NEB’s website at www.neb-one.gc.ca
Setting Aside Money
Pembina has started the process of setting aside money (beginning in January 2015) to cover the costs of future pipeline abandonment for all of Pembina’s NEB-regulated assets.
Money will be placed into separate trusts (“Qualifying Environmental Trusts or QETs”) for the following Systems:
- Pouce Coupé Pipe Line Ltd.’s Northwest System;
- Pouce Coupé Pipe Line Ltd.’s Northern System; and
- Pouce Coupé Pipe Line Ltd.’s Pouce Coupé System.
Separate letters of credit (“LOC”) have been created for the following systems:
see NEBC and Vantage map link on right side of page
- Pembina Prairie Facilities Ltd’s Vantage Pipeline System; and
- Pembina Energy Services Inc.’s Taylor to Boundary Lake System.
Pembina Resource Services GP Inc. has a 50 percent ownership in a pipeline lateral (Kerrobert Pipeline) which is operated by a joint venture partner. Pembina and the joint partner have begun the process of placing money aside into a separate trust but the joint venture partner is responsible for the submission of the NEB-compliance based filings for this asset.
see Kerrobert map link on right side of page
Pembina filed Statement of Investment Policies and Procedures (“SIPP”) applicable to its trusts with the NEB. The purpose of this SIPP is to outline investment guidelines, monitoring and reporting procedures in accordance with the objectives of the trust, the NEB MH-001-2013 Reasons for Decision and the provisions in the Income Tax Act which govern Qualified Environmental Trusts.