Pembina Pipeline Corporation ("Pembina" or "PPL") (TSX: PPL; NYSE:
PBA) and TC Energy Corporation ("TC Energy") (TSX, NYSE: TRP) are
pleased to share their plan to jointly develop a world-scale carbon
transportation and sequestration system which, when fully
constructed, will be capable of transporting more than 20 million
tonnes of CO2 annually. By leveraging existing pipelines and a
newly developed sequestration hub, the Alberta Carbon Grid ("ACG"
or the "Project") represents the infrastructure platform needed for
Alberta-based industries to effectively manage their emissions and
contribute positively to Alberta's lower-carbon economy and create
sustainable long-term value for Pembina and TC Energy stakeholders.
Designed to be an open-access system, the ACG
will serve as the backbone of Alberta's emerging carbon capture
utilization and storage ("CCUS") industry, connecting the Fort
McMurray region, the Alberta Industrial Heartland, and the Drayton
Valley region to key sequestration locations and delivery points
across the province, and serving multiple industries.
For Canada to achieve its enhanced climate
targets, including a 40-45% reduction in greenhouse gas emissions
below 2005 levels by 2030, CCUS technology and infrastructure will
need to play a vital role. Pembina and TC Energy are uniquely
positioned to take a leadership role in the transportation of CO2
given their collective skills and extensive network of pipeline
infrastructure. As a hub-based infrastructure solution accessible
to Alberta's largest industrial emitters across industries, ACG
will pave the way for Canada to successfully meet its emissions
reduction objectives and provides a tangible example of Pembina and
TC Energy's commitment to energy diversification, industry
collaboration and a lower carbon future.
Support for the Alberta Carbon
Grid
"Carbon capture, utilization and storage will
lower emissions, create jobs, and increase our competitiveness,"
said the Honourable Seamus O'Regan Jr., Canada's Minister of
Natural Resources. "Congratulations to Pembina and TC Energy for
coming together with an integrated CO2 transportation and storage
infrastructure solution to lower emissions in Alberta. This is how
we get to net-zero."
"Alberta is already a global leader in advancing
and investing in CCUS technology with over $1.24 billion committed
to-date. CCUS is one of the most promising forms of
emissions-reduction technology – both in terms of
cost-effectiveness and tangible environmental outcomes. On-going
innovation and partnerships are critical to the success of both
industry and government in reaching our economic and environmental
goals," said the Honourable Jason Nixon, Minister of Environment
and Parks.
"Our government is committed to the development
of the emerging CCUS industry in our province. Our province's
energy industry is vital to achieving Canada's GHG reduction goals
and Alberta companies are global leaders in reducing emissions. By
working together to bring forward world-class solutions, innovative
companies like Pembina and TC Energy are leading the way to our
lower carbon future," said the Honourable Sonya Savage, Alberta's
Minister of Energy.
"For more than 65 years, Pembina's integrated
network of energy transportation and midstream assets has provided
a full spectrum of services to Alberta's energy sector, helping our
customers connect to high-value markets and take advantage of
opportunities for diversification and growth," said Mick Dilger,
Pembina's President and Chief Executive Officer. "The ACG
highlights our commitment to customers by helping them solve
problems and creating new services; communities, by reducing
emissions and using existing infrastructure to reduce the impact to
the land; employees, through development of an entirely new line of
business and job opportunities; and shareholders through attractive
incremental capital investment. Pembina is proud of our commitment
to all stakeholders and pleased to leverage our expertise to
provide a key market solution toward a lower carbon economy with
another industry leading partner."
"It is innovative partnerships like this that
excite me about our collective energy future," said François
Poirier, Chief Executive Officer and President of TC Energy.
"Industry players collaborating to leverage our existing energy
infrastructure and expertise to support meaningful emission
reductions and reduce our carbon footprint is a great example of
how we can secure meaningful new investment opportunities, serve
current and future customers and achieve operational excellence
while continuing to safely and responsibly deliver the energy
people need."
The Alberta Carbon Grid
Through redeployment, retrofits using proven
technology, recapitalization, and optimization of surplus capacity
across our collective pipeline systems, including, subject to
closing of the transaction, through Pembina's proposed acquisition
of Inter Pipeline Ltd. ("IPL"), ACG is designed to connect the
province's largest sources of industrial emissions to a
sequestration location north-east of Redwater, Alberta. The
principal segments include:
-
North Leg: Pembina and TC Energy plan to retrofit
existing pipeline systems, combined with new build expansion to
connect the Oil Sands to a sequestration hub. Initial hydraulics
indicate a design capacity of up to 40,000 tonnes of CO2 per day,
allowing a significant portion of emissions from the Fort McMurray
area to be transported to a sequestration location;
-
Central Leg: Pembina and TC Energy plan to
retrofit existing pipeline systems, combined with new gathering
laterals, to provide interconnectivity in the Alberta Industrial
Heartland and gather and deliver CO2 from and to industrial sources
with initial hydraulics indicating a design capacity of 10,000 to
20,000 tonnes per day;
-
Southwest Leg: Pembina and TC Energy plan to
retrofit existing pipeline systems, combined with new build
expansion, to form the southwest leg of the system. This portion
would capture CO2 from power generation facilities in the region
with possible capacity of 10,000 to 20,000 tonnes per day;
-
Future Legs: With customer support, Pembina and TC
Energy have identified multiple opportunities to extend ACG into
other regions, for example Joffre, Christina Lake, Cold Lake or
Swan Hills, enabling future expansions and greater
connectivity;
-
Sequestration: A reservoir near Fort Saskatchewan
has been selected, where large volumes of CO2 will be sequestered
in the Basal Cambrian Sands. Permit applications have been prepared
and the companies have worked with the Government of Alberta to
obtain support for the Project and set a path to obtain
sequestration rights. Initial studies indicate this reservoir will
be capable of sequestering more than 2,000,000,000 tonnes of CO2,
which represents many decades of sequestration capacity. The
companies envision delivering to both the proposed sequestration
location as well as 3rd party sequestration locations, establishing
the development of a strategically located carbon storage hub in
the Fort Saskatchewan region;
-
Partnership: Pembina and TC Energy are open to
other infrastructure owners with suitable existing infrastructure
to join the partnership with a view to enhancing the capability and
reach of the Project.
Key Benefits of the Alberta Carbon
Grid
-
World-Scale Carbon Capacity: The open-access
system is being designed with the ability to scale up to more than
60,000 tonnes per day of capacity, or 20,000,000 tonnes per annum,
representing approximately 10 percent of Alberta's industrial
emissions.
-
Interconnectivity: Pembina and TC Energy view the
ACG as a multi-sector solution with interconnectivity between
multiple key hubs for expanded emissions reductions.
-
Environment, Cost and Time Benefits: Utilizing
existing assets dramatically accelerates timing, greatly reduces
cumulative environmental and community impacts, and is
significantly less capital intensive than building a new pipeline.
Pembina and TC Energy are targeting the first phase to be
operational as early as 2025, with the fully scaled solution
complete as early as 2027, subject to regulatory and environmental
approvals.
-
Economic Development: The construction and
operation of the ACG, along with other investments in CCUS
technology and infrastructure, will create an entirely new business
platform for each company and create new high-value jobs and
support economic growth across Alberta.
-
Safe & Reliable Operations: World-leading
experts have been engaged to evaluate technical and operating
conditions of using existing pipeline systems to transport CO2. The
companies have the skills and experience to safely operate these
kinds of systems as the characteristics of CO2 are very similar to
other products which are safely transported today, such as
specification ethane. The completed feasibility study demonstrates
that ACG is achievable while maintaining high standards of safety
and reliability. The companies have been working with regulators to
advance the Project.
-
Customer-Focused Solution: With multiple inlets
and outlets, customers will have flexibility to decide delivered
CO2 end-uses including industrial processes and sequestration.
-
Cost Advantaged, Fee Based Commercial Framework:
The full build out of ACG over time represents the potential for a
multi-billion-dollar incremental investment by Pembina and TC
Energy over time, sustained by a commercial framework comprised of
long-term fee-for-service contracts plus a marketing and trading
pool to facilitate CO2 and carbon offset transactions. At the scale
proposed and by repurposing existing pipelines, the tolls on the
ACG will be materially less than the current price of carbon in
Alberta, ensuring the ACG's long-term competitive viability as a
CCUS solution and results in an extremely attractive value
proposition for customers.
-
Sequestration: Pembina and TC Energy bring
experience with sequestration, underground cavern storage, and acid
gas and water disposal across our collective asset base.
-
Platform for Diversification: Longer term, ACG
creates a new platform with a growing reach across Alberta to
facilitate production of blue hydrogen and enhance petrochemical
facilities in the future, benefiting the Alberta economy, as well
as Pembina and TC Energy shareholders.
Advancing ACG is also an important step in both
Pembina's and TC Energy's commitment to reduce greenhouse gas
emissions intensity across our businesses while supporting
emissions abatement across the industry. Given the shared
capabilities in this area, Pembina and TC Energy recognize they
must take a leadership role in reducing GHG emissions while proudly
supplying the world with affordable and reliable energy.
About Pembina
Pembina is a leading transportation and
midstream service provider that has been serving North America's
energy industry for more than 65 years. Pembina owns an integrated
system of pipelines that transport various hydrocarbon liquids and
natural gas products produced primarily in western Canada. Pembina
also owns gas gathering and processing facilities; an oil and
natural gas liquids infrastructure and logistics business; and is
growing an export terminals business. Pembina's integrated assets
and commercial operations along the majority of the hydrocarbon
value chain allow it to offer a full spectrum of midstream and
marketing services to the energy sector. Pembina is committed to
identifying additional opportunities to connect hydrocarbon
production to new demand locations through the development of
infrastructure that would extend Pembina's service offering even
further along the hydrocarbon value chain. These new developments
will contribute to ensuring that hydrocarbons produced in the
Western Canadian Sedimentary Basin and the other basins where
Pembina operates can reach the highest value markets throughout the
world.
Purpose of Pembina:
To be the leader in delivering integrated
infrastructure solutions connecting global markets:
-
Customers choose us first for reliable and
value-added services;
-
Investors receive sustainable industry-leading
total returns;
-
Employees say we are the 'employer of choice' and
value our safe, respectful, collaborative and fair work culture;
and
-
Communities welcome us and recognize the net
positive impact of our social and environmental commitment.
Pembina is structured into three Divisions:
Pipelines Division, Facilities Division and Marketing & New
Ventures Division.
Pembina's common shares trade on the Toronto and
New York stock exchanges under PPL and PBA, respectively. For more
information, visit www.pembina.com.
About TC Energy
We are a vital part of everyday life —
delivering the energy millions of people rely on to power their
lives in a sustainable way. Thanks to a safe, reliable network of
natural gas and crude oil pipelines, along with power generation
and storage facilities, wherever life happens — we're there. Guided
by our core values of safety, responsibility, collaboration and
integrity, our 7,500 people make a positive difference in the
communities where we operate across Canada, the U.S. and
Mexico.
TC Energy's common shares trade on the Toronto
(TSX) and New York (NYSE) stock exchanges under the symbol TRP. To
learn more, visit us at TCEnergy.com.
Forward-Looking Statements and
Information
This document 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 "expects", "will", "would", "anticipates", "plans",
"estimates", "develop", "intends", "potential", "continue",
"could", "create", and similar expressions suggesting future events
or future performance.
In particular, this document contains
forward-looking statements pertaining to, without limitation, the
following: ACG, including its anticipated capacity, composition,
geographic scope, environmental impact, cost, completion date,
safety, reliability and the expected benefits thereof for customers
(including in regards to expected tolls), communities, employees
and shareholders; the expected contribution of ACG towards
Alberta's CCUS industry and the transition towards a lower-carbon
economy; the expected long-term impacts of ACG on the production of
blue hydrogen and the development of petrochemical facilities in
Alberta; the impact of ACG and other private sector investments in
CCUS technology on job creation and economic growth in Alberta; the
expected importance of CCUS technology infrastructure generally,
and ACG in particular, in relation to Canada's enhanced climate
targets; Pembina's competitive advantages, including related
experience, with respect to the transportation of CO2; Pembina's
Carbon Stand and its commitment to energy diversification, reducing
greenhouse gas emissions intensity and industry collaboration; and
the acquisition of IPL.
These 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: that
ACG will perform in a manner that is consistent with management
expectations in relation thereto; that ACG will be operational on
time and on budget in accordance with current expectations; the
ability of Pembina and IPL to satisfy the conditions to closing of
the acquisition by Pembina of IPL in a timely manner and on
acceptable terms; that favourable circumstances continue to exist
in respect of current operations and current and future growth
projects; the availability of capital to fund future capital
requirements relating to existing assets and projects; oil and gas
industry exploration and development activity levels and the
geographic region of such activity; prevailing regulatory, tax and
environmental laws and regulations; the ability of
Pembina to maintain favourable credit ratings (both
before and following the acquisition of IPL); future cash
flows; prevailing commodity prices, interest rates, carbon prices,
tax rates and exchange rates; future operating costs; geotechnical
and integrity costs; that any required commercial agreements
can be reached; that any third-party projects relating to Pembina's
growth projects will be sanctioned and completed as expected; that
all required regulatory and environmental approvals can be obtained
on the necessary terms in a timely manner; that counterparties will
comply with contracts in a timely manner; that there are no
unforeseen events preventing the performance of contracts or the
completion of the relevant facilities; that there are no unforeseen
material costs relating to the relevant facilities which are not
recoverable from customers; maintenance of operating margins; the
amount of future liabilities relating to lawsuits and environmental
incidents; and the availability of coverage under Pembina's
insurance policies (including in respect of Pembina's business
interruption insurance policy).
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 ACG;
material cost-overruns in respect of ACG or a material delay to the
expected operational date for ACG; expectations and assumptions
concerning, among other things: customer demand for Pembina's
services (particularly services pertaining to its planned carbon
transportation and sequestration system); commodity prices and
interest and foreign exchange rates; planned synergies, capital
efficiencies and cost-savings; applicable tax laws; future
production rates; the sufficiency of budgeted capital expenditures
in carrying out planned activities; labour and material shortages;
in relation to the acquisition by Pembina of IPL, the ability of
the parties to receive, in a timely manner, the necessary
regulatory, court, securityholder, stock exchange and other
third-party approvals, including but not limited to the receipt of
applicable competition approvals; 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; the
impact of competitive entities and pricing; reliance on key
relationships and agreements; reliance on third parties
to successfully operate and maintain certain assets; the
strength and operations of the oil and natural gas production
industry and related commodity prices; the continuation or
completion of third-party projects; the regulatory environment
and decisions and Indigenous and landowner consultation
requirements; actions by governmental or regulatory authorities,
including changes in tax laws and treatment, changes in the
regulation of competition in Canada and elsewhere; changes in
royalty rates, climate change initiatives or policies or increased
environmental regulation; fluctuations in operating results;
adverse general economic and market conditions
in Canada, North America and worldwide, including
changes, or prolonged weaknesses, as applicable, in
interest rates, foreign currency exchange rates, commodity
prices, supply/demand trends and overall industry activity levels;
risks relating to the current and potential adverse impacts of
the COVID-19 pandemic; constraints on existing infrastructure and
the unavailability of adequate infrastructure; the political
environment in North America and elsewhere, and public
opinion; lower than anticipated results of operations and accretion
from Pembina's business initiatives; ability to access various
sources of debt and equity capital; changes in credit ratings;
counterparty credit risk; technology and cyber security risks;
natural catastrophes; and certain other risks detailed 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 document speak only as
of the date of this document. 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 document are expressly qualified by this cautionary
statement.
For further information
contact:
Pembina Pipeline
Corporation |
TC Energy |
|
|
Investor
Relations:Cam GoldadeVice President, Capital Markets(403)
231-31561-855-880-7404e-mail:
investor-relations@pembina.comwww.pembina.com |
Investor & Analyst
Inquiries:David Moneta / Hunter Mau403-920-7911 or
800-361-6522 |
|
|
Media
Relations:(403) 691-7601media@pembina.com |
Media
Inquiries:Jaimie Harding / Suzanne Wilton403-920-7859 or
800-608-7859 |
PDF
available: http://ml.globenewswire.com/Resource/Download/20bc366b-a7ad-4f2c-a981-a75fbe1523fd
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