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News Release

Pembina Pipeline Announces Strategic Acquisition of Natural Gas Gathering and Processing Assets in West Central Alberta and Related Financing


    CALGARY, April 29 /CNW/ - Pembina Pipeline Corporation ("Pembina"), a
wholly owned subsidiary of Pembina Pipeline Income Fund (the "Fund") (TSX:
PIF.UN, PIF.DB.B), is pleased to announce that Pembina Gas Services Limited
Partnership, a newly formed indirect subsidiary of Pembina, has entered into
an agreement with Talisman Energy Canada ("Talisman") to acquire its Cutbank
Complex midstream gas gathering and processing facilities for $300 million in
an all cash transaction. The acquisition, which is anticipated to close on
June 2, 2009, provides Pembina's Midstream business unit with a strategic
entry into the natural gas gathering and processing business. Closing of the
acquisition is subject to satisfaction of closing conditions customary for a
transaction of this nature, including Competition Act approval.
    The Cutbank Complex is a fully interconnected sweet gas gathering and
processing complex comprised of three gas plants (the Cutbank, Musreau and
Kakwa gas plants), nine compressor stations, and approximately 300 kilometres
of gathering systems with a total gross processing capacity of 360 MMcf per
day (305 MMcf per day net to Pembina). The Cutbank gas plant and the Musreau
gas plant will be operated by Pembina and the Kakwa Gas Plant, in which
Pembina will acquire a 50% interest, is operated by a third party. Average
throughput at the Cutbank Complex in 2008 was 208 MMcf per day net to
Talisman. The Cutbank Complex is located in the west central region of Alberta
and provides fee for service gathering and processing to customers in the
area. A portion of the assets within the Cutbank Complex are subject to rights
of first refusal. If all of the rights of first refusal are fully exercised,
Pembina's effective net processing capacity will be reduced to 250 MMcf per
day, average net throughput (based on net 2008 throughput) would be reduced to
175 MMcf per day, and the purchase price will be reduced by the value of the
assets which are excluded from the acquisition. The interconnectivity of the
assets provides a high degree of flexibility with respect to the utilization
of capacity. Further, all operating costs associated with the Cutbank Complex
are passed through to customers which helps to provide stability to cash
    Bob Michaleski, Pembina's President and CEO, stated that, "The
acquisition of the Cutbank Complex is consistent with Pembina's overall
strategy of growth and vertical integration of its energy infrastructure
assets. Over the past decade Pembina has selectively pursued strategic entry
points into businesses that can deliver the long term growth profile that our
Unitholders desire. Pembina anticipates that the acquisition of the Cutbank
Complex will be accretive to Unitholders and will diversify Pembina's
interests into a business that both integrates well with our existing suite of
assets and provides potential organic and acquisition growth opportunities."

    Rationale for the Cutbank Complex Acquisition

    The Fund believes that the principal benefits of the Cutbank Complex
Acquisition are as follows:

    Excellent Strategic Fit

    Consistent with the Fund's existing assets, the assets comprising the
Cutbank Complex represent high quality energy (natural gas and NGLs)
infrastructure located in the Deep Basin region of the western Canadian
sedimentary basin. The acquisition of the Cutbank Complex will integrate the
ownership of the Cutbank Complex with the Pembina owned Peace Pipeline,
through which the processed NGLs are transported to the Edmonton, Alberta

    Consistent Risk Profile

    The Cutbank Complex is not directly exposed to the price of natural gas
and other commodities. The gathering and processing contracts associated with
the Cutbank Complex provide for the flow through of operating costs and are
structured on a fee-for-service basis. Over 50% of the capacity associated
with the Cutbank Complex is contracted on a firm service basis until 2014,
thereby providing the Fund with a potential source of long-term stable cash

    Value-Added Transaction

    Pembina expects the acquisition of the Cutbank Complex to be accretive to
distributable cash flow per trust unit ("Trust Unit") and anticipates the
Cutbank Complex will generate additional net operating income of $40 million
on an annual basis.

    Enhanced Diversification

    The Cutbank Complex acquisition will further diversify the Fund's
operations to include natural gas gathering and processing capacity.

    Financing of the Cutbank Complex Acquisition

    Pembina has arranged financing for the acquisition of the Cutbank Complex
through new committed bank credit facilities.
    Pembina has obtained a commitment from a Canadian chartered bank to
provide a $150 million 18 month term credit facility and a $150 million 9
month equity bridge facility. Closing of the term credit facility and equity
bridge facility is subject to satisfaction of conditions that are typical of
transactions of this nature, including simultaneous completion of the Cutbank
Complex acquisition, on or before August 31, 2009. Pembina intends to use the
net proceeds from the new credit facilities to complete the acquisition of the
Cutbank Complex. The credit facilities are unsecured and rank pari passu with
all other senior unsecured debt of Pembina.
    The Fund is among the leading issuers in the Canadian energy
infrastructure trust sector. Pembina's extensive network of conventional
liquids feeder pipelines, growing presence in the oil sands, heavy oil and
midstream sectors, provide an integral service to the western Canadian energy
industry. This balanced portfolio of premium, long-life energy infrastructure
assets supports the stability and sustainability of the Fund.

    Forward-Looking Information and Statements

    This document contains certain forward-looking information and 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 particular, this document contains forward-looking information and
statements regarding: (i) the performance of the Cutbank Complex, and
specifically with respect to the expected accretion to distributable cash flow
per Trust Unit and generation of additional net operating income, (ii) the
expected time for receiving various approvals to proceed with the acquisition
of the Cutbank Complex, (iii) commitments with respect to the credit
facilities to be drawn on for the purpose of completing the acquisition of the
Cutbank Complex; and (iv) the projected closing date of the acquisition of the
Cutbank Complex. In some cases, forward-looking information and statements can
be identified by terminology such as "may", "will", "should", "expects",
"projects", "plans", "anticipates", "contemplates", "targets", "believes",
"strives", "estimates", "continue", "designed", "objective", "maintain",
"schedule", "endeavor", "subject", "development, "confidence" and similar
    The 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; the ability of Pembina to
satisfy certain conditions to funding under the committed credit facilities in
connection with the Cutbank Complex acquisition; failure to successfully
integrate the Cutbank Complex into Pembina's existing operations; and certain
other risks detailed from time to time in the Fund's public disclosure
documents. The Fund believes the expectations and material factors and
assumptions reflected in these forward-looking statements are reasonable as of
the date hereof, but no assurance can be given that these expectations,
factors and assumptions will prove to be correct. In respect of the proposed
acquisition of the Cutbank Complex, the accretive nature of such acquisition
to Pembina and generation of additional net operating income, Pembina has
assumed that the timing of the closing will be June 2, 2009; performance of
the Cutbank assets will be consistent with 2008 operating and financial
results ; that all regulatory approvals required can be obtained; that all
closing conditions are satisfied; that certain rights of first refusal
relating to the assets are expired or waived; that the counterparties comply
with contracts in a timely manner; that there are no unforeseen events
preventing the performance of contracts by Pembina; and financing arrangements
in respect of the Cutbank Complex acquisition are completed as planned. Undue
reliance should not be placed on these forward-looking statements as both
known and unknown risks and uncertainties, including those business risks
stated above, may cause actual performance and financial results in future
periods to differ materially from any projections of future performance or
results expressed or implied by such forward-looking statements. 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 or information contained herein, except as required
by applicable laws.

    %SEDAR: 00008906E

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