Oil & Gas Product News Logo

Acquisition of assets continues to pay off for Pembina


Company info

4000, 585 - 8th Avenue S.W.
Calgary, AB
CA, T2P 1G1


Read more

A 2017 acquisition continues to drive improvements in year-over-year assets for Pembina Pipeline Corporation, which reported significant increases in second quarter earnings through June, 2018.

Pembina generated record second quarter results in revenue volumes, adjusted cash flow from operating activities, operating margin and Adjusted EBITDA, largely driven by a $10 billion increase in assets year-over-year from the acquisition of Veresen in 2017, and new assets placed into service following a large-scale capital program. 

Other highlights included:
  • Generated second quarter and year-to-date earnings of $246 million and $576 million, a 110 percent and 76 percent increase, respectively, over the same periods of the prior year, due to increased net revenue and share of profit from equity accounted investees;
  • Realized record second quarter and year-to-date operating margin of $787 million and $1.5 billion, 123 percent and 103 percent higher, respectively, than the second quarter and first half of 2017.
  • Achieved record second quarter and year-to-date Adjusted EBITDA of $700 million and $1.4 billion, representing 136 percent and 112 percent increases, respectively, over the same periods in 2017;
  • Cash flow from operating activities was $603 million for the second quarter and $1.1 billion year-to-date in 2018, increases of 67 percent and 60 percent, respectively, over the same periods in 2017. Adjusted cash flow from operating activities increased by 103 percent and 87 percent to $558 million and $1.1 billion in the second quarter and first half of 2018, respectively, compared to the same period in 2017; and
  • On a per share (basic) basis, cash flow from operating activities for the second quarter and year-to-date in 2018 increased 33 percent and 27 percent, respectively, compared to the same periods in the prior year. On a per share (basic) basis, adjusted cash flow from operating activities for the second quarter increased 63 percent and 48 percent year-to-date compared to the same periods of the prior year.

Operational Highlights 

  • Achieved record total volumes on a quarterly basis of 3,385 mboe/d and 3,333 mboe/d year-to-date, 48 percent and 43 percent increases, respectively, over the prior year;
  • Realized record Pipeline Division revenue volumes during the second quarter of 2,536 mboe/d and year-to-date of 2,479 mboe/d, representing 52 percent and 49 percent increases, respectively, compared to the same periods of 2017. Higher revenue volumes were the result of system expansions on Pembina's Peace and northeast B.C. pipeline systems, in addition to the fourth quarter 2017 Veresen Acquisition which included Alberta Ethane Gathering System ("AEGS"), Alliance and Ruby. The acquired assets accounted for an increase of 518 mboe/d revenue volumes (net to Pembina) in the second quarter of 2018 and 530 mboe/d on a year-to-date basis;
  • Facilities Division generated record revenue volumes of 849 mboe/d in the second quarter and 854 mboe/d year-to-date in 2018, increases of 37 percent and 29 percent, respectively, compared to the same periods of 2017. Increased revenue volumes were a result of the Redwater Fractionation Site III ("RFS III") being placed into service on June 30, 2017. Revenue volumes were also driven by the startup of the Duvernay I gas plant, the acquisition of Veresen Midstream in the fourth quarter of 2017, and increased take-or-pay commitments and additional volumes; and
  • Marketing & New Ventures Division realized strong second quarter performance, increasing marketed NGL volumes by 38 percent to 155 mboe/d over the comparable period in 2017 and generating quarterly operating margin of $118 million, a 146 percent increase over the comparable period in 2017. Strong results in the marketing business were driven by increased product prices and margins resulting in greater market opportunities, as well as Aux Sable, which contributed 37 mboe/d and $39 million in the second quarter and 41 mboe/d and $55 million year-to-date. Aux Sable was acquired in the fourth quarter of 2017, and has benefiting Pembina in 2018 from with access to US markets which offer relatively strong propane plus margins and a wide Chicago-AECO differential.

Pembina continues to generate record results driven by new assets acquired or placed into service over the past 18 months, according to company executives.

"We are seeing strong customer demand for our services, leading to higher volumes and increased utilization in the Pipelines and Facilities Divisions, combined with rising commodity prices which drive solid performance in our Marketing business," said Mick Dilger, Pembina's President and Chief Executive Officer. "As well, the recent strengthening of crude oil and condensate prices is a welcome development for our customers," added Mr. Dilger. 

At Pembina's 2018 Investor Day held on May 29, the company announced the next evolution in Pembina's corporate strategy, being the move towards accessing global markets. Pembina is committed to identifying additional opportunities to connect hydrocarbon production to new demand locations through the development of infrastructure that would extend our service offering further along the hydrocarbon value chain. These new developments will contribute to ensuring that hydrocarbons produced in the Western Canada Sedimentary Basin and the other basins where Pembina operates can reach the highest value markets throughout the world. Our proposed Jordan Cove LNG project, the proposed PDH/PP facility, and the Prince Rupert LPG Export Terminal are examples of such developments. 

Based on strong year-to-date results and the outlook for the remainder of the year, we reiterate our 2018 Adjusted EBITDA guidance range of $2,650 to $2,750 million. 

"Our strong second quarter results have once again demonstrated the strength of the underlying business, our unwavering commitment to our financial guardrails and our strategic approach to growth," concluded Scott Burrows, Pembina's Senior Vice President and Chief Financial Officer.

More from Industry News

Liberals must build Trans Mountain Expansion to fulfill promises and benefit Canadians: Canada Action

He's endorsed it, campaigned in favour of it and even arranged for taxpayers to purchase it. Now newly re-elected Prime Minister Justin Trudeau has to move quickly to build the long-delayed Trans Mountain Pipeline expansion project (TMX), says a non-partisan grassroots group that advocates for the energy and natural resources economy.

Investment firms to acquire AltaGas for $1.7 billion

AltaGas Canada Inc., the Public Sector Pension Investment Board, and the Alberta Teachers' Retirement Fund Board announced that PSP Investments and ATRF and ACI have concluded a definitive arrangement agreement whereby the Consortium will indirectly acquire all of the issued and outstanding common shares of ACI  in an all-cash transaction for $33.50 per Common Share.

Hybrid cloud infrastructure target of Schneider Electric and NetApp collaboration

Schneider Electric has announced a collaboration with NetApp to deliver the pre-validated Optimized Edge for NetApp HCI solution, which is built on NetApp's hyperconverged infrastructure (HCI) platform and designed for enterprise, remote/branch offices, and small- to medium-sized business (SMB) spaces. Optimized Edge for NetApp HCI combines edge computing infrastructure with an open and scalable on-premise hybrid cloud infrastructure to revolutionize the private cloud into a deployable region of customers' multi-cloud. The solution is a compatible physical infrastructure solution that is integrated, pre-engineered, and pre-validated to help organizations of all sizes reduce deployment time, accelerate time to market, and minimize on-site and remote management.

Caterpillar Oil and Gas introduces HMI panel for gas compression products

Caterpillar Oil & Gas is pleased to announce the next generation of human-machine interface (HMI) panels available as an integrated component on select gas compression models. The easy to use touchscreen display performs the functions of the customer version of Cat Electronic Technician. Now, with the HMI panel integration, controlling the engine and monitoring the system's status is at the users' fingertips. The new HMI panel is now available on the CG137-8 and will be released as an offering for additional gas compression models at a later date.

New B.C. gas processing facility opened by Black Swan Energy

Black Swan Energy Ltd. has officially opened its Nig Creek Gas Processing Facility located in northeast British Columbia. The company hosted a celebration at the plant which was attended by the Chief of the Blueberry River First Nations, Marvin Yahey, Mayor of Fort St. John and 2019 Canadian Energy Person of the Year, Lori Ackerman and Liberal MLA for Peace River North, Dan Davies. Following a tour of the state-of-the-art facility Elder May Apsassin offered a blessing, which highlighted the importance of actively engaging with our First Nations partners.

Subscribe to our free newsletter

Get our newsletter

Learn more

Rangeland kicks off construction of Marten Hills pipeline system

Rangeland Midstream Canada, Ltd., a wholly owned subsidiary of Rangeland Energy III LLC, has commenced the construction of its Marten Hills Pipeline System. The system consists of new crude oil and condensate pipelines located in the Marten Hills region of north central Alberta. The Marten Hills Pipeline System will extend approximately 85 kilometres (52.8 miles), terminating at an interconnect with Plains Midstream Canada's Rainbow Pipeline System, which serves the Edmonton, Alberta, hub and refining market (system map here). The Marten Hills system is expected to come into service in the second quarter of 2020.

Greenfield Global takes next steps to expand production at its Varennes biorefinery

Greenfield Global Inc., Canada's largest ethanol producer and a world leader in high-purity specialty alcohols, welcomed the Government of Quebec's pre-publication of draft regulations on the minimum volume of renewable fuel in gasoline and diesel fuel. Announced this week, the government's proposal would set blending thresholds of 10% renewable fuel in gasoline and 2% in diesel fuel by 2021 and increase the thresholds to 15% in gasoline and 4% in diesel fuel, respectively, by 2025.

Suncor Energy increases participation in Enerkem, strengthening existing relationship

Enerkem Inc., the world-leading waste-to-biofuels and chemicals producer, has announced the closing of a $50 million equity investment from Suncor. As Canada's leading integrated energy company, Suncor first participated in the ownership of Enerkem in April 2019 as part of a $76.3 million equity financing alongside Enerkem's existing shareholders. With this new investment, Suncor becomes a significant, strategic shareholder of Enerkem.

Subscribe to our free magazine

Get Our Magazine

Paper or Digital delivered monthly to you

Subscribe or Renew Learn more

CAS DataLoggers provide unique safety support in chemical plant

CAS DataLoggers provided a unique gas monitoring and temperature monitoring solution for an international chemical company, where health and safety was an important consideration. Harmful gas detection was placed high on the list of priorities: hydrochloric acid gas was produced when a standard chemical made by the company leaked to the atmosphere as fumes, while chlorine was used as a raw material at the plant. Therefore, it was necessary to monitor and record both hydrochloric acid gas levels (HCL) and chlorine (CH2) levels. 

Alberta launches support for indigenous groups to enter energy sector

Alberta Bill 14, the Alberta Indigenous Opportunities Corporation Act introduced recently, would set up a first-of-its-kind Crown corporation to facilitate Indigenous investments and job creation. The AIOC would make it easier for Indigenous communities to access funding, invest in major natural resources development projects and fuel their prosperity while helping to grow Alberta's natural resource sectors.

C3 Oleflex technology helps with first contract for propane dehydrogenation technology in Turkey

Honeywell announced that Ceyhan Polipropilen Üretim A.Ş. will use Honeywell UOP's C3 Oleflex technology to produce 457,000 metric tons per year of polymer-grade propylene for a new petrochemicals complex in Ceyhan, Turkey. Ceyhan Polipropilen Uretim is a joint venture of Rönesans Holding and the Algerian national energy company Sonatrach S.p.A. The new unit will be used to supply propylene for production of polypropylene, which is used to make a wide variety of plastic products that are growing in demand globally.

September 2019 international rig count released by Baker Hughes

Baker Hughes, a GE company announced that the Baker Hughes international rig count for September 2019 was 1,131, down 7 from the 1,138 counted in August 2019, and up 127 from the 1,004 counted in September 2018. The international offshore rig count for September 2019 was 242, down 2 from the 244 counted in August 2019, and up 38 from the 204 counted in September 2018. 

TransAlta, SemCAMS Midstream to build Alberta cogeneration plant

TransAlta Corporation and SemCAMS Midstream ULC, a subsidiary of SemGroup Corporation, have entered into definitive agreements to develop, construct and operate a new cogeneration facility at the Kaybob South No. 3 sour gas processing plant. The Kaybob facility is strategically located in the Western Canadian Sedimentary Basin and accepts natural gas production out of the Montney and Duvernay formations. TransAlta will construct the cogeneration plant which will be jointly owned, operated and maintained with SemCAMS. The capital cost of the new cogeneration facility is expected to be approximately $105 million and the project is expected to deliver approximately $18 million in annual EBITDA. TransAlta will be responsible for all capital costs during construction and, subject to the satisfaction of certain conditions, SemCAMS will purchase a fifty percent (50%) interest in the new cogeneration facility as of the commercial operation date, which is targeted for late 2021.

Universal mCloud offers 3D digital twin capabilities to Alberta customers

Universal mCloud Corp. (TSX-V: MCLD) (OTCQB: MCLDF) ("mCloud"   or the "Company"), a leading provider of asset management solutions combining IoT, cloud computing, artificial intelligence ("AI") and analytics, today announced the launch of a new AssetCare™️ solution under the banner of the "3D Digital Twin." This solution enables mCloud to take advantage of high-precision 3D laser scanners to create digital replicas of facilities along with a suite of capabilities designed to use these 3D models to streamline field work, minimize facility downtime, and eliminate unnecessary field visits.

Subscribe to our free newsletter

Get our newsletter

Learn more

Armor cladding alloy now available from Schlumberger for drill bits

Smith Bits, a Schlumberger company, has introduced Aegis armor cladding that significantly improves bit body design flexibility and erosion resistance, increasing rate of penetration (ROP) and bit durability for longer runs. Composed of a proprietary tungsten carbide material, Aegis cladding increases bit erosion resistance by 400% and strength by 40% when compared to conventional matrix polycrystalline diamond compact (PDC) bits.

Melius Energy successfully tests new bitumen shipping approach

Calgary based Melius Energy has successfully transported bitumen from Edmonton, Alberta to Prince Rupert, British Columbia, continuing to global markets in custom 20-foot shipping containers utilizing intermodal rail and vessel infrastructure. The shipment is the company's first BitCrude transportation process demonstration, proving the ability to move bitumen safely and efficiently, in adherence to Canada's regulatory framework.    

Advanced production modeling and reservoir engineering software solutions from Emerson on display

Emerson will showcase its advanced Exploration & Production (E&P) software solutions for optimizing Production Modeling and Reservoir Engineering workflows at the Society of Petroleum Engineers Annual Technical Convention and Exhibition in Calgary, September 30 - October 2.  Daily demonstrations at booth #819 will highlight Emerson's technologies for solving subsurface and surface challenges, to reduce uncertainty and enhance confidence in drilling decisions.

Pipestone gas plant officially commissioned by Tidewater

Tidewater Midstream and Infrastructure Ltd. has announced that it completed commissioning and start-up of the Pipestone Montney sour deep-cut gas processing complex.  The Pipestone Gas Plant is designed to process approximately 100 MMcf/day of sour gas and includes an acid gas injection well, salt water disposal well, and pipelines that directly connect to Tidewater's Pipestone Gas Storage Facility.  Additionally, the Pipestone Gas Plant is connected to both the Alliance and TC Energy pipeline network.

Subscribe to our free magazine

Get Our Magazine

Paper or Digital delivered monthly to you

Subscribe or Renew Learn more