Pembina joins 1 million barrel per day Canada pipeline project

Pembina signed a non-binding deal for up to a 20% stake in a 1 million bpd crude pipeline to Canada's Pacific coast.

Pembina Pipeline Corp. will take up to a 20% stake in a proposed 1 million barrel per day crude pipeline to Canada's West Coast, joining a government-backed push to break the country's dependence on US energy markets.

"This project represents a once-in-a-generation opportunity to advance nation-building energy infrastructure that strengthens Canada's economy and expands access to global markets for Canadian energy," said Scott Burrows, President and Chief Executive Officer of Pembina.

The non-binding heads of agreement, signed with the Government of Canada, the Province of Alberta, Trans Mountain Corp. and the Alberta Petroleum and Marketing Commission, gives Pembina a 10% economic interest during construction with the option to acquire an additional 10% once the pipeline enters commercial operations. The project will use the existing Trans Mountain right-of-way along the southern route, with Trans Mountain Corp. serving as lead proponent responsible for construction and regulatory approvals. Definitive agreements are targeted for September 2026, with Pembina retaining full discretion over any final investment decision and no at-risk development capital required before that point.

The pipeline represents Canada's most ambitious attempt to diversify crude exports beyond the US, where the vast majority of Alberta's 4 million barrels per day of production currently flows. Prime Minister Mark Carney has set a goal to double non-US exports within a decade, while Alberta — home to one of the world's largest proven oil reserves — is scheduled to hold a non-binding referendum on October 19 on whether to begin the process of leaving Canada, a vote fueled by frustration over federal energy policy.

Carney on Thursday confirmed that the federal tanker ban along British Columbia's northern coast will remain in place, addressing a key environmental concern that doomed previous pipeline proposals such as the Northern Gateway project under former Prime Minister Justin Trudeau. British Columbia Premier David Eby said his province will not go to court to challenge the pipeline, effectively removing a major legal obstacle that has stalled past cross-provincial energy projects. The federal government also pledged to accelerate LNG development in British Columbia, targeting a tripling of production over the next decade.

Pembina, which has operated in Canada's energy sector for more than 70 years, will contribute its project development and execution expertise while maintaining what it described as a measured approach to capital allocation. The company said the multi-stakeholder structure includes protections for cost overruns and returns, and it will evaluate the opportunity against defined milestones before committing capital. The last major Canadian pipeline expansion — the Trans Mountain pipeline, completed in 2024 at a final cost of C$34 billion, nearly five times its initial estimate — underscored the financial risks inherent in large-scale energy infrastructure projects.

The project's success hinges on securing regulatory approvals, Indigenous partnerships and commercial agreements over the coming months. Pembina said it will provide updates at appropriate milestones as the evaluation progresses.

This article is for informational purposes only and does not constitute investment advice.