Pembina Targets Growth With Expansions and LNG Projects for 2026

Pembina Pipeline Corporation PBA, a leader in North America's energy infrastructure, has outlined an ambitious growth strategy for 2026. This includes an increase in fee-based adjusted EBITDA, key commercial agreements and significant expansions of its pipeline systems. With a focus on long-term sustainability, Pembina's strategy positions it to capitalize on evolving market conditions, strong customer demand and emerging opportunities in the energy sector.

2026 Financial Guidance: Key Highlights

Pembina's projected financial performance for 2026 signals a robust growth trajectory. The company expects an adjusted EBITDA of C$4.1 billion to C$4.4 billion, marking an approximate 4% increase in fee-based adjusted EBITDA compared with 2025. This growth is driven primarily by increased volumes across Pembina’s diversified energy assets.

At the midpoint of the 2026 guided range, Pembina anticipates a compound annual growth rate of approximately 5% in fee-based adjusted EBITDA per share from 2023 to 2026. The fee-based business, a significant driver of Pembina’s earnings, is expected to continue expanding, despite a more moderate contribution from the marketing sector, impacted by commodity pricing fluctuations.

Strategic Capital Investments and Expansions

Canada-based oil and gas storage and transportation company’s capital investment program for 2026 is pegged at an impressive C$1.6 billion. This includes investments in both sustaining and growth capital. Notably, C$640 million is allocated to Pembina’s pipelines division, focusing on expanding existing assets and developing new infrastructure to support customer demand. This includes the continued development of the Fox Creek-to-Namao Expansion of the Peace Pipeline System, which will enhance operational flexibility and capacity by adding 70,000 barrels per day of propane-plus market delivery capacity.

Additionally, C$255 million has been earmarked for the facilities division, covering essential projects like the RFS IV Expansion and the Prince Rupert Terminal Optimization, aimed at increasing storage and terminalling capacity. These strategic capital expenditures reflect Pembina's commitment to providing reliable energy infrastructure solutions while maintaining a focus on cost-efficiency and operational excellence.

Cedar LNG Agreement: Securing Long-Term Growth

A pivotal development for Pembina is its new 12-year agreement with Ovintiv Inc. OVV for 0.5 million tons per annum (mtpa) of liquefaction capacity at the Cedar LNG facility. This marks the completion of the remarketing of Pembina's 1.5 mtpa capacity at Cedar LNG. The deal strengthens Pembina’s position in the growing LNG sector and enhances its strategy to diversify its revenue streams and deliver stable, long-term cash flows.

The agreement with Ovintiv is expected to contribute C$220 million to C$280 million annually in adjusted EBITDA, further setting Pembina’s commitment to securing high-value, long-term contracts. The expansion of the Cedar LNG project is progressing on schedule, with an expected in-service date in late 2028. The facility’s capacity and the strategic nature of the partnerships involved highlight Pembina's role in shaping the global LNG market.

Expansion of the Peace Pipeline System

Pembina has approved a C$200 million expansion of its Peace Pipeline System to increase propane-plus market delivery capacity to the Namao, Alberta hub. The expansion is a response to increasing demand for energy products, driven by growth in the Canadian oil and gas sector. Pembina continues to enhance its pipeline capacity through ongoing projects such as the Birch-to-Taylor and Taylor-to-Gordondale expansions, which are designed to facilitate greater volumes of liquids from the Montney and Duvernay resource plays in British Columbia and Alberta.

This expansion also includes renewed and newly executed commercial contracts that total more than 200,000 barrels per day of pipeline transportation capacity. The added capacity from these projects will support the growth of both Pembina's existing assets and the broader energy sector.

Greenlight Electricity Centre: A Step Toward Innovation

As part of its long-term growth strategy, Pembina, in partnership with Kineticor, is advancing the development of the Greenlight Electricity Center, a multi-phased natural gas-fired combined-cycle power generation facility. This project aims to provide up to 1,800 MW of electricity to Alberta's power grid, advancing the region's transition to a more sustainable and innovative energy economy.

The Greenlight project has made significant steps in 2025, including the completion of a 907 MW power grid allocation, land transactions and the securing of key turbine deliveries for the first phase. Pembina is expected to make a final investment decision in the first half of 2026, marking a major milestone in its commitment to clean energy and technological innovation.

Corporate Leadership and Organizational Evolution

In alignment with its long-term vision, Pembina is undergoing a leadership transition to support its strategic goals. Key executives, including Stu Taylor, Janet Loduca and Eva Bishop, will retire by the end of 2025, making way for the next generation of leaders. This transition reflects Pembina’s focus on strengthening its organizational capabilities to navigate future challenges and capitalize on new opportunities.

As part of this evolution, Sarah Schwann has been appointed as the new Chief Legal, People & Corporate Affairs Officer, consolidating several key functions to drive alignment and enhance operational efficiency.

2026 Marketing Outlook: Navigating Commodity Price Sensitivity

Pembina's marketing business plays a critical role in its overall performance, contributing to adjusted EBITDA growth through commodity price management and margin realization. However, the outlook for 2026 indicates a more moderate contribution from the marketing segment, driven by lower frac spreads and changing natural gas prices. Pembina's marketing business will continue to navigate these market dynamics through hedging strategies and strategic contracts to mitigate risks and stabilize earnings.

Despite these challenges, Pembina has maintained a strong track record in its marketing operations, which continues to provide value for customers and support overall profitability.

Conclusion: A Bright Future Ahead for Pembina

With a robust financial outlook, strategic expansions and strong customer demand, Pembina is well-positioned to continue its leadership in the North American energy infrastructure market. The company’s diversified assets, strategic growth initiatives and prudent risk management strategies will enable it to navigate the evolving energy landscape and deliver value for shareholders, customers and communities alike.

Pembina’s focus on safe, reliable and cost-effective energy infrastructure solutions remains at the heart of its strategy, ensuring long-term sustainability and growth. The company’s successful execution of key projects, such as Cedar LNG, the Peace Pipeline System expansion and the Greenlight Electricity Center, underscores its ability to adapt to market changes while driving innovation and meeting the growing energy demands of the future.

As Pembina looks toward 2026 and beyond, it remains confident in the ability to generate strong, predictable cash flows, create long-term value and play a key role in the global energy transition.

PBA's Zacks Rank & Key Picks

Currently, PBA and OVV carry a Zacks Rank #3 (Hold) each.

Investors interested in the energy sector might look at some better-ranked stocks like USA Compression Partners USAC and Oceaneering International OII, which sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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