Pembina Pipeline Q2 Earnings Call Highlights

Pembina Pipeline NYSE: PBA reported second-quarter adjusted EBITDA of C$1.064 billion, up C$51 million, or 5%, from the same period a year earlier, as solid pipeline and facilities operations and stronger marketing results offset the impact of a revised Alliance Pipeline toll structure and revenue-sharing mechanism. President and Chief Executive Officer Scott Burrows said the quarter reflected “a constructive industry environment” alongside operational performance and new assets entering service. The company reaffirmed its 2026 adjusted EBITDA guidance range of C$4.35 billion to C$4.55 billion and said it was trending toward the midpoint. Net earnings for the quarter were C$512 million, a 23% increase from the prior-year period. Adjusted earnings rose 10% to C$415 million. Total volumes across Pembina’s pipelines and facilities businesses increased 3% year over year to 3.7 million barrels of oil equivalent per day.

Chief Financial Officer Cameron Goldade said the pipelines segment benefited from higher contracted volumes on the Nipisi Pipeline, which serves the Clearwater formation, and higher Cochin Pipeline revenue related to prior-period tariff adjustments. Those factors were partly offset by a lower Alliance Pipeline contribution under its negotiated settlement with shippers. The facilities business benefited from the late-May startup of the RFS IV fractionator at the Redwater Complex and the Wapiti Expansion in Pembina Gas Infrastructure, or PGI, which entered service at the end of March. Both projects were completed on time and at or below budget, according to management. RFS IV added 55,000 barrels per day of propane-plus fractionation capacity at Redwater. Pembina also cited improved performance at Dawson-area assets, fewer unplanned outages and higher recoveries from an asset upgrade as contributors to facilities results. Marketing and new ventures results were supported by wider Western Canadian Sedimentary Basin and U.S. natural gas liquids fractionation spreads, higher NGL prices, higher crude oil prices and higher sales volumes. Goldade said Pembina also benefited from its exposure to premium propane markets through West Coast exports, though realized NGL derivative losses were higher and realized crude-oil derivative gains were lower.

While maintaining its annual outlook, Pembina expects third-quarter adjusted EBITDA to be lower than the second quarter before a stronger seasonal fourth-quarter contribution. Goldade said the third quarter historically has represented 23% to 27% of annual adjusted EBITDA, with the company’s current outlook placing this year’s third-quarter contribution at the low end of that range. Factors expected to affect the second half include seasonal weakness in WCSB NGL fractionation spreads during the third quar...