Pembina Targets Growth With Expansions and LNG Projects for 2026

Pembina Pipeline guided 2026 adjusted EBITDA of C$4.1–4.4 billion (about a 4% increase in fee‑based adjusted EBITDA vs. 2025, implying ~5% CAGR in fee‑based EBITDA per share from 2023–2026) backed by a C$1.6 billion 2026 capex program (C$640m for pipelines, C$255m for facilities) and approved expansions including a C$200m Peace Pipeline upgrade and Fox Creek‑to‑Namao work adding 70,000 bpd of propane‑plus capacity alongside more than 200,000 bpd of commercial contracts. Strategically, Pembina completed remarketing at Cedar LNG with a new 12‑year 0.5 mtpa agreement with Ovintiv expected to contribute C$220–280m of annual adjusted EBITDA and keeps Cedar on track for late‑2028 service, while progressing the Greenlight Electricity Center (up to 1,800 MW) toward an FID in H1 2026—moves that materially diversify and lengthen contracted cash flows. The company cautioned that marketing earnings will be more moderate in 2026 due to commodity pricing and frac‑spread weakness, and is managing a planned leadership transition through end‑2025 as it scales these growth projects.

Analysis

Pembina guided 2026 adjusted EBITDA of C$4.1–4.4 billion and expects approximately a 4% increase in fee‑based adjusted EBITDA versus 2025, implying roughly a 5% CAGR in fee‑based adjusted EBITDA per share from 2023–2026; the company explicitly notes marketing will be a more moderate contributor in 2026 due to lower frac spreads and natural gas price weakness, highlighting commodity sensitivity to near‑term earnings. Pembina is deploying a C$1.6 billion 2026 capital program (C$640 million pipelines, C$255 million facilities) and approved a C$200 million Peace Pipeline expansion; ongoing projects (Fox Creek‑to‑Namao adding 70,000 bpd and >200,000 bpd of commercial contracts) support fee‑based volume growth. Strategically material actions include remarketing Cedar LNG capacity with a new 12‑year 0.5 mtpa agreement with Ovintiv expected to add C$220–280 million of annual adjusted EBITDA and Cedar remaining on track for late‑2028 in‑service, while the Greenlight Electricity Center (up to 1,800 MW) is progressing toward an FID in H1 2026. Execution and governance risks include the 2025 leadership turnover and the need to convert project spend into contracted cash flows on schedule; these factors, combined with marketing volatility, will determine realized cash flow stability versus guided targets.

Key Decisions for Investors

• Consider an incremental overweight to Pembina to reflect guided C$4.1–4.4 billion EBITDA and the C$220–280 million annualized Cedar LNG contribution, but scale in to monitor execution and late‑2028 in‑service timing
• Monitor near‑term catalysts closely — Cedar LNG delivery milestones, Greenlight FID in H1 2026, Peace Pipeline completion and the start dates for contracted volumes — and use missed milestones as reassessment triggers
• Protect against commodity exposure by hedging or limiting reliance on marketing earnings given guidance that marketing will be more moderate in 2026 due to frac spread and gas price weakness
• Assess management succession and capex execution metrics; tighten risk limits or reduce exposure if capital costs or project delays erode the fee‑based EBITDA trajectory