PEMBINA
PIPELINE CORPORATION



ANNUAL
INFORMATION FORM



For
the Year Ended December 31, 2012



March 1, 2013













Table
of Contents



|                                                            | Page      
|----------------------------------------------------------- | ----------
|                                                            |           
|GLOSSARY
    OF TERMS                                       | -
    1 - 
|                                                            |           
|NOTICE
    TO READER                                        | -
    7 - 
|                                                            |           
|ABBREVIATIONS
    AND CONVERSIONS                           | -
    7 - 
|                                                            |           
|NON–GAAP
    MEASURES                                       | -
    8 - 
|                                                            |           
|FORWARD–LOOKING
    STATEMENTS AND INFORMATION              | -
    9 - 
|                                                            |           
|CORPORATE
    STRUCTURE                                     | -
    13 -
|                                                            |           
|Name, Address and
    Formation                             | - 13 -    
|Corporate Conversion                                        | - 13 -    
|Provident Acquisition                                       | - 13 -    
|Pembina's Subsidiaries                                      | - 14 -    
|Amended Articles                                            | - 14 -    
|                                                            |           
|GENERAL
    DEVELOPMENTS OF PEMBINA                         | -
    15 -
|                                                            |           
|Developments in
    2010 and 2011                           | - 15 -    
|Developments in
    2012                                    | - 16 -    
|2013 Year to Date
    Developments                          | - 18 -    
|                                                            |           
|DESCRIPTION
    OF PEMBINA'S BUSINESS AND OPERATIONS        | -
    19 -
|                                                            |           
|Pembina's Business
    Objective and Strategy               | - 19 -    
|Overview of Pembina's
    Business                          | - 19 -    
|Operations Overview                                         | - 20 -    
|Conventional Pipelines
    Business                         | - 22 -    
|Oil Sands &
    Heavy Oil Business                          | - 23 -    
|Gas Services Business                                       | - 24 -    
|Midstream Business                                          | - 26 -    
|                                                            |           
|OTHER
    INFORMATION RELATING TO PEMBINA'S BUSINESS        | -
    28 -
|                                                            |           
|Information and
    Communication Systems                   | - 28 -    
|Integrity Management                                        | - 28 -    
|Environmental Matters                                       | - 30 -    
|Environmental Incidents                                     | - 30 -    
|Provisions                                                  | - 30 -    
|Derivative Financial
    Instruments                        | - 31 -    
|Pipeline Rights–of–Way
    and Land Tenure                  | - 31 -    
|Indemnification
    and Insurance                           | - 31 -    
|Employees                                                   | - 32 -    
|Corporate Social
    Responsibility                         | - 32 -    
|Corporate Governance                                        | - 34 -    
|                                                            |           
|WESTERN
    CANADIAN OIL AND GAS INDUSTRY                   | -
    34 -
|                                                            |           
|General                                                     | - 34 -    
|Canadian Crude
    and Heavy Oil Overview                   | - 34 -    
|NGL Overview                                                | - 36 -    
|Midstream Services
    for Crude Oil, SCO & NGL             | - 38 -    
|                                                            |           
|DESCRIPTION
    OF THE CAPITAL STRUCTURE OF THE CORPORATION | -
    38 -
|                                                            |           
|Common Shares                                               | - 38 -    











Table
of Contents

(continued)



|                                                                                    | Page      
|----------------------------------------------------------------------------------- | ----------
|                                                                                    |           
|Internal
    Preferred Shares                                                       | -
    39 -
|Premium DividendTM
    and Dividend Reinvestment Plan                                | - 39 -    
|Convertible Debentures                                                              | - 39 -    
|Credit Facilities                                                                   | - 40 -    
|Medium Term Notes                                                                   | - 41 -    
|Other Debt                                                                          | - 42 -    
|Credit Ratings                                                                      | - 42 -    
|                                                                                    |           
|RISK
    FACTORS                                                                    | -
    43 -
|                                                                                    |           
|Risks Inherent
    in Pembina's Business                                            | - 43 -    
|Risk Factors Relating
    to the Structure of the Corporation and the Common Shares | - 49 -    
|General Risk Factors                                                                | - 50 -    
|                                                                                    |           
|DIVIDENDS
    AND DISTRIBUTIONS                                                     | -
    53 -
|                                                                                    |           
|Cash Distributions                                                                  | - 53 -    
|Cash Dividends                                                                      | - 54 -    
|                                                                                    |           
|MARKET
    FOR SECURITIES                                                           | -
    55 -
|                                                                                    |           
|DIRECTORS
    AND OFFICERS                                                          | -
    57 -
|                                                                                    |           
|Directors of the
    Corporation                                                    | - 57 -    
|Executive Officers
    of the Corporation                                           | - 59 -    
|Conflict of Interest                                                                | - 60 -    
|                                                                                    |           
|AUDIT
    COMMITTEE INFORMATION                                                     | -
    60 -
|                                                                                    |           
|The Audit Committee's
    Charter                                                   | - 60 -    
|Composition of
    the Audit Committee and Relevant Education and Experience        | - 60 -    
|Pre-Approval Policies
    and Procedures for Audit and Non-Audit Services           | - 61 -    
|External Auditor
    Service Fees                                                   | - 62 -    
|                                                                                    |           
|INTEREST
    OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS                      | -
    62 -
|                                                                                    |           
|MATERIAL
    CONTRACTS                                                              | -
    62 -
|                                                                                    |           
|LEGAL
    PROCEEDINGS                                                               | -
    63 -
|                                                                                    |           
|REGISTRAR
    AND TRANSFER AGENT                                                    | -
    63 -
|                                                                                    |           
|INTERESTS
    OF EXPERTS                                                            | -
    63 -
|                                                                                    |           
|ADDITIONAL
    INFORMATION                                                          | -
    63 -
|                                                                                    |           
|APPENDIX
    "A"                                                                    | 1         
|                                                                                    |           
|AUDIT
    COMMITTEE CHARTER                                                         | 1         



-ii-









GLOSSARY
OF TERMS



Terms
used in this Annual Information Form and not otherwise defined have the meanings set forth below:



"2010
Base Shelf Prospectus" means the final short form base shelf prospectus filed with the securities commissions or similar
regulatory authorities in each of the provinces of Canada on November 12, 2010 allowing the Corporation to offer and issue, from
time to time: (i) Common Shares; (ii) any bonds, debentures, notes or other evidences of indebtedness of any kind, nature or description
of the Corporation ("Debt Securities"); (iii) warrants to purchase Common Shares and warrants to purchase Debt
Securities; and (iv) subscription receipts of the Corporation (together with the foregoing, collectively, the "Securities")
of up to $1,000,000,000 aggregate initial offering price of Securities (or the equivalent thereof in one or more foreign currencies
or composite currencies, including United States dollars) during the 25 month period that the 2010 Base Shelf Prospectus was valid.



"2010
Convertible Debentures" means the 7.35 percent convertible unsecured subordinated debentures of Pembina issued June 11,
2003 which were traded on the TSX under the symbol "PPL.DB.B" and matured on December 31, 2010;



"2013
Base Shelf Prospectus" means the final short form base shelf prospectus filed with the securities commissions or similar
regulatory authorities in each of the provinces of Canada on February 22, 2013 allowing the Corporation to offer and issue, from
time to time: (i) Common Shares; (ii) preferred shares; (iii) any bonds, debentures, notes or other evidences of indebtedness
of any kind, nature or description of the Corporation ("Debt Securities"); (iv) warrants to purchase Common Shares
and warrants to purchase Debt Securities; and (v) subscription receipts of the Corporation (together with the foregoing, collectively,
the "Securities") of up to $3,000,000,000 aggregate initial offering price of Securities (or the equivalent thereof
in one or more foreign currencies or composite currencies, including United States dollars) during the 25 month period that the
2013 Base Shelf Prospectus is valid.



"ABCA"
means the Business Corporations Act (Alberta), R.S.A. 2000, c. B-9, as amended from time to time, including the regulations
promulgated thereunder;



"Alberta
Pipelines" means those pipelines servicing the conventional oil and NGL production in Alberta including the Peace Pipeline,
the Northern Pipeline, the Drayton Valley Pipeline, the Swan Hills Pipeline, the Brazeau/Caroline Pipeline, the Bonnie Glen Pipeline
and the Wabasca Pipeline;



"AOSPL"
means Alberta Oil Sands Pipeline Ltd.;



"B.C.
Pipelines" means, collectively, the NEBC Pipeline and the Western Pipeline;



"BCUC"
means the British Columbia Utilities Commission;



"Board"
or "Board of Directors" means the board of directors of the Corporation from time to time;



"Bonnie
Glen Pipeline" means the pipeline system and related facilities delivering crude oil and condensate from central Alberta
to Edmonton, Alberta;



"Brazeau/Caroline
Pipeline" means the pipeline system and related facilities delivering NGL from natural gas processing plants southwest
of Edmonton, Alberta and from Caroline, Alberta to the Bonnie Glen Pipeline or to Fort Saskatchewan, Alberta;



"Cenovus"
means Cenovus Energy Inc.;



- 1 -







"Cheecham
Lateral" means the lateral pipeline and related facilities delivering SCO from an existing pump station on the Syncrude
Pipeline to a terminalling facility located near Cheecham, Alberta;



"CNRL"
means Canadian Natural Resources Limited;



"Common
Shares" means the common shares in the capital of the Corporation;



"condensate"
means a mixture consisting primarily of pentanes and heavier hydrocarbon liquids;



"Convertible
Debentures" means, collectively, the Series C Convertible Debentures, the Series E Convertible Debentures and the Series
F Convertible Debentures;



"Corporate
Conversion" means the plan of arrangement, under the provisions of section 193 of the ABCA, involving the Fund, the Corporation
and the holders of Trust Units, pursuant to which the business of the Fund was reorganized into the Corporation effective October
1, 2010. See "Corporate Structure – Corporate Conversion";



"Corporation"
or "Pembina" means Pembina Pipeline Corporation, an ABCA corporation and, unless the context otherwise requires,
includes its consolidated subsidiaries;



"Cutbank
Complex" means PGS Limited Partnership's interest in the interconnected sweet gas processing facilities comprising the
Cutbank Gas Plant, the Musreau Gas Plant, the Musreau Deep Cut Facility and the Kakwa Gas Plant and the associated pipelines and
compressors and the agreements related thereto;



"Cutbank
Gas Plant" means the facility owned 100 percent by PGS Limited Partnership located at 07-16-062-08 W6M;



"Declaration
of Trust" means the declaration of trust dated September 4, 1997, as amended and restated April 30, 1999 and as further
amended and restated October 1, 2010, pursuant to which the Fund was created;



"Dow
Canada" means Dow Chemical Canada Inc.;



"Drayton
Valley Pipeline" means the pipeline system and related facilities delivering crude oil and condensate production to Edmonton,
Alberta from the area southwest of Edmonton, Alberta;



"DRIP"
means Pembina's Premium DividendTM and Dividend Reinvestment Plan which is comprised of the Fund DRIP and all associated
agreements, which were assumed and amended and restated by the Corporation upon the completion of the Corporate Conversion effective
October 1, 2010;



"Encana"
means Encana Corporation;



"ERCB"
means the Energy Resources Conservation Board of the Government of Alberta;



"Form
40-F" means the Corporation's annual report on Form 40-F for the fiscal year ended December 31, 2012 filed with the SEC;



"Fund"
means Pembina Pipeline Income Fund, an unincorporated open-ended single purpose trust established under the laws of Alberta pursuant
to the Declaration of Trust and dissolved pursuant to the Corporate Conversion on October 1, 2010;



"Fund
DRIP" means the Premium DistributionTM, Distribution Reinvestment and Optional Unit Purchase Plan of the Fund;



- 2 -







"Horizon
Pipeline" means the pipeline system and related facilities designed to deliver SCO from the Horizon Project into the
Edmonton, Alberta area, which was completed in 2008. See "Description of Pembina's Business and Operations – Oil
Sands & Heavy Business";



"Horizon
Project" means CNRL's Horizon Oil Sands Project located approximately 70 kilometres north of Fort McMurray, Alberta;



"Internal
Preferred Shares" has the meaning ascribed thereto under "Description of the Capital Structure of the Corporation
– Internal Preferred Shares";



"Kakwa
Gas Plant" means the facility jointly owned by Encana and PGS Limited Partnership, each as to an undivided 50 percent
interest, located at 01-35-060-05 W6M;



"Medium
Term Note Indenture" means the indenture dated March 29, 2011 between the Corporation, Pouce Coupé Pipe Line Ltd.,
Plateau Pipe Line Ltd., Alberta Oil Sands Pipeline Ltd., Pembina Pipeline (an Alberta partnership), Pembina North Limited Partnership,
Pembina West Limited Partnership, Pembina Oil Sands Pipeline L.P., Pembina Marketing Ltd., Pembina Midstream Limited Partnership,
Pembina Gas Services Ltd., Pembina Gas Services Limited Partnership and Computershare Trust Company of Canada, as supplemented
by the first supplemental note indenture dated April 2, 2012 between the Corporation, Pembina NGL Corporation, 1598313 Alberta
Ltd., Provident Infrastructure and Logistics LP, Provident Midstream Holdings GP ULC, Provident Midstream Inc., Provident GP Inc.,
Provident Facilities (NGL) Ltd., Provident Facilities (NGL) L.P., 1195714 Alberta Ltd., 1444767 Alberta Ltd., Provident Energy
Pipeline Inc., Empress NGL Partnership, Kinetic Resources (LPG), Pro Holding Company, Provident Midstream (USA) Inc., Pro US LLC,
Pro Midstream Company, Kinetic Resources (U.S.A.), Pro GP Corp., Pro LP Corp., Terraquest, Inc. and Computershare Trust Company
of Canada, providing for the issuance of the Medium Term Notes;



"Medium
Term Notes" means, collectively, the Medium Term Notes, Series 1 and the Medium Term Notes, Series 2;



"Medium
Term Notes, Series 1" means the $250 million aggregate principal amount of medium term notes of the Corporation issued
March 29, 2011 and mature on March 29, 2021 and which bear interest at a fixed rate of 4.89 percent per annum. See "Description
of the Capital Structure of the Corporation – Medium Term Notes";



"Medium
Term Notes, Series 2" means the $450 million aggregate principal amount of medium term notes of the Corporation issued
October 22, 2012 and mature on October 24, 2022 and which bear interest at a fixed rate of 3.77 percent per annum. See "Description
of the Capital Structure of the Corporation – Medium Term Notes";



"Mitsue
Pipeline" means the pipeline system and related facilities that Pembina has constructed pursuant to the Mitsue TSAs and
which consists of a combination of newly constructed and existing six inch and eight inch diameter pipeline and related facilities
with a current design capacity up to 22,000 bpd, and a potential expansion capacity of up to 45,000 bpd (subject to confirmed
customer support and regulatory approval for such expansion), of condensate transportation service for product received at Whitecourt,
Alberta and delivered to Utikuma, Alberta for use as a diluent for heavy oil. See "General Developments of Pembina –
Developments in 2010 and 2011";



"Mitsue
TSAs" means the transportation service agreements entered into among Pembina, Pembina Pipeline, Cenovus (formerly Encana),
CNRL and Pembina Midstream Limited Partnership in respect of the Mitsue Pipeline. See "General Developments of Pembina
– Developments in 2010 and 2011";



"Musreau
Deep Cut Facility" has the meaning ascribed thereto under "General Developments of Pembina – Developments
in 2010 and 2011";



- 3 -







"Musreau
Gas Plant" means the Musreau A and Musreau C trains, owned 100percent by PGS Limited Partnership, and the Musreau B train,
jointly owned by ConocoPhillips Canada (BRC) Partnership and PGS Limited Partnership, each as to an undivided 50 percent interest,
located at 04-25-062-06 W6M;



"NEB"
means the National Energy Board;



"NEBC
Pipeline" means the pipeline system and related facilities delivering crude oil and condensate from northeastern British
Columbia and northwestern Alberta to Taylor, British Columbia;



"Nipisi
Pipeline" means the pipeline system and related facilities that Pembina has constructed pursuant to the Nipisi TSAs and
which consists of a combination of newly constructed and existing 16 inch, 20 inch and 24 inch diameter pipeline and related facilities
with a current design capacity of 100,000 bpd, and a potential expansion capacity of up to 200,000 bpd (subject to confirmed customer
support and regulatory approval for such expansion), of blended heavy oil transportation service for product received at Utikuma,
Alberta and delivered to Edmonton, Alberta. See "General Developments of Pembina – Developments in 2010 and 2011";



"Nipisi
TSAs" means the transportation service agreements entered into among Pembina, POSP Limited Partnership, Cenovus (formerly
Encana), CNRL and Pembina Midstream Limited Partnership in respect of the Nipisi Pipeline. See "General Developments of
Pembina – Developments in 2010 and 2011";



"NGL"
means natural gas liquids, including ethane, propane, butane and condensate;



"Northern
Pipeline" means the pipeline system and related facilities delivering NGL from Taylor, British Columbia to Fort Saskatchewan,
Alberta;



"NOVA
Chemicals" means NOVA Chemicals Corporation;



"NYSE"
means the New York Stock Exchange;



"Option
Plan" means the stock option plan for Pembina approved by the Shareholders on May 26, 2011 and, in respect of certain
options granted prior to October 1, 2010, means the trust unit option plan of the Fund dated October 16, 1997, as amended January
27, 1999, April 30, 1999 and March 2, 2006;



"Peace
Pipeline" means the pipeline system and related facilities delivering light crude oil, condensate, propane mix (C3+)
and ethane mix (C2+) from northeastern British Columbia and northwestern Alberta to Edmonton, Alberta and to Fort Saskatchewan,
Alberta;



"Peace/Northern
NGL System" has the meaning ascribed thereto under "General Developments of Pembina – Developments in 2010
and 2011";



"Pembina
Nexus Terminal" has the meaning ascribed thereto under "General Developments of Pembina – Developments
in 2010 and 2011";



"Phase
I Crude and Condensate Expansion" has the meaning ascribed thereto under "General Developments of Pembina –
Developments in 2010 and 2011";



"Phase
II Crude and Condensate Expansion" has the meaning ascribed thereto under "General Developments of Pembina –
Developments in 2012";



"Phase
I NGL Expansion" has the meaning ascribed thereto under "General Developments of Pembina – Developments
in 2010 and 2011";



- 4 -







"Phase
II NGL Expansion" has the meaning ascribed thereto under "General Developments of Pembina – Developments
in 2012";



"PGS
Limited Partnership" means Pembina Gas Services Limited Partnership, a limited partnership formed under the laws of the
Province of Alberta that is a wholly–owned subsidiary of the Corporation;



"POSP
Limited Partnership" means Pembina Oil Sands Pipeline L.P., a limited partnership formed under the laws of the Province
of Alberta that is a wholly–owned subsidiary of the Corporation;



"Provident"
means Provident Energy Ltd.;



"Provident
Acquisition" has the meaning ascribed thereto under "Corporate Structure – Provident Acquisition";



"Provident
Arrangement Agreement" has the meaning ascribed thereto under "Corporate Structure – Provident Acquisition";



"Provident
Shares" means the common shares of Provident;



"Resthaven
Facility" has the meaning ascribed thereto under "General Developments of Pembina – Developments in 2010
and 2011";



"Saturn
Facility" has the meaning ascribed thereto under "General Developments of Pembina – Developments in 2010
and 2011";



"SCADA"
means supervisory control and data acquisition. See "Other Information Relating to Pembina's Business – Information
and Communication Systems";



"SCO"
means synthetic crude oil;



"SEC"
means the United States Securities and Exchange Commission;



"Senior
Notes" means, collectively, the Series A Senior Notes, the Series C Senior Notes and the Series D Senior Notes;



"Series
A Senior Notes" means the $175 million aggregate principal amount of unsecured senior notes of Pembina issued in June
2004 and due June 15, 2014 and which bear interest at a fixed rate of 5.99 percent per annum;



"Series
C Convertible Debentures" means the 5.75 percent convertible unsecured subordinated debentures of Pembina issued November
24, 2010 and maturing November 30, 2020;



"Series
C Senior Notes" means the $200 million aggregate principal amount of unsecured senior notes of the Corporation issued
September 30, 2006 and due September 30, 2021 and which bear interest at a fixed rate of 5.58 percent per annum;



"Series
D Senior Notes" means the $267 million aggregate principal amount of unsecured senior notes of the Corporation issued
November 18, 2009 and due November 18, 2019 and which bear interest at a fixed rate of 5.91 percent per annum;



"Series
E Convertible Debentures" means the 5.75 percent convertible unsecured subordinated debentures maturing December 31,
2017 issued by Provident on November 1, 2010 and assumed by Pembina in April 2012 pursuant to the Provident Acquisition;



- 5 -







"Series
F Convertible Debentures" means the 5.75 percent convertible unsecured subordinated debentures maturing December 31,
2018 issued by Provident on April 29, 2011 and assumed by Pembina in April 2012 pursuant to the Provident Acquisition;



"Shareholders"
means the holders of Common Shares;



"Storage
Agreement" means the 20 year storage agreement entered into effective May 13, 2003 among the Storage LP, Dow Canada and
NOVA Chemicals. See "Risk Factors – Risks Inherent in Pembina's Business – Structural Integrity of the Storage
Facility";



"Storage
Facility" means the underground ethylene storage facility and related lands and equipment located at Fort Saskatchewan,
Alberta in which Pembina indirectly acquired a 50 percent non-operating interest on June 24, 2003;



"Storage
LP" means the Fort Saskatchewan Ethylene Storage Limited Partnership, an Alberta limited partnership, owned 50 percent
by Pembina and 50 percent by Dow Canada;



"Swan
Hills Pipeline" means the pipeline system and related facilities delivering light sweet crude oil from the Swan Hills
area in Alberta, and from Acheson/Ellerslie in Alberta, to Edmonton, Alberta;



"Syncrude"
or the "Syncrude Project" means the joint venture that was formed for the recovery of oil sands, crude bitumen
or products derived therefrom from the Athabasca oil sands, located near Fort McMurray, Alberta;



"Syncrude
Pipeline" means the pipeline system and related facilities delivering SCO from the Syncrude Project into the Edmonton,
Alberta area, formerly referred to as the AOSPL System;



"throughput"
means volume of product delivered through a pipeline;



"Trust
Units" means the trust units of the Fund, which, prior to the Corporate Conversion, represented an equal undivided beneficial
interest in the Fund;



"TSX"
means the Toronto Stock Exchange;



"Wabasca
Pipeline" means the pipeline system and related facilities delivering crude oil from the East Peace River Arch area of
northern Alberta to the Plains Rainbow Pipeline System; and



"Western
Pipeline" means the pipeline system and related facilities delivering crude oil from Taylor, British Columbia to Kamloops,
British Columbia.



All
dollar amounts set forth in this Annual Information Form are in Canadian dollars unless otherwise indicated. References to "$"
or "C$" are to Canadian dollars and references to "US$" are to United States dollars. On February 28, 2013,
the exchange rate based on the noon rate as reported by the Bank of Canada, was C$1.00 equals US$0.9723.



Except
where otherwise indicated, all information in this Annual Information Form is presented as at the end of the Corporation's most
recently completed financial year, being December 31, 2012.



- 6 -







NOTICE
TO READER



Effective
October 1, 2010, Pembina Pipeline Income Fund (the "Fund") and Pembina Pipeline Corporation (the "Corporation")
completed the plan of arrangement pursuant to which all of the outstanding trust units of the Fund ("Trust Units")
were converted into common shares of the Corporation. This resulted in the conversion of the Fund to a corporate entity, being
the Corporation, which has continued as a successor issuer to the Fund (the "Corporate Conversion"). In
this Annual Information Form, any references to "Pembina" when used in a historical context prior to October
1, 2010 refer to the Fund and its consolidated subsidiaries, and when used in the present tense, prospectively or for periods
on or after October 1, 2010, those terms refer to Pembina Pipeline Corporation and its consolidated subsidiaries.



Prior
to the Corporate Conversion, the Fund paid distributions to the holders of its outstanding Trust Units and, following the Corporate
Conversion, the Corporation pays dividends to the holders of its outstanding common shares, if, as and when declared thereon by
the Board of Directors of the Corporation.



ABBREVIATIONS
AND CONVERSIONS



In
this Annual Information Form, the following abbreviations have the indicated meanings:



|bbl
    and bbls   | barrel
    and barrels, each barrel representing 34.972 Imperial gallons or 42 US gallons                                                                                  
|------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|mmbbls             | millions
    of barrels                                                                                                                                                    
|bpd                | barrels
    per day                                                                                                                                                        
|mbpd               | thousands
    of barrels per day                                                                                                                                           
|mcf
        MMcf/d | thousands
        of cubic feet
        million
        cubic feet per day                                                                                                 
|boe                | barrels
                                                          of oil equivalent, using the conversion factor of 6 Mcf of natural gas being equivalent to one bbl of oil
|boe/d              | barrels
    of oil equivalent per day                                                                                                                                      
|bcf/d              | billion
    cubic feet per day                                                                                                                                             
|km                 | kilometres                                                                                                                                                                 



Boes
may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf: 1 bbl is based on an energy equivalency
conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.



The
following table sets forth certain standard conversions between Standard Imperial Units and the International System of Units
(or metric units).



|To
    convert from |  | To               |  | Multiply
    by
|------------------- |  | ---------------- |  | ---------------
|bbls                |  | cubic
    metres |  | 0.59           
|cubic
    meters    |  | bbls             |  | 6.293          
|miles               |  | kilometres       |  | 1.609          
|kilometres          |  | miles            |  | 0.621          



- 7 -







NON–GAAP
MEASURES



The
Corporation's audited consolidated financial information for the year ended December 31, 2012, which are incorporated herein by
reference and may be found on the Corporation's company profile on the SEDAR website at www.sedar.com, and in the Corporation's
annual report on Form 40-F filed on the Corporation's company profile on the EDGAR website at www.sec.gov, are presented in compliance
with International Financial Reporting Standards ("IFRS"), which have converged with Canadian generally accepted
accounting principles ("GAAP") effective for Pembina on January 1, 2010. Certain of the financial information
included in such financial statements is contained within this Annual Information Form. Readers should also take note, however,
that within this Annual Information Form the terms "earnings before interest, taxes, depreciation and amortization",
"adjusted EBITDA", "adjusted earnings", "adjusted cash flow from operating activities", "operating
margin" and "total enterprise value" are used to describe certain financial information of the Corporation and
that these terms are not defined by GAAP.



The
non-GAAP term "earnings before interest, taxes, depreciation and amortization" ("EBITDA") is commonly
used by management of Pembina, investors and creditors in the calculation of ratios for assessing leverage and financial performance
and is calculated as results from operating activities plus share of profit from equity accounted investees (before tax) plus
depreciation and amortization (included in operations and general and administrative expense) and unrealized gains or losses on
commodity-related derivative financial instruments. The non-GAAP term "adjusted EBITDA" is EBITDA excluding acquisition-related
expenses in connection with the Provident Acquisition.



The
non-GAAP term "adjusted earnings" is commonly used by management of Pembina for assessing and comparing financial performance
each reporting period and is calculated as earnings before tax excluding unrealized gains or losses on derivative financial instruments
and acquisition-related expenses in connection with the Provident Acquisition plus share of profit from equity accounted investees
(before tax).



The
non-GAAP term "adjusted cash flow from operating activities" is commonly used by management of Pembina for assessing
financial performance each reporting period and is calculated as cash flow from operating activities plus the change in non-cash
working capital and excluding acquisition-related expenses in connection with the Provident Acquisition.



The
non-GAAP term "operating margin" is commonly used by management of Pembina for assessing financial performance and is
calculated as gross profit before depreciation and amortization included in operations and unrealized gain (loss) on commodity-related
derivative financial instruments.



The
non-GAAP term "total enterprise value", in combination with other measures, is used by management of Pembina and the
investment community to assess the overall market value of the business. Total enterprise value is calculated based on the market
value of common shares and convertible debentures at a specific date plus senior debt.



Management
of Pembina believes these supplemental non-GAAP measures facilitate the understanding of Pembina's results from operations, leverage,
liquidity and financial positions. Readers should be cautioned that EBITDA, adjusted EBITDA, adjusted earnings, adjusted cash
flow from operating activities, operating margin and total enterprise value should not be construed as alternatives to net earnings,
cash flow from operating activities or other measures of financial results determined in accordance with GAAP as an indicator
of Pembina's performance. Furthermore, these non-GAAP measures may not be comparable to similar measures presented by other issuers.



For
more information with respect to financial measures which have not been defined by GAAP, see the "Non–GAAP Measures"
section of the Corporation's management's discussion and analysis for the year ended December 31, 2012, which has been filed
on the Corporation's SEDAR profile atwww.sedar.comand in the Corporation's
annual report on Form 40-F filed on the Corporation's EDGAR profile atwww.sec.gov.



- 8 -









FORWARD–LOOKING
STATEMENTS AND INFORMATION



Certain
statements contained in this Annual Information Form constitute "forward-looking statements" within the meaning of the
United States Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning
of applicable Canadian securities legislation (collectively, "forward-looking statements"). All forward-looking
statements are based on Pembina's current expectations, estimates, projections, beliefs and assumptions based on information available
at the time the statement was made and in light of its experience and its perception of historical trends. The use of any of the
words "anticipate", "continue", "estimate", "expect", "may", "will",
"project", "should", "believe", "plan", "intend", design", "target",
"undertake", "view", "indicate", "maintain", "explore", "entail",
"schedule", "objective", "strategy", "likely", "potential", "could",
"envisions", "aimed", "would" and similar expressions are intended to identify forward-looking statements.
By their nature, such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause
actual results or events to differ materially from those anticipated in such forward-looking statements. Pembina believes the
expectations reflected in those forward-looking statements are reasonable but no assurance can be given that these expectations
will prove to be correct and such forward-looking statements included in this Annual Information Form should not be unduly relied
upon. These statements speak only as of the date of this Annual Information Form.



In
particular, this Annual Information Form contains forward-looking statements pertaining to, among other things, the following:



| | · | the
                                                                                                                                                                                               future
                                                                                                                                                                                               levels
                                                                                                                                                                                               of
                                                                                                                                                                                               cash
                                                                                                                                                                                               dividends
                                                                                                                                                                                               that
                                                                                                                                                                                               Pembina
                                                                                                                                                                                               intends
                                                                                                                                                                                               to
                                                                                                                                                                                               pay
                                                                                                                                                                                               to
                                                                                                                                                                                               its
                                                                                                                                                                                               Shareholders;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | capital
                                                                                                                                                                                               expenditure-estimates,
                                                                                                                                                                                               plans,
                                                                                                                                                                                               schedules,
                                                                                                                                                                                               rights
                                                                                                                                                                                               and
                                                                                                                                                                                               activities
                                                                                                                                                                                               and
                                                                                                                                                                                               the
                                                                                                                                                                                               planning,
                                                                                                                                                                                               development,
                                                                                                                                                                                               construction,
                                                                                                                                                                                               operations
                                                                                                                                                                                               and
                                                                                                                                                                                               costs
                                                                                                                                                                                               of
                                                                                                                                                                                               pipelines,
                                                                                                                                                                                               gas
                                                                                                                                                                                               service
                                                                                                                                                                                               facilities,
                                                                                                                                                                                               fractionation
                                                                                                                                                                                               facilities,
                                                                                                                                                                                               terminalling,
                                                                                                                                                                                               storage
                                                                                                                                                                                               and
                                                                                                                                                                                               hub
                                                                                                                                                                                               facilities
                                                                                                                                                                                               and
                                                                                                                                                                                               other
                                                                                                                                                                                               facilities
                                                                                                                                                                                               or
                                                                                                                                                                                               energy
                                                                                                                                                                                               infrastructure,
                                                                                                                                                                                               including,
                                                                                                                                                                                               but
                                                                                                                                                                                               not
                                                                                                                                                                                               limited
                                                                                                                                                                                               to,
                                                                                                                                                                                               in
                                                                                                                                                                                               relation
                                                                                                                                                                                               to
                                                                                                                                                                                               the
                                                                                                                                                                                               PNT,
                                                                                                                                                                                               the
                                                                                                                                                                                               proposed
                                                                                                                                                                                               Resthaven
                                                                                                                                                                                               Facility
                                                                                                                                                                                               and
                                                                                                                                                                                               the
                                                                                                                                                                                               proposed
                                                                                                                                                                                               Saturn
                                                                                                                                                                                               Facility,
                                                                                                                                                                                               the
                                                                                                                                                                                               proposed
                                                                                                                                                                                               expansion
                                                                                                                                                                                               plans
                                                                                                                                                                                               to
                                                                                                                                                                                               strengthen
                                                                                                                                                                                               Pembina's
                                                                                                                                                                                               transportation
                                                                                                                                                                                               service
                                                                                                                                                                                               options
                                                                                                                                                                                               that
                                                                                                                                                                                               it
                                                                                                                                                                                               provides
                                                                                                                                                                                               to
                                                                                                                                                                                               producers
                                                                                                                                                                                               in
                                                                                                                                                                                               Alberta,
                                                                                                                                                                                               the
                                                                                                                                                                                               expansion
                                                                                                                                                                                               of
                                                                                                                                                                                               throughput
                                                                                                                                                                                               capacity
                                                                                                                                                                                               on
                                                                                                                                                                                               the
                                                                                                                                                                                               Peace/Northern
                                                                                                                                                                                               NGL
                                                                                                                                                                                               System
                                                                                                                                                                                               and
                                                                                                                                                                                               Peace
                                                                                                                                                                                               Pipeline,
                                                                                                                                                                                               the
                                                                                                                                                                                               proposed
                                                                                                                                                                                               expansion
                                                                                                                                                                                               of
                                                                                                                                                                                               a
                                                                                                                                                                                               number
                                                                                                                                                                                               of
                                                                                                                                                                                               existing
                                                                                                                                                                                               truck
                                                                                                                                                                                               terminals
                                                                                                                                                                                               and
                                                                                                                                                                                               construction
                                                                                                                                                                                               of
                                                                                                                                                                                               new
                                                                                                                                                                                               full-service
                                                                                                                                                                                               terminals,
                                                                                                                                                                                               the
                                                                                                                                                                                               installation
                                                                                                                                                                                               of
                                                                                                                                                                                               two
                                                                                                                                                                                               remaining
                                                                                                                                                                                               pump
                                                                                                                                                                                               stations
                                                                                                                                                                                               on
                                                                                                                                                                                               the
                                                                                                                                                                                               Nipisi
                                                                                                                                                                                               and
                                                                                                                                                                                               Mitsue
                                                                                                                                                                                               pipelines,
                                                                                                                                                                                               the
                                                                                                                                                                                               development
                                                                                                                                                                                               of
                                                                                                                                                                                               fee-for-service
                                                                                                                                                                                               storage
                                                                                                                                                                                               facilities
                                                                                                                                                                                               at
                                                                                                                                                                                               Redwater,
                                                                                                                                                                                               the
                                                                                                                                                                                               proposed
                                                                                                                                                                                               development
                                                                                                                                                                                               of
                                                                                                                                                                                               a
                                                                                                                                                                                               C2+
                                                                                                                                                                                               fractionator
                                                                                                                                                                                               at
                                                                                                                                                                                               Redwater,
                                                                                                                                                                                               and
                                                                                                                                                                                               the
                                                                                                                                                                                               potential
                                                                                                                                                                                               offshore
                                                                                                                                                                                               export
                                                                                                                                                                                               opportunities
                                                                                                                                                                                               for
                                                                                                                                                                                               LPG;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | future
                                                                                                                                                                                               expansion
                                                                                                                                                                                               of
                                                                                                                                                                                               Pembina's
                                                                                                                                                                                               pipelines
                                                                                                                                                                                               and
                                                                                                                                                                                               other
                                                                                                                                                                                               infrastructure;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | pipeline,
                                                                                                                                                                                               processing
                                                                                                                                                                                               and
                                                                                                                                                                                               storage
                                                                                                                                                                                               facility
                                                                                                                                                                                               and
                                                                                                                                                                                               system
                                                                                                                                                                                               operations
                                                                                                                                                                                               and
                                                                                                                                                                                               throughput
                                                                                                                                                                                               levels;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | oil
                                                                                                                                                                                               and
                                                                                                                                                                                               gas
                                                                                                                                                                                               industry
                                                                                                                                                                                               exploration
                                                                                                                                                                                               and
                                                                                                                                                                                               development
                                                                                                                                                                                               activity
                                                                                                                                                                                               levels;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Pembina's
                                                                                                                                                                                               strategy
                                                                                                                                                                                               and
                                                                                                                                                                                               the
                                                                                                                                                                                               development
                                                                                                                                                                                               of
                                                                                                                                                                                               new
                                                                                                                                                                                               business
                                                                                                                                                                                               initiatives;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | growth
                                                                                                                                                                                               opportunities;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | expectations
                                                                                                                                                                                               regarding
                                                                                                                                                                                               Pembina's
                                                                                                                                                                                               ability
                                                                                                                                                                                               to
                                                                                                                                                                                               raise
                                                                                                                                                                                               capital
                                                                                                                                                                                               and
                                                                                                                                                                                               to
                                                                                                                                                                                               carry
                                                                                                                                                                                               out
                                                                                                                                                                                               acquisition,
                                                                                                                                                                                               expansion
                                                                                                                                                                                               and
                                                                                                                                                                                               growth
                                                                                                                                                                                               plans;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | treatment
                                                                                                                                                                                               under
                                                                                                                                                                                               government
                                                                                                                                                                                               regulatory
                                                                                                                                                                                               regimes
                                                                                                                                                                                               including
                                                                                                                                                                                               environmental
                                                                                                                                                                                               regulations
                                                                                                                                                                                               and
                                                                                                                                                                                               related
                                                                                                                                                                                               abandonment
                                                                                                                                                                                               and
                                                                                                                                                                                               reclamation
                                                                                                                                                                                               obligations
                                                                                                                                                                                               and
                                                                                                                                                                                               Aboriginal
                                                                                                                                                                                               consultation
                                                                                                                                                                                               requirements;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



- 9 -







| | · | future
                                                                                                                                                                                               general
                                                                                                                                                                                               and
                                                                                                                                                                                               administrative
                                                                                                                                                                                               expenses
                                                                                                                                                                                               at
                                                                                                                                                                                               Pembina;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | increased
                                                                                                                                                                                               throughput
                                                                                                                                                                                               potential
                                                                                                                                                                                               due
                                                                                                                                                                                               to
                                                                                                                                                                                               increased
                                                                                                                                                                                               activity
                                                                                                                                                                                               and
                                                                                                                                                                                               new
                                                                                                                                                                                               connections
                                                                                                                                                                                               and
                                                                                                                                                                                               other
                                                                                                                                                                                               initiatives
                                                                                                                                                                                               on
                                                                                                                                                                                               Pembina's
                                                                                                                                                                                               pipelines;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | future
                                                                                                                                                                                               cash
                                                                                                                                                                                               flows,
                                                                                                                                                                                               potential
                                                                                                                                                                                               revenue
                                                                                                                                                                                               and
                                                                                                                                                                                               cash
                                                                                                                                                                                               flow
                                                                                                                                                                                               enhancements
                                                                                                                                                                                               across
                                                                                                                                                                                               Pembina's
                                                                                                                                                                                               businesses
                                                                                                                                                                                               and
                                                                                                                                                                                               the
                                                                                                                                                                                               maintenance
                                                                                                                                                                                               of
                                                                                                                                                                                               operating
                                                                                                                                                                                               margins;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | tolls
                                                                                                                                                                                               and
                                                                                                                                                                                               tariffs
                                                                                                                                                                                               and
                                                                                                                                                                                               transportation,
                                                                                                                                                                                               storage
                                                                                                                                                                                               and
                                                                                                                                                                                               services
                                                                                                                                                                                               commitments
                                                                                                                                                                                               and
                                                                                                                                                                                               contracts;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | cash
                                                                                                                                                                                               dividends
                                                                                                                                                                                               and
                                                                                                                                                                                               the
                                                                                                                                                                                               tax
                                                                                                                                                                                               treatment
                                                                                                                                                                                               thereof;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | operating
                                                                                                                                                                                               risks
                                                                                                                                                                                               (including
                                                                                                                                                                                               the
                                                                                                                                                                                               amount
                                                                                                                                                                                               of
                                                                                                                                                                                               future
                                                                                                                                                                                               liabilities
                                                                                                                                                                                               related
                                                                                                                                                                                               to
                                                                                                                                                                                               pipeline
                                                                                                                                                                                               spills
                                                                                                                                                                                               and
                                                                                                                                                                                               other
                                                                                                                                                                                               environmental
                                                                                                                                                                                               incidents)
                                                                                                                                                                                               and
                                                                                                                                                                                               related
                                                                                                                                                                                               insurance
                                                                                                                                                                                               coverage
                                                                                                                                                                                               and
                                                                                                                                                                                               inspection
                                                                                                                                                                                               and
                                                                                                                                                                                               integrity
                                                                                                                                                                                               programs;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | the
                                                                                                                                                                                               expected
                                                                                                                                                                                               capacity
                                                                                                                                                                                               of
                                                                                                                                                                                               the
                                                                                                                                                                                               Resthaven
                                                                                                                                                                                               Facility
                                                                                                                                                                                               and
                                                                                                                                                                                               the
                                                                                                                                                                                               Saturn
                                                                                                                                                                                               Facility
                                                                                                                                                                                               currently
                                                                                                                                                                                               under
                                                                                                                                                                                               construction;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | expectations
                                                                                                                                                                                               regarding
                                                                                                                                                                                               in-service
                                                                                                                                                                                               dates
                                                                                                                                                                                               for
                                                                                                                                                                                               new
                                                                                                                                                                                               developments,
                                                                                                                                                                                               including
                                                                                                                                                                                               the
                                                                                                                                                                                               Resthaven
                                                                                                                                                                                               Facility,
                                                                                                                                                                                               the
                                                                                                                                                                                               Saturn
                                                                                                                                                                                               Facility,
                                                                                                                                                                                               the
                                                                                                                                                                                               Peace/Northern
                                                                                                                                                                                               NGL
                                                                                                                                                                                               System
                                                                                                                                                                                               and
                                                                                                                                                                                               the
                                                                                                                                                                                               Peace
                                                                                                                                                                                               Pipeline
                                                                                                                                                                                               expansions;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | expectations
                                                                                                                                                                                               regarding
                                                                                                                                                                                               incremental
                                                                                                                                                                                               volumes
                                                                                                                                                                                               and
                                                                                                                                                                                               in-service
                                                                                                                                                                                               dates
                                                                                                                                                                                               of
                                                                                                                                                                                               proposed
                                                                                                                                                                                               expansions
                                                                                                                                                                                               and
                                                                                                                                                                                               new
                                                                                                                                                                                               developments,
                                                                                                                                                                                               including
                                                                                                                                                                                               the
                                                                                                                                                                                               Phase
                                                                                                                                                                                               I
                                                                                                                                                                                               and
                                                                                                                                                                                               II
                                                                                                                                                                                               NGL
                                                                                                                                                                                               Expansions,
                                                                                                                                                                                               the
                                                                                                                                                                                               Phase
                                                                                                                                                                                               I
                                                                                                                                                                                               and
                                                                                                                                                                                               II
                                                                                                                                                                                               Crude
                                                                                                                                                                                               and
                                                                                                                                                                                               Condensate
                                                                                                                                                                                               Expansions,
                                                                                                                                                                                               and
                                                                                                                                                                                               volumes
                                                                                                                                                                                               resulting
                                                                                                                                                                                               from
                                                                                                                                                                                               new
                                                                                                                                                                                               developments
                                                                                                                                                                                               in
                                                                                                                                                                                               Pembina's
                                                                                                                                                                                               Gas
                                                                                                                                                                                               Services
                                                                                                                                                                                               business
                                                                                                                                                                                               to
                                                                                                                                                                                               be
                                                                                                                                                                                               transported
                                                                                                                                                                                               on
                                                                                                                                                                                               Pembina's
                                                                                                                                                                                               conventional
                                                                                                                                                                                               pipelines;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | expectations
                                                                                                                                                                                               regarding
                                                                                                                                                                                               in-service
                                                                                                                                                                                               dates
                                                                                                                                                                                               for
                                                                                                                                                                                               the
                                                                                                                                                                                               fee-for-service
                                                                                                                                                                                               storage
                                                                                                                                                                                               facilities
                                                                                                                                                                                               at
                                                                                                                                                                                               Redwater
                                                                                                                                                                                               and
                                                                                                                                                                                               the
                                                                                                                                                                                               proposed
                                                                                                                                                                                               C2+
                                                                                                                                                                                               fractionator
                                                                                                                                                                                               at
                                                                                                                                                                                               Redwater;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | the
                                                                                                                                                                                               possibility
                                                                                                                                                                                               of
                                                                                                                                                                                               offshore
                                                                                                                                                                                               export
                                                                                                                                                                                               opportunities
                                                                                                                                                                                               for
                                                                                                                                                                                               LPG;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | the
                                                                                                                                                                                               possibility
                                                                                                                                                                                               of
                                                                                                                                                                                               renegotiating
                                                                                                                                                                                               debt
                                                                                                                                                                                               terms,
                                                                                                                                                                                               repayment
                                                                                                                                                                                               of
                                                                                                                                                                                               existing
                                                                                                                                                                                               debt,
                                                                                                                                                                                               seeking
                                                                                                                                                                                               new
                                                                                                                                                                                               borrowing
                                                                                                                                                                                               and/or
                                                                                                                                                                                               issuing
                                                                                                                                                                                               equity;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | expectations
                                                                                                                                                                                               regarding
                                                                                                                                                                                               participation
                                                                                                                                                                                               in
                                                                                                                                                                                               Pembina's
                                                                                                                                                                                               DRIP;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | the
                                                                                                                                                                                               expected
                                                                                                                                                                                               impact
                                                                                                                                                                                               of
                                                                                                                                                                                               changes
                                                                                                                                                                                               in
                                                                                                                                                                                               share
                                                                                                                                                                                               price
                                                                                                                                                                                               on
                                                                                                                                                                                               annual
                                                                                                                                                                                               share-based
                                                                                                                                                                                               incentive
                                                                                                                                                                                               expense;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | expectations
                                                                                                                                                                                               regarding
                                                                                                                                                                                               the
                                                                                                                                                                                               potential
                                                                                                                                                                                               construction,
                                                                                                                                                                                               expansion
                                                                                                                                                                                               and
                                                                                                                                                                                               conversion
                                                                                                                                                                                               of
                                                                                                                                                                                               downstream
                                                                                                                                                                                               infrastructure
                                                                                                                                                                                               in
                                                                                                                                                                                               the
                                                                                                                                                                                               US
                                                                                                                                                                                               Midwest
                                                                                                                                                                                               and
                                                                                                                                                                                               Gulf
                                                                                                                                                                                               Coast;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | inventory
                                                                                                                                                                                               and
                                                                                                                                                                                               pricing
                                                                                                                                                                                               levels
                                                                                                                                                                                               in
                                                                                                                                                                                               the
                                                                                                                                                                                               North
                                                                                                                                                                                               American
                                                                                                                                                                                               liquids
                                                                                                                                                                                               market;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Pembina's
                                                                                                                                                                                               discretion
                                                                                                                                                                                               to
                                                                                                                                                                                               hedge
                                                                                                                                                                                               natural
                                                                                                                                                                                               gas
                                                                                                                                                                                               and
                                                                                                                                                                                               NGL
                                                                                                                                                                                               volumes;
                                                                                                                                                                                               and
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | competitive
                                                                                                                                                                                               conditions.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Various
factors or assumptions are typically applied by Pembina in drawing conclusions or making the forecasts, projections, predictions
or estimations set out in forward-looking statements based on information currently available to Pembina. These factors and assumptions
include, but are not limited to:



| | · | the
                                                                                                                                                                                               success
                                                                                                                                                                                               of
                                                                                                                                                                                               Pembina's
                                                                                                                                                                                               operations;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



- 10 -







| | · | prevailing
                                                                                                                                                                                               commodity
                                                                                                                                                                                               prices
                                                                                                                                                                                               and
                                                                                                                                                                                               exchange
                                                                                                                                                                                               rates
                                                                                                                                                                                               and
                                                                                                                                                                                               the
                                                                                                                                                                                               ability
                                                                                                                                                                                               of
                                                                                                                                                                                               Pembina
                                                                                                                                                                                               to
                                                                                                                                                                                               maintain
                                                                                                                                                                                               current
                                                                                                                                                                                               credit
                                                                                                                                                                                               ratings;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | the
                                                                                                                                                                                               availability
                                                                                                                                                                                               of
                                                                                                                                                                                               capital
                                                                                                                                                                                               to
                                                                                                                                                                                               fund
                                                                                                                                                                                               future
                                                                                                                                                                                               capital
                                                                                                                                                                                               requirements
                                                                                                                                                                                               relating
                                                                                                                                                                                               to
                                                                                                                                                                                               existing
                                                                                                                                                                                               assets
                                                                                                                                                                                               and
                                                                                                                                                                                               projects,
                                                                                                                                                                                               including
                                                                                                                                                                                               but
                                                                                                                                                                                               not
                                                                                                                                                                                               limited
                                                                                                                                                                                               to
                                                                                                                                                                                               future
                                                                                                                                                                                               capital
                                                                                                                                                                                               expenditures
                                                                                                                                                                                               relating
                                                                                                                                                                                               to
                                                                                                                                                                                               expansion,
                                                                                                                                                                                               upgrades
                                                                                                                                                                                               and
                                                                                                                                                                                               maintenance
                                                                                                                                                                                               shutdowns;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | future
                                                                                                                                                                                               operating
                                                                                                                                                                                               costs;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | geotechnical
                                                                                                                                                                                               and
                                                                                                                                                                                               integrity
                                                                                                                                                                                               costs
                                                                                                                                                                                               associated
                                                                                                                                                                                               with
                                                                                                                                                                                               the
                                                                                                                                                                                               Western
                                                                                                                                                                                               Pipeline;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | in
                                                                                                                                                                                               respect
                                                                                                                                                                                               of
                                                                                                                                                                                               the
                                                                                                                                                                                               proposed
                                                                                                                                                                                               Saturn
                                                                                                                                                                                               Facility
                                                                                                                                                                                               and
                                                                                                                                                                                               the
                                                                                                                                                                                               proposed
                                                                                                                                                                                               Resthaven
                                                                                                                                                                                               Facility
                                                                                                                                                                                               and
                                                                                                                                                                                               their
                                                                                                                                                                                               estimated
                                                                                                                                                                                               in-service
                                                                                                                                                                                               dates
                                                                                                                                                                                               of
                                                                                                                                                                                               fourth
                                                                                                                                                                                               quarter
                                                                                                                                                                                               of
                                                                                                                                                                                               2013
                                                                                                                                                                                               and
                                                                                                                                                                                               the
                                                                                                                                                                                               third
                                                                                                                                                                                               quarter
                                                                                                                                                                                               of
                                                                                                                                                                                               2014,
                                                                                                                                                                                               respectively;
                                                                                                                                                                                               that
                                                                                                                                                                                               counterparties
                                                                                                                                                                                               will
                                                                                                                                                                                               comply
                                                                                                                                                                                               with
                                                                                                                                                                                               contracts
                                                                                                                                                                                               in
                                                                                                                                                                                               a
                                                                                                                                                                                               timely
                                                                                                                                                                                               manner;
                                                                                                                                                                                               that
                                                                                                                                                                                               there
                                                                                                                                                                                               are
                                                                                                                                                                                               no
                                                                                                                                                                                               unforeseen
                                                                                                                                                                                               events
                                                                                                                                                                                               preventing
                                                                                                                                                                                               the
                                                                                                                                                                                               performance
                                                                                                                                                                                               of
                                                                                                                                                                                               contracts
                                                                                                                                                                                               or
                                                                                                                                                                                               the
                                                                                                                                                                                               completion
                                                                                                                                                                                               of
                                                                                                                                                                                               such
                                                                                                                                                                                               facilities;
                                                                                                                                                                                               that
                                                                                                                                                                                               such
                                                                                                                                                                                               facilities
                                                                                                                                                                                               will
                                                                                                                                                                                               be
                                                                                                                                                                                               fully
                                                                                                                                                                                               supported
                                                                                                                                                                                               by
                                                                                                                                                                                               long-term
                                                                                                                                                                                               firm
                                                                                                                                                                                               service
                                                                                                                                                                                               agreements
                                                                                                                                                                                               accounting
                                                                                                                                                                                               for
                                                                                                                                                                                               the
                                                                                                                                                                                               entire
                                                                                                                                                                                               designed
                                                                                                                                                                                               throughput
                                                                                                                                                                                               at
                                                                                                                                                                                               such
                                                                                                                                                                                               facilities
                                                                                                                                                                                               at
                                                                                                                                                                                               the
                                                                                                                                                                                               time
                                                                                                                                                                                               of
                                                                                                                                                                                               such
                                                                                                                                                                                               facilities'
                                                                                                                                                                                               completion;
                                                                                                                                                                                               that
                                                                                                                                                                                               there
                                                                                                                                                                                               are
                                                                                                                                                                                               no
                                                                                                                                                                                               unforeseen
                                                                                                                                                                                               construction
                                                                                                                                                                                               costs
                                                                                                                                                                                               related
                                                                                                                                                                                               to
                                                                                                                                                                                               the
                                                                                                                                                                                               facilities;
                                                                                                                                                                                               that
                                                                                                                                                                                               there
                                                                                                                                                                                               are
                                                                                                                                                                                               no
                                                                                                                                                                                               unforeseen
                                                                                                                                                                                               delays
                                                                                                                                                                                               arising
                                                                                                                                                                                               from
                                                                                                                                                                                               the
                                                                                                                                                                                               Aboriginal
                                                                                                                                                                                               consultation
                                                                                                                                                                                               process;
                                                                                                                                                                                               and
                                                                                                                                                                                               that
                                                                                                                                                                                               there
                                                                                                                                                                                               are
                                                                                                                                                                                               no
                                                                                                                                                                                               unforeseen
                                                                                                                                                                                               material
                                                                                                                                                                                               costs
                                                                                                                                                                                               relating
                                                                                                                                                                                               to
                                                                                                                                                                                               the
                                                                                                                                                                                               facilities
                                                                                                                                                                                               which
                                                                                                                                                                                               are
                                                                                                                                                                                               not
                                                                                                                                                                                               recoverable
                                                                                                                                                                                               from
                                                                                                                                                                                               customers;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | in
                                                                                                                                                                                               respect
                                                                                                                                                                                               of
                                                                                                                                                                                               the
                                                                                                                                                                                               expansion
                                                                                                                                                                                               of
                                                                                                                                                                                               NGL
                                                                                                                                                                                               throughput
                                                                                                                                                                                               capacity
                                                                                                                                                                                               on
                                                                                                                                                                                               the
                                                                                                                                                                                               Peace/Northern
                                                                                                                                                                                               NGL
                                                                                                                                                                                               System
                                                                                                                                                                                               and
                                                                                                                                                                                               the
                                                                                                                                                                                               crude
                                                                                                                                                                                               and
                                                                                                                                                                                               condensate
                                                                                                                                                                                               throughput
                                                                                                                                                                                               capacity
                                                                                                                                                                                               on
                                                                                                                                                                                               the
                                                                                                                                                                                               Peace
                                                                                                                                                                                               Pipeline
                                                                                                                                                                                               and
                                                                                                                                                                                               the
                                                                                                                                                                                               estimated
                                                                                                                                                                                               in-service
                                                                                                                                                                                               dates
                                                                                                                                                                                               with
                                                                                                                                                                                               respect
                                                                                                                                                                                               to
                                                                                                                                                                                               the
                                                                                                                                                                                               same;
                                                                                                                                                                                               that
                                                                                                                                                                                               Pembina
                                                                                                                                                                                               will
                                                                                                                                                                                               receive
                                                                                                                                                                                               regulatory
                                                                                                                                                                                               approval;
                                                                                                                                                                                               that
                                                                                                                                                                                               Pembina
                                                                                                                                                                                               will
                                                                                                                                                                                               secure
                                                                                                                                                                                               adequate
                                                                                                                                                                                               customer
                                                                                                                                                                                               support;
                                                                                                                                                                                               that
                                                                                                                                                                                               counterparties
                                                                                                                                                                                               will
                                                                                                                                                                                               comply
                                                                                                                                                                                               with
                                                                                                                                                                                               contracts
                                                                                                                                                                                               in
                                                                                                                                                                                               a
                                                                                                                                                                                               timely
                                                                                                                                                                                               manner;
                                                                                                                                                                                               that
                                                                                                                                                                                               there
                                                                                                                                                                                               are
                                                                                                                                                                                               no
                                                                                                                                                                                               unforeseen
                                                                                                                                                                                               events
                                                                                                                                                                                               preventing
                                                                                                                                                                                               the
                                                                                                                                                                                               performance
                                                                                                                                                                                               of
                                                                                                                                                                                               contracts
                                                                                                                                                                                               by
                                                                                                                                                                                               Pembina;
                                                                                                                                                                                               that
                                                                                                                                                                                               there
                                                                                                                                                                                               are
                                                                                                                                                                                               no
                                                                                                                                                                                               unforeseen
                                                                                                                                                                                               construction
                                                                                                                                                                                               costs
                                                                                                                                                                                               related
                                                                                                                                                                                               to
                                                                                                                                                                                               the
                                                                                                                                                                                               expansion;
                                                                                                                                                                                               that
                                                                                                                                                                                               there
                                                                                                                                                                                               are
                                                                                                                                                                                               no
                                                                                                                                                                                               unforeseen
                                                                                                                                                                                               delays
                                                                                                                                                                                               arising
                                                                                                                                                                                               from
                                                                                                                                                                                               the
                                                                                                                                                                                               Aboriginal
                                                                                                                                                                                               consultation
                                                                                                                                                                                               process;
                                                                                                                                                                                               and
                                                                                                                                                                                               that
                                                                                                                                                                                               there
                                                                                                                                                                                               are
                                                                                                                                                                                               no
                                                                                                                                                                                               unforeseen
                                                                                                                                                                                               material
                                                                                                                                                                                               costs
                                                                                                                                                                                               relating
                                                                                                                                                                                               to
                                                                                                                                                                                               the
                                                                                                                                                                                               pipelines
                                                                                                                                                                                               that
                                                                                                                                                                                               are
                                                                                                                                                                                               not
                                                                                                                                                                                               recoverable
                                                                                                                                                                                               from
                                                                                                                                                                                               customers;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | in
                                                                                                                                                                                               respect
                                                                                                                                                                                               of
                                                                                                                                                                                               the
                                                                                                                                                                                               proposed
                                                                                                                                                                                               C2+
                                                                                                                                                                                               fractionator
                                                                                                                                                                                               at
                                                                                                                                                                                               Redwater;
                                                                                                                                                                                               that
                                                                                                                                                                                               Pembina
                                                                                                                                                                                               will
                                                                                                                                                                                               receive
                                                                                                                                                                                               regulatory
                                                                                                                                                                                               approval;
                                                                                                                                                                                               that
                                                                                                                                                                                               Pembina
                                                                                                                                                                                               will
                                                                                                                                                                                               reach
                                                                                                                                                                                               satisfactory
                                                                                                                                                                                               long-term
                                                                                                                                                                                               arrangements
                                                                                                                                                                                               with
                                                                                                                                                                                               customers;
                                                                                                                                                                                               that
                                                                                                                                                                                               counterparties
                                                                                                                                                                                               will
                                                                                                                                                                                               comply
                                                                                                                                                                                               with
                                                                                                                                                                                               such
                                                                                                                                                                                               contracts
                                                                                                                                                                                               in
                                                                                                                                                                                               a
                                                                                                                                                                                               timely
                                                                                                                                                                                               manner;
                                                                                                                                                                                               that
                                                                                                                                                                                               there
                                                                                                                                                                                               are
                                                                                                                                                                                               no
                                                                                                                                                                                               unforeseen
                                                                                                                                                                                               events
                                                                                                                                                                                               preventing
                                                                                                                                                                                               the
                                                                                                                                                                                               performance
                                                                                                                                                                                               of
                                                                                                                                                                                               contracts
                                                                                                                                                                                               by
                                                                                                                                                                                               Pembina;
                                                                                                                                                                                               that
                                                                                                                                                                                               there
                                                                                                                                                                                               are
                                                                                                                                                                                               no
                                                                                                                                                                                               unforeseen
                                                                                                                                                                                               construction
                                                                                                                                                                                               costs;
                                                                                                                                                                                               that
                                                                                                                                                                                               there
                                                                                                                                                                                               are
                                                                                                                                                                                               no
                                                                                                                                                                                               unforeseen
                                                                                                                                                                                               delays
                                                                                                                                                                                               arising
                                                                                                                                                                                               from
                                                                                                                                                                                               the
                                                                                                                                                                                               Aboriginal
                                                                                                                                                                                               consultation
                                                                                                                                                                                               process;
                                                                                                                                                                                               and
                                                                                                                                                                                               that
                                                                                                                                                                                               there
                                                                                                                                                                                               are
                                                                                                                                                                                               no
                                                                                                                                                                                               unforeseen
                                                                                                                                                                                               material
                                                                                                                                                                                               costs
                                                                                                                                                                                               relating
                                                                                                                                                                                               to
                                                                                                                                                                                               the
                                                                                                                                                                                               proposed
                                                                                                                                                                                               fractionators
                                                                                                                                                                                               that
                                                                                                                                                                                               are
                                                                                                                                                                                               not
                                                                                                                                                                                               recoverable
                                                                                                                                                                                               from
                                                                                                                                                                                               customers;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | in
                                                                                                                                                                                               respect
                                                                                                                                                                                               of
                                                                                                                                                                                               other
                                                                                                                                                                                               developments,
                                                                                                                                                                                               expansions
                                                                                                                                                                                               and
                                                                                                                                                                                               capital
                                                                                                                                                                                               expenditures
                                                                                                                                                                                               planned,
                                                                                                                                                                                               including
                                                                                                                                                                                               the
                                                                                                                                                                                               proposed
                                                                                                                                                                                               expansion
                                                                                                                                                                                               of
                                                                                                                                                                                               a
                                                                                                                                                                                               number
                                                                                                                                                                                               of
                                                                                                                                                                                               existing
                                                                                                                                                                                               truck
                                                                                                                                                                                               terminals
                                                                                                                                                                                               and
                                                                                                                                                                                               construction
                                                                                                                                                                                               of
                                                                                                                                                                                               new
                                                                                                                                                                                               full-service
                                                                                                                                                                                               terminals,
                                                                                                                                                                                               the
                                                                                                                                                                                               expectation
                                                                                                                                                                                               of
                                                                                                                                                                                               additional
                                                                                                                                                                                               NGL
                                                                                                                                                                                               and
                                                                                                                                                                                               crude
                                                                                                                                                                                               volumes
                                                                                                                                                                                               being
                                                                                                                                                                                               transported
                                                                                                                                                                                               on
                                                                                                                                                                                               the
                                                                                                                                                                                               conventional
                                                                                                                                                                                               pipelines,
                                                                                                                                                                                               the
                                                                                                                                                                                               proposed
                                                                                                                                                                                               expansion
                                                                                                                                                                                               plans
                                                                                                                                                                                               to
                                                                                                                                                                                               strengthen
                                                                                                                                                                                               Pembina's
                                                                                                                                                                                               transportation
                                                                                                                                                                                               service
                                                                                                                                                                                               options
                                                                                                                                                                                               that
                                                                                                                                                                                               it
                                                                                                                                                                                               provides
                                                                                                                                                                                               to
                                                                                                                                                                                               producers
                                                                                                                                                                                               developing
                                                                                                                                                                                               the
                                                                                                                                                                                               Cardium
                                                                                                                                                                                               oil
                                                                                                                                                                                               formation
                                                                                                                                                                                               located
                                                                                                                                                                                               in
                                                                                                                                                                                               central
                                                                                                                                                                                               Alberta,
                                                                                                                                                                                               the
                                                                                                                                                                                               installation
                                                                                                                                                                                               of
                                                                                                                                                                                               two
                                                                                                                                                                                               remaining
                                                                                                                                                                                               pump
                                                                                                                                                                                               stations
                                                                                                                                                                                               on
                                                                                                                                                                                               the
                                                                                                                                                                                               Nipisi
                                                                                                                                                                                               and
                                                                                                                                                                                               Mitsue
                                                                                                                                                                                               pipelines,
                                                                                                                                                                                               the
                                                                                                                                                                                               development
                                                                                                                                                                                               of
                                                                                                                                                                                               fee-for-service
                                                                                                                                                                                               storage
                                                                                                                                                                                               facilities
                                                                                                                                                                                               at
                                                                                                                                                                                               Redwater
                                                                                                                                                                                               and
                                                                                                                                                                                               that
                                                                                                                                                                                               counterparties
                                                                                                                                                                                               will
                                                                                                                                                                                               comply
                                                                                                                                                                                               with
                                                                                                                                                                                               contracts
                                                                                                                                                                                               in
                                                                                                                                                                                               a
                                                                                                                                                                                               timely
                                                                                                                                                                                               manner;
                                                                                                                                                                                               that
                                                                                                                                                                                               there
                                                                                                                                                                                               are
                                                                                                                                                                                               no
                                                                                                                                                                                               unforeseen
                                                                                                                                                                                               events
                                                                                                                                                                                               preventing
                                                                                                                                                                                               the
                                                                                                                                                                                               performance
                                                                                                                                                                                               of
                                                                                                                                                                                               contracts
                                                                                                                                                                                               by
                                                                                                                                                                                               Pembina;
                                                                                                                                                                                               that
                                                                                                                                                                                               there
                                                                                                                                                                                               are
                                                                                                                                                                                               no
                                                                                                                                                                                               unforeseen
                                                                                                                                                                                               construction
                                                                                                                                                                                               costs;
                                                                                                                                                                                               and
                                                                                                                                                                                               that
                                                                                                                                                                                               there
                                                                                                                                                                                               are
                                                                                                                                                                                               no
                                                                                                                                                                                               unforeseen
                                                                                                                                                                                               material
                                                                                                                                                                                               costs
                                                                                                                                                                                               relating
                                                                                                                                                                                               to
                                                                                                                                                                                               the
                                                                                                                                                                                               developments,
                                                                                                                                                                                               expansions
                                                                                                                                                                                               and
                                                                                                                                                                                               capital
                                                                                                                                                                                               expenditures
                                                                                                                                                                                               which
                                                                                                                                                                                               are
                                                                                                                                                                                               not
                                                                                                                                                                                               recoverable
                                                                                                                                                                                               from
                                                                                                                                                                                               customers;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | the
                                                                                                                                                                                               future
                                                                                                                                                                                               exploration
                                                                                                                                                                                               for
                                                                                                                                                                                               and
                                                                                                                                                                                               production
                                                                                                                                                                                               of
                                                                                                                                                                                               oil,
                                                                                                                                                                                               NGL
                                                                                                                                                                                               and
                                                                                                                                                                                               natural
                                                                                                                                                                                               gas
                                                                                                                                                                                               in
                                                                                                                                                                                               the
                                                                                                                                                                                               capture
                                                                                                                                                                                               area
                                                                                                                                                                                               around
                                                                                                                                                                                               Pembina's
                                                                                                                                                                                               conventional
                                                                                                                                                                                               and
                                                                                                                                                                                               midstream
                                                                                                                                                                                               assets,
                                                                                                                                                                                               including
                                                                                                                                                                                               new
                                                                                                                                                                                               production
                                                                                                                                                                                               from
                                                                                                                                                                                               the
                                                                                                                                                                                               Cardium
                                                                                                                                                                                               formation
                                                                                                                                                                                               in
                                                                                                                                                                                               western
                                                                                                                                                                                               Alberta,
                                                                                                                                                                                               the
                                                                                                                                                                                               demand
                                                                                                                                                                                               for
                                                                                                                                                                                               gathering
                                                                                                                                                                                               and
                                                                                                                                                                                               processing
                                                                                                                                                                                               of
                                                                                                                                                                                               hydrocarbons,
                                                                                                                                                                                               and
                                                                                                                                                                                               the
                                                                                                                                                                                               corresponding
                                                                                                                                                                                               utilization
                                                                                                                                                                                               of
                                                                                                                                                                                               Pembina's
                                                                                                                                                                                               assets;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



- 11 -







| | · | in
                                                                                                                                                                                               respect
                                                                                                                                                                                               of
                                                                                                                                                                                               the
                                                                                                                                                                                               stability
                                                                                                                                                                                               of
                                                                                                                                                                                               Pembina's
                                                                                                                                                                                               dividend;
                                                                                                                                                                                               prevailing
                                                                                                                                                                                               commodity
                                                                                                                                                                                               prices,
                                                                                                                                                                                               margins,
                                                                                                                                                                                               volumes
                                                                                                                                                                                               and
                                                                                                                                                                                               exchange
                                                                                                                                                                                               rates;
                                                                                                                                                                                               that
                                                                                                                                                                                               Pembina's
                                                                                                                                                                                               future
                                                                                                                                                                                               results
                                                                                                                                                                                               of
                                                                                                                                                                                               operations
                                                                                                                                                                                               will
                                                                                                                                                                                               be
                                                                                                                                                                                               consistent
                                                                                                                                                                                               with
                                                                                                                                                                                               past
                                                                                                                                                                                               performance
                                                                                                                                                                                               and
                                                                                                                                                                                               management
                                                                                                                                                                                               expectations
                                                                                                                                                                                               in
                                                                                                                                                                                               relation
                                                                                                                                                                                               thereto;
                                                                                                                                                                                               the
                                                                                                                                                                                               continued
                                                                                                                                                                                               availability
                                                                                                                                                                                               of
                                                                                                                                                                                               capital
                                                                                                                                                                                               at
                                                                                                                                                                                               attractive
                                                                                                                                                                                               prices
                                                                                                                                                                                               to
                                                                                                                                                                                               fund
                                                                                                                                                                                               future
                                                                                                                                                                                               capital
                                                                                                                                                                                               requirements
                                                                                                                                                                                               relating
                                                                                                                                                                                               to
                                                                                                                                                                                               existing
                                                                                                                                                                                               assets
                                                                                                                                                                                               and
                                                                                                                                                                                               projects,
                                                                                                                                                                                               including
                                                                                                                                                                                               but
                                                                                                                                                                                               not
                                                                                                                                                                                               limited
                                                                                                                                                                                               to
                                                                                                                                                                                               future
                                                                                                                                                                                               capital
                                                                                                                                                                                               expenditures
                                                                                                                                                                                               relating
                                                                                                                                                                                               to
                                                                                                                                                                                               expansion,
                                                                                                                                                                                               upgrades
                                                                                                                                                                                               and
                                                                                                                                                                                               maintenance
                                                                                                                                                                                               shutdowns;
                                                                                                                                                                                               the
                                                                                                                                                                                               success
                                                                                                                                                                                               of
                                                                                                                                                                                               growth
                                                                                                                                                                                               projects;
                                                                                                                                                                                               future
                                                                                                                                                                                               operating
                                                                                                                                                                                               costs;
                                                                                                                                                                                               that
                                                                                                                                                                                               counterparties
                                                                                                                                                                                               to
                                                                                                                                                                                               material
                                                                                                                                                                                               agreements
                                                                                                                                                                                               will
                                                                                                                                                                                               continue
                                                                                                                                                                                               to
                                                                                                                                                                                               perform
                                                                                                                                                                                               in
                                                                                                                                                                                               a
                                                                                                                                                                                               timely
                                                                                                                                                                                               manner;
                                                                                                                                                                                               that
                                                                                                                                                                                               there
                                                                                                                                                                                               are
                                                                                                                                                                                               no
                                                                                                                                                                                               unforeseen
                                                                                                                                                                                               events
                                                                                                                                                                                               preventing
                                                                                                                                                                                               the
                                                                                                                                                                                               performance
                                                                                                                                                                                               of
                                                                                                                                                                                               contracts;
                                                                                                                                                                                               and
                                                                                                                                                                                               that
                                                                                                                                                                                               there
                                                                                                                                                                                               are
                                                                                                                                                                                               no
                                                                                                                                                                                               unforeseen
                                                                                                                                                                                               material
                                                                                                                                                                                               construction
                                                                                                                                                                                               or
                                                                                                                                                                                               other
                                                                                                                                                                                               costs
                                                                                                                                                                                               related
                                                                                                                                                                                               to
                                                                                                                                                                                               current
                                                                                                                                                                                               growth
                                                                                                                                                                                               projects
                                                                                                                                                                                               or
                                                                                                                                                                                               current
                                                                                                                                                                                               operations;
                                                                                                                                                                                               and
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | prevailing
                                                                                                                                                                                               regulatory,
                                                                                                                                                                                               tax
                                                                                                                                                                                               and
                                                                                                                                                                                               environmental
                                                                                                                                                                                               laws
                                                                                                                                                                                               and
                                                                                                                                                                                               regulations.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The
actual results of Pembina could differ materially from those anticipated in these forward-looking statements as a result of the
material risk factors set forth below:



| | · | the
                                                                                                                                                                                               regulatory
                                                                                                                                                                                               environment
                                                                                                                                                                                               and
                                                                                                                                                                                               decisions
                                                                                                                                                                                               and
                                                                                                                                                                                               Aboriginal
                                                                                                                                                                                               consultation
                                                                                                                                                                                               requirements;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | the
                                                                                                                                                                                               impact
                                                                                                                                                                                               of
                                                                                                                                                                                               competitive
                                                                                                                                                                                               entities
                                                                                                                                                                                               and
                                                                                                                                                                                               pricing;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | labour
                                                                                                                                                                                               and
                                                                                                                                                                                               material
                                                                                                                                                                                               shortages;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | reliance
                                                                                                                                                                                               on
                                                                                                                                                                                               key
                                                                                                                                                                                               alliances
                                                                                                                                                                                               and
                                                                                                                                                                                               agreements;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | the
                                                                                                                                                                                               strength
                                                                                                                                                                                               and
                                                                                                                                                                                               operations
                                                                                                                                                                                               of
                                                                                                                                                                                               the
                                                                                                                                                                                               oil
                                                                                                                                                                                               and
                                                                                                                                                                                               natural
                                                                                                                                                                                               gas
                                                                                                                                                                                               production
                                                                                                                                                                                               industry
                                                                                                                                                                                               and
                                                                                                                                                                                               related
                                                                                                                                                                                               commodity
                                                                                                                                                                                               prices;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | non-performance
                                                                                                                                                                                               or
                                                                                                                                                                                               default
                                                                                                                                                                                               by
                                                                                                                                                                                               counterparties
                                                                                                                                                                                               to
                                                                                                                                                                                               agreements
                                                                                                                                                                                               which
                                                                                                                                                                                               Pembina
                                                                                                                                                                                               or
                                                                                                                                                                                               one
                                                                                                                                                                                               or
                                                                                                                                                                                               more
                                                                                                                                                                                               of
                                                                                                                                                                                               its
                                                                                                                                                                                               affiliates
                                                                                                                                                                                               has
                                                                                                                                                                                               entered
                                                                                                                                                                                               into
                                                                                                                                                                                               in
                                                                                                                                                                                               respect
                                                                                                                                                                                               of
                                                                                                                                                                                               its
                                                                                                                                                                                               business;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | actions
                                                                                                                                                                                               by
                                                                                                                                                                                               governmental
                                                                                                                                                                                               or
                                                                                                                                                                                               regulatory
                                                                                                                                                                                               authorities
                                                                                                                                                                                               including
                                                                                                                                                                                               changes
                                                                                                                                                                                               in
                                                                                                                                                                                               tax
                                                                                                                                                                                               laws
                                                                                                                                                                                               and
                                                                                                                                                                                               treatment,
                                                                                                                                                                                               changes
                                                                                                                                                                                               in
                                                                                                                                                                                               royalty
                                                                                                                                                                                               rates
                                                                                                                                                                                               or
                                                                                                                                                                                               increased
                                                                                                                                                                                               environmental
                                                                                                                                                                                               regulation;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | fluctuations
                                                                                                                                                                                               in
                                                                                                                                                                                               operating
                                                                                                                                                                                               results;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | adverse
                                                                                                                                                                                               general
                                                                                                                                                                                               economic
                                                                                                                                                                                               and
                                                                                                                                                                                               market
                                                                                                                                                                                               conditions
                                                                                                                                                                                               in
                                                                                                                                                                                               Canada,
                                                                                                                                                                                               North
                                                                                                                                                                                               America
                                                                                                                                                                                               and
                                                                                                                                                                                               elsewhere,
                                                                                                                                                                                               including
                                                                                                                                                                                               changes
                                                                                                                                                                                               in
                                                                                                                                                                                               interest
                                                                                                                                                                                               rates,
                                                                                                                                                                                               foreign
                                                                                                                                                                                               currency
                                                                                                                                                                                               exchange
                                                                                                                                                                                               rates
                                                                                                                                                                                               and
                                                                                                                                                                                               commodity
                                                                                                                                                                                               prices;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | the
                                                                                                                                                                                               failure
                                                                                                                                                                                               to
                                                                                                                                                                                               realize
                                                                                                                                                                                               the
                                                                                                                                                                                               anticipated
                                                                                                                                                                                               benefits
                                                                                                                                                                                               of
                                                                                                                                                                                               the
                                                                                                                                                                                               Provident
                                                                                                                                                                                               Acquisition;
                                                                                                                                                                                               and
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | the
                                                                                                                                                                                               failure
                                                                                                                                                                                               to
                                                                                                                                                                                               complete
                                                                                                                                                                                               remaining
                                                                                                                                                                                               integration
                                                                                                                                                                                               of
                                                                                                                                                                                               the
                                                                                                                                                                                               businesses
                                                                                                                                                                                               of
                                                                                                                                                                                               Pembina
                                                                                                                                                                                               and
                                                                                                                                                                                               Provident.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



These
factors should not be construed as exhaustive. Unless required by law, Pembina does not undertake any obligation to publicly update
or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Any forward-looking
statements contained herein are expressly qualified by this cautionary statement.



- 12 -







CORPORATE
STRUCTURE



Name,
Address and Formation



Pembina
Pipeline Corporation is a corporation amalgamated under the ABCA. It is the successor to the Fund following the completion of
the reorganization of the Fund from an income trust structure to a corporate structure by way of the Corporate Conversion on October
1, 2010. The Corporation's principal and registered office is located at Suite 3800, 525 - 8th Avenue S.W., Calgary, Alberta,
T2P 1G1.



Corporate
Conversion



The
Corporate Conversion was completed on October 1, 2010 and involved, among other things, the exchange on a one-for-one basis, of
all outstanding Trust Units for Common Shares. In accordance with the terms of the Corporate Conversion, the Fund was dissolved
and, through a series of steps, the Corporation acquired all of the assets of the Fund and assumed all of the liabilities of the
Fund.



The
Corporation's Common Shares commenced trading on the TSX under the trading symbol "PPL" on October 5, 2010.



Provident
Acquisition



On
January 15, 2012, Pembina and Provident entered into an arrangement agreement (the "Provident Arrangement Agreement")
pursuant to which Pembina agreed to acquire all of the outstanding Provident Shares by way of a plan of arrangement under the
Business Corporations Act (Alberta) (the "Provident Acquisition"). The Provident Acquisition was completed
on April 2, 2012. Holders of Provident Shares received 0.425 of a Common Share for each Provident Share held for a total consideration
of 116,535,750 Pembina Common Shares. Under the Provident Acquisition, Pembina assumed all of the rights and obligations of Provident
relating to the Series E Convertible Debentures and the Series F Convertible Debentures, which received a supplemental listing
on the TSX under the symbols "PPL.DB.E" and "PPL.DB.F", respectively. See "Description of the Capital
Structure of the Corporation – Convertible Debentures".



In
connection with the Provident Acquisition, the Common Shares were listed and began trading on the NYSE under the symbol "PBA"
on April 2, 2012 and the Provident Shares were delisted from the NYSE.



Pursuant
to the Provident Acquisition, Provident amalgamated with a wholly-owned subsidiary of Pembina and continued under the name "Pembina
NGL Corporation". The acquired business forms a part of the Midstream business of Pembina.



In
connection with the closing of the Provident Acquisition, Pembina's Revolving Credit Facility was increased from $800 million
to $1.5 billion for a term of five years. See "Description of the Capital Structure of the Corporation – Credit
Facilities".



For
a further description of the Provident Acquisition, please refer to the business acquisition report of the Corporation dated May
1, 2012, a copy of which was filed on the Corporation's SEDAR profile at www.sedar.com and on EDGAR at www.sec.gov.



- 13 -







Pembina's
Subsidiaries



The
following chart indicates the Corporation's major subsidiaries, including their jurisdictions of formation and the percentage
of common equity or other ownership interest held or controlled, directly or indirectly, by the Corporation or its subsidiaries.



|Principal Subsidiaries                                                                           |  | Jurisdiction ofIncorporation/Organization |  | Ownership  
|------------------------------------------------------------------------------------------------ |  | ----------------------------------------- |  | -----------
|Pouce
    Coupé Pipe Line Ltd.                                                                   |  | Canada
    (Federal)                      |  | 100%       
|Plateau
    Pipe Line Ltd.                                                                       |  | Alberta                                   |  | 100%       
|Alberta
    Oil Sands Pipeline Ltd.                                                              |  | Alberta                                   |  | 100%       
|Pembina
    Marketing Ltd.                                                                       |  | Alberta                                   |  | 100%       
|Pembina
    Gas Services Ltd.                                                                    |  | Alberta                                   |  | 100%       
|Pembina
    Pipeline                                                                             |  | Alberta                                   |  | 100%       
|Pembina
    West Limited Partnership                                                             |  | Alberta                                   |  | 100%       
|Pembina
    North Limited Partnership                                                            |  | Alberta                                   |  | 100%       
|Pembina
    Oil Sands Pipeline L.P.                                                              |  | Alberta                                   |  | 100%       
|Pembina
    Midstream Limited Partnership                                                        |  | Alberta                                   |  | 100%       
|Pembina
    Gas Services Limited Partnership                                                     |  | Alberta                                   |  | 100%       
|Pembina
    NGL Corporation (formerly Provident Energy Ltd.)                                     |  | Alberta                                   |  | 100%       
|Pembina
    Facilities NGL LP (formerly Provident Facilities (NGL) LP)                           |  | Alberta                                   |  | 100%       
|Pembina
    Empress NGL Partnership (formerly Empress NGL Partnership)                           |  | Alberta                                   |  | 100%       
|Pembina
    Resource Services Canada (formerly Kinetic Resources (LPG))                          |  | Alberta                                   |  | 100%       
|Pembina
    Infrastructure and Logistics LP (formerly Provident Infrastructure and Logistics LP) |  | Alberta                                   |  | 100%       
|Three
    Star Trucking Ltd.                                                                     |  | Saskatchewan                              |  | 66
    2/3%
|Pembina
    Resource Services (U.S.A.) (formerly Kinetic Resources (U.S.A.))                     |  | Michigan,
    US                          |  | 100%       



Amended
Articles



On
March 27, 2012, Pembina filed articles of amendment under the ABCA to increase the maximum number of directors of Pembina from
nine to eleven after receiving Shareholder approval for such amendment.



- 14 -









GENERAL
DEVELOPMENTS OF PEMBINA



During
the three-year period ending on December 31, 2012, and 2013 year-to-date Pembina continued to execute its business plan and advance
its growth strategy as discussed below.



Developments
in 2010 and 2011





|2010 |  | March    |  | Announced
    the Board of Directors approved the conversion of the Fund into a corporation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|---- |  | -------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |  |          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|2010 |  | October  |  | Pembina
    completed the Corporate Conversion pursuant to which the business of the Fund was reorganized into the Corporation effective
    October 1, 2010. See "Corporate Structure – Corporate Conversion".                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     |  |          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|2010 |  | November |  | Pembina
    secured an anchor contract with Encana for the construction of an enhanced NGL extraction facility at its Cutbank Complex's
    Musreau Gas Plant as well as a 10-km pipeline to deliver the incremental NGL to the Peace Pipeline (the "Musreau Deep
    Cut Facility") and initiated construction of the Musreau Deep Cut Facility.                                                                                                                                                                                                                                                                                                                                                                               
|     |  |          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|2010 |  | November |  | On
    November 12, 2010, Pembina filed the 2010 Base Shelf Prospectus with the securities commissions or similar regulatory authorities
    in each of the Provinces of Canada, which 2010 Base Shelf Prospectus allowed the Corporation to offer and issue, from time
    to time securities of up to $1,000,000,000 aggregate initial offering price of securities (or the equivalent thereof in one
    or more foreign currencies or composite currencies, including United States dollars) during the 25 month period that the 2010
    Base Shelf Prospectus was valid.                                                                                                                                                  
|     |  |          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|2010 |  | November |  | On
    November 24, 2010, Pembina issued and sold $250 million of Series C Convertible Debentures under the 2010 Base Shelf Prospectus.
    See "Description of the Capital Structure of the Corporation – Convertible Debentures".                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|     |  |          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|2010 |  | December |  | The
    2010 Convertible Debentures matured on December 31, 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|     |  |          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|2011 |  | January  |  | Pursuant
    to the acquisition that closed on January 7, 2011 with an effective date retroactive to December 31, 2010, Pembina Midstream
    Limited Partnership acquired terminalling and storage facilities in the Edmonton, Alberta area from Gibson Energy Partnership
    for an aggregate purchase price of approximately $57 million, which assets form an integral part of the terminal connecting
    key infrastructure in the Edmonton-Fort Saskatchewan-Namao, Alberta area (the "Pembina Nexus Terminal" or
    "PNT").                                                                                                                                                                                           
|     |  |          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|2011 |  | March    |  | On
    March 29, 2011, the Corporation issued and sold $250 million aggregate principal amount of Medium Term Notes, Series 1 pursuant
    to a pricing supplement under its 2010 Base Shelf Prospectus as supplemented by a prospectus supplement thereto dated March
    16, 2011. The Corporation used the net proceeds from the sale of the Medium Term Notes, Series 1 to partially repay the existing
    credit facilities at that time and to fund organic growth opportunities. See "Description of the Capital Structure
    of the Corporation – Medium Term Notes".                                                                                                                                                 
|     |  |          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|2011 |  | August   |  | Pembina
        announced the completion and start-up of the Nipisi Pipeline and Mitsue Pipeline which service the Pelican and Peace River
        heavy oil regions of Alberta.
        
        The
        Nipisi TSAs and Mitsue TSAs provide for committed ship-or-pay throughput on the Nipisi Pipeline and Mitsue Pipeline by
        the shippers for an initial 10 year term from the in-service date, with extension rights. In addition, the Nipisi Pipeline
        can be expanded to an ultimate capacity of approximately 200,000 bpd while the Mitsue Pipeline can be expanded to a capacity
        of approximately 45,000 bpd with additional capital and subject to contractual arrangements with customers.



- 15 -







|2011 |  | October  |  | Pembina
        announced on October 13, 2011 plans to further expand its gas handling assets in the Deep Basin in west central Alberta.
        Pembina entered into agreements to develop a combined shallow cut and deep cut NGL extraction facility (the "Resthaven
        Facility") by modifying and expanding an existing gas plant. Once operational, the initial phase of the Resthaven
        Facility will have a gross capacity of 200 MMcf/d (130 MMcf/d net to Pembina) and 13,000 bpd of NGL extraction capability.
        Pembina also plans to construct a new NGL pipeline to transport the extracted NGL from the Resthaven Facility to the Peace
        Pipeline.
                                                                      
        Once
        completed, Pembina will own approximately 65 percent of the Resthaven Facility and will own 100 percent of the NGL pipeline.
        The estimated cost of the Resthaven Facility, associated NGL pipeline and storage facilities is approximately $230 million
        and is expected to be in-service in the third quarter of 2014. The Resthaven Facility is supported by long-term firm service
        agreements with two of the major area producers with the associated NGL pipeline is underpinned by long-term service agreements
        with the Resthaven Facility owners.
|---- |  | -------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |  |          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|2011 |  | October  |  | Pembina
        announced on October 28, 2011 plans to construct a new enhanced NGL extraction facility (the "Saturn Facility")
        in the Berland area of Alberta. The Saturn Facility will be connected to Talisman Energy Inc.'s Wild River and Bigstone
        gas plants through existing and newly constructed gas gathering lines. Once operational, the Saturn Facility will have
        a gross capacity of 200 MMcf/d and 13,500 bpd of NGL extraction capability. Pembina also plans to construct an 83 km,
        8-inch NGL pipeline to transport the extracted NGL from the Saturn Facility to the Peace Pipeline.
                                                          
        The
        estimated cost of the Saturn Facility, associated NGL and gas gathering pipelines and storage facilities is approximately
        $200 million and is expected to be in-service in the fourth quarter of 2013. Pembina has entered into a long-term, firm
        service agreement with a major producer in support of the Saturn Facility.                                                                                                                                                                                                                                                                                                           
|     |  |          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|2011 |  | November |  | On
    November 9, 2011, Pembina announced plans to expand its NGL pipeline transportation capacity on its Peace Pipeline and Northern
    Pipeline (collectively, the "Peace/Northern NGL System") by 52,000 bpd (the "Phase I NGL Expansion").
    The Phase I NGL Expansion will require the installation of five new pump stations and the upgrade five existing stations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     |  |          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|2011 |  | December |  | Pembina
    announced plans to expand it crude and condensate throughput capacity on its Peace Pipeline by 40,000 bpd (the "Phase
    I Crude and Condensate Expansion"). The Phase I Crude and Condensate Expansion will require the upgrading of two
    existing pump stations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            



Developments
in 2012



|2012 |  | January |  | The
    Corporation announced that it had entered into an agreement for Pembina to acquire all of the issued and outstanding common
    shares of Provident by way of a plan of arrangement under the Business Corporations Act (Alberta) to create an integrated
    company that will be a leading player in the North American energy infrastructure sector.
|---- |  | ------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



- 16 -







|2012 |  | January   |  | The
    Corporation reinstated the DRIP effective as of the January 25, 2012 record date and the corresponding dividend was paid on
    February 15, 2012. The DRIP was reinstated to help fund Pembina's ongoing capital program. See "Description of the
    Capital Structure of the Corporation – Premium DividendTMand Dividend Reinvestment Plan".                                                                                                                                                                                                                                                                                                               
|---- |  | --------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |  |           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|2012 |  | February  |  | Mick
    Dilger was appointed to the position of President and Chief Operating Officer, effective February 15, 2012.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     |  |           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|2012 |  | February  |  | The
    construction on the Musreau Deep Cut Facility, including a new 205 MMcf/d NGL extraction facility and the related 10
    km NGL sales pipeline connected to the Peace Pipeline, was completed in 2011 and commissioning of the Musreau Deep Cut Facility
    occurred on February 15, 2012. In March, the Musreau Deep Cut Facility experienced an unplanned outage due to issues with
    a gearbox. It was placed back into service on September 2, 2012.                                                                                                                                                                                                    
|     |  |           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|2012 |  | March     |  | Pembina
    entered into a new unsecured revolving credit facility of $800 million with a syndicate of Canadian banking institutions for
    a term of 5 years. Pembina increased the facility to $1.5 billion on closing the Provident Acquisition. See "Description
    of the Capital Structure of the Corporation – Credit Facilities".                                                                                                                                                                                                                                                                                                                            
|     |  |           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|2012 |  | March     |  | The
    BCUC approved the terms of new 5-year transportation agreements negotiated between Pembina and the Western Pipeline shippers.
    In addition to allowing Pembina to earn a reasonable rate of return, the new contracts allow for direct flow through of all
    operating costs including upgraded integrity management program costs.                                                                                                                                                                                                                                                                                                                       
|     |  |           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|2012 |  | April     |  | The
    Provident Acquisition was completed effective April 2, 2012; the Common Shares were listed on the NYSE under the symbol "PBA";
    and Pembina increased the monthly dividend by 3.8 percent (from $0.13 per share per month to $0.135). See "Corporate
    Structure – Provident Acquisition" and "Description of the Capital Structure of the Corporation –
    Convertible Debentures".                                                                                                                                                                                                                                                                     
|     |  |           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|2012 |  | April     |  | In
    July 2002, the Corporation issued $100 million aggregate principal amount of senior secured notes due 2017 and bearing interest
    at 7.38 percent per annum on a private placement basis, which were redeemed by the Corporation on April 30, 2012.                                                                                                                                                                                                                                                                                                                                                                                                           
|     |  |           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|2012 |  | May       |  | Expanded
    the capacity on the Drayton Valley Pipeline by completing the refurbishing of the Calmar booster station which resulted in
    an additional 50,000 bpd and increased system capacity to approximately 190,000 bpd.                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     |  |           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|2012 |  | September |  | Completed
    and commissioned an 8,000 bpd expansion at the Redwater fractionator.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     |  |           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|2012 |  | September |  | Brought
    a fee-for-service cavern storage facility on stream at Redwater.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|     |  |           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|2012 |  | September |  | The
    expansion of the Musreau Gas Plant's shallow cut gas processing capability by 50 MMcf/d was completed in August 2012 and was
    placed into service on September 13, 2012. Pembina has entered into contracts with a minimum term of five years with area
    producers for the entire capacity of the expansion on a fee-for-service basis.                                                                                                                                                                                                                                                                                                                  
|     |  |           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|2012 |  | October   |  | On
    October 22, 2012, the Corporation issued and sold $450 million aggregate principal amount of Medium Term Notes, Series 2 pursuant
    to a pricing supplement under its 2010 Base Shelf Prospectus as supplemented by a prospectus supplement thereto dated October
    17, 2012. The notes have a fixed interest rate of 3.77 percent per annum, paid semi-annually, and will mature on October 24,
    2022. The Corporation used the net proceeds from the sale of the Medium Term Notes, Series 2 to repay a portion of the Corporation's
    existing Credit Facilities. See "Description of the Capital Structure of the Corporation – Medium Term Notes".



- 17 -







|2012 |  | October  |  | Construction started on a joint venture full-service terminal in the Judy Creek, Alberta area which will
focus on emulsion treating (separating oil from impurities to meet shipping quality requirements), produced water handling and
water disposal. The estimated project completion date is April 2013.                                                                                                                                                                                                                                                                                                                                                       
|---- |  | -------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |  |          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|2012 |  | October  |  | Pembina
    commenced construction on the Saturn Facility and Resthaven Facility.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     |  |          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|2012 |  | November |  | Pembina
    commenced developing plans for 73,000 bpd C2+ fractionator at Redwater and investigating offshore export opportunities for
    propane.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     |  |          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|2012 |  | November |  | Announced
    plans to significantly expand NGL, crude oil and condensate throughput capacity on the Peace Pipeline and Peace/Northern NGL
    System. The total cost of the projects is anticipated to be approximately $545 million plus approximately $125 million of
    additional capital to tie in producers to both the expanded systems. Expansion plans include increasing crude and condensate
    capacity on the Peace Pipeline by 55,000 bpd by late-2014 (the "Phase II Crude and Condensate Expansion")
    and the increasing NGL capacity on the Peace/Northern NGL System by 53,000 bpd by early to mid-2015 (the "Phase II
    NGL Expansion").



2013
Year to Date Developments



|2013 |  | February |  | On
    February 22, 2013, Pembina filed the 2013 Base Shelf Prospectus with the securities commissions or similar regulatory authorities
    in each of the Provinces of Canada, which 2013 Base Shelf Prospectus allows the Corporation to offer and issue from time to
    time securities of up to $3,000,000,000 aggregate initial offering price (or the equivalent thereof in one or more foreign
    currencies or composite currencies, including United States dollars) during the 25 month period that the 2013 Base Shelf Prospectus
    is valid. Securities may be offered separately or together, in amounts, at prices and on terms to be determined based on market
    conditions at the time of the sale and set forth in one or more shelf prospectus supplements.                                                                                                                                                                                                              
|---- |  | -------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |  |          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|2013 |  | February |  | Pembina
    announced it reached its contractual threshold to proceed with its previously announced Phase II Crude and Condensate Expansion
    to significantly expand its crude oil and condensate throughout capacity on its Peace Pipeline by 55,000 bpd. Pembina expects
    the total cost of Phase II Crude and Condensate Expansion to be approximately $250 million (including the mainline expansion
    and tie-ins). Subject to obtaining regulatory and environmental approvals and Aboriginal and stakeholder consultation, Pembina
    anticipates being able to bring the expansion into service by late-2014. Once complete, this expansion will increase capacity
    on the Peace Pipeline to 250,000 bpd. The Phase II Crude and Condensate Expansion is underpinned by long-term fee-for-service
    agreements with area producers. The combination of the Phase I and Phase II Crude and Condensate Expansions will increase
    capacity by 61 percent from current levels.



- 18 -







DESCRIPTION
OF PEMBINA'S BUSINESS AND OPERATIONS



Pembina's
Business Objective and Strategy



Pembina
is a trusted member of the communities in which it operates and is committed to generating value for its investors by running
its business in a safe, environmentally responsible manner that is respectful of community stakeholders. Pembina's goal is to
provide highly competitive and reliable returns to investors through monthly dividends while enhancing the long-term value of
its Common Shares. To achieve this, Pembina's strategy is to:



| | · | Preserve
                                                                                                                                                                                                     value
                                                                                                                                                                                                     by
                                                                                                                                                                                                     providing
                                                                                                                                                                                                     safe,
                                                                                                                                                                                                     responsible,
                                                                                                                                                                                                     cost-effective
                                                                                                                                                                                                     and
                                                                                                                                                                                                     reliable
                                                                                                                                                                                                     services.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Diversify
                                                                                                                                                                                                     Pembina's
                                                                                                                                                                                                     asset
                                                                                                                                                                                                     base
                                                                                                                                                                                                     along
                                                                                                                                                                                                     the
                                                                                                                                                                                                     hydrocarbon
                                                                                                                                                                                                     value
                                                                                                                                                                                                     chain
                                                                                                                                                                                                     by
                                                                                                                                                                                                     providing
                                                                                                                                                                                                     integrated
                                                                                                                                                                                                     service
                                                                                                                                                                                                     offerings
                                                                                                                                                                                                     which
                                                                                                                                                                                                     enhance
                                                                                                                                                                                                     profitability.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Pursue
                                                                                                                                                                                                     projects
                                                                                                                                                                                                     or
                                                                                                                                                                                                     assets
                                                                                                                                                                                                     that
                                                                                                                                                                                                     are
                                                                                                                                                                                                     expected
                                                                                                                                                                                                     to
                                                                                                                                                                                                     generate
                                                                                                                                                                                                     increased
                                                                                                                                                                                                     cash
                                                                                                                                                                                                     flow
                                                                                                                                                                                                     per
                                                                                                                                                                                                     share
                                                                                                                                                                                                     and
                                                                                                                                                                                                     capture
                                                                                                                                                                                                     long-life,
                                                                                                                                                                                                     economic
                                                                                                                                                                                                     hydrocarbon
                                                                                                                                                                                                     reserves.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Maintain
                                                                                                                                                                                                     a
                                                                                                                                                                                                     strong
                                                                                                                                                                                                     balance
                                                                                                                                                                                                     sheet
                                                                                                                                                                                                     through
                                                                                                                                                                                                     the
                                                                                                                                                                                                     application
                                                                                                                                                                                                     of
                                                                                                                                                                                                     prudent
                                                                                                                                                                                                     financial
                                                                                                                                                                                                     management
                                                                                                                                                                                                     to
                                                                                                                                                                                                     all
                                                                                                                                                                                                     business
                                                                                                                                                                                                     decisions.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Overview
of Pembina's Business



There
are three general sectors in the oil and gas industry: "upstream", "midstream" and "downstream".
The upstream sector encompasses exploration for and production of hydrocarbon liquids in their raw forms. In the midstream sector,
hydrocarbon products are gathered, processed, transported and marketed to the downstream sector. The downstream sector consists
of end-use customers, local distributers and wholesalers across North America.



Pembina
is a leading transportation and midstream service provider that has been serving North America's energy industry for nearly 60
years. Pembina owns and operates: pipelines that transport conventional and synthetic crude oil and natural gas liquids produced
in western Canada; oil sands and heavy oil pipelines; gas gathering and processing facilities; and, an oil and natural gas liquids
infrastructure and logistics business. With facilities strategically located in western Canada and in natural gas liquids markets
in eastern Canada and the U.S., Pembina also offers a full spectrum of midstream and marketing services that spans across its
operations. Pembina's integrated assets and commercial operations enable it to offer services needed by the energy sector along
the hydrocarbon value chain. The business segments of Pembina are grouped for functional, geographic and accounting purposes into
four categories, described in their respective sections: Conventional Pipelines; Oil Sands & Heavy Oil; Gas Services; and
Midstream.



- 19 -







Operations
Overview



The
following map illustrates Pembina's assets:











- 20 -







The
net revenue contribution from each of Pembina's four businesses in 2012 was divided as follows:









The
following table sets forth certain operating highlights for 2012, 2011 and 2010.

Operating
Highlights

(in
$ millions unless otherwise noted)





|                                                                               |  | Conventional
    Pipelines |       |  | Oil
    Sands & Heavy Oil(2) |  |       | Gas
    Services |  |  | Midstream(3) |  |  | Total(5) |      
|------------------------------------------------------------------------------ |  | -------------------------- | ----- |  | ---------------------------- |  | ----- | ---------------- |  |  | ------------ |  |  | -------- | -----
|                                                                               |  | 2012                       |       |  | 2011                         |  |       | 2010             |  |  | 2012         |  |  | 2011     |      
|Average
    throughput (mbpd)                                                  |  |                            | 456.3 |  |                              |  | 413.9 |                  |  |  | 374.0        |  |  |          | 870.0
|Net
    Revenue                                                                |  |                            | 338.8 |  |                              |  | 296.2 |                  |  |  | 261.6        |  |  |          | 172.4
|Operating
    expenses                                                         |  |                            | 129.6 |  |                              |  | 119.1 |                  |  |  | 93.2         |  |  |          | 55.6 
|                                                                               |  |                            |       |  |                              |  |       |                  |  |  |              |  |  |          |      
|Realized
    gain (loss) on commodity-related derivative financial instruments |  |                            | 0.1   |  |                              |  | 4.4   |                  |  |  | 0.6          |  |  |          | n/a  
|Operating
    margin(1)                                                        |  |                            | 209.3 |  |                              |  | 181.5 |                  |  |  | 169.0        |  |  |          | 116.8





Notes:

| | (1) | See
                                                                                                                                                 "Non–GAAP
                                                                                                                                                 Measures"
                                                                                                                                                 on
                                                                                                                                                 page
                                                                                                                                                 8.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Revenue
                                                                                                                                                 is
                                                                                                                                                 contract
                                                                                                                                                 based
                                                                                                                                                 and
                                                                                                                                                 independent
                                                                                                                                                 of
                                                                                                                                                 utilization
                                                                                                                                                 rates,
                                                                                                                                                 therefore
                                                                                                                                                 volumes
                                                                                                                                                 reported
                                                                                                                                                 are
                                                                                                                                                 contracted
                                                                                                                                                 capacity.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | Midstream
                                                                                                                                                 revenue
                                                                                                                                                 is
                                                                                                                                                 net
                                                                                                                                                 of
                                                                                                                                                 $2,494.5 million
                                                                                                                                                 in
                                                                                                                                                 cost
                                                                                                                                                 of
                                                                                                                                                 goods
                                                                                                                                                 sold,
                                                                                                                                                 net
                                                                                                                                                 of
                                                                                                                                                 product
                                                                                                                                                 purchases
                                                                                                                                                 for
                                                                                                                                                 2012
                                                                                                                                                 (2011:
                                                                                                                                                 $1,072.4 million).
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | Average
                                                                                                                                                 throughput
                                                                                                                                                 for
                                                                                                                                                 Gas
                                                                                                                                                 Services
                                                                                                                                                 is
                                                                                                                                                 in
                                                                                                                                                 MMcf/d.
                                                                                                                                                 Average
                                                                                                                                                 mboe/d
                                                                                                                                                 processed
                                                                                                                                                 in
                                                                                                                                                 2012
                                                                                                                                                 were
                                                                                                                                                 45.9
                                                                                                                                                 compared
                                                                                                                                                 to
                                                                                                                                                 42.3
                                                                                                                                                 in
                                                                                                                                                 2011.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (5) | Not
                                                                                                                                                 including
                                                                                                                                                 corporate
                                                                                                                                                 recoveries
                                                                                                                                                 of
                                                                                                                                                 $2.6 million
                                                                                                                                                 for
                                                                                                                                                 2012
                                                                                                                                                 (2011:
                                                                                                                                                 $2.4 million).
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Further
discussion of operational results and new developments and outlook for Pembina's four businesses for the years ended December
31, 2012 and 2011 is contained in the section "Operating Results" in the Corporation's management's discussion and analysis
for the year ended December 31, 2012, which section is incorporated by reference herein, an electronic copy of which is available
on the Corporation's profile on the SEDAR website at www.sedar.com, and in the Corporation's annual report on Form 40-F filed
on the EDGAR website at www.sec.gov, or at www.pembina.com.



- 21 -







Conventional
Pipelines Business



Overview



Pembina's
Conventional Pipelines business comprises a well-maintained and strategically located 7,850 km pipeline network that extends across
much of Alberta and British Columbia. It transports approximately half of Alberta's conventional crude oil production, about thirty
percent of the NGL produced in western Canada, and virtually all of the conventional oil and condensate produced in British Columbia.
This business' primary objective is to generate sustainable operating margins while pursuing opportunities for increased throughput
and revenue. Conventional Pipelines endeavours to maintain and/or improve operating margins by capturing incremental volumes,
expanding its pipeline systems, managing revenue and adopting strong discipline relative to operating expenses.



Major
Customers



There
are approximately 50 shippers (including all major shippers of petroleum products in western Canada) on the conventional pipeline
systems owned and operated by Pembina. The major delivery points include the Enbridge Pipeline system, the Express Pipeline system
(Pembina does not deliver here directly), the Kinder Morgan North 40 terminal, the refineries in the Edmonton area as well as
the NGL fractionators near Fort Saskatchewan, Alberta. Deliveries are also made to Husky Energy Inc.'s refinery in Prince George,
British Columbia and to the TransMountain pipeline system owned by Kinder Morgan Canada Inc. at Kamloops, British Columbia and
Edmonton, Alberta.



Contractual
Arrangements



Pembina's
Conventional Pipeline system generally operates on fee-for-service evergreen contracts, which continue in force until terminated
by either party by providing prior notice to the other party (generally between one and six months prior notice).



For
Pembina's expansion projects on its Conventional Pipelines, the Corporation has underpinned the Phase I NGL Expansion on the Peace/Northern
NGL System by securing the majority of the existing capacity and all of the incremental additional capacity under long-term take-or-pay
contracts. Pembina has also secured long-term contracts to underpin the Phase II Crude and Condensate Expansions on its Peace
Pipeline.



Competitive
Environment



Competition
among existing oil and NGL pipelines is based primarily on the cost of transportation, access to supply, the quality and reliability
of service, contract carrier alternatives and proximity to markets. Unconnected volumes of product are typically trucked to the
most competitive truck unloading facility, and there is direct competition from other pipelines serving the same area. With respect
to trucked volumes, the means by which a producer determines transport of its product is only partially based on tariffs, and
is also based on whether the volumes need some form of treatment to meet pipeline specifications, as well as commercial competition
to move volume based on blending opportunities. With respect to other pipelines, an example of this is the Alliance Pipeline that
is a natural gas gathering and pipeline system carrying NGL-rich natural gas from northeastern British Columbia through northwestern
Alberta to Chicago, Illinois. This pipeline competes for the volumes of NGL carried on Pembina's Peace/Northern NGL System. Other
examples of competing pipelines are the Rainbow Pipeline and the Rangeland Pipeline, which both compete with Pembina's pipelines
both north and south of Edmonton, Alberta for crude oil and condensate volumes.



Producer
activity focused on NGL development continues to be strong in the Deep Basin Cretaceous, Montney and Duvernay resource plays served
by Pembina's Peace and Northern systems. The deep Cretaceous sands and Duvernay resource plays are also beginning to emerge in
the areas served by the Corporation's Brazeau/Caroline Pipeline.



- 22 -







The
magnitude of potential volume growth in both crude oil and NGL production proportionately increases the risk of third-party projects
to physically bypass Pembina's pipeline systems. The Peace and Brazeau/Caroline Pipelines are susceptible to new bypass projects
due to the number and magnitude of potential new production developments; however, Pembina is working diligently to protect these
service areas.



A
delay in the development of downstream processing, transportation and end-user facilities may also impact the development and
profitability of Pembina's Conventional Pipeline systems. The Edmonton, Alberta, area NGL fractionation capacity will need to
be expanded to process the forecasted incremental NGL volumes. Alberta crude oil and NGL export transportation will require increased
capacity to accommodate forecasted volumes from Pembina and third-party feeder pipeline systems. Limited ethylene cracking capacity
may also dampen ethane demand and limit expansion of Pembina's NGL pipeline systems.



Pembina believes that it is well positioned
to compete with other alternatives for transportation. In addition, Pembina has been active in attracting incremental volumes
to its pipelines, expanding pipeline capacity and entering into long-term contracts with shippers and producers.



Other
Information – Industry Regulations



The feeder pipeline industry in Alberta
normally operates in an environment of unregulated tariffs. Once a permit to construct the pipeline is issued by the ERCB, subject
to the licensing of operational matters or a common carrier declaration, the pipeline is free to establish tariffs in a competitive
environment. Tariffs are established under contracts of varying terms and conditions and are also posted by location. Posted tariffs
generally can be adjusted to respond to changing volumes, costs and market circumstances. Contracted tariffs can also be adjusted,
where permitted by the terms of the contract, for such things as changes in power costs, municipal taxes, environmental, integrity
and safety costs. Pipeline customers have recourse to the ERCB, with respect to pipeline access and discrimination among customers,
if they can establish that the pipeline should be declared to be a common carrier. Once declared a common carrier, the ERCB has
the authority to set rates for the pipeline. No pipeline owned by Pembina in the province of Alberta has ever been declared to
be a common carrier. Tariffs for all of Pembina's Alberta pipelines are generally established to recover all costs and earn a reasonable
rate of return on the investment in its pipelines.



In British Columbia the tariffs on the NEBC
Pipeline and the Western Pipeline are regulated by the BCUC. The BCUC approves tariffs for common carriers and regulates others
on a complaints basis.



Small segments of the Peace Pipeline, the
Northern Pipeline and the NEBC Pipeline are Group II NEB regulated pipelines. For these pipeline systems, the NEB only reviews
the tariffs if a customer files a formal complaint concerning the tariffs. There have been no complaints to the NEB about tariffs
on these systems for as long as Pembina has owned and operated them.



Oil
Sands & Heavy Oil Business



Overview



Pembina
plays an important role in supporting Alberta's oil sands and heavy oil industry. Pembina's Oil Sands & Heavy Oil business
owns and operates five pipelines that support oil sands and heavy oil producers operating near Fort McMurray, Alberta and Pelican
Lake/Seal: the Syncrude Pipeline, the Cheecham Lateral, the Horizon Pipeline, the Nipisi Pipeline and the Mitsue Pipeline. The
Oil Sands & Heavy Oil business operates approximately 1,650 km of pipeline and has 870 mbpd of capacity under long-term,
extendible contracts which provide for the flow-through of operating expenses to customers. As a result, operating margin from
this business is primarily related to invested capital and is not sensitive to fluctuations in operating expenses or actual throughput.



- 23 -







Major
Customers



The
major shippers on Pembina's oil sands, heavy oil and diluent pipelines are CNRL, Syncrude and Cenovus. Pembina's oil sands and
heavy oil pipelines provide dedicated service under long-term contracts.



Contractual
Arrangements



Pembina's
Syncrude Pipeline has a capacity of 389,000 bpd and is fully contracted to the owners of Syncrude Canada Ltd. under a cost-of-service
extendable, long-term agreement that expires at the end of 2035.



Pembina's
Cheecham Lateral has a capacity of 136,000 bpd and is fully contracted to shippers under the terms of a 25-year fixed return agreement
that expires in 2032.



The
Horizon Pipeline is fully contracted to CNRL and has an ultimate capacity of 250,000 bpd. The Horizon Pipeline is operated under
the terms of a 25-year fixed return extendable contract, which expires in 2033.



The
Nipisi Pipeline and Mitsue Pipeline are contracted by CNRL, Cenovus and Pembina Midstream Limited Partnership under a 10 year
fixed return agreement which commenced in 2011. This contract also has extension rights.



Competitive
Environment



Despite
weakness in crude oil differentials and export pipeline constraints, which have the potential to negatively impact development
of oil sands and heavy oil reserves in the WCSB, the long-term outlook for crude oil pricing remains relatively strong. As such,
producers are expected to continue to develop and execute oil sands and heavy oil projects. Consistent with the past few years,
the industry is focused on shipping bitumen blend to market rather than upgrading the crude domestically. Consequently, Oil Sands
& Heavy Oil will maintain its focus on expanding existing condensate and synthetic diluent infrastructure.



In this business, existing assets do not
compete with other assets for pipeline throughputs and revenue as they are operated under long-term agreements. However, competition
primarily arises with respect to new pipeline projects and cost of capital as Pembina would compete with other pipeline companies
to bid for new construction projects. In some cases, existing pipeline companies have under-utilized assets which can be re-purposed
to suit a customer's needs, which could give them a competitive advantage when bidding for new projects.



However,
Pembina believes with its recent construction experience and operating expertise that it is in a favourable position to secure
a share of the growth in oil sands transportation needs. Further, Pembina is confident in its abilities to attract incremental
volumes to the Nipisi Pipeline and Mitsue Pipeline, as the Corporation continues to enhance its competitive advantage in the Nipisi
area with respect to both tolls and services.



Gas
Services Business



Overview



Pembina's
operations include a growing natural gas gathering and processing business. Located approximately 100 km south of Grande Prairie,
Alberta, Pembina's key revenue-generating Gas Services assets form the Cutbank Complex which comprises three sweet gas processing
plants with 425 MMcf/d of processing capacity (368 MMcf/d net to Pembina), a 205 MMcf/d ethane plus extraction facility, as well
as approximately 350 km of gathering pipelines. The Cutbank Complex is connected to Pembina's Peace Pipeline system and serves
an active exploration and production area in the Western Canadian Sedimentary Basin. Pembina has initiated construction on two
projects in its Gas Services business, the Saturn Facility and the Resthaven Facility, to meet the growing needs of producers
in west central Alberta.



- 24 -







Major Customers



Gas Services has approximately 30 customers
with a vast majority (greater than 80 percent) of its processed volumes being from a few large, independent and multi-national
oil and gas companies. Gas Services processes customers' natural gas at Pembina’s owned and operated Cutbank Complex and
delivers the natural gas to the TransCanada pipeline system and the NGL to the Pembina-owned and operated Peace Pipeline system.



Contractual Arrangements



As part of its acquisition of the Cutbank
Complex in 2009, Pembina indirectly took assignment of approximately 65 gathering and processing contracts with area producers.
Under the contractual arrangements associated with the Cutbank Complex, Pembina is not directly exposed to the impact of market
fluctuations in the price of natural gas and NGL. The gathering and processing business is based on charging fees to customers
on the volume of raw gas that is gathered and/or processed through its facilities and the fees are based on a fixed-fee methodology.
The processor has flexibility to tailor the fees it charges customers to capitalize on market conditions and to meet different
levels of service. In the case of raw gas processing fees, the fee is usually based on the composition of the raw gas stream being
processed and the level of competition in the area.



The contracts associated with the Cutbank
Complex comprise a mixture of firm and interruptible service contracts of varying durations. A number of the firm service contracts
contain provisions dedicating specified areas of gas reserves to the Cutbank Complex facilities, which in turn provides some assurance
that a substantial portion of natural gas produced from reserves developed in these areas will be processed at the Cutbank Complex.
The contractual fee structure incorporates a capital fee based on functional unit usage, and nearly all of the contracts include
provisions for the recovery of operating costs, including overhead and certain environmental costs.



Over 88 percent of the capacity associated
with the Cutbank Complex is on a firm service basis until 2014. Several of the firm service contracts incorporate a "take-or-pay"
or "produce-or-pay" commitment which allows the processor to manage capacity utilization and revenue risk. In 2012, approximately
78 percent of revenue from the Cutbank Complex was derived from contracts containing "take-or-pay" commitments.



For the Saturn Facility and Resthaven Facility,
Pembina has secured 100 percent of the operating capacity at each plant under long-term "take-or-pay" agreements.



Competitive Environment



Gas producers continue to shift their activities
toward NGL development. NGL prices remain significantly more attractive than dry gas prices, making it economically viable to explore
for NGL using horizontal drilling and completion technologies. Land positions are being amassed by producers in the Deep Basin/liquid-rich
gas regions of British Columbia and Alberta, which continues to support Pembina's Gas Services expansion plans.



With its existing assets, the Corporation
is able to process gas, extract valuable NGL from the gas and transport the NGL through its conventional pipelines to its fractionation
facility at Fort Saskatchewan, Alberta, where it then is able to separate the component parts of the NGL stream for end-users.
With this integrated service offering along the NGL value chain, Pembina believes it is strongly positioned compared to other NGL
service providers.



- 25 -







Midstream
Business



Pembina offers customers a comprehensive
suite of midstream products and services through its Midstream business as follows:



| | · | Crude oil midstreamtargets oil and diluent-related opportunities from key sites across
Pembina's network, which comprises 15 truck terminals (including one capable of emulsion treating and water disposal), terminalling
at downstream hub locations, storage, and the PNT. PNT includes: 21 inbound pipelines connections, 13 outbound pipelines connections,
in excess of 1.2 million bpd of crude oil and condensate throughput accessing the terminal, and 310,000 bbl of surface storage.
With the current congestion on downstream pipelines, Pembina is pursuing opportunities to develop and service crude oil transportation
by rail.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | NGL midstream, which Pembina acquired through the Provident Acquisition, includes two operating
systems, Redwater West and Empress East:
| | - | ----------------------------------------------------------------------------------------------------------------------------------------



| | o | The Redwater West NGL system includes the Younger extraction and fractionation facility in British
Columbia; the recently expanded 73,000 bpd Redwater NGL fractionator, 6.8 mmbbls of cavern storage and terminalling facilities
at Redwater, Alberta; and, third-party fractionation capacity in Fort Saskatchewan, Alberta.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | o | The Empress East NGL system includes a 2.1 bcf/d interest in the straddle plants at Empress,
Alberta; 20,000 bpd of fractionation capacity as well as 1.1 mmbbls of cavern storage in Sarnia, Ontario; and, approximately
5.0 mmbbls of hydrocarbon storage at Corunna, Ontario.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Crude Oil Midstream: Major
Customers



Pembina's crude oil midstream customers
are generally those who produce and/or market crude oil and condensate on Pembina's pipeline systems, are downstream markets for
those volumes, or are interested in ancillary services related to those volumes. On Pembina's conventional pipelines, its crude
oil midstream business is the 'single shipper'. These systems include the Peace, Swan Hills and Drayton Valley systems. On these
systems, Pembina enters into simultaneous "buy/sell" agreements whereby the Corporation takes ownership of the product
in transport from receipt point to delivery point.



At Pembina's truck terminals, the Corporation's
customer base generally comprises the same group who provide throughout volumes to Pembina's conventional pipeline systems. Pembina's
truck terminal network generally brings an average of 60,000 bpd onto the conventional pipelines.



Dow Canada and NOVA Chemicals are the principal
customers of the Storage Facility.



Crude Oil Midstream: Contractual Arrangements



In certain of Pembina's crude oil midstream
activities, customers sign master "buy/sell" agreements designating the Corporation as an approved service provider with
pricing agreed upon prior to delivery of product or service provided. Certain of the Corporation's full-service terminals are constructed
and operated under joint venture agreements with third-parties. In aggregate, the crude oil midstream business' broad service offerings
leverage the value chain – focusing on services that complement the existing network of facilities and energy infrastructure
across Pembina's asset base, including those recently acquired in the Provident transaction. All facilities and services provided
by crude oil midstream are complimentary to one another and create synergies for the Corporation and its customers.



- 26 -







With respect to Pembina's Storage Facility,
Dow Canada performs important functions for the Storage LP under an operating agreement and a facilities agreement, and NOVA Chemicals
is the owner and operator of the ethylene delivery system, whose operations are essential to the operations of the Storage Facility.



PNT consists of three distinct assets connected
by a network of proprietary and third-party pipelines. Key asset locations are the Fort Saskatchewan/Heartland areas with the NGL
midstream facilities and bare land at Heartland with associated salt rights suitable for developing incremental crude oil and condensate
storage, and the Edmonton location where most of Pembina’s oil and condensate delivery systems terminate. PNT includes: 21
inbound pipelines connections, 13 outbound pipelines connections, in excess of 1.2 million bpd of crude oil and condensate throughput
accessing the terminal, and 310,000 barrels of surface storage. With the current congestion on downstream pipelines, Pembina is
pursuing opportunities to develop and service crude oil transportation by rail. Plans are underway to develop incremental storage
and a truck terminal facility at the Edmonton site and rail in the Fort Saskatchewan/Heartland area.



NGL Midstream: Major Customers



Pembina's NGL midstream business extracts,
processes, stores, transports and markets NGL and offers these services to third-party customers. The assets are integrated across
Canada and the US, and are also used to generate fee-for-service income. The business is supported by an integrated supply, marketing
and distribution function that contributes to the overall operating margin of the Corporation.



Pembina purchases NGL mix from various natural
gas producers and fractionates it into finished products at the Redwater fractionation facility near Edmonton, Alberta. Redwater
West also includes natural gas supply volumes from the Younger NGL extraction plant located at Taylor in north eastern British
Columbia. The Younger plant supplies specification NGL to local markets as well as NGL mix supply to the Fort Saskatchewan area
for fractionation and sale.



Also located at the Redwater facility is
Pembina's industry-leading rail-based condensate terminal, which serves the heavy oil industry and its need for diluent. Pembina's
condensate terminal is the largest of its size in western Canada.



Pembina extracts NGL from natural gas at
the Empress straddle plants and sells ethane and condensate in the western Canadian marketplace while transporting C3/C4
NGL mix to Sarnia, Ontario for fractionation and sale into markets in central Canada and the eastern United States. Demand for
propane is seasonal and results in inventory that generally builds over the second and third quarters of the year and is sold in
the fourth quarter and the first quarter of the following year.



Ethane is predominately purchased by NOVA
Chemicals and Dow Canada. Cenovus and its affiliates purchase the majority of the condensate from the Empress debutanizer. Plains
All American Pipeline operates the Plains E1 Plant at Empress, Alberta and the west to east system described herein. If for any
reason these parties were unable to perform their obligations under the various agreements with Pembina, the revenue and the operations
of Pembina's NGL midstream business could be negatively impacted.



NGL Midstream: Contractual
Arrangements



The services provided by Pembina's NGL midstream
business – including fractionation, storage, NGL terminalling, loading and offloading – are provided to third parties
on a cost-of-service or a fee basis utilizing assets at Pembina's Redwater facility. Pembina also owns a debutanizer at its Empress
facility, which removes condensate from the NGL mix for sale as a diluent to blend with heavy oil. This service is provided to
a major energy company on a long-term cost-of-service basis. Earnings from these activities have little direct exposure to market
price volatility and are thus relatively stable. Pembina's Redwater West and Empress East assets used to generate this fee-for-service
income are also employed to generate proprietary income.



- 27 -







Pembina’s Midstream business model
operates in a competitive environment for transportation, terminalling, storage and more recently rail. Pembina’s asset
base provides a platform for competitive solutions in these areas. The demand for terminalling, storage and rail is growing as
downstream pipeline capacity is unable to keep pace with upstream supply growth and downstream consumption interest.



Pembina's Midstream infrastructure and logistics
business is subject to competition from other truck terminals, full-service terminals, storage facilities and fractionators which
are either in the general vicinity of the facilities or have gathering systems that are or could potentially extend into areas
served by the facilities.



Producers in western Canada compete with
producers in other regions to supply crude oil, condensate and natural gas and other hydrocarbon products to customers in North
America, and the hydrocarbon industry also competes with other industries to supply the fuel, feedstock and other needs of consumers.
Such competition may have an adverse effect on the production of hydrocarbon products in western Canada and, as a result, on the
demand for Pembina's services.



The value potential associated with any
Midstream service offering is dependent upon the ability of Pembina to: provide connections to both downstream pipelines and end-use
markets; understand the value of the commodities transported and terminalled; provide flexibility and a variety of storage options;
and, adjust to a liquid, responsive, forward commodity market. Pembina actively monitors market conditions and stream values to
target revenue opportunities. Pembina is also proactively working with upstream and downstream customers to develop value-added
terminalling solutions and increase available optionality.



OTHER INFORMATION RELATING TO PEMBINA'S
BUSINESS



Information and Communication Systems



Pembina employs SCADA technology on all
of its pipeline systems. The SCADA systems allow for continuous electronic monitoring and control of the pipeline systems from
dedicated computer consoles located in Pembina's Edmonton control centre. Operators monitor the computer consoles 24 hours per
day, 365 days per year. The SCADA systems and associated leak detection software continually monitor pipeline flow and operating
conditions. Line balance calculations are performed automatically by the system and alarms are triggered when imbalances are detected
or measured pressures do not match those projected by software models.



For 2012, Pembina continued to work on its
long–term initiative to standardize and upgrade the SCADA systems and leak detection platforms used to remotely monitor and
control the various pipelines. Pembina is currently in the process of migrating the control of the Liquids Gathering System pipeline
(an asset acquired through the Provident Acquisition) from the Redwater Plant to the SCADA system in the Edmonton Control Centre.



Integrity Management



Pembina employs a comprehensive pipeline
integrity management program ("IMP") and dedicates a significant portion of its annual operating budget directly
to pipeline integrity management activities. Pembina's IMP includes the systems, processes, analysis and documentation designed
to ensure proactive and transparent management of its pipeline systems and compliance with applicable standards and regulations.



Pembina's IMP is designed to achieve enhanced
safety, reliability and longevity through the entire pipeline lifecycle. Integrity management begins at the engineering and design
phase with quality specifications/standards during pipe manufacturing, selection and application of high-quality coatings to protect
buried pipe, route selection to avoid geologically unstable or high consequence areas, and the use of cathodic protection systems
to electrically protect the pipe from external corrosion.



- 28 -







Proactive integrity management activities
extend into pipeline operations with programs including right–of–way patrols and public awareness to reduce the likelihood
of third-party damage, system–specific hazard evaluations and risk assessments, geotechnical programs to manage slope instability
and river crossings, training and qualification programs for staff and contractors, enhanced emergency response procedures, and
the use of specific chemicals to reduce the likelihood of internal corrosion from impurities and bacteria in the oil.



Between 2010 and 2012, Pembina completed
a baseline geotechnical inspection program of pipelines to inventory all water crossings and slopes and to assess integrity threats
posed by these crossings and slopes. In 2012, Pembina completed 25 crossing mitigation projects (generally identified in 2011)
as well as assessed over 400 water crossings and completed 163 detailed stream crossing surveys. For 2013, Pembina has identified
28 stream crossings that will require varying degrees of work to mitigate the impacts of stream erosion. In 2013, Pembina also
plans to remediate or stabilize two potentially unstable slopes.



The cornerstone of Pembina's IMP is the
use of in-line inspection ("ILI") technology to measure and record both the distribution and severity of specific
features in the pipe depending on the ILI technology. Through proactive use of these sophisticated electronic tools, defects with
the potential to compromise pipeline integrity are identified and repaired. Projected defect growth rates and/or historical operating
knowledge are used to plan re-inspection intervals. Pembina's re-inspection frequency is typically three to seven years with intervals
selected so that remaining defects are re-assessed and repaired before they have a material effect on pipe integrity.



Pembina has employed in-line inspection
since the early 1970s, progressing to newer high resolution ILI technology in the late 1990s. As part of Pembina's ongoing IMP,
70 pipeline segments were inspected in 2012 compared to 66 in 2011. Several of the segments inspected in 2012 were inspected for
the first time with a geometry tool which measures pipeline deformations which could be related to original construction damage,
geotechnical movement and/or third-party hits. Approximately 49 line segments are scheduled for inspection in 2013.



For those line segments with higher susceptibility
to crack failures, Pembina also employs specialized ultrasonic ILI crack detection technology. Between 2004 and 2011, Pembina has
completed crack detection inspections on the Western Pipeline, portions of the Peace Pipeline (LaGlace to Fox Creek), the 12 inch
and 20 inch lines from Fox Creek to Edmonton, the 16 inch crude line from Judy Creek to Edmonton, the 16 inch NGL line from Judy
Creek to Edmonton and on the 22 inch Horizon Pipeline. In 2012, Pembina completed five ultrasonic inspections. These include a
re-inspection of the Peace Pipeline 20 inch between Fox Creek and Edmonton, as well as first time inspection of the 16 inch Valleyview
to Fox Creek, 10 inch Swan Hills to Namao, 16 inch Redwater to Pipeline Alley and 16 inch Judy Creek to Whitecourt pump station.
In 2013, Pembina plans to run ultrasonic tools on an additional four pipeline segments. Data from these inspections is analyzed
by Pembina and third-party technical experts, in conjunction with pipeline pressure data, to design appropriate mitigation, repair
and re-assessment programs.



In addition to the IMP for pipeline assets,
Pembina also has regularly scheduled inspection and repair programs for the above and below-ground storage tanks and pressure vessels.
Pembina complies with inspection frequencies for pressure vessels set out by Pembina's Owner User Program, registered with the
Alberta Boilers Safety Association ("ABSA") and for atmospheric storage tanks by ERCB Directive 55. In 2012, Pembina
completed 32 vessel, 13 storage tank, and 51 sump tank inspections. For each inspection, repairs are conducted as required to ensure
compliance to applicable codes and standards. In addition, in 2012 Pembina's pressure equipment integrity management plans were
audited by the ABSA. Both audits resulted in only minor findings which have been addressed with ABSA. In 2013, Pembina is scheduled
to inspect 57 pressure vessels, 40 storage tanks, 72 sump tanks, and 2 storage tubes (internal inspection).



In 2011, Pembina initiated a verification
program (blanket inventory) of all pressure equipment. This program is currently at 80 percent complete and will be 100 percent
by the fourth quarter of 2013.



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Environmental Matters



Operation of Pembina's pipelines and other
assets are subject to environmental controls in the form of approvals and compliance with applicable federal, provincial, and local
laws and regulations. Such laws and regulations govern, among other things, operating and maintenance standards, emissions and
waste discharge and disposal. Management believes that Pembina's facilities and operations meet or exceed those requirements.



To confirm regulatory compliance and conformance
with Pembina's internal environmental standards, Pembina has in place a planned environmental audit program. As part of this program,
regularly scheduled third-party environmental audits are conducted on a five-year rotating basis at various major facilities within
a selected business each year. The program is designed such that each major facility is audited at least once every five years.



In addition, Pembina has an incident review
panel (the "IRP"), which has been in place since first quarter 2010, that meets monthly and consists of operational,
safety and environmental leaders as well as business Vice Presidents, the President and other members of the executive team. The
IRP is focused on analyzing and understanding incident root causes, determining and completing resulting action plans to eliminate
re-occurrence and more importantly ensuring that these learnings are fully communicated and implemented on a corporate-wide basis.



Environmental Incidents



Pembina's focus on integrity management
and safe operations continues to result in low incident frequency and minimal environmental impact.



The July, 2011 Moosehorn release event clean-up
efforts were substantially complete by the fourth quarter of 2011. In 2012, further site monitoring was undertaken with no additional
contamination found and all soil replacement and final site contouring was completed in the fourth quarter of 2012. Final area
seeding and tree planting will take place in mid-2013. A majority of these costs will be covered by insurance. Pembina met with
Environment Canada in the first quarter of 2012 regarding this event and received a summary warning letter but no charges were
laid. The ERCB published its final report on February 26, 2013 in relation to this event. Also in 2012, the 10 km segment
of 8 inch pipeline was successfully replaced and the pipeline was back in full service in the second quarter of 2012.



Pembina spent approximately $3.3 million
on other pre-existing spill sites in 2012, approximately $1.2 million on yearly environmental programs, monitoring and audits,
and approximately $1.4 million on the update and maintenance of Pembina's Emergency Response Planning system and corporate
security measures.



In addition to the environmental expenses
associated with its operations, Pembina also invests in environmental assessment, planning and post-construction monitoring associated
with capital projects.



Provisions



A provision is recognized if, as a result
of a past event, the Corporation has a present legal or constructive obligation that can be estimated reliably, and it is probable
that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected
future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific
to the liability. Provisions are re-measured at each reporting date based on the best estimate of the settlement amount. The unwinding
of the discount rate (accretion) is recognized as a finance cost.



Decommissioning provision



The Corporation's activities give rise to
dismantling, decommissioning and site disturbance remediation activities. A provision is made for the estimated cost of site restoration
and capitalized in the relevant asset category.



- 30 -







Decommissioning obligations are measured
at the present value, based on a risk-free rate, of management's best estimate of expenditure required to settle the obligation
at the balance sheet date. Subsequent to the initial measurement, the obligation is adjusted at the end of each period to reflect
the passage of time, changes in the risk-free rate and changes in the estimated future cash flows underlying the obligation. The
increase in the provision due to the passage of time is recognized as finance costs whereas increases/decreases due to changes
in the estimated future cash flows or risk free rate are added to or deducted from the cost of the related asset.



For more information with respect to the
Corporation's estimated net present value of decommissioning obligations, see Note 14 to the Corporation's audited consolidated
financial statements for the year ended December 31, 2012, which may be found on the Corporation's company profile on the SEDAR
website at www.sedar.com and the EDGAR website at www.sec.gov.



Derivative Financial Instruments



The Corporation has entered into derivative
financial instruments to limit the exposure to changes in commodity prices, interest rates, cost of power, and foreign exchange
rates. Hedge accounting has not been applied; however, Pembina still considers that there is an economic hedge which limits the
exposure to fluctuations in revenue and expenses.



For more information with respect to the
Corporation's derivative financial instruments and financial risk management program, see "Market Risk Management Program"
in the Corporation's management discussion and analysis for the year ended December 31, 2012, which section is incorporated by
reference herein, and Note 27 to Pembina's audited consolidated financial statements for the year ended December 31, 2012, which
note is incorporated by reference herein. Electronic copies of these documents can be found on the Corporation's company profile
on the SEDAR website at www.sedar.com, in the Corporation's annual report on Form 40-F filed on the EDGAR website at www.sec.gov
and on Pembina's website at www.pembina.com.



Pipeline Rights–of–Way
and Land Tenure



Pembina's real property interests fall into
two basic categories of ownership: (i) a number of locations, including many pumping stations and terminal and storage facilities,
which are owned in fee simple; and (ii) the majority of locations which are covered by leases, easements, rights–of–way,
permits or licences from landowners or governmental authorities permitting the use of such land for the construction and operation
of a pipeline. Pembina believes that the operator of each of its pipeline assets has sufficient title to its property interests
to permit the operation of such assets.



Indemnification and Insurance



Pembina maintains insurance to provide coverage
in relation to the ownership and operation of its pipeline assets, gas services assets, as well as on the Storage Facility and
its other midstream assets. Insurance coverage for Pembina's assets currently includes: (i) property insurance coverage, providing
coverage on the property and equipment that is above-ground and pipelines at river crossings, with recovery based upon replacement
costs, and, where necessary, business interruption coverage for loss of income arising from specific property damage; and (ii)
comprehensive general liability coverage, providing coverage for actions by third parties. The latter coverage includes Pembina's
sudden and accidental pollution coverage, which specifically insures against certain claims for damage from leaks or spills.



In addition, Pembina maintains director
and officer liability coverage consistent with industry practice.



Pembina believes that it has procured such
insurance coverage as would be maintained by a prudent owner and operator of the type of assets owned and operated by Pembina.
This insurance coverage is subject to limits and exclusions or limitations on coverage that Pembina considers reasonable given
the cost of procuring insurance and current operating conditions. However, there can be no assurance that insurance coverage will
be adequate in any particular situation.



- 31 -







Employees



As at December 31, 2012, Pembina employed
758 personnel, of which 417 were engaged in the performance of field operations and superintendence activities, and 341 were engaged
in the performance of facilities engineering, systems, management, finance, accounting, administration, human resources, information
services, drafting, business development and safety and environmental service activities. Of the above field operation employees,
13 are unionized. Pembina's workforce is relatively stable with limited turnover and employees are financially encouraged to remain
in Pembina's employment through options to purchase Common Shares, long-term incentive programs and pension plans, all which vest
over time.



Corporate Social Responsibility



Pembina is committed to maintaining a high
standard of corporate governance and ethical practices, both within the corporate boardroom and throughout its operations. Pembina's
corporate governance practices are designed with a view to:



| | · | Ensure it operates in a safe, reliable and environmentally responsible manner.
| | - | ------------------------------------------------------------------------------



| | · | Ensure it meets its obligations to all regulatory bodies, business partners, customers, stakeholders,
employees and shareholders; and
| | - | -------------------------------------------------------------------------------------------------------------------------------------



| | · | Ensure its businesses are effectively managed in the best interests of all stakeholders.
| | - | ----------------------------------------------------------------------------------------



Code of Ethics



The Board of Directors has adopted a Code
of Ethics which applies to all directors, officers, employees and certain contractors of Pembina. The Code of Ethics is available
at Pembina's website at www.pembina.com



In support of the Code of Ethics, Pembina
has adopted various business conduct policies covering matters, including but not limited to ethics, disclosure, insider trading
and conflicts of interest, and has adopted a number of specific procedures and guidelines to facilitate compliance with the Code
of Ethics and the various policies.



The policies include the:



| | · | Health, Safety and Environment Policy
| | - | -------------------------------------

| | · | Respectful Workplace Policy
| | - | ---------------------------

| | · | Aboriginal Relations Policy
| | - | ---------------------------

| | · | Whistleblower Policy
| | - | --------------------

| | · | Corporate Security Management Policy
| | - | ------------------------------------



Health, Safety and Environment
("HSE") Policy



HSE are top priorities in all of Pembina's
operations and business activities. The Corporation is committed to being an industry leader in conducting its business so that
it meets or exceeds all applicable laws and regulations and to protecting the health and safety of workers, the public and safeguarding
the environment affected by its activities. Pembina is also committed to improving its HSE performance. These areas are of paramount
importance to management, employees and contractors at the Corporation. Pembina believes that excellence in health, safety and
environmental practices is essential to the well-being of the Corporation.



- 32 -







The Health, Safety and Environment Committee
of Pembina's Board of Directors monitors compliance with the HSE Policy through regular reporting. Pembina's integrated HSE management
system is modeled after the International Organization for Standardization standard for environmental management systems, ISO 14001;
and the Occupational Health and Safety Assessment Series (OHSAS 18001) for occupational health and safety. The Corporation's HSE
management system conforms to external industry consensus standards and voluntary regulatory programs and complies with applicable
legislated requirements and various other internal management systems. Management is informed regularly of all important and/or
significant HSE operational issues and initiatives through formal reporting and incident management processes, including tracking
all "close calls." The HSE management system is subject to ongoing internal and external review to ensure that it remains
effective as circumstances change.



Respectful Workplace Policy



Pembina is committed to providing a workplace
that is pleasant, healthy, comfortable, and free from intimidation, hostility or other offenses which might interfere with work
performance. Employees are expected to treat each other with mutual respect, fairness and dignity. Discrimination or harassment
of any sort will not be tolerated. The purpose of this policy is to create a respectful workplace through the prevention and quick
resolution of harassment and/or discrimination.



Aboriginal Relations Policy



By striving for positive and mutually-beneficial
relationships with Aboriginal leadership and communities, Pembina employees, consultants and contractors will help build continued
success for Pembina’s existing and expanding systems and other businesses. Pembina desires to enter into lasting and mutually-beneficial
relationships with all Aboriginal peoples affected by its operations.



Whistleblower Policy



Pembina is committed to high standards of
professional and ethical conduct in all activities. Our reputation for honesty and integrity among our stakeholders is key to the
success of our business. The transparency, honesty, integrity and accountability of Pembina's financial, administrative and management
practices are vital. These high standards guide the decisions of the Board of Directors and are relied upon by Pembina's stakeholders
and the financial markets.



For these reasons, it is critical to maintain
a workplace where concerns regarding questionable business practices can be raised without fear of any discrimination, retaliation
or harassment. This reporting mechanism invites employees to act responsibly to uphold the reputation of Pembina and maintain public
confidence. Encouraging a culture of openness and ethical leadership from management will also help this process. This policy is
intended to encourage and enable stakeholders to raise serious concerns within the Corporation rather than overlooking a problem
or seeking a resolution of the problem outside the Corporation.



Corporate Security Management Policy



The Corporation is committed to protecting
the safety of its workers, the public, and to safeguarding Pembina's facilities and information. These areas are of paramount
importance to management, employees and contractors at the Corporation. Pembina believes that excellence in security management
is essential to the well-being of the Corporation. As such, the Corporation is committed to identifying security risks and establishing
appropriate programs and procedures to reduce these risks to an acceptable level, and to testing these programs and procedures
to assess their effectiveness on a regular basis.



- 33 -







Corporate Governance



Pembina's Board and management are committed
to the highest standards of ethical conduct and corporate governance.



Pembina is a public company listed on the
TSX and the NYSE, and it recognizes and respects rules and regulations in both Canada and the U.S.



The Corporation's corporate governance practices
comply with the Canadian governance guidelines, which include the governance rules of the Canadian Securities Administrators (''CSA''):



| | · | National Instrument 52-110, Audit Committees (Canadian audit committee rules);
| | - | ------------------------------------------------------------------------------



| | · | National Policy 58-201, Corporate Governance Guidelines; and
| | - | ------------------------------------------------------------



| | · | National Instrument 58-101, Disclosure of Corporate Governance Practices.
| | - | -------------------------------------------------------------------------



Pembina also complies with the governance
listing standards of the NYSE and the governance rules of the SEC that applies to foreign private issuers.



The Corporation's governance practices comply
with the NYSE standards for U.S. companies in all significant respects, except as summarized on the Corporation's website at www.pembina.com.
As a non-U.S. company, the Corporation is not required to comply with most of the governance listing standards of the NYSE. As
a foreign private issuer, however, we must disclose how our governance practices differ from those followed by U.S. companies that
are subject to the NYSE standards.



Pembina benchmarks its policies and procedures
against major North American companies to assess its standards, and it adopts best practices as appropriate. Some of its best practices
are derived from the NYSE rules and comply with applicable rules adopted by the SEC to meet the requirements of the Sarbanes-Oxley
Act of 2002 and the Dodd-Frank Wall Street Reform and Consumer Protection Act.



Further information about Pembina's corporate
governance can be found on the Corporation's website at www.pembina.com under the heading Governance.



WESTERN CANADIAN OIL AND GAS INDUSTRY



General



Western Canada is the major source of conventional
crude oil, SCO, natural gas, bitumen and related products (including NGL and condensate) in Canada. Domestic crude oil and natural
gas production in the west comes primarily from Alberta with lesser amounts from British Columbia, Saskatchewan, Manitoba and the
Northwest Territories. SCO comes from the oil sands developments near Fort McMurray, Alberta. Efficient, low cost, and safe transportation
by pipeline, rail and truck from producing fields to refineries, processing plants and domestic and export markets is essential
to the Canadian oil and gas industry.



The discussion below provides an overview
of the Canadian crude and heavy oil industry, the NGL industry and midstream service provider industry.



Canadian Crude and Heavy Oil Overview



Western Canada has one of the world’s
largest crude oil reserves. Over the past number of years, the crude oil industry in Alberta and western Canada in general has
experienced a resurgence due to the implementation of improved drilling technologies which have enabled increased recoveries and
well economics. The WCSB was once considered to be a declining resource, but these technologies (multi-stage hydraulic fracturing)
have allowed producers to access tighter areas of the reserve, which were previously considered to be uneconomical.



- 34 -







Bitumen occurs naturally in oil sands. Once
recovered and processed to separate the bitumen from the oil sands and upgraded, SCO is produced. Bitumen may be recovered in two
ways. Approximately 20 percent of bitumen in Alberta occurs in oil sands near enough to the surface that it can be mined and moved
by trucks to a cleaning facility. The remaining 80 percent of Alberta's oil sands must be extracted using a variety of in–situ
processes. These in–situ processes use steam, solvents or thermal energy to allow the bitumen to be pumped to the surface.
Because bitumen is so viscous, it requires dilution with lighter hydrocarbons, such as condensate, to make it transportable by
pipelines.



Condensate is the “heaviest”
gas liquid. As producers increase their production of oil sands and heavy oil, there is a growing demand for condensate. With assets
spanning across the crude oil, condensate and NGL value chains, Pembina is uniquely positioned to provide customers with access
to condensate via pipeline or rail.



Pipelines continue to be the most economical
and dominant mode of transportation for crude oil, condensate, and heavy oil; however, given the extensive rail infrastructure
spanning across North America, transporting hydrocarbon products by rail is gaining momentum.



Product Transportation: Feeder
Pipeline Systems



Feeder pipeline systems gather petroleum
products from producing fields and facilities for transport to regional centres for storage, fractionation, refining and connection
to larger pipelines. From these centres, petroleum products are further transported by export pipeline systems either to domestic
markets in western or eastern Canada or to markets in the northern United States for end–use, or used as feedstock in refineries
or the petrochemical industry. The major operational centre for the Canadian oil and natural gas industry is the Edmonton/Fort
Saskatchewan area of Alberta, which is the largest crude oil refining area in western Canada and a major fractionation and market
hub area for NGL and related products. In addition, the Edmonton/Fort Saskatchewan area is the hub of the Alberta feeder pipeline
network and the starting point of many large Canadian export pipelines.



All of Pembina's pipelines are feeder pipeline
systems. The conventional pipelines collectively transported approximately 480.2 mbpd of crude oil, condensate and NGL products
in 2012. The conventional pipelines transport the majority of its product into the Edmonton/Fort Saskatchewan, Alberta area, while
a smaller amount is delivered into Kamloops, B.C. Pembina's oil sands and heavy oil pipelines had a combined contracted capacity
of 870 mbpd in 2012. These pipelines primarily transport product from established production fields in their respective service
areas, the Syncrude Project or the Horizon Project, into the refining and export pipeline centres at Edmonton/Fort Saskatchewan.
The Cheecham Lateral transports SCO from an existing pump station on the Syncrude Pipeline to a terminalling facility located near
Cheecham, Alberta, where it is then used as diluent for oil sands projects in the area. The Nipisi Pipeline and Mitsue Pipeline
provide diluted heavy oil and diluent transportation for operators in the Pelican Lake and Peace River heavy oil regions of Alberta.



Feeder pipeline gathering systems generally
experience lower volumes during the spring months as a result of reduced drilling primarily due to weight restrictions on roads,
producers conducting maintenance on their batteries and gas plant turnarounds. The magnitude and duration of road weight restrictions
are dependent upon spring weather conditions. Many battery operators also perform maintenance work on production facilities during
the spring months. Road restrictions and battery maintenance can also impact gathering pipeline receipts during the fall months,
although the impact on throughput is generally less pronounced than during the spring months.



- 35 -







Product Transportation: Export
Liquids Pipeline Systems



The export liquids pipelines originating
in the Edmonton and Fort Saskatchewan area are the TransMountain Pipeline, the Enbridge Pipeline and the Cochin Pipeline. Crude
oil and refined products delivered to domestic and export markets on the west coast are transported through the Express Pipeline.
Crude oil and refined products delivered to eastern Canada and the northern United States are transported through the Enbridge
Pipeline. NGL delivered to eastern Canadian and export markets are transported through the Enbridge Pipeline and the Cochin Pipeline.
With respect to the Cochin Pipeline, Kinder Morgan Energy Partners has completed a successful binding open season for reversing
the pipeline which, subject to necessary approvals, is expected to allow for a new service to move condensate from Illinois to
existing terminal facilities near Fort Saskatchewan, Alberta in 2014. Should this project proceed, the Cochin Pipeline would no
longer be considered an export pipeline. The TCPL Keystone Pipeline and Express Pipeline also exports crude oil from Hardisty,
Alberta. However, none of Pembina's systems are directly connected to Hardisty.



In recent years, there has been an increase
in the export pipeline capacity available to transport crude oil and NGL from western Canada to markets in eastern Canada and eastern
and midwestern United States. Pembina anticipates that this additional export capacity, together with continued exploration activity
within its service areas, will maintain the future utilization of its existing feeder pipeline systems.



NGL Overview



The Canadian NGL industry involves the
production, storage, transportation and marketing of products that are extracted from natural gas prior to its sale to end-use
customers. The profitability of the industry is based on the products extracted being of greater economic value as separate commodities
(net of the costs of extraction) than as components of natural gas.



Natural gas is a mixture of various hydrocarbon
components, the most abundant of which is methane. The higher value hydrocarbons, which include ethane (C2), propane
(C3), butane (C4) and condensate (C5+), are generally in gaseous form at the pressures and temperatures
under which natural gas is gathered and transported. NGL extraction facilities recover certain higher value hydrocarbons, such
as ethane, propane, butane and condensate, from natural gas for sale in a liquid form. Almost 90 percent of NGL supply in western
Canada is derived from natural gas processing, with the remainder derived from the refining of crude oil.



The NGL value chain begins with the gathering
of gas that is produced. The gas then gets processed through field processing plants, mainline extraction facilities and fractionation
facilities in order to remove high value NGL, as well as water, sulphur and other impurities. The value chain culminates with the
transportation and eventual sale of NGL to the final customer.



Condensate is produced naturally at the
well-head when natural gas is brought to the surface at a gas well. Typically the condensate is separated from the natural gas
at the field gas plant. The condensate is then either trucked to a connection point on a pipeline capable of transporting condensate,
or the natural gas plant may be connected directly to a feeder pipeline by a small pipeline called a gathering system.



NGL Extraction



NGL is recovered at three distinct types
of facilities: natural gas field plants, natural gas mainline straddle plants and oil refineries. Field plants process raw natural
gas, which is produced from wells in the immediate vicinity, to remove impurities such as water, sulphur and carbon dioxide prior
to the delivery of natural gas to the major natural gas pipeline systems. Field plants also remove almost all pentanes-plus and
as much as 65 percent of propane and 80 percent of butane in order to meet pipeline specifications. Most field plants do not extract
ethane but leave it in the natural gas. Once processed, the sales gas is then compressed and delivered to one of the major market
systems which include the ATCO Gas and Pipelines Ltd. gas transmission system, the Alliance Pipeline Limited Partnership system,
the Nova Gas Transmission Ltd. system and the Spectra system in British Columbia. In the Province of Alberta, any NGL and ethane
remaining in the natural gas is extracted at mainline straddle plants prior to export. Pembina has ownership interests in four
of the six mainline straddle plants on the Nova Gas Transmission system in the Empress area and the Younger Extraction plant on
the Spectra system.



- 36 -







Extracted NGL is in a mixed state (either
ethane-plus or propane-plus), which must be further processed in subsequent steps to separate out the individual products. At most
field facilities, only sufficient NGL to make the residual gas marketable is extracted; however, with the addition of enhanced
processing facilities such as Pembina's Musreau Deep Cut Facility (an example of a gas plant) and Pembina's Empress plant (an example
of a mainline straddle plant) further NGL extraction is possible to ensure the maximum amount of NGL is recovered. NGL products
have historically been priced relative to oil, so this additional level of recovery is dependent on the relative value between
oil and natural gas. As the relative price of oil versus natural gas increases, the impetus for this activity is increasingly wide
spread.



NGL Fractionation



NGL mix extracted at field plants and straddle
plants is transported to fractionation facilities, which enhances its value by separating the mix into its components: ethane,
propane, butane and pentanes-plus. Fractionation generally does not occur at field plants, but rather at a central location. NGL
mixes are moved by truck or pipeline to fractionation facilities. Once fractionated, the products are then transported to markets
by pipeline, truck or rail.



NGL Transportation



The efficient movement of NGL products in
Canada requires significant infrastructure, including transportation assets (pipelines, trucks, rail cars), storage facilities,
and terminals (rail and truck). The most efficient and the lowest-cost means for moving NGL products to markets is by pipeline.
The Canadian energy sector has an extensive pipeline network for the transportation of natural gas to field plants and extraction
facilities, and NGL to fractionation facilities, petrochemical complexes, underground storage facilities and the final customer.
Truck and rail account for a significant amount of the NGL transported, with pipelines serving as the main mode of transport.



NGL Storage



Storage assets offer a number of key strategic
advantages, which include: (i) providing the necessary operational buffer between production of NGLs (which varies daily depending
on gas flows and composition) and their consumption (which can vary from day-to-day and season-to-season depending on market needs);
(ii) allowing NGL sellers to store inventory to accommodate outages in NGL fractionation plants; and (iii) exploiting seasonal
price differentials that may develop over the course of a year (particularly for propane and butane).



NGL Marketing



The markets for NGL are North American in
scope with end uses varying substantially by product. NGL are used directly as heating and transportation fuels and also as a feedstock
for the petrochemical and crude oil refining industries. Ethane is used primarily as feedstock for the petrochemical industry.
Propane is the most versatile of the NGL products from a marketing perspective. Uses for propane include home and commercial heating,
crop drying, cooking and motor fuel. Butane is used primarily in gasoline blending, either directly or in the production of iso-octane
and as a diluent for heavy oil. Pentanes-plus is used primarily as a diluent to blend with heavy crudes to decrease the viscosity
and density of these crudes, allowing them to be transported in pipelines. In addition, pentanes-plus are used as a refinery feedstock
in the production of gasoline.



Crude oil, SCO and NGL produced in Canada
are transported to market through extensive gathering and transportation systems – feeder pipeline systems and export pipeline
systems – discussed above.



- 37 -







Midstream Services for Crude Oil, SCO
& NGL



Growth in crude oil midstream opportunities
is largely focused on receipt and delivery terminals, storage and other hub services. Crude oil production ends up being consumed
in refineries. Refineries can be located anywhere along the value chain, from the outlet of a feeder pipeline to mid-point hubs
to transmission pipeline end-points, to the international locations accessible to marine transport. For demand locations directly
connected to Pembina's feeder pipelines, there is a requirement for the service of managing supply and balancing between the pipeline
and the customer. With changes to crude oil production, declines in conventional volumes and the growth in heavy oil, there is
an interest by refiners in having custom blends produced to optimize their process without having to undertake major capital projects
to reconfigure the refineries for a changing crude production slate. Where pipelines converge, there is also a requirement to manage
the product flow between the systems. Historically this has been buffered through tankage downstream of Pembina's operations. As
the storage is owned by others, it may or may not meet Pembina's requirements. There is an internal demand for hub storage which
will not only buffer flows for downstream deliveries, but also smooth operation of Pembina's complex batched conventional pipelines.
As a further service category, with the growth in demand for diluents for heavy oil transportation, there is a growing demand to
manage diluents prior to injection into the various diluent delivery pipelines. This demand includes accessing the greatest variety
of diluents, managing specific diluent blends to differing customer needs and storage.



On the receipt side, Pembina's truck terminals
are a means for oil, condensate and NGL production, which is not pipeline connected, to secure access to transportation to market.
With the growth in multi-stage fractionation and production techniques, there is also growing demand to treat emulsion, oil-water
mixtures and waste water, prior to being ready for sale and accepted into a pipeline. The treating of emulsion and disposal of
associated water at full-service truck terminal facilities is a business expansion opportunity for Pembina. In 2012, Pembina started
construction on a joint venture full-service terminal in the Judy Creek, Alberta area which has an estimated project completion
date of April 2013.



DESCRIPTION OF THE CAPITAL STRUCTURE
OF THE CORPORATION



The authorized capital of the Corporation
consists of an unlimited number of Common Shares and an unlimited number of Internal Preferred Shares. As of December 31, 2012,
there were 293,226,473 Common Shares outstanding, 3,531,638 Common Shares reserved for issuance pursuant to the Option Plan, 10,498,284
Common Shares reserved for issuance pursuant to the Series C Convertible Debentures, 6,901,925 Common Shares reserved for issuance
pursuant to the Series E Convertible Debentures, 5,839,621 Common Shares reserved for issuance pursuant to the Series F Convertible
Debentures and 101,400,000 Internal Preferred Shares outstanding (all of which Internal Preferred Shares are owned by the Corporation's
wholly-owned subsidiary, Alberta Oil Sands Pipeline Ltd.).



The following is a summary of the rights,
privileges, restrictions and conditions attaching to the Common Shares and the Internal Preferred Shares.



Common Shares



Holders of Common Shares are entitled to
receive notice of and to attend all meetings of Shareholders and to one vote at such meetings for each Common Share held. The holders
of the Common Shares are, at the discretion of the Board of Directors and subject to applicable legal restrictions, entitled to
receive any dividends declared by the Board of Directors on the Common Shares, and are entitled to share in the remaining property
of Pembina upon liquidation, dissolution or winding up, subject to the rights of the Internal Preferred Shares, described below.



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Internal Preferred Shares



Holders of Internal Preferred Shares shall
not be entitled to receive notice of, to attend or to vote at any meeting of the Shareholders, except as required by law. The Internal
Preferred Shares are retractable and redeemable at the option of the holder thereof and the Corporation, respectively. The price
or consideration payable at which each Internal Preferred Share shall be retracted or redeemed (the "Redemption Amount")
shall be the fair market value of the consideration received thereof as determined by the Board of Directors at the time of issuance
of the Internal Preferred Shares, as adjusted from time to time pursuant to the terms of the Internal Preferred Shares.



If at any time a holder of Internal Preferred
Shares ceases to be, or is not, a direct or indirect wholly owned subsidiary of the Corporation, the Corporation, with or without
knowledge of such event, shall be deemed, without further action or notice, to have automatically redeemed all of the Internal
Preferred Shares held by such holder in exchange for the Redemption Amount.



The holders of Internal Preferred Shares
shall be entitled to receive, if and when declared by the Board of Directors, preferential non-cumulative dividends based on the
Redemption Amount applicable to such shares at the rate to be set by the Board of Directors.



Upon the liquidation, dissolution or winding-up
of the Corporation, the holders of Internal Preferred Shares shall be entitled to receive for each such share, in priority to the
holders of Common Shares, the Redemption Amount per share together with all declared but unpaid dividends thereon.



Premium DividendTM and Dividend
Reinvestment Plan



The Corporation reinstated the DRIP effective
as of the January 25, 2012 record date and the corresponding dividend was paid on February 15, 2012. The DRIP provides Shareholders
the opportunity, subject to eligibility restrictions, withholding taxes and prorating as provided for in the plan, to either receive
a cash payment equal to 102 percent of any cash dividends otherwise payable by the Corporation or accumulate additional Common
Shares at a 5 percent discount to an average market price. Pembina will determine, for each dividend payment date during a period
for which the DRIP is not suspended, the amount of new equity or premium cash payments, if any, that will be made available under
the DRIP on that date.



Convertible Debentures



Series C Convertible Debentures



On November 17, 2010, Pembina issued $300,000,000
aggregate principal amount of Series C Convertible Debentures at a price of $1,000 per Series C Convertible Debenture, which bear
interest at an annual rate of 5.75 percent payable semi-annually on May 31 and November 30 in each year commencing May 31, 2011
and have a maturity date of November 30, 2020. The Series C Convertible Debentures are listed on the TSX under the symbol "PPL.DB.C".



Each Series C Convertible Debenture is convertible
into Common Shares at the option of the holder at any time prior to the close of business on November 30, 2020 and the business
day immediately preceding the date specified for redemption by Pembina of the Series C Convertible Debentures, at a conversion
price of $28.55 per Common Share, subject to adjustment in certain events. Pembina may, at its option on or after November 30,
2014 and prior to November 30, 2016, elect to redeem the Series C Convertible Debentures in whole or in part, provided that the
volume weighted average trading price of the Common Shares on the TSX during the 20 consecutive trading days ending on the fifth
trading day preceding the date on which the notice of redemption is given is not less than 125 percent of the conversion price
of the Series C Convertible Debentures. On or after November 30, 2016, the Series C Convertible Debentures may be redeemed
in whole or in part at the option of Pembina at a price equal to their principal amount plus accrued and unpaid interest. Pembina
can elect to pay interest on the Series C Convertible Debentures by issuing Common Shares.



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As at December 31, 2012, $299.7 million
principal amount of Series C Convertible Debentures were outstanding.



Series E and Series F Convertible
Debentures



Pursuant to the Provident Acquisition, Pembina
assumed all of the rights and obligations of Provident related to the Series E Convertible Debentures and Series F Convertible
Debentures, which are now listed on the TSX under the symbols "PPL.DB.E" and "PPL.DB.F", respectively.



The Series E Convertible Debentures were
issued November 1, 2010 in the principal aggregate amount of $172,500,000, which bear interest at an annual rate of 5.75 percent
payable semi-annually on June 30 and December 31 and have a maturity date of December 31, 2017. Each Series E Convertible Debenture
is convertible into Common Shares at the option of the holder at any time prior to the close of business on December 31, 2017 and
the business day immediately preceding the date specified for redemption by Pembina of the Series E Convertible Debentures, at
a conversion price of $24.94 per Common Share, subject to adjustment in certain events. Pembina may, at its option on or after
December 31, 2013 and prior to December 31, 2015, elect to redeem the Series E Convertible Debentures in whole or in part, provided
that the volume weighted average trading price of the common price of the shares on the TSX during the 20 consecutive trading days
ending on the fifth trading day preceding the date on which the notice of redemption is given is not less than 125 percent of the
conversion price of the Series E Convertible Debentures. On or after December 31, 2015, the Series E Convertible Debentures may
be redeemed in whole or in part at the option of Pembina at a price equal to their principal amount plus accrued and unpaid interest.
Any accrued unpaid interest will be paid in cash.



As at December 31, 2012, $172.1 million
principal amount of Series E Convertible Debentures were outstanding.



The Series F Convertible Debentures were
issued April 29, 2011 in the principal aggregate amount of $172,500,000, which bear interest at an annual rate of 5.75 percent
payable semi-annually on June 30 and December 31 and have a maturity date of December 31, 2018. Each Series F Convertible Debenture
is convertible into Common Shares at the option of the holder at any time prior to the close of business on December 31, 2017 and
the business day immediately preceding the date specified for redemption by Pembina of the Series F Convertible Debentures, at
a conversion price of $29.53 per Common Share, subject to adjustment in certain events. Pembina may, at its option on or after
December 31, 2014 and prior to December 31, 2016, elect to redeem the Series F Convertible Debentures in whole or in part, provided
that the volume weighted average trading price of the common price of the shares on the TSX during the 20 consecutive trading days
ending on the fifth trading day preceding the date on which the notice of redemption is given is not less than 125 percent of the
conversion price of the Series F Convertible Debentures. On or after December 31, 2016, the Series F Convertible Debentures may
be redeemed in whole or in part at the option of Pembina at a price equal to their principal amount plus accrued and unpaid interest.
Any accrued unpaid interest will be paid in cash.



As at December 31, 2012, $172.4 million
principal amount of Series F Convertible Debentures were outstanding.



Credit Facilities



Pembina's credit facilities as at December
31, 2012 consisted of an unsecured $1,500 million revolving credit facility due March 20, 2017 (the "Revolving Credit Facility")
and an unsecured operating facility of $30 million due July 2013 (the "Operating Credit Facility", and together
with the Revolving Credit Facility, the "Credit Facilities"). Borrowings on the Credit Facilities bear interest
at prime lending rates plus nil to 1.25 percent or Bankers' Acceptances rates plus 1.00 percent to 2.25 percent. Margins on the
Credit Facilities are based on the credit rating of Pembina's senior unsecured debt. There are no repayments due over the term
of the Credit Facilities. As at December 31, 2012, Pembina had $525 million drawn on bank debt, $0.1 million in letters
of credit and $27.3 million in cash, leaving $1,032.3 million of unutilized debt available under the Credit Facilities.
In addition, as at December 31, 2012, Pembina had $14.3 million in letters of credit issued in a separate demand letter of
credit facility. In October 2012, Pembina used the net proceeds of the offering of the Medium Term Notes, Series 2 to repay a portion
of the Credit Facilities.



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In addition, Pembina has a $75 million senior
unsecured term credit facility from a Canadian chartered bank at a fixed rate of 6.16 percent and which matures on May 20, 2014
(the "Term Facility"). Pembina, on a consolidated basis, is required under the Term Facility to meet certain financial
covenants which mirror the covenants with respect to the Credit Facilities, and is subject to customary positive and negative covenants
relating to its operations and activities, including restrictions on the granting of security, incurring indebtedness and the sale
of its assets.



Medium Term Notes



Medium Term Notes, Series
1



On March 29, 2011, the Corporation issued
and sold $250 million aggregate principal amount of Medium Term Notes, Series 1. The Medium Term Notes, Series 1 have an annual
coupon rate of interest of 4.89 percent and mature on March 29, 2021. Pembina's obligations under the Medium Term Notes, Series
1 and the Medium Term Note Indenture are guaranteed by certain subsidiaries of Pembina.



Pembina may redeem the Medium Term Notes,
Series 1, either in whole at any time, or in part from time to time, upon not less than 30 and not more than 60 days prior notice,
at a price equal to the greater of (i) par and (ii) the Canada Yield Price (as defined below), plus, in either case, accrued but
unpaid interest, if any, to but excluding, the date of redemption. "Canada Yield Price" means, in effect, a price
equal to the price of the Medium Term Notes, Series 1 calculated in accordance with generally accepted financial practice in Canada
to provide a yield to maturity equal to the Government of Canada Yield (as defined below) plus 0.395 percent per annum for the
Medium Term Notes, Series 1 issued on March 29, 2011. "Government of Canada Yield" means, on any date, in effect,
the yield to maturity on such date compounded semi-annually which a non-callable Government of Canada bond would carry if issued,
in Canadian dollars in Canada, at 100 percent of its principal amount on such date with a term to maturity equal to the remaining
term to maturity of the Medium Term Notes, Series 1. The Government of Canada Yield will be the average of the yields determined
by two major Canadian investment dealers selected by Pembina. In certain circumstances following a Change of Control (as such term
is defined in the Medium Term Note Indenture) and a resulting downgrade in the ratings of the Medium Term Notes, Series 1 to below
an investment grade, Pembina will be required to make an offer to repurchase all or, at the option of any holder of Medium Term
Notes, Series 1, any part, at a purchase price payable in cash equal to 101 percent of the aggregate outstanding principal amount
thereof plus accrued and unpaid interest, if any, to the date of purchase.



Medium Term Notes, Series
2



On October 29, 2012, the Corporation issued
and sold $450 million aggregate principal amount of Medium Term Notes, Series 2. The Medium Term Notes, Series 2 have an annual
coupon rate of interest of 3.77 percent and mature on October 24, 2022. Pembina's obligations under the Medium Term Notes, Series
2 and the Medium Term Note Indenture are guaranteed by certain subsidiaries of Pembina.



Pembina may redeem the Medium Term Notes,
Series 2, either in whole at any time, or in part from time to time, upon not less than 30 and not more than 60 days prior notice,
at a price equal to the great of (i) par and (ii) the Canada Yield Price (as defined below), plus, in either case, accrued but
unpaid interest, if any, to but excluding the date of redemption. "Canada Yield Price" means, in effect, a price
equal to the price of the Medium Term Notes, Series 2 calculated in accordance with generally accepted financial practice in Canada
to provide a yield to maturity equal to the Government of Canada Yield plus 0.46 percent per annum for the Medium Term Notes, Series
2 issued October 29, 2012. "Government of Canada Yield" means, on any date, in effect, the yield to maturity on
such date compounded semi-annually which a non-callable Government of Canada bond would carry if issued, in Canadian dollars in
Canada, at 100 percent of its principal amount on such date with a term to maturity equal to the remaining term to maturity of
the Medium Term Notes, Series 2. The Government of Canada Yield will be the average of the yields determined by two major Canadian
investment dealers selected by Pembina. In certain circumstances following a Change of Control (as such term is defined in the
Medium Term Note Indenture) and a resulting downgrade in the ratings of the Medium Term Notes, Series 2 to below an investment
grade, Pembina will be required to make an offer to repurchase all or, at the option of any holder of Medium Term Notes, Series
2, any part, at a purchase price payable in cash equal to 101 percent of the aggregate outstanding principal amount thereof plus
accrued and unpaid interest, if any, to the date of purchase.



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Other Debt



Other debt at December 31, 2012 included
$175 million in Series A senior unsecured notes bearing interest at 5.99 percent payable semi-annually due 2014 (the "Series
A Senior Notes"); $267 million in Series D senior unsecured notes bearing interest at 5.91 percent payable semi-annually
due 2019 (the "Series D Senior Notes"); and $200 million in Series C unsecured notes bearing interest at 5.58
percent payable semi-annually due 2021 (the "Series C Senior Notes"). The Senior Notes are subject to the maintenance
of certain financial ratios.



Subsidiary Debt



In connection with the Provident Acquisition,
Pembina acquired a two-thirds ownership interest in Provident's subsidiary, Three Star Trucking Ltd. ("Three Star").
Three Star's debt is comprised of fixed rate, demand loans secured by specific assets of Three Star. As at December 31, 2012, the
weighted average interest rate was 5.04 percent.



Credit Ratings



The following information with respect to
Pembina's credit ratings is provided as it relates to Pembina's financing costs and liquidity. Specifically, credit ratings affect
Pembina's ability to obtain short-term and long-term financing and the cost of such financing. A reduction in the current ratings
on Pembina's debt by its rating agencies, particularly a downgrade below investment grade ratings, could adversely affect Pembina's
cost of financing and its access to sources of liquidity and capital. In addition, changes in credit ratings may affect Pembina's
ability to, and the associated costs of, entering into normal course derivative or hedging transactions. Credit ratings are intended
to provide investors with an independent measure of credit quality of any issues of securities. The credit ratings assigned by
the rating agencies are not recommendations to purchase, hold or sell the securities nor do the ratings comment on market price
or suitability for a particular investor. Any rating may not remain in effect for a given period of time or may be revised or withdrawn
entirely by a rating agency in the future if in its judgement circumstances so warrant.



DBRS Limited



DBRS Limited ("DBRS") has
assigned a debt rating of "BBB" to each of the Medium Term Notes, Series 1 and Medium Term Notes, Series 2. DBRS also
rates Pembina's senior unsecured notes 'BBB'.



The BBB rating is the fourth highest of
DBRS' ten rating categories for long–term debt, which range from AAA to D. DBRS uses "high" and "low"
designations on ratings from AA to C to indicate the relative standing of securities being rated within a particular rating category.
The absence of a "high" or "low" designation indicates that a rating is in the "middle" of the category.
The BBB rating indicates that, in DBRS's view, the rated securities are of adequate credit quality. Protection of interest and
principal is considered acceptable, but the entity is fairly susceptible to adverse changes in financial and economic conditions,
or there may be other adverse conditions present which reduce the strength of the entity and its rated securities.



When a significant event occurs that directly
impacts the credit quality of a particular entity or group of entities, DBRS will attempt to provide an immediate rating opinion.
However, if there is uncertainty regarding the outcome of the event, and DBRS is unable to provide an objective, forward-looking
opinion in a timely fashion, then the ratings of the issuer will be placed "Under Review."



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Standard & Poor's



Standard & Poor's Rating Services, a
division of The McGraw-Hill Companies ("S&P") has a long-term corporate credit rating on Pembina of 'BBB'.
S&P also has assigned a rating of "BBB" to the Medium Term Notes, Series 1 and Medium Term Notes, Series 2.



The BBB rating is the fourth highest rating,
of S&P's ten rating categories for long–term debt which range from AAA to D. The ratings from AA to CCC may be modified
by the addition of a plus (+) or minus (–) sign to show relative standing within the major rating categories.



Issues of debt securities rated BBB are
judged by S&P to exhibit adequate protection parameters. However, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.



These securities ratings are not recommendations
to purchase, hold or sell the securities inasmuch as such ratings do not comment as to market price or suitability for a particular
investor. There is no assurance that any rating will remain in effect for any given period of time or that any rating will not
be revised or withdrawn entirely by a rating agency in the future if, in its judgment, circumstances so warrant.



See "Risk Factors – General
Risk Factors – Credit Ratings".



RISK FACTORS



The following information is a summary only
of certain risk factors relating to Pembina or an investment in securities of the Corporation or its subsidiaries and is qualified
in its entirety by reference to, and must be read in conjunction with, the detailed information appearing elsewhere in this Annual
Information Form. Shareholders and prospective investors should carefully consider these risk factors before investing in Pembina's
securities, as each of these risks may negatively affect the trading price of Pembina's securities, the amount of dividends paid
to Shareholders and the ability of Pembina to fund its debt obligations, including debt obligations under its outstanding convertible
debentures and any other debt securities that Pembina may issue from time to time.



Investors should carefully consider the
risk factors set out below and consider all other information contained herein and in the Corporation's other public filings before
making an investment decision.



Pembina continually works to mitigate the
impact of potential risks to its business by identifying all significant risks so that they can be appropriately managed. To assist
with identifying risk, the Corporation has implemented a comprehensive enterprise risk management program.



Risks Inherent in Pembina's Business



Operational Risks



Operational risks include: pipeline leaks;
the breakdown or failure of equipment, information systems or processes; the performance of equipment at levels below those originally
intended (whether due to misuse, unexpected degradation or design, construction or manufacturing defects); spills at truck terminals
and hubs; failure to maintain adequate supplies of spare parts; operator error; labour disputes; disputes with interconnected facilities
and carriers; operational disruptions or apportionment on third-party systems or refineries which may prevent the full utilization
of Pembina's pipelines; and catastrophic events such as natural disasters, fires, explosions, fractures, acts of terrorists and
saboteurs, and other similar events, many of which are beyond the control of Pembina. The occurrence or continuance of any of these
events could increase the cost of operating Pembina's assets or reduce revenue, thereby impacting earnings.



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Pembina is committed to preserving customer
and Shareholder value by proactively managing operational risk through safe and reliable operations. Senior managers are responsible
for the daily supervision of operational risk by ensuring appropriate policies and procedures are in place within their business
units and internal controls are operating efficiently. Pembina also has an extensive program to manage system integrity, which
includes the development and use of in–line inspection tools and various other leak detection technologies. Maintenance,
excavation and repair programs are directed to the areas of greatest benefit and pipe is replaced or repaired as required. The
Corporation carries insurance coverage with respect to some, but not all, casualty occurrences in amounts customary for similar
business operations, which coverage may not be sufficient to compensate for all casualty occurrences. In addition, Pembina has
a comprehensive Corporate Security Management Program designed to reduce security-related risks.



Midstream Business



Pembina's Midstream business includes product
storage terminalling and hub services. These activities expose the Corporation to certain risks including that the Corporation
may experience volatility in revenue due to variations in commodity prices. Primarily, the Corporation enters into contracts to
purchase and sell crude oil at floating market prices. The prices of products that are marketed by the Corporation are subject
to fluctuations as a result of such factors as seasonal demand changes, general economic conditions, changes in crude oil markets
and other factors. The Corporation manages its risk exposure by balancing purchases and sales to lock-in margins. Notwithstanding
the Corporation's management of price and quality risk, marketing margins for crude oil can vary and has varied significantly from
period to period and this could have an adverse effect on the results of the Corporation's commercial Midstream business and the
Corporation's overall results of operations. To assist in effectively smoothing that variability, Midstream is investing in assets
that have a fee-based revenue component, and look to expand this area going forward.



The Midstream business is also exposed to
possible price declines between the time Pembina purchases NGL feedstock and sells NGL products, and to narrowing frac spreads.
Frac spread is the difference between the selling prices for NGL products and the cost of NGLs sourced from natural gas and acquired
at natural gas related prices. The frac spread can change significantly from period to period depending on the relationship between
crude oil and natural gas prices (the "frac spread ratio"), absolute commodity prices, and changes in the Canadian
to US dollar foreign exchange rate. There is also a differential between NGL product prices and crude oil prices which can change
prices received and margins realized for midstream products separate from frac spread ratio changes. The amount of profit or loss
made on the extraction portion of the NGL midstream business will generally increase or decrease with the frac spread. This exposure
could result in material variability of cash flow generated by the NGL midstream business, which could negatively affect Pembina
and the cash dividends of Pembina.



Reputation



Reputational risk is the potential for negative
impacts that could result from the deterioration of Pembina's reputation with key stakeholders. The potential for harming Pembina's
corporate reputation exists in every business decision and all risks can have an impact on reputation, which in turn can negatively
impact Pembina business and its securities. Reputational risk cannot be managed in isolation from other forms of risk. Credit,
market, operational, insurance, liquidity and regulatory and legal risks must all be managed effectively to safeguard Pembina's
reputation. Negative impacts from a compromised reputation could include revenue loss, reduction in customer base, delays in regulatory
approvals on growth projects, and decreased value of Pembina's securities.



Pembina's reputation as a reliable and responsible
energy services producer with consistent financial performance and long-term financial stability is one of its most valuable assets.
Key to effectively building and maintaining Pembina's reputation is fostering a culture that promotes integrity and ethical conduct.
Ultimate responsibility for Pembina's reputation lies with the executive team that examines reputational risk and issues as part
of all business decisions. Nonetheless, every employee and representative of Pembina has a responsibility to contribute in a positive
way to its reputation. This means ensuring ethical practices are followed at all times, interactions with our stakeholders are
positive, and compliance with applicable policies, legislation and regulations. Reputational risk is most effectively managed when
every individual works continuously to protect and enhance Pembina's reputation.



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Environmental Costs and Liabilities



Pembina's operations, facilities and petroleum
product shipments are subject to extensive national, regional and local environmental, health and safety laws and regulations governing,
among other things, discharges to air, land and water, the handling and storage of petroleum compounds and hazardous materials,
waste disposal, the protection of employee health, safety and the environment, and the investigation and remediation of contamination.
Pembina's facilities could experience incidents, malfunctions or other unplanned events that result in spills or emissions in excess
of permitted levels and result in personal injury, fines, penalties or other sanctions and property damage. Pembina could also
incur liability in the future for environmental contamination associated with past and present activities and properties. The facilities
and pipelines must maintain a number of environmental and other permits from various governmental authorities in order to operate,
and these facilities are subject to inspection from time to time. Failure to maintain compliance with these requirements could
result in operational interruptions, fines or penalties, or the need to install potentially costly pollution control technology.



While Pembina believes its current operations
are in compliance with all applicable environmental and safety regulations, there can be no assurance that substantial costs or
liabilities will not be incurred. Moreover, it is possible that other developments, such as increasingly strict environmental and
safety laws, regulations and enforcement policies thereunder, claims for damages to persons or property resulting from the Corporation's
operations, and the discovery of pre-existing environmental liabilities in relation to any of the Corporation's existing or future
properties or operations, could result in significant costs and liabilities to the Corporation. In addition, the costs of environmental
liabilities in relation to spill sites of which the Corporation is currently aware (see "Other Information Relating to
Pembina's Business — Environmental Incidents") could be greater than the Corporation currently anticipates, and
any such differences could be substantial. If the Corporation is not able to recover the resulting costs or increased costs through
insurance or increased tariffs, cash flow available to pay dividends to Shareholders and to service obligations under the Convertible
Debentures and the Corporation's other debt obligations could be adversely affected.



While the Corporation maintains insurance
in respect of damage caused by seepage or pollution in an amount it considers prudent and in accordance with industry standards,
certain provisions of such insurance may limit the availability thereof in respect of certain occurrences unless they are discovered
within fixed time periods, which typically range from 72 hours to 30 days. Although the Corporation believes it has adequate
leak detection systems in place to monitor a significant spill of product, if the Corporation is unaware of a problem or is unable
to locate the problem within the relevant time period, insurance coverage may not be available. However, Pembina believes
it has adequate leak detection systems in place to detect and monitor a significant spill.



Pembina is committed to protecting the health
and safety of employees, contractors and the general public and to sound environmental stewardship. Pembina believes that prevention
of incidents and injuries, and protection of the environment, benefits everyone and delivers increased value to Shareholders, customers
and employees. Pembina has health, safety and environmental management systems and has established policies, programs and practices
for conducting safe and environmentally sound operations. Regular reviews and audits are conducted to assess compliance with legislation
and company policy.



Abandonment Costs



The Corporation is responsible for compliance
with all applicable laws and regulations regarding the abandonment of its pipeline and other assets at the end of their economic
life, and these abandonment costs may be substantial. The proceeds of the disposition of certain assets, including, in respect
of certain pipeline systems, line fill, may be available to offset abandonment costs. However, it is not possible to predict abandonment
costs since they will be a function of regulatory requirements at the time and the value of the Corporation's assets, including
line fill, may then be more or less than abandonment costs. The Corporation may, in the future, determine it prudent or be required
by applicable laws or regulations to establish and fund one or more reclamation funds to provide for payment of future abandonment
costs. Such reserves could decrease cash flow available for dividends to Shareholders and to service obligations under the Convertible
Debentures and the Corporation's other debt obligations.



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On May 26, 2009 the NEB issued its Reasons
for Decision RH-2-2008 with respect to the Land Matters Consultation Initiative – Stream 3 which dealt with financial issues
of pipeline abandonment for pipelines under the NEB's jurisdiction. The NEB decided in principle to set an ultimate goal to have
all companies under its jurisdiction begin setting aside funds for the abandonment of pipelines no later than 5 years from the
date of the decision. The NEB recommended an action plan to achieve this ultimate goal that would require pipelines to submit to
the NEB preliminary cost estimates and fund collection mechanisms for pipeline abandonment prior to the setting aside of funds.
In November 2011, Pembina (and formerly Provident) submitted preliminary cost estimates totalling $11,350,000 to the NEB for its
affected approximately 275 km segments of pipeline. Pembina is working towards a pipeline abandonment fund collection plan and
set aside mechanism to present to the NEB by May 31, 2013 prior to the setting aside of funds.



Reserve Replacement, Throughput
and Product Demand



The Corporation's Conventional Pipeline
tariff revenue is based upon a variety of tolling arrangements, including ship-or-pay contracts, cost-of-service arrangements and
market-based tolls. As a result, certain pipeline tariff revenue is heavily dependent upon throughput levels of crude oil, NGL
and condensate. Future throughput on the Corporation's crude oil and NGL pipelines and replacement of oil and gas reserves in the
service areas will be dependent upon the success of producers operating in those areas in exploiting their existing reserve bases
and exploring for and developing additional reserves. Without reserve additions, or expansion of the service areas, throughput
on such pipelines will decline over time as reserves are depleted. As oil and gas reserves are depleted, production costs may increase
relative to the value of the remaining reserves in place, causing producers to shut-in production or seek out lower cost alternatives
for transportation. If the level of tariffs collected by the Corporation decreases as a result, cash flow available for dividends
to Shareholders and to service obligations under the Convertible Debentures and the Corporation's other debt obligations could
be adversely affected.



Over the long term, the Corporation's business
will depend, in part, on the level of demand for crude oil, condensate, NGL and natural gas in the markets served by the crude
oil and NGL pipelines and gas processing and gathering infrastructure in which the Corporation has an interest. The global economic
events of 2008 and 2009 had a substantial downward effect on the demand for and prices of such products. Although prices rebounded
in 2010 and remained relatively strong through 2012, Pembina cannot predict the impact of future economic conditions on the energy
and petrochemical industries or future demand for and prices of natural gas, crude oil, condensate and NGL. Future prices of these
products are determined by supply and demand factors, including weather and general economic conditions as well as economic, political
and other conditions in other oil and natural gas regions, all of which are beyond the Corporation's control.



The volumes of natural gas processed through
Pembina's gas processing assets and of NGL and other products transported in the pipelines depend on production of natural gas
in the areas serviced by the business and pipelines. Without reserve additions, production will decline over time as reserves are
depleted and production costs may rise. Producers may shut-in production at lower product prices or higher production costs. Producers
in the areas serviced by the business may not be successful in exploring for and developing additional reserves, and the gas plants
and the pipelines may not be able to maintain existing volumes of throughput. Commodity prices may not remain at a level which
encourages producers to explore for and develop additional reserves or produce existing marginal reserves. Lower production volumes
will also increase the competition for natural gas supply at gas processing plants which could result in higher shrinkage premiums
being paid to natural gas producers.



The rate and timing of production from proven
natural gas reserves tied into the gas plants is at the discretion of the producers and is subject to regulatory constraints. The
producers have no obligation to produce natural gas from these lands. Pembina's gas processing assets are connected to various
third-party trunkline systems. Operational disruptions or apportionment on those third-party systems may prevent the full utilization
of the business.



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Over the long-term, business will depend,
in part, on the level of demand for NGL and natural gas in the geographic areas in which deliveries are made by pipelines and
the ability and willingness of shippers having access or rights to utilize the pipelines to supply such demand. Pembina cannot
predict the impact of future economic conditions, fuel conservation measures, alternative fuel requirements, governmental regulation
or technological advances in fuel economy and energy generation devices, all of which could reduce the demand for natural gas
and NGL.



Operating and Capital Costs



Operating and capital costs of the Corporation's
business may vary considerably from current and forecast values and rates and represent significant components of the cost of providing
service. In general, as equipment ages, costs associated with such equipment may increase over time. Dividends may be reduced if
significant increases in operating or capital costs are incurred.



Although operating costs are to be recaptured
through the tariffs charged on natural gas volumes processed and oil and NGL transported, respectively, to the extent such charges
escalate, producers may seek lower cost alternatives or stop production of their natural gas.



Completion of the Resthaven
Facility and Saturn Facility



The Resthaven Facility and the Saturn Facility
are currently under development by the Corporation and the successful completion of these facilities is dependent on a number of
factors outside of the Corporation's control. These factors include completion of the construction of the Resthaven Facility and
Saturn Facility on schedule, as well as construction costs that may change depending on supply, demand and/or inflation. Under
the agreements governing the construction and operation of the Resthaven Facility and the Saturn Facility, the Corporation is obligated
to construct the facilities and the Corporation bears the risk for any cost overruns. While the Corporation is not currently aware
of any significant cost overruns at the date hereof, any such cost overruns in the future could reduce the Corporation's expected
return on the Resthaven Facility and the Saturn Facility and adversely affect the Corporation's results of operations which, in
turn, could reduce the level of cash available for dividends to Shareholders. See "– General Risk Factors –
Additional Financing and Capital Resources" below.



Expansion of the Peace/Northern
NGL Systemand Peace Pipeline



The Corporation has announced plans to expand
throughput capacity on the Peace/Northern NGL System (Phase I NGL Expansion: 52,000 bpd, Phase II NGL Expansion: 55,000 bpd) and
Peace Pipeline (Phase I Crude and Condensate Expansion: 40,000 bpd and Phase II Crude and Condensate Expansion: 55,000). The successful
completion of these expansions is dependent on numerous factors outside of the Corporation's control. These factors include receipt
of regulatory approval and reaching long-term commercial arrangements with customers in respect of certain portions of the expansions,
completion of the construction of the expansions on schedule, as well as construction costs that may change depending on supply,
demand and/or inflation. Any agreements with customers entered into with respect to the expansions may require that the Corporation
bears the risk for any cost overruns and any such cost overruns could reduce the Corporation's expected return on the expansion
and adversely affect the Corporation's results of operations which, in turn, could reduce the level of cash available for dividends
to Shareholders. There is no certainty, nor can the Corporation provide any assurance, that regulatory approval will be received
or that satisfactory commercial arrangements with customers will be reached where needed on a timely basis or at all. See "–
General Risk Factors – Additional Financing and Capital Resources" below.



- 47 -







Possible Failure to Realize
Anticipated Benefits of Acquisitions



As part of its ongoing strategy, the Corporation
has completed acquisitions, such as the Provident Acquisition, and may complete additional acquisitions of assets or other entities
in the future. Achieving the benefits of completed and future acquisitions depends in part on successfully consolidating functions
and integrating operations, procedures and personnel in a timely and efficient manner, as well as the Corporation's ability to
realize the anticipated growth opportunities and synergies from combining the acquired businesses and operations with those of
the Corporation. The integration of acquired businesses and entities requires the dedication of substantial management effort,
time and resources which may divert management's focus and resources from other strategic opportunities and from operational matters
during this process. The integration process may result in the loss of key employees and the disruption of ongoing business, customer
and employee relationships that may adversely affect the Corporation's ability to achieve the anticipated benefits of any acquisitions.



Competition



Pembina competes with other pipelines, midstream
and marketing and gas processing and handling services providers in its service areas as well as other transporters of crude oil
and NGL. The introduction of competing transportation alternatives into the Corporation's service areas could potentially have
the impact of limiting the Corporation's ability to adjust tolls as it may deem necessary. Additionally, potential pricing differentials
on the components of NGL may result in these components being transported by competing gas pipelines. Pembina believes it
is prepared for and determined to meet these existing and potential competitive pressures.



Execution Risk



Pembina's ability to successfully execute
the development of its organic growth projects may be influenced by capital constraints, third-party opposition, changes in shipper
support over time, delays in or changes to government and regulatory approvals, cost escalations, construction delays, shortage
and in-service delays. Pembina's growth plans may strain its resources and may be subject to high cost pressures in the North American
energy sector. Early stage project risks include right-of-way procurement, special interest group opposition, Aboriginal consultation,
and environmental and regulatory permitting. Cost escalations may impact project economics. Construction delays due to slow delivery
of materials, contractor non-performance, weather conditions and shortages may impact project development. Labour shortages and
productivity issues may also affect the successful completion of projects.



Pembina has a centralized and clearly defined
governance structure and process for all major projects with dedicated resources organized to lead and execute each major project.
Capital constraints and cost escalation risks are mitigated through structuring of commercial agreements, typically where shippers
retain complete or a share of capital cost excess. Pembina's emphasis on corporate social responsibility promotes generally positive
relationships with landowners, aboriginal groups and governments which help to facilitate right-of-way acquisition, permitting
and scheduling. Detailed cost tracking and centralized purchasing is used on all major projects to facilitate optimum pricing and
service terms. Strategic relationships have been developed with suppliers and contractors. Compensation programs, communications
and the working environment are aligned to attract, develop and retain qualified personnel.



Shipper and Processing Contracts



Throughput on the Corporation's pipelines
is or will be governed by transportation contracts or tolling arrangements with various producers of petroleum products. In addition,
the Corporation is party to numerous contracts of varying durations in respect of its gas gathering, processing and fractionating
facilities. Any default by counterparties under such contracts or any expirations of such contracts or tolling arrangements without
renewal or replacement may have an adverse effect on the Corporation's business. Furthermore, some of the contracts associated
its gas gathering, processing and fractionating facilities are comprised of a mixture of firm and interruptible service contracts
and the revenue that the Corporation earns on the contracts which are based on interruptible service is dependent on the volume
of natural gas and NGL produced by producers in the relevant geographic areas and lower than historical production volumes in
these areas (for reasons such as low commodity prices) may have an adverse effect on Pembina's revenue. See "Description
of Pembina's Business and Operations — Oil Sands & Heavy Oil Business", "Description of Pembina's
Business and Operations — Conventional Pipelines Business".



- 48 -







Structural Integrity of the
Storage Facility



The operation of the Storage Facility is
subject to risks related to the nature of the salt caverns that are currently used to store ethylene. Three of the five ethylene
storage caverns in the Storage Facility are currently out of service and it is unlikely those caverns will be put back into ethylene
storage service. The joint owners of this facility are examining alternative capacity options for ethylene storage available elsewhere
on the jointly owned property. At this stage, the Corporation does not expect to see a material reduction in revenue as a result,
and it is anticipated that an additional cavern will be washed. If arrangements with respect to alternative uses and additional
ethylene storage capacity are not entered into on terms favourable to Pembina, or if other disruptions to the operations of the
caverns occur and reduce the storage capacity of the Storage Facility for an extended period of time, this would result in a reduction
in the revenue received by Pembina from its ownership interest in the Storage Facility and could potentially decrease cash flow
available for dividends to Shareholders and to service obligations under the Convertible Debentures and Pembina's other debt obligations.
In addition, the Storage LP may be required to make capital expenditures to ameliorate any such storage disruptions in excess of
the obligations of Dow Canada and NOVA Chemicals to contribute to capital expenses under the Storage Agreement which could also
result in a reduction in the revenue received by Pembina from its ownership interest in the Storage Facility.



Reliance on Principal Customers
and Operators



The Corporation relies on several significant
customers to purchase product from the Midstream Business. Ethane is predominately purchased by NOVA Chemicals and Dow Canada.
Cenovus and its affiliates will purchase the majority of the condensate from Empress debutanizer. Plains All American Pipeline
operates the Plains E1 Plant at Empress, Alberta and the west to east system described herein. If for any reason these parties
were unable to perform their obligations under the various agreements with the Corporation, the revenue and dividends of the Corporation,
and the operations of the Midstream Business could be negatively impacted.



Risk Factors Relating to the Structure
of the Corporation and the Common Shares



Dilution of Shareholders



The Corporation is authorized to issue,
among other classes of shares, an unlimited number of Common Shares for consideration and on terms and conditions as established
by the Board of Directors without the approval of Shareholders in certain instances. The Shareholders will have no pre-emptive
rights in connection with such further issues.



Risk Factors Relating to the
Activities of the Corporation and the Ownership of Common Shares



The following is a list of certain risk
factors relating to the activities of the Corporation and the ownership of Common Shares:



| | · | the level of the Corporation's indebtedness from time to time could impair the Corporation's ability
to obtain additional financing on a timely basis to take advantage of business opportunities that may arise;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | the uncertainty of future dividend payments by the Corporation and the level thereof as the Corporation's
dividend policy and the funds available for the payment of dividends from time to time will be dependent upon, among other things,
operating cash flow generated by the Corporation and its subsidiaries, financial requirements for the Corporation's operations
and the execution of its growth strategy and the satisfaction of solvency tests imposed by the ABCA for the declaration and payment
of dividends;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



- 49 -







| | · | the Corporation may make future acquisitions or may enter into financings or other transactions
involving the issuance of securities of the Corporation which may be dilutive;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | the inability of the Corporation to manage growth effectively, and realize the anticipated growth
opportunities from reorganizing the Fund into a corporate structure, could have a material adverse impact on its business, operations
and prospects; and
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | the risk that the market value of the Common Shares may materially deteriorate if the Corporation
is unable to meet its cash dividend targets or make cash dividends in the future.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Market Value of Common Shares
and Other Securities



Pembina cannot predict at what price the
Common Shares, Convertible Debentures or other securities issued by the Corporation will trade in the future. Common Shares, Convertible
Debentures and other securities of the Corporation will not necessarily trade at values determined solely by reference to the underlying
value of Pembina's assets. One of the factors that may influence the market price of such securities is the annual yield on the
Common Shares and the Convertible Debentures. An increase in market interest rates may lead purchasers of Common Shares or Convertible
Debentures to demand a higher annual yield and this could adversely affect the market price of the Common Shares or Convertible
Debentures. In addition, the market price for the Common Shares and the Convertible Debentures may be affected by changes in general
market conditions, fluctuations in the market for equity or debt securities and numerous other factors beyond the control of Pembina.



Shareholders are encouraged to obtain
independent legal, tax and investment advice in their jurisdiction of residence with respect to the holding of Common Shares.



General Risk Factors



Regulation



Legislation in Alberta and British Columbia
exists to ensure that producers have fair and reasonable opportunities to produce, process and market their reserves. In Alberta,
the ERCB and in British Columbia, the BCUC, may, on application and following a hearing (and in Alberta with the approval
of the Lieutenant Governor in Council), declare the operator of a pipeline a common carrier of oil or NGL and, as such, must not
discriminate between producers who seek access to the pipeline. Producers and shippers may also apply to the regulatory authorities
for a review of tariffs, and such tariffs may then be regulated if it is proven that the tariffs are not just and reasonable. Applications
by producers to have a pipeline operator declared a common carrier are usually accompanied by an application to have the tariffs
set by the regulatory authorities. The extent to which regulatory authorities in such instances can override existing transportation
or processing contracts has not been fully decided. The potential for direct regulation of tolls, other than for the Corporation's
provincially regulated B.C. pipelines, while considered remote by the Corporation, could result in toll levels that are less advantageous
to the Corporation and could impair the economic operation of such regulated pipeline systems.



Additional Financing and Capital
Resources



Future acquisitions, expansions of the Corporation's
pipeline systems and midstream operations, other capital expenditures, including the capital expenditures that the Corporation
has committed to in respect of the proposed Resthaven Facility, the Saturn Facility and the expansion of the Peace/Northern NGL
System, and the repayment or refinancing of existing debt as it becomes due will be financed from sources such as cash generated
from operations, the issuance of additional Common Shares or other securities (including debt securities) of the Corporation, and
borrowings. Dividends to Shareholders may be reduced, or even eliminated, at times when significant capital or other expenditures
are made. There can be no assurance that sufficient capital will be available on terms acceptable to the Corporation, or at all,
to make additional investments, fund future expansions or make other required capital expenditures. To the extent that external
sources of capital, including the issuance of additional Common Shares or other securities or the availability of additional credit
facilities, becomes limited or unavailable on favourable terms or at all due to credit market conditions or otherwise, the ability
of the Corporation to make the necessary capital investments to maintain or expand its operations, to repay outstanding debt and
to invest in assets, as the case may be, will be impaired.



- 50 -







Credit Risk



Pembina is subject to credit risk arising
out of its operations. A majority of Pembina's accounts receivable are with customers in the oil and gas industry and are subject
to normal industry credit risk. Credit risk is managed through credit approval and monitoring procedures. The credit worthiness
assessment takes into account available qualitative and quantitative information about the counterparty including, but not limited
to, financial status and external credit ratings. Depending on the outcome of each assessment, guarantees or some other credit
enhancement may be requested as security. Pembina attempts to mitigate its exposure by entering into contracts with customers that
may permit netting or entitle Pembina to lien or take product in kind and/or allow for termination of the contract on the occurrence
of certain events of default. Each business segment monitors outstanding accounts receivable on an ongoing basis. Historically,
Pembina has collected its accounts receivable in full.



Debt Service



The Corporation and its subsidiaries are
permitted to borrow funds to finance the purchase of pipelines and other energy infrastructure assets, to fund capital expenditures
and other financial obligations or expenditures in respect of those assets and for working capital purposes. Amounts paid in respect
of interest and principal on debt incurred in respect of those assets reduce the amount of cash flow available for dividends to
Shareholders. Variations in interest rates and scheduled principal repayments for which the Corporation may not be able refinance
at favourable rates or at all, could result in significant changes in the amount required to be applied to service debt, which
could have detrimental effects on the amount of cash available for dividends to Shareholders. Certain covenants contained in the
agreements with the Corporation's lenders may also limit dividend payments. Although the Corporation believes the existing credit
facilities are sufficient for immediate requirements, there can be no assurance that the amount will be adequate for the future
financial obligations of the Corporation or that additional funds will be able to be obtained on terms favourable to Pembina or
at all.



The lenders under the Corporation's unsecured
credit facilities and Senior Notes have also been provided with similar guarantees and subordination agreements. If the Corporation
becomes unable to pay its debt service charges or otherwise commits an event of default such as bankruptcy, payments to all of
the lenders will rank in priority to dividends to Shareholders and payments to holders of Convertible Debentures.



The Corporation, on a consolidated basis,
is also required to meet certain financial covenants under the credit facilities and the Senior Notes and is subject to customary
restrictions on its operations and activities, including restrictions on the granting of security, incurring indebtedness and the
sale of its assets.



Credit Ratings



Rating agencies regularly evaluate the Corporation,
basing their ratings of its long-term and short-term debt on a number of factors. This includes the Corporation's financial strength
as well as factors not entirely within its control, including conditions affecting the industry in which Pembina operates generally
and the wider state of the economy. There can be no assurance that one or more of the Corporation's credit ratings will not be
downgraded.



The Corporation's borrowing costs and ability
to raise funds are directly impacted by its credit ratings. Credit ratings may be important to suppliers or counterparties when
they seek to engage in certain transactions. A credit rating downgrade could potentially impair the Corporation's ability to enter
into arrangements with suppliers or counterparties, to engage in certain transactions, and could limit the Corporation's access
to private and public credit markets and increase the costs of borrowing under its existing credit facilities. A downgrade could
also limit the Corporation's access to debt and preferred share markets and increase its cost of borrowing.



- 51 -







The occurrence of a downgrade in the Corporation's
credit ratings could adversely affect the Corporation's ability to execute portions of its business strategy and could have a material
adverse effect on its liquidity, results of operations and capital position.



Changes in Legislation



There can be no assurance that income tax
laws, regulatory and environmental laws or policies and government incentive programs relating to the pipeline or oil and natural
gas industry, will not be changed in a manner which adversely affects the Corporation or its Shareholders or other securityholders.



Reliance on Management



Shareholders and other securityholders of
the Corporation will be dependent on senior management and directors of the Corporation in respect of the governance, administration
and management of all matters relating to the Corporation and its operations and administration. The loss of the services of key
individuals could have a detrimental effect on the Corporation.



Potential Conflicts of Interest



Shareholders are dependent upon senior management
of the Corporation and the directors of the Corporation for the governance, administration and management of the Corporation. Additionally,
certain directors and officers of the Corporation may be directors or officers of entities in competition to the Corporation. As
such, these directors or officers of the Corporation may encounter conflicts of interest in the administration of their duties
with respect to the Corporation.



Litigation



The Corporation and its various subsidiaries
and affiliates are, in the course of their business, subject to lawsuits and other claims. Defence and settlement costs associated
with such lawsuits and claims can be substantial, even with respect to lawsuits and claims that have no merit. Due to the inherent
uncertainty of the litigation process, the resolution of any particular legal proceeding could have a material adverse effect on
the financial position or operating results of the Corporation.



Variations in Interest Rates
and Foreign Exchange Rates



Variations in interest rates could result
in a significant change in the amount the Corporation pays to service debt, potentially impacting dividends to Shareholders. Variations
in the exchange rate for the Canadian dollar versus the U.S. dollar could affect future dividends.



- 52 -







DIVIDENDS AND DISTRIBUTIONS



Cash Distributions



The following table sets forth the amount
of monthly cash distributions historically paid by the Fund per Trust Unit since January 2005 up until the completion of the Corporate
Conversion on October 1, 2010.



Cash Distribution Per Trust Unit



|                      |  | Cash Distribution Per Trust Unit |     
|--------------------- |  | -------------------------------- | ----
|Month of Payment Date |  | 2010                             |     
|January               |  | $                                | 0.13
|February              |  | $                                | 0.13
|March                 |  | $                                | 0.13
|April                 |  | $                                | 0.13
|May                   |  | $                                | 0.13
|June                  |  | $                                | 0.13
|July                  |  | $                                | 0.13
|August                |  | $                                | 0.13
|September             |  | $                                | 0.13
|October(1)            |  | $                                | 0.13
|November              |  |                                  | -   
|December              |  |                                  | -   
|Total                 |  | $                                | 1.30



Note:



| | (1) | On September 10, 2010, the Fund announced a cash distribution to holders of Trust Units of 13 cents
per Trust Unit, which was paid by the Corporation after completion of the Corporate Conversion on October 15, 2010 to holders of
Trust Units of record on September 25, 2010.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



- 53 -







Cash Dividends



Following completion of the Corporate Conversion,
the Corporation began paying monthly dividends to Shareholders, and the initial monthly dividend of $0.13 per Common Share was
paid on November 15, 2010 to Shareholders of record on October 25, 2010. On April 12, 2012, following closing of the Provident
Acquisition, the Corporation announced an increase to its monthly dividend rate from $0.13 to $0.135 per Common Share. The following
table sets forth the amount of monthly cash dividends paid by the Corporation in 2010, 2011, 2012 and to date in 2013.



Cash Dividends Per Common Shares



|Month of Payment |  | Cash Dividend Per Common Share |      
|---------------- |  | ------------------------------ | -----
|Date             |  | 2013                           |      
|January          |  | $                              | 0.135
|February         |  | $                              | 0.135
|March            |  |                                | -    
|April            |  |                                | -    
|May              |  |                                | -    
|June             |  |                                | -    
|July             |  |                                | -    
|August           |  |                                | -    
|September        |  |                                | -    
|October          |  |                                | -    
|November         |  |                                | -    
|December         |  |                                | -    
|Total            |  | $                              | 0.27 



On February 12, 2013, Pembina announced
that the Board of Directors had declared a dividend of $0.135 per Common Share to be paid, subject to applicable law, on March
15, 2013 to holders of Common Shares of record on February 25, 2013.



The declaration and payment of any dividend
by Pembina is at the discretion of the Board of Directors and will depend on numerous factors, including compliance with applicable
laws and the financial performance, debt obligations, working capital requirements and future capital requirements of the Corporation
and its subsidiaries. See "Risk Factors".



The agreements governing the Corporation's
Credit Facilities provide that if an event of default has occurred under the Credit Facilities, the indebtedness may be accelerated
by the lenders, and the ability to pay dividends to Shareholders thereupon ceases. The Corporation is restricted from making distributions
(including the declaration of dividends) if it is in default under its credit facilities (or a default would be expected to occur
as a result of such distribution) or if its borrowings exceed its borrowing base threshold.



- 54 -







MARKET FOR SECURITIES



The Common Shares are listed and traded
on the TSX under the symbol "PPL". The following table sets forth the price range for and trading volume of the Common
Shares on the TSX for 2012, as reported by the TSX.



|Month     |  | High ($) |       |  | Low ($) |  |       | Close ($) |  |  | Volume (000s) | 
|--------- |  | -------- | ----- |  | ------- |  | ----- | --------- |  |  | ------------- | 
|January   |  |          | 30.15 |  |         |  | 26.12 |           |  |  | 26.82         | 
|February  |  |          | 28.99 |  |         |  | 26.90 |           |  |  | 28.07         | 
|March     |  |          | 28.32 |  |         |  | 26.89 |           |  |  | 28.18         | 
|April     |  |          | 30.18 |  |         |  | 27.81 |           |  |  | 29.88         | 
|May       |  |          | 30.80 |  |         |  | 27.13 |           |  |  | 27.83         | 
|June      |  |          | 27.90 |  |         |  | 24.86 |           |  |  | 26.02         | 
|July      |  |          | 27.94 |  |         |  | 26.05 |           |  |  | 26.80         | 
|August    |  |          | 27.79 |  |         |  | 25.50 |           |  |  | 26.72         | 
|September |  |          | 27.99 |  |         |  | 26.55 |           |  |  | 27.60         | 
|October   |  |          | 28.37 |  |         |  | 27.12 |           |  |  | 27.93         | 
|November  |  |          | 28.23 |  |         |  | 27.01 |           |  |  | 28.13         | 
|December  |  |          | 29.10 |  |         |  | 27.52 |           |  |  | 28.46         | 



The Common Shares are also listed and began
trading on the NYSE on April 2, 2012 under the trading symbol "PBA". The following table sets forth the price range for
and trading volume of the Common Shares on the NYSE for April 2, 2012 through December 31, 2012, as reported by the NYSE.



|Month        |  | High (US$) |       |  | Low (US$) |  |       | Close (US$) |  |  | Volume | 
|------------ |  | ---------- | ----- |  | --------- |  | ----- | ----------- |  |  | ------ | 
|April 2 – 30 |  |            | 30.70 |  |           |  | 28.01 |             |  |  | 30.22  | 
|May          |  |            | 30.93 |  |           |  | 26.22 |             |  |  | 26.94  | 
|June         |  |            | 27.32 |  |           |  | 24.15 |             |  |  | 25.61  | 
|July         |  |            | 27.63 |  |           |  | 24.95 |             |  |  | 26.67  | 
|August       |  |            | 28.16 |  |           |  | 25.60 |             |  |  | 27.16  | 
|September    |  |            | 28.80 |  |           |  | 26.50 |             |  |  | 28.10  | 
|October      |  |            | 28.75 |  |           |  | 27.38 |             |  |  | 27.95  | 
|November     |  |            | 28.42 |  |           |  | 26.91 |             |  |  | 28.32  | 
|December     |  |            | 29.53 |  |           |  | 27.61 |             |  |  | 28.64  | 



The Series C Convertible Debentures are
listed and traded on the TSX under the symbol "PPL.DB.C". The following table sets forth the price range for and trading
volume of the Series C Convertible Debentures on the TSX for 2012, as reported by the TSX.



- 55 -







|Month     |  | High ($) |        |  | Low ($) |  |        | Close ($) |  |  | Volume | 
|--------- |  | -------- | ------ |  | ------- |  | ------ | --------- |  |  | ------ | 
|January   |  |          | 111.50 |  |         |  | 104.55 |           |  |  | 108.50 | 
|February  |  |          | 111.87 |  |         |  | 108.25 |           |  |  | 109.10 | 
|March     |  |          | 110.00 |  |         |  | 107.25 |           |  |  | 109.00 | 
|April     |  |          | 112.74 |  |         |  | 106.95 |           |  |  | 110.51 | 
|May       |  |          | 115.54 |  |         |  | 106.00 |           |  |  | 107.99 | 
|June      |  |          | 109.00 |  |         |  | 105.05 |           |  |  | 108.74 | 
|July      |  |          | 110.99 |  |         |  | 107.11 |           |  |  | 109.00 | 
|August    |  |          | 110.50 |  |         |  | 107.85 |           |  |  | 108.61 | 
|September |  |          | 111.33 |  |         |  | 108.55 |           |  |  | 109.76 | 
|October   |  |          | 111.50 |  |         |  | 109.15 |           |  |  | 110.45 | 
|November  |  |          | 111.76 |  |         |  | 109.80 |           |  |  | 110.06 | 
|December  |  |          | 112.69 |  |         |  | 109.03 |           |  |  | 111.00 | 



The Series E Convertible Debentures were
listed and posted for trading on the TSX under the symbol "PVE.DB.E" until the close of trading on April 5, 2012, and
subsequently upon Pembina's supplemental listing becoming effective on April 9, 2012 in connection with the Provident Acquisition,
the Series E Convertible Debentures were listed and posted for trading on the TSX under the symbol "PPL.DB.E". The following
table sets forth the price range for and trading volume of the Series E Convertible Debentures on the TSX for 2012, as reported
by the TSX.



|Month     |  | High ($) |        |  | Low ($) |  |        | Close ($) |  |  | Volume | 
|--------- |  | -------- | ------ |  | ------- |  | ------ | --------- |  |  | ------ | 
|January   |  |          | 114.50 |  |         |  | 104.00 |           |  |  | 112.75 | 
|February  |  |          | 119.43 |  |         |  | 113.00 |           |  |  | 115.81 | 
|March     |  |          | 117.99 |  |         |  | 112.83 |           |  |  | 117.50 | 
|April     |  |          | 122.99 |  |         |  | 115.78 |           |  |  | 122.25 | 
|May       |  |          | 124.67 |  |         |  | 113.98 |           |  |  | 115.25 | 
|June      |  |          | 116.34 |  |         |  | 110.00 |           |  |  | 112.06 | 
|July      |  |          | 116.50 |  |         |  | 111.43 |           |  |  | 114.50 | 
|August    |  |          | 117.99 |  |         |  | 113.40 |           |  |  | 115.00 | 
|September |  |          | 117.48 |  |         |  | 113.34 |           |  |  | 117.48 | 
|October   |  |          | 117.50 |  |         |  | 113.96 |           |  |  | 116.50 | 
|November  |  |          | 118.00 |  |         |  | 113.00 |           |  |  | 118.00 | 
|December  |  |          | 121.00 |  |         |  | 116.00 |           |  |  | 117.00 | 



The Series F Convertible Debentures were
listed and posted for trading on the TSX under the symbol "PVE.DB.F" until the close of trading on April 5, 2012, and
subsequently upon Pembina's supplemental listing becoming effective on April 9, 2012 in connection with the Provident Acquisition,
the Series F Convertible Debentures were listed and posted for trading on the TSX under the symbol "PPL.DB.F". The following
table sets forth the price range for and trading volume of the Series F Convertible Debentures on the TSX for 2012, as reported
by the TSX.



- 56 -







|Month     |  | High ($) |        |  | Low ($) |  |        | Close ($) |  |  | Volume | 
|--------- |  | -------- | ------ |  | ------- |  | ------ | --------- |  |  | ------ | 
|January   |  |          | 106.00 |  |         |  | 101.00 |           |  |  | 105.50 | 
|February  |  |          | 108.49 |  |         |  | 105.50 |           |  |  | 107.50 | 
|March     |  |          | 108.50 |  |         |  | 104.70 |           |  |  | 107.38 | 
|April     |  |          | 111.82 |  |         |  | 105.01 |           |  |  | 109.84 | 
|May       |  |          | 112.26 |  |         |  | 104.00 |           |  |  | 106.99 | 
|June      |  |          | 108.13 |  |         |  | 104.02 |           |  |  | 107.98 | 
|July      |  |          | 110.00 |  |         |  | 106.42 |           |  |  | 109.50 | 
|August    |  |          | 110.88 |  |         |  | 108.00 |           |  |  | 109.51 | 
|September |  |          | 111.99 |  |         |  | 108.98 |           |  |  | 110.37 | 
|October   |  |          | 111.00 |  |         |  | 109.11 |           |  |  | 110.49 | 
|November  |  |          | 111.40 |  |         |  | 109.01 |           |  |  | 110.00 | 
|December  |  |          | 111.00 |  |         |  | 109.00 |           |  |  | 110.75 | 



- 57 -









DIRECTORS AND OFFICERS



Directors of the Corporation



The following table sets out the name and
residence for each director of the Corporation as of the date of this Annual Information Form, the date on which they were appointed
as a director of the Corporation (or as a trustee of the Fund prior to an internal reorganization in which the directors of the
Corporation replaced a board of trustees of the Fund as the entity responsible for the governance of the Fund) and their principal
occupations during the past five years.



|Name and Residence                                        |  | Date Appointed   |  | Principal OccupationDuring the Past Five Years                                                                                                                                                                                                                                                                                                                                                                                                                             
|--------------------------------------------------------- |  | ---------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                          |  |                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Grant D. Billing(2)(3)
        Calgary, Alberta, Canada   |  | April 2, 2012    |  | Independent businessman since November 2011; prior thereto, Chairman and Chief Executive Officer of Superior Plus Corp. (a propane distribution, specialty chemicals and construction products distribution company) from July, 2006 to November, 2011 and Executive Chairman since 1998. Currently Chairman of the Board of Superior Plus Corp.                                                                                                                           
|                                                          |  |                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Thomas W. Buchanan(4)(5)
        Calgary, Alberta, Canada |  | August 5, 2010   |  | Chairman and Chief Executive Officer of Charger Energy Corporation (a private oil and natural gas exploration, development and production company) since October 2010; prior thereto, Chief Executive Officer of Provident Energy Trust (a diversified energy company that owned and managed an oil and gas exploration, development and production business and a, NGL infrastructure and logistics business) from March 2001 (with the title of President added in 2007).
|                                                          |  |                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Allan L. Edgeworth(2)(4)
        Calgary, Alberta, Canada |  | July 1, 2006     |  | President of ALE Energy Inc. (a private consulting company) since 2005; prior thereto, President and Chief Executive Office of Alliance Pipeline Ltd., from 2001 to 2004.                                                                                                                                                                                                                                                                                                  
|                                                          |  |                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Randall J. Findlay(2)(3)
        Calgary, Alberta, Canada |  | March 8, 2007    |  | Corporate director; prior thereto, President of Provident Energy Trust from 2001 to 2006.                                                                                                                                                                                                                                                                                                                                                                                  
|                                                          |  |                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Lorne B. Gordon(1)(4)(5)
        Calgary, Alberta, Canada |  | October 24, 1997 |  | Independent businessman; prior thereto, Vice Chairman of Coril Holdings Ltd. (a private investment and holding company) from 2004 to 2006 and Chief Executive Officer of Coril Holdings Ltd. from 1997 to 2004.                                                                                                                                                                                                                                                            
|                                                          |  |                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            



- 58 -







|Name and Residence                                          |  | Date Appointed    |  | Principal OccupationDuring the Past Five Years                                                                                                                                                                                                                                                                                                                                                                                                                                  
|----------------------------------------------------------- |  | ----------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                            |  |                   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|David M.B. LeGresley(2)(3)
        Toronto, Ontario, Canada |  | August 16, 2010   |  | Independent businessman since September 2008; prior thereto, Vice Chairman of National Bank Financial from 2006 to 2008 and Executive Vice President and Head of Corporate and Investment Banking of National Bank Financial from 1999 to 2006.                                                                                                                                                                                                                                 
|                                                            |  |                   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Robert B. Michaleski
        Calgary, Alberta, Canada       |  | January 4, 2000   |  | Chief Executive Officer of the Corporation since February 15, 2012; prior thereto, President and Chief Executive Officer of the Corporation.                                                                                                                                                                                                                                                                                                                                    
|                                                            |  |                   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Leslie A. O'Donoghue(3)(5)
        Calgary, Alberta, Canada |  | December 17, 2008 |  | Executive Vice President, Corporate Development and Strategy and Chief Risk Officer of Agrium Inc. (a retail supplier of agricultural products and services and a producer and marketer of agricultural nutrients and industrial products) since October 30, 2012; prior thereto, Executive Vice President, Operations of Agrium Inc. from April 30, 2011 to October 30, 2012; prior thereto, Chief Legal Officer and Senior Vice President, Business Development of Agrium Inc.
|                                                            |  |                   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Jeffrey T. Smith(4)(5)
        Calgary, Alberta, Canada     |  | April 2, 2012     |  | Independent businessman. Currently serves on the board of NAL Resources Limited (an oil and gas company) and Pace Oil and Gas Ltd. (an oil-weighted company).                                                                                                                                                                                                                                                                                                                   



Notes:

| | (1) | Chairman of the Board.
| | --- | ----------------------

| | (2) | Member of Audit Committee.
| | --- | --------------------------

| | (3) | Member of Human Resources and Compensation Committee.
| | --- | -----------------------------------------------------

| | (4) | Member of the Health, Safety and Environment Committee.
| | --- | -------------------------------------------------------

| | (5) | Member of the Governance Committee.
| | --- | -----------------------------------



Shareholders elect the directors of the
Corporation at each annual meeting of the Shareholders. The directors of the Corporation serve until the next annual meeting of
the Shareholders or until their successors are duly elected or appointed. All of the Corporation's directors are "independent"
within the meaning of National Instrument 58–101 – Disclosure of Corporate Governance Practices, adopted by
the Canadian Securities Administrators, with the exception of Mr. Michaleski, who is the Chief Executive Officer of the Corporation,
and Mr. Buchanan, the former President and Chief Executive Officer of Provident until April 2010 (and therefore deemed non-independent
until April 30, 2013). In addition, Pembina has adopted Standards for Director Independence which meet or exceed the requirements
set out in National Policy 58–201 – Corporate Governance Guidelines, National Instrument 52–110 –
Audit Committees, the SEC rules and regulations, the Sarbanes-Oxley Act of 2002 and the NYSE rules.



The Board of Directors has four committees,
being the Audit Committee, the Health, Safety and Environment Committee, the Human Resources and Compensation Committee and the
Governance Committee. Additional information regarding the responsibilities of these committees will be contained in the Corporation's
information circular for its annual meeting of Shareholders to be held on May 10, 2013.



- 59 -







Executive Officers of the Corporation



The following table sets out the name, residence
and office held with the Corporation for each executive officer of the Corporation, as well as their principal occupations during
the past five years.



|Name and Residence                                    |  | Office with the Corporation                         |  | Principal OccupationDuring the Past Five Years                                                                                                                                                                                                                            
|----------------------------------------------------- |  | --------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                      |  |                                                     |  |                                                                                                                                                                                                                                                                           
|Robert B. Michaleski
        Calgary, Alberta, Canada |  | Chief Executive Officer                             |  | Chief Executive Officer of the Corporation since February 15, 2012; prior thereto, President and Chief Executive Officer of the Corporation.                                                                                                                              
|                                                      |  |                                                     |  |                                                                                                                                                                                                                                                                           
|Michael H. Dilger
        Calgary, Alberta, Canada    |  | President and Chief Operating Officer               |  | President and Chief Operating Officer since February 15, 2012; prior thereto, Vice President, Chief Operating Officer of the Corporation from November 2008 to February 15, 2012; prior thereto, Vice President, Business Development of the Corporation since March 2005.
|                                                      |  |                                                     |  |                                                                                                                                                                                                                                                                           
|Peter D. Robertson
        Calgary, Alberta, Canada   |  | Vice President, Finance and Chief Financial Officer |  | Vice President, Finance and Chief Financial Officer of the Corporation since January 2000.                                                                                                                                                                                
|                                                      |  |                                                     |  |                                                                                                                                                                                                                                                                           
|Robert M. Jones
        Calgary, Alberta, Canada      |  | Vice President, Crude Oil Midstream                 |  | Vice President, Midstream of the Corporation since November 2008; prior thereto, President of Merchant Energy Holdings Corp. since 2002, which provided consulting services to producers and infrastructure companies, including the Corporation from 2005 to 2008.       
|                                                      |  |                                                     |  |                                                                                                                                                                                                                                                                           
|Stuart V. Taylor
        Calgary, Alberta, Canada     |  | Vice President, Gas Services                        |  | Vice President, Gas Services of the Corporation since July 1, 2009; prior thereto, Manager, Planning of Talisman Energy Inc. since November 2003.                                                                                                                         
|                                                      |  |                                                     |  |                                                                                                                                                                                                                                                                           
|Paul J. Murphy
        Calgary, Alberta, Canada       |  | Vice President, Conventional Pipelines              |  | Vice President, Conventional Pipelines of the Corporation since February 14, 2011; prior thereto, Vice President, NGL Extraction of Inter Pipeline Fund since July 2004.                                                                                                  
|                                                      |  |                                                     |  |                                                                                                                                                                                                                                                                           
|Debbie A. Sulkers
        Calgary, Alberta, Canada    |  | Vice President, Corporate Services                  |  | Vice President, Corporate Services of the Corporation since June 2011; prior thereto Vice President, Human Resources of SemCAMS ULC (a natural gas gathering and processing company) from October 2006 to April 2011.                                                     
|                                                      |  |                                                     |  |                                                                                                                                                                                                                                                                           
|Harold K. Andersen
        Calgary, Alberta, Canada   |  | General Counsel                                     |  | General Counsel of the Corporation since December 2011; prior thereto Partner and Associate at Stikeman Elliott LLP (a law firm) from June 2000 to December 2011.                                                                                                         
|                                                      |  |                                                     |  |                                                                                                                                                                                                                                                                           
|Michael A. Hantzsch
        Calgary, Alberta, Canada  |  | Vice President, Oil Sands & Heavy Oil               |  | Vice President, Oil Sands & Heavy Oil of the Corporation since April 2012; prior thereto Vice President, Business Development of Provident from January 2006 to April 2012.                                                                                               



- 60 -







|Name and Residence                              |  | Office with the Corporation |  | Principal OccupationDuring the Past Five Years                                                                                        
|----------------------------------------------- |  | --------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------
|                                                |  |                             |  |                                                                                                                                       
|Robert D. Lock
        Calgary, Alberta, Canada |  | Vice President, NGL         |  | Vice President, NGL of the Corporation since April 2012; prior thereto, Vice President, Supply and Extraction of Provident since 2005.



As at February 28,2013, the directors
and executive officers of the Corporation beneficially owned, or controlled or directed, directly or indirectly, an aggregate of
1,495,818 Common Shares, representing approximately 0.5 percent of the then outstanding Common Shares.



Conflict of Interest



The directors and executive officers named
above may be directors or officers of entities which are in competition to the Corporation. As such, these directors or officers
of the Corporation may encounter conflicts of interest in the administration of their duties with respect to the Corporation. See
"Risk Factors – General Risk Factors – Potential Conflicts of Interest".



AUDIT COMMITTEE INFORMATION



The Audit Committee's Charter



The Audit Committee Charter is set forth
in Appendix "A" to this Annual Information Form.



Composition of the Audit Committee
and Relevant Education and Experience



The Corporation's Audit Committee is comprised
of David M.B. LeGresley, as Chairman, Grant D. Billing, Randall J. Findlay and Allan L. Edgeworth, each of whom is independent
and financially literate within the meaning of National Instrument 52–110 – Audit Committees of the Canadian
Securities Administrators and in accordance with the Corporation's Standards for Director Independence available at www.pembina.com.
Set forth below are additional details regarding each member of the Audit Committee.



David M.B. LeGresley



David M.B. LeGresley is the Chairman of
the Audit Committee and has been a member of the Audit Committee since April 2, 2012. Mr. LeGresley is independent within
the meaning of such term in National Instrument 52-110 – Audit Committees. David LeGresley is a former executive of
National Bank Financial and spent 12 years with that company, most recently serving as Vice Chairman from 2006 to 2008. Prior to
that assignment he was National Bank Financial's Executive Vice President and Head of Corporate and Investment Banking (1999 to
2006); Managing Director and Head of Vancouver Investment Banking (1998 to 1999); and Managing Director, Investment Banking (1996
to 1998). Mr. LeGresley has extensive experience in the financial services industry including positions at Salomon Brothers
Canada from 1990 to 1996 and CIBC Wood Gundy from 1986 to 1990. He also serves as a director of a TSX-listed company, Equitable
Group Inc., as well as one private company, Woodland Biofuels Inc. He is on the advisory committee for CANFAR (the Canadian Foundation
for AIDS Research). Mr. LeGresley received a Bachelor of Applied Science Degree in Engineering from the University of Toronto
in 1981 and a Master of Business Administration from Harvard Business School in 1986. He is a graduate of the Institute of Corporate
Directors – Rotman Directors Education Program and a member of the Institute of Corporate Directors. This business experience
provides Mr. LeGresley with the skill set and financial literacy required to carry out his duties as a member of the Audit
Committee.



- 61 -







Allan L. Edgeworth



Allan L. Edgeworth has been a member of
the Audit Committee since August 5, 2010, and prior to that was a member of the Audit Committee from July 1, 2006 to February 4,
2009. Mr. Edgeworth is independent within the meaning of such term in National Instrument 52-110 – Audit Committees.
Allan Edgeworth is currently the President of ALE Energy Inc. (a private consulting company), a position he has held since 2005.
He has held a number of positions at the senior executive level, with the most recent being the President and CEO of Alliance Pipeline
Ltd. (the general partner of Alliance Pipeline Limited Partnership, a public natural gas pipeline entity) from 2001 to 2004. He
holds a Bachelor of Applied Science in Geological Engineering and is a graduate of the Queen's Executive Program. Mr. Edgeworth
is a director of AltaGas Ltd. and Emera Incorporated and is a Commission Member of the Alberta Securities Commission. This business
experience, coupled with his prior experience on the Audit Committee, provides Mr. Edgeworth with the skill set and financial literacy
required to carry out his duties as a member of the Audit Committee.



Grant D. Billing



Grant D. Billing has been a member of the
Audit Committee since April 2, 2012. Mr. Billing is independent within the meaning of such term in National Instrument 52-110 –
Audit Committees. Mr. Billing was the Chairman and Chief Executive Officer of Superior Plus Corp. from 2006 to 2011, and
prior thereto the Executive Chairman since 1998. Mr. Billing has extensive strategic and business experience gained over a period
of more than 30 years in various CEO/senior management capacities, including as President and CEO of Norcen Energy Resources Ltd.
He has served as chairman and director of a number of public companies, as well as the Canadian Association of Petroleum Producers.
He is currently Chairman of the Board of Superior Plus Corp. He holds a Bachelor of Science degree from the University of Calgary.
This experience, coupled with his designation as a Chartered Accountant, received in 1976, provide Mr. Billing with the skill set
and financial literacy required to carry out his duties as a member of the Audit Committee.



Randall J. Findlay



Randall J. Findlay has been a member of
the Audit Committee since April 2, 2012. Mr. Findlay is independent within the meaning of such term in National Instrument 52-110
– Audit Committees. Mr. Findlay is a corporate director who retired as the President of Provident Energy Trust in
2006, a position he held since March 2001. Prior thereto, he was Chief Operating Officer of Founders Energy Ltd. from December
1999 to March 2001, Senior Vice President of TransCanada Pipelines Ltd. and President and Chief Executive Officer of TransCanada
Gas Processing L.P. from 1998 to 1999. Mr. Findlay holds a BASc from the University of British Columbia. He is a director of Superior
Plus Inc., and is Chair of the Board of HNZ Group Inc. He is also a director of EllisDon Construction Inc., Sea NG Management
Ltd., and Summerland Energy Ltd., all of which are private companies. Mr. Findlay is a Board member and past Chairman of the Alberta
Children's Hospital Foundation. This academic and business experience provided Mr. Findlay with the skill set and financial literacy
required to carry out his duties as a member of the Audit Committee.



Pre-Approval Policies and Procedures
for Audit and Non-Audit Services



The terms of engagement of Pembina's external
auditors provide that audit services provided to Pembina by the external auditors, including the budgeted fees for such audit services
and the representations and disclaimer relating thereto, must be pre-approved by the entire Audit Committee.



In addition, subject to any de minimis
exemption available under applicable laws, all permitted non-audit services provided to Pembina by its external auditors, including
the terms thereof and the fees related thereto, are pre-approved by the entire Audit Committee. Notwithstanding the foregoing,
the Audit Committee's Mandate permits the Audit Committee to establish policies and procedures for the pre-approval of audit and
permitted non-audit services to be provided by the external auditors. In particular, the Audit Committee may delegate the ability
to grant such pre-approvals to one or more members of the Audit Committee to the extent permitted by law and the terms of engagement
of the external auditors, provided that any pre-approvals granted pursuant to any such delegation must be detailed as to the particular
service to be provided, may not delegate Audit Committee responsibilities to management of Pembina, and must be reported to the
full Audit Committee at its next scheduled meeting following such pre-approval.



- 62 -







External Auditor Service Fees



The following table sets out the fees billed
to Pembina for professional services provided by KMPG during each of the last two financial years:



|Year |  | Audit Fees(1) |           |  | Audit-RelatedFees(2) |   |        | Tax Fees(3) |  |   | All Other Fees(4)
|---- |  | ------------- | --------- |  | -------------------- | - | ------ | ----------- |  | - | -----------------
|2012 |  | $             | 1,519,600 |  |                      | $ | 35,000 |             |  | $ | 112,600          
|2011 |  | $             | 634,077   |  |                      | $ | 16,830 |             |  | $ | 88,052           



Notes:



| | (1) | Audit fees were for professional services rendered by KPMG LLP for the audit of the Corporation's
annual financial statements and reviews of the Corporation's quarterly financial statements, as well as services provided in connection
with statutory and regulatory filings or engagements and additional fees incurred for audit services rendered in connection with
the implementation of IFRS. In 2012, fees included additional expenses associated with the filing of securities and regulatory
documents and associated French translations, as well as review of accounting policies, purchase price equation and prior year
audit file associated with the Provident Acquisition. In 2011, fees included additional expense for the Corporation's prospectus
supplement in connection with the offering of the Medium Term Notes, Series 1 and associated French translation.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Audit-related fees are for assurance and related services reasonably related to the performance
of the audit or review of the Corporation's financial statements and not reported under "Audit Fees" above. 2012
and 2011 fees included audit fees for the pension plan audit.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Tax fees were for tax compliance, tax advice and tax planning. The fees were for services performed
by the Corporation's auditors' tax division except those tax services related to the audit. 2012 and 2011 fees included general
tax consultation and tax compliance fees incurred for preparing and filing the tax returns for the Corporation's subsidiaries.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | All other fees are fees for products and services provided by the Corporation's auditors other
than those described as "Audit Fees", "Audit-related Fees" and "Tax Fees".
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------



INTEREST OF MANAGEMENT AND OTHERS IN
MATERIAL TRANSACTIONS



To the knowledge of the directors and executive
officers of the Corporation, none of the directors or executive officers of the Corporation, and no person or company that is the
direct or indirect beneficial owner of, or who exercises control or direction over, more than 10 percent of the Common Shares,
and no associate or affiliate of any of the foregoing, has had any material interest, direct or indirect, in any material transaction
with Pembina since January 1, 2010 or in any proposed transaction that would materially affect Pembina.



MATERIAL CONTRACTS



Set out below are the contracts material
to the Corporation and its subsidiaries that were entered into during 2012 or are currently in effect, other than contracts entered
into in the ordinary course of business:



| | 1. | the Provident Arrangement Agreement (see "Corporate Structure – Provident Acquisition").
| | -- | ----------------------------------------------------------------------------------------



Copies of the above contracts are filed
on the Corporation's profile on the SEDAR website www.sedar.com.



LEGAL PROCEEDINGS



There are no outstanding legal proceedings
material to the Corporation to which the Corporation or any of its direct or indirect subsidiaries is a party or in respect of
which any of the properties of the Corporation or any of its direct or indirect subsidiaries are subject, nor are there any such
proceedings known to be contemplated.



- 63 -







REGISTRAR AND TRANSFER AGENT



The
registrar and transfer agent for the Common Shares, the Convertible Debentures and Medium Term Notes is Computershare Trust Company
of Canada, at its principal offices in Calgary, Alberta, Canada and Toronto, Ontario, Canada. The co-transfer agent and registrar
for the Common Shares in the U.S. is Computershare Investor Services U.S., at its principal offices in Golden, Colorado, U.S.



INTERESTS OF EXPERTS



The auditors of the Corporation are KPMG
LLP, Chartered Accountants, of Calgary, Alberta, Canada. KPMG LLP has confirmed that they are independent with respect to the Corporation
within the meaning of the Rules of Professional Conduct of the Institute of Chartered Accountants of Alberta and within the meaning
of the U.S. Securities Act of 1933 and the applicable rules and regulations thereunder adopted by the SEC and the Public Company
Accounting Oversight Board (United States).



Prior to the completion of the Provident
Acquisition, the auditors of Provident were PricewaterhouseCoopers LLP, Chartered Accountants, of Calgary, Alberta, Canada. PricewaterhouseCoopers
LLP has confirmed that they were independent with respect to Provident within the meaning of the Rules of Professional Conduct
of the Institute of Chartered Accountants of Alberta.



ADDITIONAL INFORMATION



Additional information relating to the Corporation
and legacy Provident filed with the Canadian securities commissions and the SEC can be found on the Corporation's company profile
on the SEDAR website at www.sedar.com, the EDGAR website at www.sec.gov, and on Pembina's website at www.pembina.com. Additional
information, including directors' and officers' remuneration and indebtedness, principal holders of the Corporation's securities
and securities authorized for issuance under equity compensation plans, as applicable, is contained in the Corporation's information
circular for its most recent annual meeting of securityholders that involved the election of directors. Furthermore, additional
financial information relating to the Corporation is provided in the Corporation's audited consolidated financial statements and
management's discussion and analysis for the year ended December 31, 2012, which have also been filed on SEDAR and EDGAR.



Any document referred to in this Annual
Information Form and described as being filed on SEDAR at www.sedar.com and on EDGAR at www.sec.gov (including those documents
referred to as being incorporated by reference in this Annual Information Form) may be obtained free of charge from us by contacting
our Investor Relations Department by telephone (toll free 1-855-880-7404) or by email (investor-relations@pembina.com).



- 64 -







APPENDIX "A"



AUDIT COMMITTEE CHARTER



| | I. | ROLE AND OBJECTIVES
| | -- | -------------------



The Audit Committee is a committee of the
Board of Directors (the "Board") of Pembina Pipeline Corporation (the "Corporation") to which the Board has
delegated certain responsibilities relating to the integrity of financial reporting, oversight of the external auditors, oversight
of Pembina's internal audit function and the performance of internal accounting procedures, for the Corporation and entities controlled
by the Corporation (collectively, "Pembina"). The Audit Committee also prepares reports, if and when required, for inclusion
in Pembina's disclosure documents.



The objectives of the Audit Committee are:



| | (a) | assist Board oversight of the integrity, preparation
and disclosure of the financial statements and related matters;
| | --- | --------------------------------------------------------------------------------------------------------------------



| | (b) | to assist Board oversight of the external auditor's qualifications,
independence and performance;
| | --- | -------------------------------------------------------------------------------------------------



| | (c) | to assist Board oversight of Pembina's compliance with
legal and regulatory requirements;
| | --- | -----------------------------------------------------------------------------------------



| | (d) | to assist Board oversight of Pembina's internal audit
function;
| | --- | ---------------------------------------------------------------



| | (e) | to increase the transparency, credibility and objectivity
of financial reporting;
| | --- | ---------------------------------------------------------------------------------



| | (f) | to enhance communication between management, the external
auditors, and the Board; and
| | --- | --------------------------------------------------------------------------------------



| | (g) | to discuss policies with respect to risk assessment and
management.
| | --- | -------------------------------------------------------------------



| | II. | MEMBERSHIP AND POLICIES
| | --- | -----------------------



The Board, based on recommendation from
the Governance Committee, will appoint members of the Audit Committee. Each member shall serve until his or her successor is appointed,
unless he or she shall resign or be removed by the Board or he or she shall otherwise cease to be a director of the Corporation.



The Audit Committee must be composed of
not less than three (3) members of the Board, each of whom must be independent and financially literate pursuant to the Corporation's
Standards for Director Independence. In addition, at least one member must be an "audit committee financial expert" within
the meaning of that term under the United States Securities Exchange Act of 1934, as amended, and the rules adopted by the United
States Securities and Exchange Commission thereunder. The Board Chair, in consultation with the Governance Committee, will select
the Chair of the Audit Committee from amongst its members.



The Audit Committee may at any time retain
outside financial, legal or other advisors as it determines necessary to carry out its duties, at the expense of Pembina. Pembina
shall provide for appropriate funding, as determined by the Audit Committee in its capacity as a committee of the Board, for payment
of: (i) compensation to the external auditor for the purpose of preparing or issuing an audit report or performing other audit,
review or attest services for Pembina, (ii) compensation to any advisors employed by the Audit Committee, and (iii) ordinary administrative
expenses of the Audit Committee that are necessary or appropriate in carrying out its duties.



In discharging its duties under this Charter,
the Audit Committee may investigate any matter brought to its attention and will have access to all books, records, facilities
and personnel, may conduct meetings or interview any officer or employee, the Corporation's legal counsel, external auditors and
consultants, and may invite any such persons to attend any part of any meeting of the Audit Committee.



The Audit Committee has neither the duty
nor the responsibility to conduct audit, accounting or legal reviews, or to ensure that the Corporation's financial statements
are complete, accurate and in accordance with Canadian generally accepted accounting principles applicable to publicly accountable
enterprises, which is within the framework of International Financial Reporting Standards as issued by the International Accounting
Standards Board incorporated into the Canadian Institute of Chartered Accountants (CICA) Handbook - Part 1 (referred to as "GAAP");
rather, management is responsible for the financial reporting process, internal review process, and the preparation of the Corporation's
financial statements in accordance with GAAP, and the Corporation's external auditors are responsible for auditing those financial
statements.



– A-1 –







| | III. | FUNCTIONS
| | ---- | ---------



| | A | External Auditor
| | - | ----------------



The Audit Committee, in its capacity as
a committee of the Board and subject to the rights of holders of the Corporation's shares ("Shareholders") and applicable
law, is directly responsible for the overseeing the relationship of the external auditor firm with Pembina, including the appointment,
termination, compensation, retention and oversight of the work of the external auditor engaged by the Corporation (including resolution
of disagreements or disputes between management and the auditor regarding financial reporting) for the purpose of preparing or
issuing an audit report or performing other audit, review or attest services for Pembina. The Audit Committee's selection of the
external auditor is subject to approval by the Shareholders.



The external auditor will report directly
to the Audit Committee.



The Audit Committee must pre-approve, subject
to any de minimis exemption available under applicable laws, the appointment of the external auditor to provide all audit
services and permitted non-audit services to be provided by the external auditor, including the terms thereof and the fees related
thereto. If desired, the Audit Committee may establish detailed policies and procedures for pre-approval of the provision of audit
services and permitted non-audit services by the external auditor. The Audit Committee may delegate this ability to one or more
members of the Audit Committee to the extent permitted by applicable law, provided that any pre-approvals granted pursuant to
any such delegation must be detailed as to the particular service to be provided, may not delegate Audit Committee responsibilities
to management of Pembina, and must be reported to the full Audit Committee at its next scheduled meeting.



The Audit Committee will consider whether
the provision of any non-audit services is compatible with the auditor's independence.



The Audit Committee will obtain and review
at least annually a written report by the external auditor setting out the auditor's internal quality-control procedures, any material
issues raised by the most recent internal quality-control review, or peer review, of the firm, or by any inquiry or investigation
by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried
out by the firm, and any steps taken to deal with any such issues.



The Audit Committee will review and discuss
with the external auditor all relationships that the external auditor and its affiliates have with Pembina and its affiliates in
order to determine the external auditor's independence, including, without limitation:



| | (a) | requesting, receiving and reviewing, on a periodic basis but at least annually, a formal written statement from the external
auditor delineating all relationships that may reasonably be thought to bear on the independence of the external auditor with respect
to Pembina;
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | discussing with the external auditor any disclosed relationships or services that the external auditor believes may affect
the objectivity and independence of the external auditor; and
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | recommending that the Board take appropriate action in response to the external auditor's report to satisfy itself of the external
auditor's independence.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------



In addition, in respect of the external
auditor, the Audit Committee will:



| | (a) | consider whether the external auditor's quality controls are compatible with the auditor's independence;
| | --- | --------------------------------------------------------------------------------------------------------



| | (b) | evaluate, at least annually, the auditor's qualifications, performance and independence;
| | --- | ----------------------------------------------------------------------------------------



| | (c) | ensure the rotation of partners on the audit engagement team of the external auditor in accordance with applicable law;
| | --- | -----------------------------------------------------------------------------------------------------------------------



– A-2 –







| | (d) | review and evaluate the lead partner of the external auditor;
| | --- | -------------------------------------------------------------



| | (e) | periodically consider whether, in order to assure continuing external auditor independence, it is appropriate to adopt a policy
of rotating the external auditing firm on a regular basis; and
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (f) | set clear hiring policies for Pembina regarding partners and employees and former partners and employees of the present and
former external auditor of the Corporation (it being understood that partners and employees and former partners and employees of
the present and former external auditor may not be hired by the Corporation without the prior approval of the Audit Committee);
and
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (g) | present its conclusions with respect to the external auditor to the Board on at least an annual basis.
| | --- | ------------------------------------------------------------------------------------------------------



| | B | Internal Auditor
| | - | ----------------



The Audit Committee, in its capacity as
a committee of the Board will carry out the following responsibilities with regard to the internal audit function:



| | (a) | review with management and the head of the internal audit the charter, activities, staffing, and organizational structure of
internal audit;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | have final authority to review and approve the annual audit plan and all major changes to the plan; and
| | --- | -------------------------------------------------------------------------------------------------------



| | (c) | ensure there are no unjustified restrictions or limitations, and review and concur in the appointment, replacement, or dismissal
of the head of internal audit; and
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | on a regular basis, meet separately with the head of internal audit to discuss any matters that the Audit Committee or the
head of internal audit believes should be discussed privately.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | C | Oversight of Financial Statements and Internal Controls
and Procedures
| | - | ----------------------------------------------------------------------



The Audit Committee will meet with management
and the external auditor to review and discuss annual and quarterly financial statements and management's discussion and analyses
and earnings press releases. The Audit Committee will review and discuss the financial information to be included in public disclosure
documents and determine whether to recommend to the Board that the financial statements be presented to the Board and to the Shareholders
and included in public disclosure documents. In connection with these procedures, the Audit Committee will, as applicable and without
limitation:



| | (a) | review and discuss with management the type and presentation of information to be included in earnings press releases, paying
particular attention to any use of "pro forma" or "adjusted" non-GAAP information, as well as financial information
and earnings guidance provided by Pembina to analysts and rating agencies. Such discussion may be done generally (consisting of
discussing the types of information to be disclosed and the types of presentations to be made);
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | review with management and the external auditor any material correspondence with regulators or government agencies and any
employee complaints or published reports which raise issues regarding the Corporation's financial statements or accounting policies;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | meet periodically with the appropriate legal advisors to review material legal issues, the Corporation's compliance policies
and any material reports or inquiries received from regulators or governmental agencies;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | will review major issues regarding accounting principles and financial statement presentations;
| | --- | -----------------------------------------------------------------------------------------------



| | (e) | review analyses prepared by, and discuss with, management and the external auditor with respect to significant financial reporting
issues and judgments made in connection with the preparation of Pembina's financial statements, including any significant changes
in Pembina's selection or application of accounting principles, any major issues as to the adequacy of Pembina's internal controls
and any special steps adopted in light of material control deficiencies;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



– A-3 –







| | (f) | review and discuss with management and the external auditor the effect of regulatory and accounting initiatives, as well as
off-balance sheet structures, on Pembina's financial statements;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (g) | review with the Chief Financial Officer (the "CFO") and the external auditor any changes in accounting policies as
well as any other significant financial reporting issues; and
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (h) | review Pembina's financial reporting procedures and policies to ensure compliance with all legal and regulatory requirements
and to investigate any non-adherence to those procedures and policies.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



In addition, the Audit Committee will review
and discuss a report from the external auditor at least quarterly regarding:



| | (a) | all critical accounting policies and practices to be used;
| | --- | ----------------------------------------------------------



| | (b) | all alternative treatments of financial information within GAAP that have been discussed with management, including the ramifications
of the use of such alternative disclosures and treatments, and the treatment preferred by the external auditor; and
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | other material written communications between the external auditor and management, such as any management letter or schedule
of unadjusted differences.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------



In connection with its review of the annual
audited financial statements and quarterly financial statements, the Audit Committee will also review the process for the CEO and
CFO certifications with respect to the financial statements and Pembina's disclosure controls and internal controls, including
any material deficiencies or changes in those controls. The Audit Committee will review the disclosures made to the Audit Committee
by the Corporation's CEO and CFO during their certification process. In particular, the Audit Committee will review with the CEO,
CFO, internal auditor and external auditor: (i) all significant deficiencies and material weaknesses in the design or operation
of Pembina's internal control over financial reporting that could adversely affect Pembina's ability to record, process, summarize
and report financial information required to be disclosed by the Corporation in the reports that it files or submits under applicable
securities laws, within the required time periods, and (ii) any fraud, whether or not material, that involves management of Pembina
or other employees who have a significant role in Pembina's internal control over financial reporting. In addition, the Audit Committee
will review with the CEO, CFO and the internal auditor Pembina's disclosure controls and procedures and at least annually will
review management's conclusions about the efficacy of disclosure controls and procedures, including any significant deficiencies
or material non-compliance with disclosure controls and procedures.



The Audit Committee will also annually discuss
with the external auditor whether they have become aware of any illegal acts in the course of the audit of Pembina's financial
statements.



In connection with the annual audit of Pembina's
financial statements, the Audit Committee will review with the external auditor:



| | (a) | prior to commencement of the audit, plans, staffing and scope for each annual audit;
| | --- | ------------------------------------------------------------------------------------



| | (b) | the results of the annual audit and resulting opinion including major issues regarding accounting and auditing principles and
practices;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------



| | (c) | the adequacy of internal controls;
| | --- | ----------------------------------



| | (d) | any audit problems or difficulties, including any restrictions on the scope of the external auditor's activities or on access
to requested information, any significant disagreements with management, and management's response (such review should also include
discussion of the responsibilities, budget and staffing of Pembina's internal audit function).
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The Audit Committee will also establish
a Whistleblower Policy, including procedures for:



| | (a) | the receipt, retention and treatment of complaints received regarding accounting, internal accounting controls or auditing
matters; and
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------



– A-4 –







| | (b) | the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.
| | --- | ----------------------------------------------------------------------------------------------------------------------



| | D | Risk Management
| | - | ---------------



The Audit Committee will review, discuss
and monitor Pembina's major financial risk exposures, including commodity and hedging risk, and risk management and assessment
policies, and the steps taken by management to monitor and control those exposures. In respect of these responsibilities, the Audit
Committee must discuss guidelines and policies to govern the process by which risk assessment and management is undertaken and
may develop such guidelines or policies that it deems necessary or desirable, or direct that any such guidelines or policies be
developed under its supervision.



| | E | Additional Duties and Responsibilities
| | - | --------------------------------------



The Audit Committee will also:



| | (a) | review the appointment of the CFO and any other key financial executives who are involved in the financial reporting process;
| | --- | -----------------------------------------------------------------------------------------------------------------------------



| | (b) | review and reassess the adequacy of this Charter annually and submit any proposed changes to the Governance Committee for approval;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------



| | (c) | review Pembina's asset retirement obligations and receive reports related to future abandonment and decommissioning costs;
| | --- | --------------------------------------------------------------------------------------------------------------------------



| | (d) | facilitate information sharing with other committees as required to address matters of mutual interest or concern in respect
of the Corporation's financial reporting;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (e) | report regularly to the Board on its activities, including the results of meetings and reviews undertaken, any issues that
arise with respect to quality or integrity of the Corporation's financial statements, Pembina's compliance with legal or regulatory
requirements, the performance and independence of the external audit, or the internal audit function and any associated recommendations;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (f) | receive and review reports from the Corporate Pension Committee at Pembina and to recommend or approve changes as appropriate
with respect to risk management of pension assets and liabilities, actuarial valuation as required by statute, the Statement of
Investment Policies and Procedures, funding policy and corporate performance for the pension plans;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (g) | jointly with the Human Resources and Compensation Committee, report on the status of the pension plans to the Board at least
annually;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------



| | (h) | the Audit Committee shall meet separately with the internal auditor, periodically as the Audit Committee may deem appropriate,
to consider any matter that the Audit Committee or internal auditor believes should be brought to the attention of the Board, the
Audit Committee or the Shareholders;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (i) | the Audit Committee shall meet separately with the external auditor, periodically as the Audit Committee may deem appropriate,
to consider any matter that the Audit Committee or external auditor believes should be brought to the attention of the Board, the
Audit Committee or the Shareholders; and
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (j) | the Audit Committee shall meet separately with the Corporation's management, periodically as the Audit Committee may deem appropriate,
to consider any matter that the Audit Committee or management believes should be brought to the attention of the Board, the Audit
Committee or the Shareholders.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



In addition, The Audit Committee will perform
such other functions as are assigned by law and the Corporation's by-laws, and on the instructions of the Board.



– A-5 –







| | IV. | MEETINGS
| | --- | --------



The Audit Committee will meet quarterly,
or more frequently at the discretion of the members of the Audit Committee, as circumstances require.



Notice of each meeting of the Audit Committee
will be given to each member and to the internal and external auditors, who are entitled to attend each meeting of the Audit Committee.
The notice will:



| | (a) | be in writing (which may be communicated by fax or email);
| | --- | ----------------------------------------------------------



| | (b) | be accompanied by an agenda that states the nature of the business to be transacted at the meeting in reasonable detail;
| | --- | ------------------------------------------------------------------------------------------------------------------------



| | (c) | to the extent practicable, be accompanied by copies of documentation to be considered at the meeting; and
| | --- | ---------------------------------------------------------------------------------------------------------



| | (d) | be given at least 48 hours preceding the time stipulated for the meeting, unless notice is waived by the committee members.
| | --- | ---------------------------------------------------------------------------------------------------------------------------



A quorum for a meeting of the Audit Committee
is a majority of the members present in person or by telephone.



If the Chair is not present at a meeting
of the Audit Committee, a Chair will be selected from among the members present. The Chair will not have a second or deciding vote
in the event of an equality of votes.



At each meeting, the Audit Committee will
meet in-camera, without management or internal or external auditors present, and will meet in separate sessions with each of the
head of internal audit and the lead partner of the external auditor at least annually.



The Audit Committee may invite others to
attend any part of any meeting of the Audit Committee as it deems appropriate. This includes other directors, members of management,
any employee, the Corporation's legal counsel, external auditors and consultants.



Minutes will be kept of all meetings of
the Audit Committee. The minutes will include copies of all resolutions passed at each meeting, will be maintained with the Corporation's
records, and will be available for review by members of the Audit Committee, the Board, and the external auditor.



| | V. | OTHER MATTERS
| | -- | -------------



| | A | Review of Charter
| | - | -----------------



The Audit Committee shall review and reassess
the adequacy of this Charter at least annually or otherwise, as it deems appropriate, and propose recommended changes to the Governance
Committee.



| | B | Reporting
| | - | ---------



The Audit Committee shall report regularly
to the Board about any issues that arise with respect to the quality or integrity of the Corporation's financial statements, Pembina's
compliance with legal or regulatory requirements, the performance and independence of the external auditor, or the internal audit
function.



| | C | Evaluation
| | - | ----------



The Audit Committee's performance shall
be evaluated annually by the Governance Committee and the Board as part of the Board assessment process established by the Governance
Committee and the Board.





– A-6 –