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Overview of Pembina Pipeline Corporation
Pembina Pipeline Corporation (NYSE: PBA) is a leading North American energy transportation and midstream service provider with over 70 years of experience in the industry. The company owns and operates an extensive network of pipelines, gas gathering and processing facilities, and hydrocarbon storage and export terminals. These assets are strategically located in Western Canada, Eastern Canada, and the United States, enabling Pembina to play a critical role in connecting energy producers with end markets across the continent and beyond.
Core Business Areas
Pembina's operations are organized into three primary segments:
- Pipeline Transportation: Pembina owns and operates pipelines that transport a wide range of hydrocarbon products, including conventional and synthetic crude oil, heavy oil, oil sands products, condensate, and natural gas liquids (NGLs). These pipelines provide reliable and cost-effective transportation solutions for producers in Western Canada and the U.S.
- Gas Gathering and Processing: The company operates an extensive network of gas gathering systems and processing facilities. These assets are designed to capture and process natural gas and its associated liquids, ensuring efficient and environmentally responsible operations.
- Midstream and Marketing Services: Pembina offers a full spectrum of midstream services, including fractionation, storage, and marketing of natural gas liquids. Its integrated approach allows the company to provide customized solutions that meet the diverse needs of its customers.
Integrated Value Chain
One of Pembina's key differentiators is its integrated value chain, which spans the entire hydrocarbon lifecycle. From transportation and processing to storage and marketing, Pembina's interconnected assets and commercial operations enable it to deliver seamless energy solutions. This integration not only enhances operational efficiency but also provides customers with a one-stop-shop for their midstream needs.
Geographic and Strategic Advantage
Pembina's assets are strategically located in energy-rich regions such as Western Canada and key natural gas liquids markets in Eastern Canada and the U.S. This geographic positioning allows Pembina to capitalize on proximity to major production basins like the Montney and Duvernay formations, as well as access to export markets. The company's export terminals further extend its reach, enabling international trade and enhancing its competitive positioning.
Competitive Landscape
Pembina operates in a highly competitive midstream sector, facing competition from other large players such as Enbridge and TC Energy. However, Pembina's integrated asset base, geographic focus, and ability to provide end-to-end solutions set it apart. Its commitment to operational excellence and customer service further strengthens its market position.
Challenges and Opportunities
Like other companies in the energy sector, Pembina faces challenges such as regulatory scrutiny, environmental concerns, and market volatility. However, its diversified asset portfolio and integrated business model provide resilience against these challenges. Additionally, Pembina's focus on innovation and strategic partnerships positions it to capitalize on emerging opportunities in the energy transition and infrastructure development.
Significance in the Energy Industry
As a critical link in the energy value chain, Pembina plays a vital role in ensuring the safe and efficient transportation and processing of hydrocarbons. Its operations not only support energy producers but also contribute to the reliability and sustainability of North America's energy infrastructure. By leveraging its extensive experience and strategically located assets, Pembina continues to deliver value to its customers, investors, and communities.
Pembina Pipeline Corporation (PBA) confirmed it will not change the share exchange ratio of 0.50 common shares in its proposed acquisition of Inter Pipeline Ltd. (IPL). The board of directors of Inter Pipeline has unanimously recommended this Strategic Combination.
Shareholders are urged to vote in favor by the proxy voting deadlines on July 27, 2021, with the transaction expected to close in late Q3 or early Q4 2021.
Pembina Pipeline Corporation announced that the Alberta Securities Commission (ASC) upheld its proposed acquisition plan with Inter Pipeline and confirmed a $350 million break fee that may be payable by Inter Pipeline under certain conditions. The ASC dismissed Brookfield's bid application and established a higher minimum tender condition for Brookfield's takeover bid at 55% of the shares. This decision protects shareholder rights and emphasizes the advantages of the Pembina-Inter Pipeline Arrangement, which proposes a significant increase in dividends and aims to create a leading energy infrastructure firm.
Pembina Pipeline Corporation has declared a common share cash dividend of $0.21 per share for July 2021, payable on August 13, 2021 to shareholders of record as of July 23, 2021. This dividend is recognized as an 'eligible dividend' for Canadian tax purposes. For U.S. shareholders, the equivalent cash dividend is approximately $0.1687 per share. The Board of Directors also announced several quarterly preferred share dividends with varying payment dates in September 2021.
Pembina Pipeline Corporation (PBA) has filed a Joint Circular for a special virtual meeting scheduled for July 29, 2021, to discuss a proposed strategic combination with Inter Pipeline Ltd. The deal, endorsed by both boards, aims to create a leading energy infrastructure company in Canada. Shareholders of Inter Pipeline will receive 0.5 Pembina shares for each of their shares, equating to an immediate value of $20.06. This combination is expected to enhance shareholder value through increased dividends, synergies, and growth opportunities.
Pembina Pipeline Corporation (PBA) and Inter Pipeline Ltd. have filed cross-applications with the Alberta Securities Commission to address disclosure issues related to Brookfield's hostile takeover offer for Inter Pipeline. Pembina's CEO emphasized the importance of transparency for shareholders in choosing between offers. The Inter Pipeline Board supports Pembina's strategic share-exchange transaction, offering a 175% dividend increase for shareholders. Pembina seeks regulatory relief to ensure fair processes and protect shareholder rights against Brookfield's tactics.
Pembina Pipeline Corporation (PBA) and TC Energy are collaborating on a world-scale carbon transportation and sequestration system, the Alberta Carbon Grid (ACG). This project aims to transport over 20 million tonnes of CO2 annually, enhancing emissions management for industries in Alberta. The system will utilize existing pipeline infrastructure, facilitating a cost-effective and environmentally friendly solution.
With a target operational date for the first phase in 2025, the ACG is pivotal in supporting Canada’s climate targets and economic growth, creating jobs and promoting a lower-carbon future.
Pembina Pipeline Corporation (TSX: PPL, NYSE: PBA) announced a mid-year business update, showcasing robust growth in pipeline and facility volumes, exceeding pre-COVID levels. Over $400 million in assets were placed into service this year, including the new Prince Rupert Terminal. The company is reactivating the Phase IX Peace Pipeline Expansion, with a projected cost of approximately $120 million. Pembina identified over $7 billion in development projects, focusing on sustainable growth and partnerships with Indigenous communities. The positive outlook is supported by strong commodity prices and anticipated record volumes.
Pembina Pipeline Corporation and the Haisla Nation have partnered to develop the Cedar LNG Project, aiming to leverage Canada's natural gas resources for global markets. This initiative, located in Kitimat, British Columbia, seeks to produce low-carbon LNG and is expected to create up to 500 construction jobs and 100 permanent positions. The project aims for a 2023 final investment decision and anticipates an operational date in 2027. The total estimated cost is around US$2.4 billion.
Pembina Pipeline Corporation (PBA) cautions Inter Pipeline Ltd. (IPL) shareholders against accepting Brookfield's hostile offer, emphasizing the value of a board-supported strategic merger between Pembina and Inter Pipeline. The merger promises a 45% premium, immediate dividend increases, and significant synergies between $150-$200 million. Pembina assures tax-deferred rollover options for Canadian shareholders, alongside substantial growth opportunities and regulatory certainty. The anticipated closing date for the merger is late-Q3/early-Q4 2021.
Pembina Pipeline Corporation (PBA) has declared a cash dividend of $0.21 per common share for June 2021, payable on July 15, 2021, to shareholders on record as of June 25, 2021. This qualifies as an 'eligible dividend' for Canadian income tax. For U.S. shareholders, the dividend is expected to be approximately $0.1742 per share. Pembina continues to emphasize its commitment to delivering sustainable, reliable services within North America's energy sector.
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