Pembina Pipeline Issues 2026 Guidance, Signs Cedar LNG Deal, Expands Peace Pipeline

Pembina Pipeline issued 2026 guidance calling for adjusted EBITDA of C$4.125–4.425 billion and about a 4% increase in fee‑based adjusted EBITDA versus 2025, backed by an approximate C$1.6 billion 2026 capital program and a reaffirmed three‑year plan targeting ~5% CAGR in fee‑based adjusted EBITDA per share from 2023–2026. The company completed remarketing of its 1.5 mtpa Cedar LNG allocation by signing a 12‑year, 0.5 mtpa agreement with Ovintiv, approved a C$200 million expansion of the Peace Pipeline System to boost propane‑plus deliveries into the Namao, Alberta hub, and is advancing phased pipeline expansions in northeast British Columbia; in 2025 it also renewed and added over 200,000 bpd of conventional pipeline capacity. Pembina and partner Kineticor are progressing the Greenlight Electricity Centre with an anticipated final investment decision in H1 2026.

Analysis

Pembina issued 2026 guidance calling for adjusted EBITDA of C$4.125–C$4.425 billion and expects approximately a 4% increase in fee‑based adjusted EBITDA versus 2025, backed by an approximately C$1.6 billion 2026 capital program. The company reaffirmed its three‑year plan targeting roughly 5% CAGR in fee‑based adjusted EBITDA per share from 2023–2026, signaling management confidence in organic fee‑based cash‑flow growth.

On commercial execution, Pembina completed remarketing of its 1.5 mtpa Cedar LNG allocation, signing a 12‑year, 0.5 mtpa agreement with Ovintiv, approved a C$200 million expansion of the Peace Pipeline System to increase propane‑plus deliveries into the Namao hub, and reported phased expansions in northeast British Columbia with construction to begin in stages. In 2025 it also renewed and added agreements totaling over 200,000 barrels per day of conventional pipeline capacity, strengthening contracted throughput.

The mix of renewed contracts, LNG remarketing and targeted infrastructure spend improves revenue visibility and reduces short‑term commodity sensitivity, supporting the moderately positive market sentiment. Key risks are execution and timing of the C$1.6 billion capex program, the C$200 million Peace expansion, the phased NE B.C. builds and the Greenlight Electricity Centre FID expected in H1 2026, all of which could affect cash flow if delayed or cost‑inflated.

Key Decisions for Investors

• Consider a constructive/hold bias given guided fee‑based EBITDA growth and the completed Cedar LNG remarketing, look to accumulate on material pullbacks
• Monitor execution of the C$1.6 billion 2026 capex program and the C$200 million Peace Pipeline expansion closely and be prepared to reduce exposure if timelines or costs slip
• Treat the H1 2026 Greenlight Electricity Centre FID and the ramp schedule of newly contracted volumes (over 200,000 bpd added in 2025) as near‑term catalysts to re‑rate visibility
• Maintain vigilance on overall cash‑flow conversion versus capex outlays and on counterparty performance for long‑term contracts (e.g., Ovintiv) as triggers for re‑positioning