\nPembina Pipeline Corporation (“Pembina” or the “Company”) (TSX: PPL; NYSE: PBA) announced today its 2025 financial guidance and provided a business update.<\/p>\n
This press release features multimedia. View the full release here: https:\/\/www.businesswire.com\/news\/home\/20241212048876\/en\/<\/a><\/p>\n Highlights<\/b><\/p>\n Business Update<\/b><\/p>\n \nPembina anticipates a record setting financial year in 2024 reflecting the positive impact of recent acquisitions, growing volumes in the WCSB, and a strong contribution from the marketing business. As expected, volumes in the conventional pipelines business have strengthened in the fourth quarter relative to the first three quarters of the year.<\/p>\n \nIn 2024, the Company meaningfully advanced its strategy through the full consolidation of Alliance Pipeline and Aux Sable (the “Alliance\/Aux Sable Transaction”), and by reaching a positive final investment decision on the Cedar LNG Project. These two accomplishments highlight Pembina\u2019s focus on strengthening the existing franchise, increasing exposure to resilient end-use markets, and accessing global market pricing for Canadian energy products. In addition, Pembina Gas Infrastructure (“PGI”) announced transactions with Veren Inc. and Whitecap Resources Inc., creating opportunities with attractive economics that are expected to enhance asset utilization, capture future volumes, and benefit Pembina\u2019s full value chain. Through these two transactions, we are realizing the vision set forth with the creation of PGI in 2022.<\/p>\n \nOther accomplishments over the past year include the completion of the $430 million Phase VIII Peace Pipeline Expansion and the $90 million NEBC MPS Expansion, on time and under budget; sanctioning $210 million (net to Pembina) of new projects, including the Wapiti Expansion and K3 Cogeneration Facility; and entering into long-term agreements with Dow Chemical Canada to supply up to 50,000 barrels per day (“bpd”) of ethane for their Path2Zero Project (the “Dow Supply Agreement”).<\/p>\n \nThrough its extensive asset base and integrated value chain, Pembina can provide a full suite of transportation and midstream services across multiple hydrocarbons \u2013 natural gas, crude oil, condensate, and NGL. This uniquely positions the Company to benefit from a robust, multi-year growth outlook for the WCSB driven by transformational developments that include the recent completion of the Trans Mountain Pipeline expansion, new West Coast liquefied natural gas (“LNG”) and NGL export capacity, and the development of new petrochemical facilities creating significant demand for ethane and propane. Growing production and demand for services in the WCSB continues to provide opportunities to increase utilization on existing assets and pursue expansion opportunities.<\/p>\n \nAs attention turns to 2025, Pembina is focused on several key priorities including:<\/p>\n Alliance Pipeline CER Toll Review<\/span><\/p>\n \nThe CER initiated a review of Alliance Pipeline\u2019s tolls, which were previously approved by the CER. As such, the CER has ordered Alliance Pipeline to submit for approval a detailed toll application justifying why the current tolling methodology remains compliant with the Canadian Energy Regulator Act,<\/i> or a new tolling methodology application. Likewise, the CER has ordered that the current tolls shall be deemed interim tolls until resolution of the above.<\/p>\n \nAlliance Pipeline’s tolls for the Canadian segment of the pipeline are approved by the CER, while its tolls for the United States segment are approved by the Federal Energy Regulatory Commission. Alliance Pipeline’s Canadian long-term firm service tolls have remained level since they were approved by the CER in 2015, while its full path tolls to Chicago have declined by approximately 15 percent. In comparison, tolls on alternative systems have increased by approximately 30 percent. Likewise, Alliance Pipeline has operated at an industry leading reliability rate. Furthermore, Alliance Pipeline remains an \u2018at-risk\u2019 commercial model where returns and cost recovery are squarely driven by the customer demand for its service and Alliance Pipeline’s ability to efficiently provide such service. By contrast, the competitive alternatives and the majority of CER regulated Group 1 natural gas pipelines’ returns are not materially exposed to volume or cost recovery risk.<\/p>\n \nAlliance Pipeline is working collaboratively with its stakeholders through the CER review process and will remain focused on delivering the highest standards of service that customers have come to expect. Pembina will work expeditiously throughout 2025 with shippers towards a negotiated solution, in accordance with all CER direction.<\/p>\n \nApproximately 60 percent of the adjusted EBITDA contribution from Alliance Pipeline is generated from the Canadian portion of the pipeline. Pembina\u2019s 2025 adjusted EBITDA guidance, discussed below, assumes the existing toll is in effect for the full year.<\/p>\n Board of Directors Appointment<\/span><\/p>\n \nPembina is pleased to announce that Mr. Alister Cowan has been appointed to the board of directors effective December 3, 2024.<\/p>\n \nMr. Cowan has over 20 years of experience in the energy industry and has significant financial executive level experience at various public companies. In 2023, he was Executive Advisor of Suncor Energy Inc. (“Suncor”) and was previously Chief Financial Officer of Suncor from 2014 to 2023 where he oversaw financial operations, accounting, investor relations, treasury, tax, internal audit, and enterprise risk management. Prior to joining Suncor, Alister was Chief Financial Officer of Husky Energy Inc. from 2008 to 2014. Before that, he was Executive Vice President and Chief Financial Officer and Chief Compliance Officer of British Columbia Hydro and Power Authority. Mr. Cowan is a non-executive director of The Chemours Company and of Smiths Group PLC. He has a Bachelor of Arts in Accounting and Finance from Heriot-Watt University and is a member of the Institute of Chartered Accountants of Scotland.<\/p>\n \nMr. Cowan has also been appointed to the audit committee.<\/p>\n \n“The board of directors is excited to welcome Alister, and we look forward to working with him. Alister is a seasoned financial executive with extensive experience in Canadian energy. We are sure to benefit from his contribution as we work together to ensure Pembina’s continued success during a transformational period of growth in the Canadian oil and gas industry,” said Henry Sykes, Chair of the Board.<\/p>\n 2025 Guidance<\/b><\/p>\n \nPembina is anticipating 2025 adjusted EBITDA of $4.2 billion to $4.5 billion. Relative to the midpoint of Pembina\u2019s adjusted EBITDA guidance range for 2024, the major factors driving the outlook for 2025 adjusted EBITDA include:<\/p>\n \nPembina has hedged approximately 32 percent of its 2025 frac spread exposure. For 2025, the weighted average price of Pembina’s frac spread hedges, excluding transportation and processing costs, is approximately C$36 per barrel, which compares to the prevailing 2025 forward price at the end of November 2024 of approximately C$37 per barrel.<\/p>\n \nThe mid-point of the 2025 adjusted EBITDA guidance range includes a forecasted contribution from the Marketing & New Ventures segment of $550 million.<\/p>\n \nExcluding the contribution from the Marketing & New Ventures segment, the midpoint of the 2025 guidance range reflects an approximately 5.5 percent increase in fee-based adjusted EBITDA, relative to the forecast for 2024. Further, Pembina remains on-track to achieve four to six percent compound annual growth of fee-based adjusted EBITDA per share from 2023-2026.<\/p>\n \nThe lower and upper ends of the guidance range are framed primarily as a function of (1) commodity prices and the resulting contribution from the marketing business; (2) interruptible volumes on key systems; and (3) the U.S.\/Canadian dollar exchange rate.<\/p>\n \nCurrent income tax expense in 2025 is anticipated to be $415 million to $470 million as Pembina will continue to benefit from the availability of tax pools from assets recently placed into service.<\/p>\n \nPembina’s 2025 adjusted EBITDA may be directly impacted by market-based prices as follows:<\/p>\n\n
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