Pembina Pipeline Corp. management predicted “meaningful” growth after robust second quarter activity and advancement of some key infrastructure projects.

Cedar LNG

CEO Scott Burrows said the second quarter was an indicator of the upward trajectory for the company, supported by growth in natural gas liquid volumes “across many of Pembina’s systems.” Support for Canadian LNG projects also is expected to lead to more growth in the months to come.

“Given industry tailwinds, I’m looking forward to continued strength and momentum into the back half of this year and beyond,” Burrows said.

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The Calgary-based firm also reported higher margins for its processing and transport and marketing businesses. This combined with increased volumes on its Peace Pipeline system to help it take in record revenue despite a decline in transportation volumes during 2Q2022.

Pembina continued engineering and contracting discussions for the Cedar floating liquefied natural gas terminal off the British Columbia (BC) coast at Kitimat. It is a 49.9% partner with the Haisla Nation.

Pembina has observed “considerable interest” from offtakers during commercial discussions about LNG, Burrows said.

Pembina also is exploring a carbon capture, utilization and storage (CCUS) project with TC Energy Corp. with the cooperation of the Alberta government. Burrows said the Alberta Carbon Grid was in the “planning” phase after the provincial government gave initial regulatory approval.

The firm is progressing plans to revive a previously deferred 90-mile addition to its Peace Pipeline system to add 235,000 b/d of Montney Shale liquids capacity. The project would include pumps and terminal upgrades throughout the system.

Pembina made service deals with three Montney producers during the quarter. The agreements would give the company “transportation, fractionation and marketing rights to a significant portion of forecast future growth” in the northeastern part of the Montney, which straddles BC and Alberta.

Pipeline volumes overall declined by 156,000 boe/d to 3.35 million boe/d in 2Q2022, compared with the year-prior period. The decrease was driven largely by the bankruptcy of Ruby Pipeline LLC. Contract expiration for the Nipisi and Mitsue systems, combined with lower volumes on the Alberta Ethane Gathering System, also contributed.

Pembina, which reports in Canadian dollars (C$1.00 = 77 cents), reported 2Q2022 earnings of $418 million (70 cents/share), a 161% change compared with $254 million (39 cents) in the year-prior period.

Gordon Jaremko contributed to this story.