Energia
Pembina Pipeline Corporation Reports Record Annual Results in 2019
CALGARY , Feb. 27, 2020 /CNW/ - Pembina Pipeline Corporation (" Pembina " or the "Company") (TSX: PPL; NYSE: PBA) announced today its financial and operating results for the fourth quarter and full-year 2019.
This past year, Pembina marked its 65th anniversary and we have much to celebrate with this milestone. From rather humble beginnings as a single pipeline in Alberta with 31 people and an enterprise value of $20 million , Pembina has grown into one of Canada's largest companies. Today, we are nearly 3,000 people strong with an enterprise value in excess of $40 billion .
As proud as we are about the past, our stakeholders are more interested in the future. The keys to our success to date - our unwavering commitment to long-term value creation, rather than chasing trends or fads, combined with solid core values and consideration of all stakeholders - will continue to propel us to new successes. Furthermore, we have put forth a number of financial rules, or 'guardrails', which are our commitment to continue to grow both the depth and breadth of our value chain in a disciplined way. This approach results in greater synergy, value-added service and diversification. This is the Pembina way and it will not change.
From a financial perspective, a number of new records were set in 2019. Earnings in 2019 of $1.5 billion were 17 percent higher than the previous year. Record adjusted EBITDA of $3.1 billion , exceeded the high end of our guidance range and our 2019 adjusted cash flow per share of $4.36 was another all-time high.
In 2019, we placed in excess of $600 million of projects safely and successfully into service, including Duvernay II, Burstall Ethane Storage as well as other infrastructure at our Redwater Complex. Furthermore, we are excited about the $1.2 billion of additional fee based projects which are expected to enter service in 2020. With these new projects coming online, in conjunction with the contribution from the Kinder Acquisition assets, we anticipate generating 2020 adjusted EBITDA of between $3.25 and $3.55 billion .
The most significant single event this year was the $4.25 billion Kinder Acquisition. At our 2019 Investor Day, we talked about our focus on getting better, not just bigger and this acquisition clearly make us better. The majority of the assets we acquired are already directly connected to our system. The Edmonton Terminals connect our pipeline systems with the major trunkline third-party export pipelines. Based on their location and connectivity, these assets sit at the nexus of the Canadian oil market and are essentially impossible to replicate. By owning these assets, Pembina gains another premium franchise, thereby enhancing the longevity and stability of our earnings stream. In addition, in the current political and regulatory environment, 'pipe in the ground' and particularly cross-border pipelines, possess considerable scarcity value. The Cochin Pipeline, which transports premium condensate from the U.S. Midwest to Fort Saskatchewan, Alberta , offers access to another condensate supply basin, is connected to Pembina's Canadian Diluent Hub and strengthens our existing condensate franchise. Finally, the assets we acquired have considerable upside by overlaying Pembina's exiting commercial models.
In addition to the strategic benefits, the acquisition also has a positive financial impact, enhancing the diversification in our business and providing opportunities for future growth. These assets are predominantly supported by long-term fee-for-service, take-or-pay contracts, which are underpinned by strong investment grade counterparties, enhancing Pembina's financial guardrails. We have identified meaningful financial upside available from a portfolio of small capital projects and the integration of the acquired assets within Pembina's existing businesses. Over the next five years, we expect to realize additional annual adjusted EBITDA of $100 million , a roughly 30 percent increase, with only modest capital spending.
As we look to the future, we are excited about our continued progress in accessing global markets. In early 2019, we took a major step forward with the approval of the integrated propane dehydrogenation ("PDH") plant and polypropylene ("PP") upgrading facility ("PDH/PP Facility") through our 50 percent owned joint-venture entity, Canada Kuwait Petrochemical Limited Partnership ("CKPC"). This project is true to our strategy of trying to 'do more with the hydrocarbon molecules we touch' and leverages our position as the largest supplier of propane in western Canada. More recently, we were pleased to announce that we have executed a lump sum engineering, procurement and construction ("EPC") contract relating to the construction of the PDH plant. With this contract, we have locked in approximately 60 percent of the cost of the PDH/PP Facility thus far, reflecting our disciplined and prudent approach to spending.
In addition to advancing our petrochemical facility, we also are very excited about our Prince Rupert Terminal. This project is important as it represents our first export facility. Demand for propane export capacity was significant and we were pleased to approve an expansion of this export terminal, increasing capacity to approximately 40 mbpd.
We are entering a new decade with significant momentum and abundant growth opportunities. In fact, some of the hardest decisions we must make are what projects are we not going to pursue. Our continued focus on being better and not just bigger, in addition to our financial guardrails and strategic investment criteria based on long-term thinking, will remain our guiding principles for future growth, ensuring we continue to create long-term sustainable value.
Pipelines and Facilities have $3.1 billion of capital projects underway, which in aggregate are trending on budget.
Pipelines:
Facilities:
Marketing & New Ventures:
Pembina will host a conference call on Friday, February 28, 2020 at 8:00 a.m. MT ( 10:00 a.m. ET ) for interested investors, analysts, brokers and media representatives to discuss details related to the fourth quarter 2019 results. 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 March 6, 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 9883147.
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://event.on24.com/wcc/r/2069094/71FE24986EF4AA2586DFEB2F80A50DCA 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 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 currently constructing 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 WCSB 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.
Investor Relations, Scott Arnold , Manager Investor Relations, (403) 231-3156, 1-855-880-7404, E-mail: investor-relations@pembina.com, www.pembina.com