Successful Investigation Results in Guilty Plea and a $200,000 Financial Penalty

PRINCE GEORGE, BC – April 22, 2004 - Federated Pipe Lines Ltd., a wholly owned subsidiary of Pembina Pipeline Income Fund, today pled guilty in the Provincial Court of British Columbia to depositing a deleterious substance, namely crude oil, into water frequented by fish, contrary to
section 36(3) of the Fisheries Act.

An agreed statement of facts was jointly filed with the court by Crown and defense counsel.

Federated Pipe Lines Ltd. was sentenced to a financial penalty of $200,000, comprising of a fine of $5,000 and a payment of $195,000 to the Environmental Damages Fund, which is administered by Environment Canada. The money will be used to conserve and protect fish and fish habitat in the Peace River watershed in north-eastern British Columbia.

Environment Canada, assisted by Fisheries and Oceans Canada and the British Columbia Conservation Officer Service, conducted a lengthy investigation of a spill of crude oil into the Pine River near Chetwynd, British Columbia. As a result of the investigation, Environment Canada laid charges. The investigation revealed that on July 31, 2000, a pipeline operated by Federated Pipe Lines Ltd. ruptured and as a result, crude oil was released into the environment. The rupture was caused by a defect in the pipeline. Federated Pipe Lines Ltd. cooperated with Environment Canada officials throughout the investigation.

The Environmental Damages Fund is rooted in the “polluter pays” principle, and courts can use the Fund to ensure that compensation is provided by convicted polluters for the damage that they cause to the environment. The Fund also gives the court a way to ensure that financial penalties imposed under the Canadian Environmental Protection Act, 1999 and the Fisheries Act are used for environmental protection purposes.

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