Canada's Pembina Targets up to $755mn Cut in 2020 Capex

Canadian oil and gas transportation provider Pembina Pipeline announced on March 18 that it would slash its capital spending plan for this year by almost half, cutting between C$900mn and C$1.1bn ($617-755mn) in response to the Covid-19 pandemic and the steep decline in energy prices.

The Calgary-based company's 2020 capex budget will now total C$1.2-1.4bn. It will also defer several projects, including the Peace Pipeline Phase VII, VIII and IX expansions, valued at C$1.55bn, while cancelling extra discretionary spending plans. The deferred projects were mostly expected to come on stream between 2021 and 2023, and so Pembina's core earnings for this year will be unaffected. 

Having taken these actions, Pembina expects its pre-tax earnings (Ebitda) to fall within its previously disclosed guidance range, but near the lower end, it said.