Pembina Pipeline Corporation ("Pembina") (TSX: PPL; NYSE: PBA)
is pleased to announce today the signing of a Memorandum of
Agreement ("MOA") with Marubeni Corporation ("Marubeni"), to
progress an end-to-end, low-carbon ammonia supply chain from
Western Canada to Japan and other Asian markets (the "Project").
The Project includes the joint development of a world-scale,
low-carbon hydrogen and ammonia production facility (the
"Facility") to be sited on Pembina-owned lands adjacent to its
Redwater Complex in the Alberta Industrial Heartland near Fort
Saskatchewan, Alberta.
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"This project represents a transformative opportunity that is
highly aligned with Pembina's strategic priorities, including
supporting global decarbonization efforts by exporting low-carbon
energy derived from natural gas responsibly produced in Western
Canada," said Stu Taylor, Pembina's Senior Vice President &
Corporate Development Officer. "The Project is an example of
Pembina's ability to leverage its existing asset base and core
competencies to develop new integrated value chains, including
carbon capture, utilization and storage ("CCUS") and low-carbon
energy such as hydrogen, and ammonia as a hydrogen carrier and fuel
source. Marubeni has deep expertise in areas critical to the
success of the Project and we are delighted to be working with them
to facilitate the global movement towards greater use of low-carbon
ammonia and to support Japan's decarbonization strategy."
Demand for low-carbon ammonia in Japan and other Asian markets
is expected to grow substantially given its efficiency as a carrier
of hydrogen and use as a low-carbon fuel source. Ammonia is one of
the most widely produced synthetical chemicals in the world today
and the production technology and handling are well understood and
established. Alberta is the leading region in Canada for existing
ammonia production and the Project is another opportunity to
support development of a hydrogen and low-carbon economy.
"The Project will leverage access to existing infrastructure and
benefit from Canada's abundant natural gas supply, advantaged West
Coast shipping access to Asia, and growing carbon capture and
sequestration industry. Pembina has a long history and strong
reputation as a leading Canadian energy infrastructure provider and
we are honoured to be working together as partners in the
establishment of a low-carbon fuel supply chain from Canada to
Japan," said Yoshiaki Yokota, Marubeni's Chief Executive Officer,
Energy & Infrastructure Solution Group.
Initial feasibility studies have been completed and the Facility
has an anticipated design capacity of up to 185 kilotonnes per
annum of low-carbon hydrogen production, which will be converted
into approximately one million tonnes per year of low-carbon
ammonia. The Facility is contemplated to utilize innovative
technology to capture a significant amount of the CO2 emissions
with the potential for integrated transportation and sequestration
on the proposed Alberta Carbon Grid being developed by Pembina and
TC Energy. The low-carbon ammonia would be transported via rail to
Canada's West Coast and shipped to Japan and other Asian
markets.
Pembina and Marubeni will utilize their complementary strengths
to develop and execute the Project. Pembina brings its expertise in
Western Canadian energy infrastructure development, construction
and operations, rail logistics and export. Marubeni, a globally
leading independent power producer and integrated trading
conglomerate, will leverage its marketing and marine logistics
capabilities, and is expected to contract for offtake from the
Facility, which will be used to supply Marubeni-owned and other
Japanese utility power plants. Under the MOA, Pembina and Marubeni
will focus on completing work critical to the development of the
Project, including preliminary Front End Engineering Design
("pre-FEED"), engagement with various stakeholders, including
governments in Canada and Japan, and commercial activities. The
Project is expected to be structured as an infrastructure-style,
fee-based business with investment grade counterparties. Pre-FEED
work is currently expected to be completed by early 2024.
Pembina Low Carbon
Complex
The Project would potentially serve as an anchor development to
advance Pembina's ongoing efforts to establish a new growth
platform known as the Pembina Low Carbon Complex ("PLCC"). With
over 2,000 contiguous acres of undeveloped land located in the
Alberta Industrial Heartland, Pembina's vision is to develop an
industrial complex for low-carbon energy infrastructure to better
enable Pembina and third parties to develop projects, while
reducing costs, emissions, and risk.
The PLCC will be focused on attracting and developing investment
for innovative and emerging energy transition technologies,
sustainable fuels, and chemicals, specifically low-carbon hydrogen
and hydrogen carriers such as ammonia and methanol. Projects within
the PLCC would gain access to one or more of the following
prerequisites to enable the construction and operation of
large-scale clean energy projects: land, low-carbon hydrogen, clean
power, natural gas and industrial gases, water, CCUS, and the
construction and operation of rail assets to support product
movement.
Within the PLCC, Pembina would lease land to third parties and
provide infrastructure, logistics, and shared services to tenants,
depending on their needs, under typical Pembina commercial models.
Tenants are contemplated to capture CO2 and direct those emissions
to Pembina in support of the proposed Alberta Carbon Grid. Pembina
may also consider direct investments in projects.
Commercial discussions are progressing with various potential
tenants and strategic partners and Pembina looks forward to
providing future updates.
About Pembina
Pembina Pipeline Corporation is a leading energy transportation
and midstream service provider that has served North America's
energy industry for more than 65 years. Pembina owns an integrated
network of hydrocarbon liquids and natural gas pipelines, gas
gathering and processing facilities, oil and natural gas liquids
infrastructure and logistics services, and a growing export
terminals business. Through our integrated value chain, we seek to
provide safe and reliable infrastructure solutions which connect
producers and consumers of energy across the world, support a more
sustainable future and benefit our customers, investors, employees
and communities. For more information, please visit
pembina.com.
Forward-Looking Information and Statements
This news release contains certain forward-looking statements
and forward-looking information (collectively, "forward-looking
statements"), including forward-looking statements within the
meaning of the "safe harbor" provisions of applicable securities
legislation, that are based on Pembina's current expectations,
estimates, projections and assumptions in light of its experience
and its perception of historical trends. In some cases,
forward-looking statements can be identified by terminology such as
"continue", "anticipate", "schedule", "will", "expects",
"estimate", "potential", "planned", "future", "outlook",
"strategy", "protect", "trend", "commit", "maintain", "focus",
"ongoing", "believe" and similar expressions suggesting future
events or future performance.
In particular, this news release contains forward-looking
statements pertaining to, without limitation, the following:
details relating to the Project, including location, benefits of
the Project, anticipated design capacity of the Facility, use of
technology, and the production, transportation and use of
low-carbon ammonia; the potential for development opportunities
connected to Pembina's infrastructure; expected future demand for
low-carbon ammonia and global decarbonization efforts; expectations
that Marubeni will contract for offtake from the Facility; expected
timing for completion of pre-feed work; that the Project would
potentially serve as an anchor development to advance the PLCC; and
details relating to the PLCC, including Pembina's vision and focus
for the complex in addition to potential commercial structures and
offerings available to participants in such complex.
The forward-looking statements are based on certain assumptions
that Pembina has made in respect thereof as at the date of this
news release regarding, among other things: the demand for
low-carbon ammonia and global decarbonization efforts; that
technologies will perform as expected; oil and gas industry
exploration and development activity levels and the geographic
region of such activity; prevailing commodity prices, interest
rates, carbon prices, tax rates and exchange rates; the
availability of capital to fund future capital requirements
relating to the Project and the PLCC; that any required commercial
agreements can be reached and the terms on which they can be
reached; that all required regulatory and environmental approvals
can be obtained on the necessary terms in a timely manner;
prevailing regulatory, tax and environmental laws and regulations;
and certain other assumptions in respect of Pembina's
forward-looking statements detailed in Pembina's Annual MD&A
and Annual Information Form for the year ended December 31, 2022
and from time to time in Pembina's public disclosure documents
available at www.sedar.com, www.sec.gov and through Pembina's
website at www.pembina.com.
Although Pembina believes the expectations and material factors
and assumptions reflected in these forward-looking statements are
reasonable as of the date hereof, there can be no assurance that
these expectations, factors and assumptions will prove to be
correct. These forward-looking statements are not guarantees of
future performance and are subject to a number of known and unknown
risks and uncertainties including, but not limited to: the failure
to realize the anticipated benefits of the Project and the PLCC;
expectations and assumptions concerning, among other things,
customer demand for Pembina's services (particularly services
related to the Project and the PLCC); the regulatory environment
and decisions; the impact of competitive entities and pricing; the
strength and operations of the oil and natural gas production
industry and related commodity prices; non-performance or default
by counterparties to agreements which Pembina or one or more of its
affiliates has entered into in respect of its business; actions by
governmental or regulatory authorities; the ability of Pembina to
acquire or develop the necessary infrastructure in respect of
future development projects; fluctuations in operating results;
adverse general economic and market conditions in Canada, North
America and worldwide; the ability to access various sources of
debt and equity capital; changes in credit ratings; counterparty
credit risk; and certain other risks and uncertainties detailed in
Pembina's Annual MD&A and Annual Information Form for the year
ended December 31, 2022 and from time to time in Pembina's public
disclosure documents available at www.sedar.com, www.sec.gov and
through Pembina's website at www.pembina.com.
This list of risk factors should not be construed as exhaustive.
Readers are cautioned that events or circumstances could cause
results to differ materially from those predicted, forecasted or
projected. The forward-looking statements contained in this news
release speak only as of the date of this news release. Pembina
does not undertake any obligation to publicly update or revise any
forward-looking statements or information contained herein, except
as required by applicable laws. The forward-looking statements
contained in this news release are expressly qualified by this
cautionary statement.
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Investor Relations (403) 231-3156 1-855-880-7404 (toll-free)
e-mail: investor-relations@pembina.com
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e-mail: media@pembina.com www.pembina.com
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