Pembina's Q2 2025 Earnings Call: Unpacking Contradictions on Pipeline Risks, LNG Capacity, and Project Returns

Alliance pipeline risk sharing model, Cedar LNG capacity remarketing progress, producer customer conversations and drilling activity, Greenlight project returns and risk appetite are the key contradictions discussed in Pembina Pipeline Corporation's latest 2025Q2 earnings call.



Financial Performance and Volume Growth:
- Pembina Pipeline Corporation (Pembina) reported quarterly adjusted EBITDA of $1.013 billion for Q2 2025, which represents a 7% decrease over the same period in 2024.
- The decline in EBITDA was partly due to lower firm tolls on the Cochin Pipeline, lower revenue at the Edmonton Terminals, and lower volumes at PGI assets.
- However, Pembina expects to deliver full-year results within its original 2025 adjusted EBITDA guidance range, indicating a return to growth trends.

Project and Infrastructure Development:
- Pembina is progressing with its Cedar LNG Project, which is on time and budget with an expected in-service date of late 2028.
- The project includes construction of a floating LNG vessel and substantial infrastructure, with significant interest from potential off-takers for its capacity.
- The progression of LNG egress projects like Cedar LNG is supported by strong demand for LNG supply on the West Coast of North America.

Capital Expenditure and Growth Initiatives:
- Pembina's 2025 capital investment program has been increased to $1.3 billion, reflecting continued progress on core business initiatives and acquisitions.
- The increased capital spend is largely driven by acquisitions in PGI and incremental projects, offset by cost savings on existing projects.
- This financial commitment reflects Pembina's confidence in capturing growth opportunities across the Western Canadian Sedimentary Basin.

Strategic Partnerships and Market Access:
- Pembina has entered into a new commercial agreement with AltaGas for LPG export capacity, enhancing its propane export capabilities.
- This agreement, along with optimizing its own Prince Rupert Terminal, expands access to global markets and enhances netbacks for Pembina and its customers.
- The strategy is focused on leveraging its integrated value chain and access to premium markets to maintain a competitive edge in a growing market.