Energia
Pembina Pipeline Corporation Reports Third Quarter Results
CALGARY, AB , Nov. 5, 2020 /PRNewswire/ -- Pembina Pipeline Corporation ("Pembina" or the "Company") (TSX: PPL) (NYSE: PBA) announced today its financial and operating results for the third quarter of 2020.
Pembina's results for the third quarter of 2020 again reinforced the stability and resiliency of our business and the strategy that underpins it. Our focus on integration across the hydrocarbon value chain began over 10 years ago with the acquisition of the Cutbank Complex. It was furthered in 2012, by an expansion into the natural gas liquids midstream business, and then more so in 2017 with an expansion into the natural gas value chain. Along with integration came diversification of customers, commodities and currencies. Finally, an unwavering commitment to Pembina's financial guardrails has been a common thread through this cycle and those which have preceded it, including the 2015-16 oil price collapse and the 2008-09 financial crisis. Evidence of Pembina's resilience include:
While it is easy to become mired in the challenges facing the energy industry, a number of opportunities are beginning to come into greater focus and we remain optimistic as we approach 2021.
Firstly, the disruptions and challenges of the COVID-19 pandemic, deferral of major capital projects and new work-from-home protocols have afforded Pembina the opportunity to sharpen its focus on the productivity and efficiency of the business. Our focus has been overwhelmingly growth oriented for many years and current circumstances have created space to enhance another capability, ultimately benefiting all our stakeholders – customers, investors, employees and communities. In March, we announced a target of reducing full year operating and general and administrative expenses by $100 million relative to the Company's 2020 budget. We currently expect that 2020 cost savings will exceed our original target by approximately 50 percent. A significant portion of those savings are expected to be sustainable into 2021 and beyond.
Secondly, activity levels have stabilized and are beginning to improve. In Pembina's conventional pipelines business, physical volumes in July and August were consistent with levels seen at the end of the second quarter, or roughly eight percent below first quarter levels and well above the lows experienced in late April and early May. As is typical for the third quarter of each year, physical volumes declined in September as operators elected to perform routine maintenance and turnaround activities. Additional unplanned outages at third-party facilities also contributed to lower physical volumes. October physical volumes have since recovered to levels slightly above those in July and August. Notably, despite slightly lower and more volatile physical volumes, due to the take-or-pay nature of the underlying contracts, revenue volumes in the conventional pipeline business during the third quarter were relatively unaffected.
Finally, Pembina continues to evaluate its portfolio of deferred projects. As it relates to the Phase VII Peace Pipeline Expansion in particular, engineering work is ongoing and focused on optimizing the scope of the project to meet customers' needs. As a result of this work, estimated project costs are trending materially lower. Phase VII and the other deferred projects, including CKPC's PDH/PP Facility, and the conditions under which they may be restarted, continue to be evaluated within the context of our customers' future plans and the ongoing COVID-19 pandemic and resulting global economic outlook. Further options for allocating capital include funding a growing backlog of other uncommitted growth projects, debt repayment and returning capital to shareholders. Pembina looks forward to providing a fulsome business update in early December, including an update on each of the Company's currently deferred capital projects, as well as its 2021 outlook, capital budget and funding plan.
Pipelines:
Facilities:
Pembina will host a conference call on Friday, November 6, 2020 at 8:00 a.m. MT ( 10:00 a.m. ET ) for interested investors, analysts, brokers and media representatives to discuss results for the third quarter of 2020. The conference call dial-in numbers for Canada and the U.S. are 647-427-7450 or 888-231-8191. A recording of the conference call will be available for replay until November 13, 2020 at 11:59 p.m. ET . To access the replay, please dial either 416-849-0833 or 855-859-2056 and enter the password 4396278.
A live webcast of the conference call can be accessed on Pembina's website at pembina.com under Investor Centre/ Presentation & Events, or by entering:
https://produceredition.webcasts.com/starthere.jsp?ei=1290111&tp_key=6417bd122e in your web browser. Shortly after the call, an audio archive will be posted on the website for a minimum of 90 days.
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 . The Company also owns gas gathering and processing facilities; an oil and natural gas liquids infrastructure and logistics business; is growing an export terminals business; and is developing a petrochemical facility to convert propane into polypropylene. 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.
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.
Contact: Investor Relations, Scott Arnold , Manager Investor Relations, (403) 231-3156, 1-855-880-7404, E-mail: investor-relations@pembina.com, www.pembina.com