News Release

Pembina Receives Approval for Nipisi and Mitsue Pipeline Projects

CALGARY, July 13 /CNW/ - Pembina Pipeline Corporation, a wholly-owned subsidiary of Pembina Pipeline Income Fund (the "Fund" or "Pembina") (TSX: PIF.UN, PIF.DB.B), announced today that it has received approval from the Energy Resources Conservation Board (the "ERCB") to construct and operate two pipeline projects that will support Northern Alberta's heavy oil industry.

The Nipisi Pipeline, designed to initially transport 100,000 barrels per day (bbls/d) of diluted heavy oil, is proposed to originate north of Slave Lake and run south to Judy Creek. From there it would connect to an existing pipeline system that delivers products to the Edmonton area. The Nipisi Pipeline is designed such that it can ultimately be expanded to a capacity of approximately 200,000 bbls/d. The Mitsue Pipeline is being designed to transport approximately 20,000 bbls/d of condensate (a light hydrocarbon used to dilute the heavy oil) from Whitecourt, Alberta to producers operating north of Slave Lake. The Mitsue Pipeline is designed such that it can ultimately be expanded to a capacity of 45,000 bbls/d.

"Project planning is complete and reflects the needs of our customers and community neighbours," said Bob Michaleski, President and Chief Executive Officer. "Our next priorities are to fulfill the commitments we've made to our customers as well as those made during the consultation process and constructing the pipeline in a safe and environmentally responsible manner."

The approvals to proceed with construction of the pipeline projects were granted by the ERCB without a public hearing, as all stakeholder objections were resolved through the consultation process.

Both projects, which Pembina estimates to cost a combined total of $440 million, are scheduled to be placed into service in mid-2011. Pembina has executed long-term transportation services agreements which will govern operations on the Nipisi and Mitsue Pipelines once they have been completed. Founding customers, Canadian Natural Resources Ltd. and Cenovus Energy Inc. have, subject to certain conditions, contracted 80 percent of the 100,000 bbls/d capacity on the Nipisi Pipeline and 50 percent of the 20,000 bbls/d capacity on the Mitsue Pipeline. Pembina Marketing Ltd., a subsidiary of Pembina Pipeline Corporation, has contracted for the balance of available capacity on these pipelines.

The agreements are designed to provide Pembina with a fixed return on invested capital and allow for the full recovery of operating expenses. Based on certain assumptions, as discussed in more detail below, Pembina's internal projections estimate the two projects combined will generate approximately $45 million per annum in net operating income.

Project construction is expected to proceed immediately. Piping fabrication for the pump stations will commence later in July and the pump station construction is expected to begin in August. Right-of-way clearing is anticipated to begin in September in preparation for pipeline construction which is planned to start in early December. Approximately 800 to 1,000 temporary positions are expected to be created during construction. All engineering, construction and procurement contracts have been awarded.

Pembina Pipeline Corporation transports crude oil and natural gas liquids produced in Western Canada, owns and operates oil sands pipelines and has a growing presence in the midstream and gas services sectors.

Forward-Looking Information and Statements

This news release contains certain forward-looking information and statements ("forward looking statements") that are based on the Fund's current expectations, estimates, projections and assumptions in light of its experience and its perception of historical trends. In this news release, such forward-looking statements can be identified by terminology such as "to be", "believes", "expects", "proposed". "plans", "estimates", "will", "anticipate", "designed", "scheduled" and similar expressions.

In particular, this document contains forward-looking statements, including certain financial outlook, pertaining to: (i) the expected in-service dates of the Nipisi and Mitsue Pipelines; (ii) the designed capacities and future expansion capabilities of the Nipisi and Mitsue Pipelines; (iii) the estimated costs to complete the Nipisi and Mitsue Pipelines; and (iv) the estimated future net operating income contributions from the Nipisi and Mitsue Pipelines, once such projects are completed. Various factors or assumptions are typically applied by the Fund in drawing conclusions or making the forecasts, projections, predictions or estimations set out in forward looking statements and financial outlook based on information currently available to the Fund. Factors and assumptions used by the Fund include that: the in-service date for the Nipisi and Mitsue Pipelines will be in mid-2011; future tolls and operating costs in respect of such pipelines will be consistent with internal projections; counterparties will comply with contracts in a timely manner; there are no unforeseen events preventing the performance of contracts by Pembina; prevailing commodity prices and exchange rates; there are no unforeseen construction costs related to the Nipisi and Mitsue Pipelines; funds will be available at acceptable rates to fund capital requirements relating to the pipeline projects; and there are no unforeseen material costs relating to the pipeline systems which are not recoverable from shippers.

These forward-looking statements are not guarantees of future performance and are subject to a number of known and unknown risks and uncertainties, including, but not limited to: non-performance of agreements in accordance with their terms; the impact of competitive entities and pricing; reliance on key industry partners, alliances and agreements; the strength and operations of the oil and natural gas production industry and related commodity prices; the continuation or completion of third-party projects; regulatory environment and inability to obtain required regulatory approvals; tax laws and treatment; fluctuations in operating results; the ability of Pembina to raise sufficient capital to complete future projects and satisfy future commitments; construction delays; labour and material shortages; and certain other risks detailed from time to time in the Fund's public disclosure documents including, among other things, those detailed under the heading "Risk Factors" in the Fund's management's discussion and analysis for the year ended December 31, 2009, which can be found at

Accordingly, readers are cautioned that events or circumstances could cause results to differ materially from those predicted, forecasted or projected. Such forward-looking statements are expressly qualified by the above statements. The Fund does not undertake any obligation to publicly update or revise any forward-looking statements contained herein, except as required by applicable laws. Management of the Fund approved the financial outlook contained herein as of the date of this news release. Readers should be aware the information contained in the financial outlook contained herein may not be appropriate for other purposes.

All dollar values are in Canadian dollars.

For further information: Glenys Hermanutz, Vice President, Corporate Affairs, Pembina Pipeline Corporation, (403) 231-7500, 1-888-428-3222, e-mail: [email protected]