Ladies and gentlemen, thank you for joining us, and welcome to Pembina Pipeline Corporation Q3 2026 results. After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Dan Tucunel, Vice President, Capital Markets. Dan, please go ahead.
Thank you, Leah. Good morning, everyone. Welcome to Pembina's conference call and webcast to review highlights from the third quarter of 2026. On the call today, we have Scott Burrows, President and Chief Executive Officer, and Cameron Goldade, Chief Financial Officer, along with other members of Pembina's leadership team. I would like to remind you that some of the comments made today may be forward-looking in nature and are based on Pembina's current expectations, estimates, judgments, and projections. Forward-looking statements we may express or imply today are subject to risks and uncertainties, which could cause actual results to differ materially from expectations. Further, some of the information provided refers to non-GAAP measures. To learn more about these forward-looking statements and non-GAAP measures, please see the company's MD&A dated November 5, 2026, for the period ended September 30th, 2026, as well as the press release Pembina issued yesterday.
All materials are available online at pembina.com and on both SEDAR+ and EDGAR. I will now turn things over to Scott.
Thanks, Dan. Yesterday, we reported third- quarter results, which were highlighted by adjusted EBITDA of CAD 1.128 billion, a 9% increase over the third quarter of 2025. It was another solid quarter that reflects strong operational performance, new assets entering service, and a constructive commodity environment. The outperformance over our initial expectations for the quarter was mostly due to the benefits of our exposure to premium propane prices in Asian markets late in the quarter through West Coast exports, which provided a significant uplift for the quarter. As Cam will discuss in more detail, given our third quarter performance and the commodity outlook for the remainder of the year, we have updated our 2026 adjusted EBITDA guidance range to CAD 4.45 billion-CAD 4.55 billion, and we are currently trending to the upper end of that range based on the current market outlook.
Against the backdrop of improving policy support, expanding market access for all products, and growing demand for Canadian energy, Pembina continues to execute on opportunities that reinforce our position at the center of Western Canada's evolving energy value chain. We believe the Western Canadian Sedimentary Basin is entering a period where expanding market access, growing energy demand, and infrastructure investment can reinforce one another in a powerful growth cycle across all hydrocarbons. We refer to this as the energy flywheel. Greater crude oil egress would support higher oil sands production, driving increased demand for condensate. In turn, the increase in liquids-rich natural gas production needed to produce the condensate could support incremental opportunities across gas processing, transportation, fractionation, petrochemicals, LNG exports, and power generation.
As the premier energy infrastructure company with an integrated value chain spanning all of these products and markets, we believe Pembina is uniquely positioned for growth opportunities throughout the basin. Since our business update in April, we have made tangible progress executing our strategy, sanctioning nearly CAD 3 billion of projects that will contribute to our growth targets through 2030, while advancing longer-term projects that are expected to extend profitable growth through the next decade. As a reminder, our 3Cs Strategy is built around three complementary pillars: to capture growing production from the highest quality resource plays, to connect those products to global markets, and to catalyze new demand platforms in the markets where we operate. Over the past quarter, within Capture, the Lator infrastructure, including a new battery and gathering laterals, was completed on time and entered service early in October.
Gas volumes from the Lator infrastructure will flow to PGI's Musreau facility, supporting long-term plant utilization, and the liquids are contracted on Pembina's pipeline and fractionation infrastructure. The assets are secured by long-term take-or-pay contracts and contribute to our fee-based growth. Within Connect, we announced that we had entered into an agreement to participate in Pacific Link, a proposed new approximately 1 MMbpd crude oil pipeline system connecting Alberta's West Coast and related exports, or connecting Alberta to Canada's West Coast and a related export terminal. Within Catalyze, Pembina and its partners sanctioned the Greenlight Electricity Centre, a 932 MW natural gas-fired combined cycle power generation facility to be located in the Alberta Industrial Heartland. Greenlight will create new demand for Canadian natural gas while strengthening and diversifying Pembina's businesses through a long-term contracted business tied to data center development.
Contracted power for data centers is a significant and scalable growth opportunity, and this first project has proven the commercial model to support future expansions. Taken together, the progress this quarter demonstrates tangible execution across each pillar of the 3Cs Strategy. We remain confident in our ability to deliver our targeted 5%-7% compound annual fee-based adjusted EBITDA per share growth through 2030. With a growing backlog of projects such as Pacific Link and future Greenlight expansions, we are well-positioned to extend that growth well into the next decade. I'll now turn things over to Cam.
Thanks, Scott. As Scott noted, Pembina reported third- quarter adjusted EBITDA of CAD 1.128 billion. Compared to the third quarter of 2025, the 9% increase reflects higher NGL margins, driven by the benefits from exposure to premium propane prices in Asian markets through West Coast exports and higher North American NGL prices, as well as strong operational performance and higher volumes across the Pipelines and Facilities divisions. These factors were partially offset by the impact of the new toll structure and revenue-sharing mechanism on the Alliance Pipeline that came into effect on November 1st, 2025. Looking at quarter-over-quarter results by division, Pipelines reported adjusted EBITDA of CAD 606 million, a 4% decrease, reflecting the net impact of lower net revenue on the Alliance Pipeline as a result of the new toll structure, lower operating costs on certain pipeline assets, and higher volumes on the Nipisi and Drayton Valley pipelines.
Facilities reported adjusted EBITDA of CAD 400 million, a 13% increase, reflecting higher revenue from the Redwater Complex as a result of RFS IV entering service in May, higher demand for terminalling services, and no comparable planned outage as occurred in the third quarter of 2025. In addition, higher contributions from PGI as a result of higher volumes from the Wapiti expansion entering service in March and improved volumes in 2026 due to a planned outage in 2025 that did not reoccur. Finally, a higher contribution from Vancouver Wharves due to increased demand for services.
In Marketing and New Ventures, third-quarter adjusted EBITDA was CAD 167 million, a 69% increase, reflecting an increase in NGL margins driven by higher WCSB and U.S. NGL prices, as well as the benefits from exposure to premium propane prices in Asian markets through West Coast exports, all of which were largely the result of rising global demand and geopolitical supply concerns, partially offset by higher realized losses on NGL-based derivatives. As well, higher realized gains on crude oil-based derivatives. Finally, in the Corporate segment, third-quarter adjusted EBITDA was -CAD 45 million, an 8% improvement over the prior period. Earnings in the third quarter were CAD 570 million, which represents a 99% increase over the same period in the prior year.
In addition to the factors impacting adjusted EBITDA, the change in earnings in the third quarter was primarily due to lower depreciation and amortization in Pipelines, a lower impairment expense recognized on certain PGI assets, and the non-recurrence of a gain recognized in the third quarter of 2025. As well, a higher share of profit from Cedar LNG, driven by unrealized gains on interest rate derivative financial instruments in the third quarter of 2026 compared to losses in the same quarter of 2025, and a higher share of profit from Greenlight, resulting from unrealized gains on interest rate derivative financial instruments.
Adjusted earnings were CAD 479 million, or an 11% increase over the same period in the prior year. The change reflects similar factors that impacted earnings discussed above, excluding the lower impairment expense recognized on certain PGI assets and the higher share of profit from Cedar LNG and Greenlight.
The positive factors were partially offset by lower realized gains on derivative instruments in the marketing and new ventures division. Total volumes in pipelines and facilities divisions were 3.7 million barrels of oil equivalent per day in the third quarter. This represents an increase of approximately 1% over the same period in the prior year. Higher third-quarter pipeline volumes were driven primarily by higher interruptible volumes on EGGS, higher contracted volumes on the Nipisi and Drayton Valley pipelines, and higher volumes on the Peace Pipeline system. Higher third-quarter facilities volumes were driven by the impact of RFS IV entering service in May and higher volumes at PGI, primarily from the Wapiti expansion and fewer planned outages compared to the same period in 2025.
These increases were partially offset by lower contracted volumes at the Saturn complex, lower volumes at Younger due to an asset upgrade in the third quarter of 2026, and lower volumes at Aux Sable due to decrease in ethane sales. Pembina has also updated its 2026 adjusted EBITDA guidance range to CAD 4.45 billion-CAD 4.55 billion from CAD 4.35 billion- CAD 4.55 billion previously. We are currently trending towards the upper end of that range based on the current market outlook for 2026, and we plan to provide our 2027 guidance in December.
The specific factors expected to impact the fourth quarter include seasonality in the WCSB NGL frac spread business, resulting in higher marketed NGL volumes, a higher contribution on the Alliance Pipeline due to seasonality and the ability to transport higher volumes during colder periods, higher contribution from the Cochin Pipeline driven by higher interruptible volumes arising from more favorable commodity price differentials, and a higher contribution from PGI due to new assets entering service and non-recurring revenue recognition. The lower and the upper ends of the updated 2026 guidance range are framed primarily as a function of commodity prices and the resulting contribution from the marketing business, interruptible volumes on key systems, the U.S./Canadian dollar exchange rate, and Pembina's share price performance and its impact on incentive compensation costs. I will now turn things back to Scott.
Thanks, Cam. In closing, the third quarter reflects tangible execution of our 3Cs Strategy and the breadth of opportunities available within Pembina's business. With nearly CAD 3 billion of projects sanctioned since April, a growing backlog of opportunities and the financial capacity to pursue them, Pembina is well-positioned to continue shaping and supporting the evolution of the Western Canadian energy sector. Reliable energy infrastructure is critical to support economic growth, energy security, and global competitiveness. An increasingly constructive environment, including improving policy support, expanding market access for all products, and growing demand for Canadian energy, supports what Pembina has long done: build and operate critical energy infrastructure across an integrated value chain with a focus on profitability and financial discipline. Please go ahead and open up the line for questions.
We will now begin the question-and-answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Theresa Chen with Barclays. Your line is open. Please go ahead.
Good morning, everyone. Following the FID of Greenlight earlier this year, you have repeatedly discussed the potential to add additional power generation projects. Could you elaborate on your view of the competitive landscape for BTM projects in Alberta, given other operators evaluating, also making inroads into space at this point?
Sure. I think as it relates to Greenlight, obviously getting that off the ground was a key achievement for Pembina, as we said in our opening remarks, including what we believe to be a first-mover advantage. We are already in the field moving dirt and pouring piles, so we are making great progress on Greenlight 1. As we talked about with our Q2 results, we had recently purchased incremental land in the Industrial Heartland right next to our site. When we think about Greenlight, we have always said we see this as a business, not as a project. The existing site we have today is not only licensed for 1.8 GW, so double what we are building today, but we also have significant industrial zone land right beside the existing project. We are feeling confident about future development phases of Greenlight.
Thank you. I wanted to come back to your comments earlier about the direct exposure to strong Asian propane pricing through West Coast exports. How sustainable do you see this current dynamic? Is it primarily being driven by elevated freight and the economics of replacing Middle East molecules, which would arguably normalize at some point, or are there other structural factors at play? How meaningful of a tailwind could this be for the business over the next year?
Yeah, thanks, Theresa. It's Cam here. I mean, the first thing I'll say is note and agree with your comment. I'd say that we would clearly acknowledge and agree that the market from that side is very frothy right now. Stepping back from just that particular arb, we see many key arbs in which Pembina participates at record levels, and differentials are wide across the board. Clearly, those are as strong conditions as we've seen in a very long time. I think when we look at the sustainability of this, we recognize that markets ebb and flow, and one thing that we really think is a benefit and a strategic value of the Pembina platform is the diversification of our market access.
When you look at our model, we've got great access to Asian markets through a combination of our own propane export terminal off Prince Rupert, as well as capacity in another facility. We ship NGLs through the Alliance Pipeline down into the Midwest. We ship NGLs east into the Eastern Canada Sarnia market. We obviously have an extensive rail platform to be able to move NGLs all throughout North America. I think what we see is, in times of uncertainty, as we are right now, customers value flexibility and optionality. That really benefits Pembina's system, our operating capability, and our access to multiple markets.
I think, to close out the question, clearly there does seem to be a step change in market flows, and for a long time, we've seen the Asian market as being a very long-term and sustainable demand source, which is why we've prioritized having that market access. But finally, we do continue to think that having access to multiple markets is very valuable.
Thank you so much.
Your next question comes from the line of Aaron MacNeil with TD Cowen. Your line is open. Please go ahead.
Hey, morning, all. Thanks for taking my questions. Maybe just building on Theresa's Greenlight question. You've talked about the advantages you have around the existing site. Maybe that's even more in focus this week, given some of the challenges we're potentially seeing in the U.S. market. Can you frame the potential timing and remaining milestones for phase two? Beyond phase two, with the recent cluster three filings showing another 466 MW at the Greenlight site and much larger potential development that links Sturgeon next door, how should investors characterize those opportunities today in terms of how tangible they are or the potential timing?
Yeah. It's Chris. We've certainly been upfront about our plans, as Scott mentioned, to expand on this site and the adjacent lands. The path we're going to take on Greenlight 2 is going to feel very similar to the path we took on Greenlight 1. We put the strategic pieces in place that sort of maintain our position in the market as we see it. Over the next number of months, through Q4 and into Q1, we're going to be working with customers to get agreements nailed down that support the backstopping and the progression of turbines and connections and all the components that make Greenlight 1 successful.
As far as scale, I mean, that remains to be seen, but we're certainly positioning ourselves to make this a business beyond Greenlight 1, and you can see that through our land acquisitions and the permitting you referenced.
Okay, fair enough. I also want to switch to marketing and realized pricing as well. Can you give us a sense of how you are approaching 2027 hedging in the current environment? Do you think you lock in here, or do you want to retain some exposure to that premium pricing?
Yeah. Great question here. It is Cam here again. I would say that, picking up on the last question, when there is times of uncertainty, clearly you focus on what is in your control. As I mentioned, the first is our really strong operating capability and making sure we have ability to move product into all those markets, and our teams on the ground are doing a great job of that. The second is following our disciplined risk management philosophy. With that, as we have maybe talked about in the past, we really focus on a matrix which guides us to where we should be hedging based on where prices are. So, we used the strength in the third quarter, following our hedging policy, to layer on incremental hedges. We would have been closer to 15%-20% hedged on the Q2 call.
Today, as we stand here today, we are closer to 55% hedged for 2027. So, following the risk matrix, but clearly the ability to crystallize some of this as we look to some of the uncertainty in the future.
Great. Makes sense. Thanks for the time. I will turn it back.
Your next question comes from the line of Jeremy Tonet with JP Morgan Securities LLC. Your line is open. Please go ahead.
Hi. Good morning.
Morning, Jeremy.
Just wanted to move over towards Cedar and the potential for expansion there, given what we've seen with more gas coming to the West Coast here with recent expansions. Just wondering if you could update us there on the potential for an expansion.
Sure. Maybe before I talk about that, I will just give a quick update on Cedar, as we have now crossed 80% complete on that facility. Everything is tracking as expected, so we are getting excited and really starting to turn our minds to operational readiness here for 2028. As it relates to Cedar, just maybe I will throw out a couple reference points. Right now, we have capacity on Coastal GasLink for 400 million cubic feet a day, which we have contracted out to third parties. The ship has the capacity to do 440 million cubic feet a day, and we have an export license up to 500 million cubic feet a day.
The first priority for Pembina is really for looking for incremental gas to fill that facility up to 440 million cubic feet a day, and potentially up to 500 once it is up and running and we are able to de-bottleneck it. So, that is priority number one. As it relates to future expansions, we have long said that we needed to see what the outcome of LNG Canada phase two was. We were very pleased to see that earlier this month or last month. Now that that is behind us, we will start to have some discussions around what gas is available and what the potential is for Cedar 2. We obviously have a partner in Cedar, but from Pembina's perspective, if there is an ability to do Cedar 2, we would very much be interested in that, and we are continuing to work that file.
Got it. That is very helpful. Thank you for that. At the risk of getting too far ahead of myself here, just looking at the plan roll coming up, if I recall correctly about the adjusted EBITDA cadence of the next few years here, 2027 was below trend, and then kind of adjusted EBITDA growth was accelerating thereafter. You have some chunky capital coming into service at the end of the decade, and it seems like that would put upward pressure, I guess, on the adjusted EBITDA outlook as we roll here. Just wondering, as you think as a company about how you would communicate future growth, does it make sense if the numbers, say, to lift from 5%- 7% to, say, 6%- 8% or whatever the numbers are?
Or would Pembina prefer just to kind of rebase higher as good years come through and keep that 5%-7%? Just wondering philosophically if there is a preference there.
Yeah, Jeremy, great question. First thing I will say is, as I said in the prepared remarks, we look forward to introducing our 2027 guidance in December, and in our typical fashion, giving the market very detailed visibility into the out year at that time. Picking up the rest of your question, I would say that in April, we obviously laid out a plan to deliver 5%-7% annual fee-based growth of adjusted EBITDA per share through 2030. Since then, we sanctioned roughly CAD 3 billion of growth capital, which has really reinforced our confidence in the growth outlook, as well as the quality of that growth as a result of some of the projects that we have sanctioned so far.
The timeline of our long-term growth target was really chosen to reflect our major projects entering service, and the first meaningful step change to that is expected later in 2028 with Cedar LNG, which Scott said continues to progress on time and on budget. It also includes Greenlight's contribution for half a year in 2030 and an annualized contribution after that. Finally, I think we were quite clear, as you said, from the outset that 2027 is a springboard year to the bigger, chunkier growth that comes in 2028 and 2030. For the moment, we are really focused on execution. Clearly, we see strong signals about the potential in our core business and potential to continue to see that. But for now, we are focused on execution and the quality of the existing backlog.
All right, understood. We await December. Thank you.
Your next question comes from the line of Sam Burwell with Jefferies. Your line is open. Please go ahead.
Hey, guys. Good morning. The wider WCS diffs have gotten a lot of attention, so I was wondering to what extent you guys might be exposed to that potentially in marketing. Just wondering if it is WCS exposure or more so other grades. I mean, if you are exposed to WCS, if we see more contango in that curve, could that be a material tailwind to marketing in 4Q and subsequent quarters?
Hey, guys. It is Chris. WCS diffs do not make up a significant portion of our marketing portfolio, so I would not want to send any signal that those diffs are having impact on our marketing results. Obviously, there are some components, but for the most part, we are dealing with other differentials across the crude marketing business.
Okay, understood. Super helpful. Circling back to the Asian LPG tailwind that you called out in 3Q, just curious if your guidance for the rest of the year contemplates any of the disruption that AltaGas is facing at RIPET. I think you guys have 20,000 days of capacity there that complements Prince Rupert. So, curious what might be embedded in guidance for that dynamic.
Yeah, Sam, it is Cam here again. The short answer to your question is yes, that is reflected in our guidance range. I would point back to my earlier comments speaking about the diversification of markets and our ability to move product through a variety of channels as a means to obviously optimize and mitigate any effects that would come from that. So, short answer is yes, it is impacted, and obviously we hope for a speedy resolution, but all reflected in our guidance range.
All right. Awesome. Thank you, guys.
There are no further questions at this time. I will now turn the call back to Scott Burrows for closing remarks.
Thank you all for the questions. Our confidence in the growth outlook, both to 2030 and into the next decade, continues to strengthen. We hope you share our excitement as we continue to execute on our strategy to capture, connect, and catalyze in service of creating value for our shareholders. I'm incredibly proud of our Pembina team and everything we have accomplished this quarter. Thanks for joining us today, and we'll chat soon.
This concludes today's call. Thank you for attending. You may now disconnect.