Pembina Pipeline reports record Q3 earnings

Pembina Pipeline, the Canadian midstream services provider which also owns 49.9% of the proposed Cedar LNG project in BC, said November 3 it had record quarterly EBITDA of C$1.02bn (US$740mn) in Q3 2023, up from C$967mn in the same period last year.

But earnings fell to C$346mn from C$1.8bn a year ago, largely due to the benefits in Q3 2022 associated with Pembina’s sale of its field-based gas processing assets to Pembina Gas Infrastructure, a C$11.4bn joint venture created with KKR in August 2022.

Cash flow from operating activities fell to C$644mn from C$723mn, while total volumes in several crude oil and natural gas liquids pipeline systems and gas processing facilities operated by Pembina slipped to 3.39mn barrels of oil equivalent (boe)/day from 3.43mn boe/day in Q3 2022.

“Third quarter results are consistent with Pembina’s broader outlook for the Western Canadian Sedimentary Basin (WCSB) and the potential for significant growth driven by near term catalysts, including new egress from west coast LNG projects and the Trans Mountain Pipeline expansion, as well as potential new developments in Alberta’s petrochemical industry,” Pembina said. “Given the scope and reach of its assets, and existing long-term commercial agreements, Pembina is uniquely positioned to capture new volumes and benefit from this growth.”

Cedar LNG, in which Pembina holds a minority interest with majority owner Haisla Nation, is at the centre of that growth optimism, it said.

“Cedar LNG will provide a valuable outlet for WCSB natural gas to access global markets and is expected to achieve higher prices for Canadian producers, contribute to lower overall emissions, and enhance global energy security,” Pembina said.

A final investment decision (FID) is still targeted by the end of this year, Pembina said, but given the need to align several complex work streams, including the finalisation of a lump-sum engineering, procurement, and construction contract and the negotiation of definitive liquefaction tolling agreements, “FID may move into early 2024.”