Pembina Pipeline Corporation Stock

Thank you for joining us, and welcome to Pembina Pipeline Corporation Quarter 2 2026 results. [Operator Instructions]

I will now hand the conference over to Dan Tucunel, Vice President, Capital Markets. Dan, please go ahead.

Thank you, Matthew. Good morning, everyone. Welcome to Pembina's conference call and webcast to review highlights from the second quarter of 2026. On the call today, we have Scott Burrows, President and Chief Executive Officer; and Cameron Goldade, Chief Financial Officer, along with the other members of Pembina's leadership team.

I would like to remind you that some of the comments made today will 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 management discussion and analysis dated July 30, 2026, for the period ended June 30, 2026, as well as the press release Pembina issued yesterday all of which 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 second quarter results, which were highlighted by adjusted EBITDA of $1.064 billion. It was another solid quarter that reflects a constructive industry environment, coupled with strong underlying operational performance and new assets entering service. As Cam will discuss in more detail, we have affirmed our 2026 adjusted EBITDA guidance range of $4.35 billion to $4.55 billion, while noting we are trending [ to ] the midpoint of the range.

Since our business update in April, we've continued to build momentum across all three pillars of our 3C strategy and have further strengthened our visibility to long-term growth. As a reminder, our strategy is built around three complementary pillars. First, we aim to capture growing volumes across the Western Canadian Sedimentary Basin by leveraging our integrated midstream footprint and deep customer relationships. Second, we strive to connect those volumes to the highest value markets through our and others transportation and export infrastructure. And third, we want to catalyze new sources of hydrocarbon demand that create growth in the WCSB and incremental opportunities across our value chain.

Together, we expect these pillars will provide multiple avenues for growth and allow us to create value across changing market environments. Over the past quarter, within capture, we placed RFS IV fractionator into service in late May, on time and under budget, adding 55,000 barrels per day of propane plus fractionation capacity at Redwater complex further strengthening our industry-leading NGL franchise.

Within Connect, Cedar LNG continues to make excellent progress toward first exports in late 2028. During the quarter, we achieved key construction milestones, including mechanical completion of the pipeline that will supply the facility and successfully moving the floating LNG vessel hall from dry dock to wet dock in South Korea. We also announced our participation in the proposed West Coast oil pipeline where we can contribute our development and execution expertise to a project that has the potential to further expand market access for Canadian energy. We are participating in a purposeful and prudent way through a disciplined approach to capital allocation and risk management.

Within Catalyze, we sanction the Heartland Extraction Plant, a highly capital-efficient project that leverages existing infrastructure and monetizes our extraction rights on the yellow head pipeline. Equally important, the project was accompanied by an expansion of our long-term commercial relationship with Dow, increasing contracted ethane supply volumes by 15% and reinforcing the strength of our integrated NGL platform. We also reached a positive final investment decision on the Greenlight Electricity Center, a 932-megawatt gas-fired generation facility that will provide dedicated power to a new Alberta data center being developed by Meta.

Greenlight represents an exciting new growth platform for Pembina, creating stable long-term cash flows while also driving incremental demand for Western Canadian natural gas. Importantly, Greenlight has the potential to generate benefits across multiple parts of our existing business, and we continue to manage discussions around additional gas-to-power and data center-related opportunities and recently acquired additional land proximal to the Greenlight electricity Center and the Redwater complex to support future projects.

Taken together, the projects and announcements this quarter demonstrate the breadth of opportunities available across Pembina's franchise and our ability to identify and then convert those opportunities into tangible growth, whether it's expanding our NGL platform, connecting Canadian production to global markets or creating entirely new demand pathways for natural gas, we're seeing strong execution across each pillar of our 3C strategy.

As a result, we remain confident in our ability to deliver our targeted 5% to 7% compound annual fee-based adjusted EBITDA per share growth through 2030. And we continue adding potential new opportunities such as the West Coast oil pipeline and are pursuing additional gas-to-power for data center projects that if converted, will support extending our growth well into the next decade.

I'll now turn things over to Cam.

Thanks, Scott. As Scott noted, Pembina reported second quarter adjusted EBITDA of $1.064 billion. Compared to the second quarter of 2025, continued strong operational performance across the Pipelines and Facilities divisions and higher results in the marketing business were offset by the impact of the new toll structure and revenue sharing mechanism on the Alliance Pipeline announced last year.

The net result in the second quarter was a $51 million or a 5% increase in EBITDA over the same period in the prior year. Looking at quarter-over-quarter results by division, the major factors impacting the quarter in pipelines included higher contracted volumes on the Nipisi pipeline, higher revenue on the Cochin pipeline due to prior period tariff adjustments and a lower contribution from the Alliance pipeline due to the negotiated settlement between Alliance and its [ shippers ] partially offset by higher interruptible volumes and lower operating expenses.

The Facilities segment benefited from the RFS IV fractionator entering service in May and the Wapiti expansion in PGI entering service at the end of March, both on time and at or below budget, further extending Pembina's track record of delivering solutions for our customers in a timely and capital-efficient manner.

In addition, the quarter was positively impacted by higher contributions from PGI due to stronger performance at the Dawson assets, fewer unplanned outages and higher recoveries from an asset upgrade and no comparable planned outage at Redwater has occurred in the second quarter of 2025.

In Marketing and New Ventures, second quarter results reflected the impact of wider WCSB and U.S. NGL frac spreads resulting from higher NGL prices, including the benefits of Pembina's exposure to premium propane markets through West Coast exports as well as benefits from higher crude oil prices and higher sales volumes. In addition, the quarter was impacted by higher realized losses on NGL-based derivatives and lower realized gains on crude oil-based derivatives.

Finally, in the Corporate segment, second quarter results were lower than the prior period, primarily due to higher long-term incentive costs driven by an increase in Pembina's share price and incentive multiplier during the quarter compared to a decrease in Pembina's share price and incentive multipliers during the prior period.

Earnings in the second quarter were $512 million, which represents a 23% increase over the same period in the prior year. In addition to the factors impacting adjusted EBITDA, the change in earnings in the second quarter was due to higher unrealized gains on NGL-based and crude oil-based derivatives and unrealized losses from the Cedar LNG compared to unrealized gains in the second quarter of 2025. Adjusted earnings were $415 million or a 10% increase over the same period in the prior year. Compared to the factors related to earnings, the change in adjusted earnings excludes the impact of the unrealized gains on NGL-based and crude oil-based derivatives and the unrealized losses in Cedar LNG.

Total volumes in the Pipelines and Facilities divisions were 3.7 million barrels of oil equivalent per day in the second quarter. This represents an increase of 3% over the same period in the prior year. Higher second quarter facilities volumes were driven primarily by higher volumes on the Alliance pipeline primarily driven by stronger operational performance and higher contracted volumes on the Nipisi pipeline serving the Clearwater formation, Higher second quarter facilities volumes were driven primarily by the impact of RFS IV entering service in May and higher volumes from certain PGI assets primarily from the Wapiti Expansion and at the Dawson assets.

Yesterday, Pembina reaffirmed its 2026 adjusted EBITDA guidance of $4.35 billion to $4.55 billion, and we are currently trending towards the midpoint of that range. At the midpoint, due to seasonal factors, timing of spending and certain onetime items, Pembina anticipates that the adjusted EBITDA contribution in the third quarter will be lower than the second quarter with a seasonal contribution -- seasonal -- strong seasonal contribution expected in the fourth quarter. It is worth noting that over the past 5 years, the third quarter has contributed between 23% and 27% of the full year adjusted EBITDA.

Our current outlook for 2026 has the third quarter contributing at the low end of that range. A few specific factors that are expected to impact the second half of the year are worth noting. First, seasonality in the WCSB NGL frac spread business, resulting in a lower contribution in the third quarter and a higher contribution in the fourth quarter. On a quarterly basis for the remainder of the year, Pembina has hedged approximately 90% of its NGL frac spread exposure in the third quarter and 40% in the fourth quarter.

As a reminder, for the period from 2025 to 2026, our U.S. and Canadian frac spread businesses combined are expected to account for approximately 2/3 of our marketing. Secondly, higher integrity and maintenance spend in the second half of the year compared to the first half of the year. Due to strong 2026 results and operational efficiencies, we have chosen to fast track a portion of normal course integrity work. I want to remind listeners that the third quarter is typically our highest quarter for operating expenses.

In 2025, the third quarter accounted for 27% of the full year operating expenses, and this year is looking to follow a similar trend. Thirdly, lower contribution from Cochin Pipeline in the second half of the year compared to the first half of the year is expected, reflecting strong first half first half throughput as certain firm shippers advanced a greater portion of their annual take-or-pay commitments into the earlier part of the year. As a result, throughput above the remaining annual commitments for the second half of the year is expected to be highly correlated with connotate prices.

In 2025, approximately 60% of the full year adjusted EBITDA on Cochin was generated in the first half and 2026 appears to be following a similar pattern. Fourth, sequentially lower contribution in the third quarter and higher contribution in the fourth quarter on Alliance Pipeline due to seasonality and the ability to transport higher volumes during colder periods. And finally, a higher contribution from PGI in the fourth quarter due to new assets entering service and nonrecurring revenue recognition.

In aggregate, the lower and upper ends of the 2026 guidance 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'll now turn things back to Scott.

Thanks, Cam. In closing, I would offer once again that recent developments reflect tangible execution of our 3C strategy and highlight the breadth of opportunities available within Pembina's integrated business. The accomplishments over the past quarter reflect a continued focus on disciplined capital allocation, long-term contracted cash flows and creating value for our shareholders.

Operator, please go ahead and open up the line for questions.

[Operator Instructions] Your first question comes from the line of Jeremy Tonet with JPMorgan Securities, LLC.

There's a lot of talk in the industry with regards to incremental WCSB oil egress, Pembina, one of the projects being proposed. But I was just wondering if you could help me think a bit about the picture as a whole and how it impacts Pembina as it relates to condensate. It seems if there's sizable egress that's going to come on, that means there's sizable condensate needs.

And I was just wondering how that gets solved? Is this Cochin expandable in any sense? Is in-basin production going to really tick up? Is it going to be a combination? I mean if it seems like in-basin is going to be part of the solution, that's a lot of volumes, a lot of growth to hit Pembina's system. Am I thinking about that the right way?

Yes, Jeremy, I'll give you our high-level macro view, and I'll let my colleagues pitch in as well. I mean that's one of our key fundamental tenets from our April strategy session. We talk about the flywheel, and we always start with oil sands growth. And there's ranges out there between 600,000 to 2 million barrels of incremental oil. So let's just pick 1 million barrels for ease. If the West Coast oil pipeline goes ahead 1 million barrels a day, -- that's going to require somewhere in the neighborhood of 300,000 barrels a day of incremental condensate.

I think we have a firm view that the majority -- vast majority of that condensate needs to come from the WCSB. And we know we have the resource here in the Montney and the Duvernay. And so just condensate alone has fairly significant running room, which is some of the reason we were getting ahead of some of our expansions in Northeast BC, debottlenecking the system in advance of what we anticipate to be strong condensate growth across the system. Now of course, you don't drill for condensate alone. You drill for natural gas that condensate comes along with. So we are going to need to find incremental home for natural gas, whether that's LNG Canada Phase 2, potential pushing incremental throughput through cedar, wood fiber, et cetera, as well as incremental data center demand.

And of course, oil sands are going to need incremental gas in order to grow their production from the oil sands as well. And then lastly, of course, there's associated C2+ and C3+ that comes along with that natural gas, which should drive growth through PGI and fractionation and export as well. So just backing up a step, it's that kind of general linking of all those projects and all that growth that really leads us to be extremely optimistic about the WCSB to 2035.

And I think, Jeremy, it's Cam here I would just pitch in, you referenced Cochin. I think on top of what Scott said, I mean, a reminder that when we acquired Cochin, that asset was running at about 85,000 to 90,000 barrels a day through some great operational work by our team in the field and in Calgary here, we've managed to increase the capacity of that system to about 120,000 barrels a day, and it's running very firmly, very strongly, and I think we'll continue to be in high demand, especially as oil sands volumes continue to grow in the coming years. That said, I think the opportunity for more imported condensate is also a potential solution. And clearly, with our franchise, we'd be looking at the best way to serve customers across the board.

Got it. That's very helpful there. And then I just wanted to go, I guess, towards Greenlight, and I realize I'm getting well ahead of myself here, but I'll try nonetheless. We've seen in other areas where data centers have developed, there's been a tendency to cluster where initial toeholds have led to bigger developments over time. Just wondering now that this project is in motion, thoughts about the potential for that way down the road.

Jeremy, it's Chris. Yes, I mean, the FID earlier this month really support our thesis about gas-to-power as a business serving data centers in Alberta. Do you think it's a scalable project? We think Alberta remains one of the best jurisdictions to build in. We've got a very supportive government continue to have a first-mover advantage across land, our adjacent businesses, expertise.

And then to what you're referencing, like the customer demand and interest remains high, including around the concept of clustering. We certainly saw that happening elsewhere and have a view around the potential for that to happen in this area. The team is already hard at work developing the next phase of the project, that includes acquiring some incremental strategic lands approximate to our lands. We had an opportunity to consolidate some contiguous lands right around our existing Greenlight site. And they're all progressing customer discussions and all of that is really centered around some of what you're referencing.

Both from the initial customer perspective, the probability or likelihood of the clustering but then also how these facilities tend to group across a variety of customers in strategic areas like the Heartland.

Your next question comes from the line of Theresa Chen with Barclays.

Following up on the Greenlight side of things. With Phase 1 underway and as you have already consolidated the contiguous lands and in the process of commercializing Phase 2 and maybe beyond, would you expect the time line for further phases to be a little quicker? And anything to say on size and scope at this point?

Yes. Theresa, it's Chris again. I don't think we can get into timing a lot. I think there's a few things happening in the market that you can look to as -- for a little bit of guidance, the AESO's Phase 2 large load allocation that's underway and the continuation of the bring your own power strategy is, I think, a bit of a guide to think about timing.

I think we've got a relatively proven model on how to progress these projects. We're really focused now on getting those front-end strategic sort of first-mover components in place, and we're working with customers to derisk them much like we did on Phase 1. So I can't really give a guide on exact timing, but I can sort of tell you we're moving quickly and with pace, but very much in a similar vein to how we've done on the last round.

Understood. And on the diluent side of things, can you just lay out the economics of in-basin production versus importing incremental barrels of condensate? What do you think is the marginal relative cost to the customer at this point? And if you move forward with the next phase of expansion for Cochin beyond the 120,000 barrels per day, what kind of size or economics should we think about related to that?

I think what I'll first say is that we see the economics of the condensate barrel as being market-driven, meaning that the price gets set based on the availability of the supply. And clearly, as Scott said, the vast majority of that supply gets filled domestically today. And obviously, those economics in the basin for domestic condensate production are some of the most competitive available.

In terms of your specific question around the marginal economics of bringing condensate up, I mean, I think it's a bit preliminary. We're not at a stage yet where we can share something to that degree. I think what we recognize is that both the scale and the economics have to have commercial support from the customers. And I think with that, we've made some positive first steps in terms of the MOU with the government.

The Pathways Group has secured some signals that there is a desire to grow but the time line of that ultimately remains subject to their decisions and their capital allocation decisions. And so as we always do, we look forward to working with customers closely to provide a value-added solution, but probably a bit preliminary to start sharing that at this point.

Your next question comes from the line of Spiro Dounis with Citi.

I wanted to revisit the 2030 growth outlook. I guess since you've provided that update, you've now sanctioned another $3 billion of projects, which I believe underwrites about 6% of that 5% CAGR range. So first, am I sort of thinking about that right? And as you think about that sort of remaining $2 billion bucket still up to sanction, how do you think about the ability to grow that opportunity set beyond $2 billion, but still be within that 2030 time frame that could maybe even take you above that 7% high end?

Thanks for the question. And first off, I think we would look at it similarly to you, meaning that we've crystallized or derisked a material portion of what was in that growth outlook from 2026 through 2030. As a reminder, that was somewhere between $1.50 to $2.15 of adjusted EBITDA -- fee-based adjusted EBITDA per share growth between 2026 and 2030, and we've obviously derisked a material portion of that.

What remains in that is a combination of some core volume growth within our business and some core capital investment opportunities. And I think the -- the positive thing I would say about that is that, one, much of that or effectively all of it is within our core franchise, our core business and very much only gets better and more compelling with continued volume growth, which I think we have even more confidence around based on what we've seen more recently. And I think as we've said since April 7, probably the biggest near-term lever for us on that 5% to 7% within the time frame, is overall industry activity.

And I guess I would couple that by saying and reminding everyone that the level of organic volume growth that was really embedded in our 5% to 7% was more historical looking. I think I've said before in the sort of 2% to 3% range for liquids. And I think what we take positive signals from is some of the large customers in the basin and some of our large customers talking about multiyear volume growth in excess of that number through 2030.

Some customers talking about volume growth up to the likes of 5% EBIT. And so that would be obviously very capital efficient for us and very, very quick turnaround. So I think there's -- that's probably the biggest opportunity for us. And as Scott signaled in his prepared remarks, what we're really getting excited about whether it's future phases of Greenlight, whether it's the West Coast pipeline opportunity is the ability to extend that growth that we've signaled through 2030 into the next decade.

And I think based on some of those opportunities, based on the condensate opportunity that we talked about earlier and the breadth and the integration of our value chain, which we truly believe is unmatched. We stand very well positioned to continue to grow at that rate into the next decade.

That's helpful color, Cam. Second one, maybe just going to the West Coast oil pipeline actually. So Scott, you had mentioned sort of taking a prudent approach here and wanted to dig into that a little bit further. Just curious how you're thinking about the need to sort of protect your capital and preserve your return if this project does go forward? And maybe perhaps more broadly, can you just talk about your overall decision to get involved here? I think as has been highlighted on this call, you really benefit from WCSB growth almost regardless of the egress method. So curious maybe what some of the rationale was here.

Sure. I think from a Pembina perspective, I mean there was discussions over time of our involvement in TMX. And so I think that the southern route and that idea of getting our Canadian depressed prices higher through egress has always been a strategy and clearly is highlighted in our 3C strategy.

So when I think about the strategy, this fits clearly in the connect bucket. Anything we can do in the basin, whether it's natural gas, LPGs, crude oil to increase the production and the netback for our customers, has that knock-on effect throughout the business. So just from a core strategic perspective, it fits directly in what we're talking about. I think we see an opportunity here as we talked about previously to be part of a consortium where we're able to lend our experience and really complement and not replace the project proponent and build -- and bring our skilled project execution discipline to it. So we're pretty excited about our role.

And I would say that we approach this no different than how we approach many of our projects. We look at the risk return trade-off. We have our long track record of financial guardrails. We're willing to put some money at risk, but [ it ] comes back to the risk reward and when we stacked up all the key aspects of this project, we felt like it was something that we wanted to be involved in and are very excited about it not just for Pembina, but what it can do for the basin as well.

Your next question comes from the line of Praneeth Satish with Wells Fargo.

Maybe just staying on Greenlight here. I guess just broadly speaking, I know it's still early, but when you think about Phase 2 and when you think about another potential site, should we expect the economics and commercial structure and risk profile broadly to look like Phase 1 now that you've got that out there? Is that kind of like the blueprint or the rough template for how you're pursuing some of these other projects? Or do you think they're all kind of a little bit different?

Yes. It's Chris here. As I was saying earlier, I think we really feel like we've proved out our sort of thesis on gas-to-power is a midstream business in Alberta. And part of that is certainly the commercial construct and how we've thought about the risk profile and the fit of the project with how we think about our broader business.

And so still in motion certainly and still underway, but future phases, we're targeting to structure them in a similar way to Phase 1. They're going to be long term. They're going to be fixed fee, low-risk arrangements that align with Pembina's business model. I think as you get out into expansions, not necessarily everything always looks the same out in time, but we've been really effective across all of our businesses of keeping that risk profile and keeping that structure in line with our business model, and this will be no different.

Got it. That makes sense. And then maybe just switching gears. So there are a number of pipeline projects being proposed in the U.S. to serve growing low demand in the Midwest and Alliance and Aux Sable kind of sit right in the middle of that demand corridor. So I'm just wondering if you see an opportunity to expand and extend south of Aux Sable and participate in some of that growth?

Jaret here. With respect to expanding downstream of the terminus of Alliance past the Shanahan extraction facility, I would say we're probably more focused in getting incremental gas egress unlocked out of Western Canada to -- so our customers can produce more condensate like Scott talked about and Cam talked about that entire flywheel needs to find egress for all of those products as oil sands grows. So I would say we're probably more inclined to look at getting more gas down into the Midwest versus just extending the existing gas volume further down the value chain.

Got it. Okay. Yes. No, that's kind of what I was suggesting here to kind of bring some of that gas down and serve the demand load but understood.

Your next question comes from the line of Aaron MacNeil with TD Cowen.

Cam, you sort of touched on this a bit already, but I wanted to put a finer point on it. Can you remind us of the basin growth assumptions that underpin your -- sort of April business update guidance and how you might take a crack at sensitizing the guidance in the event that production growth exceeds your assumption?

And maybe as a follow-on, are there projects that were not referenced in that update that would be required like any fractionator or incremental pipeline expansions, would they be required to sort of realize that higher production-driven growth rate?

Sure, Aaron. Yes. So as I mentioned earlier, the volume growth that was embedded in our April 7 update and our 2026 to 2030 outlook was, again, in a bit of a historical sense. And we've seen liquids volume growth over the past 4 to 5 years in that 2% to 3% range, and that's effectively what we embedded in our outlook.

I think, as I mentioned earlier, if you see that escalate beyond that, our math is that there's a very direct relationship in terms of our growth and the basin growth stepping up. So kind of percentage point percentage point, obviously, depending on timing and when that comes. But if you want to try and distill it to the highest level, that's the way I would think about it.

In terms of the investment there, I think that we have -- one of the values of our franchise is the breadth and the integration. And as you know, we have debottlenecked various points of that franchise along the way. Certainly, on the pipeline side, we have -- we debottlenecked upstream of Fox Creek significantly over the past 5 years. We made the investment close to 10 years ago to create the corridor from Fox Creek in. And we continue to have space there.

I will say if we see activity and we do start to see 1 million barrels or more of new crude egress come to fruition and the requirements for condensate and the associated NGLs that come along with that, I think it's no surprise that we will be looking for additional fractionation capacity in the basin. There may be debottlenecking investment depending on where that supply comes from. But we certainly do have some running room in the near term here and the ability to respond quickly and capital efficiently where there isn't.

Makes sense, and that's helpful rule of thumb. I can appreciate your committed to self-funding growth today. So maybe just a hypothetical for now, but what market conditions would have to occur to incentivize you to deviate from that? And what might the funding plan look like in that scenario?

Yes. I'll remind everyone that our target leverage range or our leverage guardrail has been 3.5x to 4.25x senior debt -- proportionally consolidated senior debt to EBITDA for a very long time now. And clearly, we've been well below that because as you mentioned, we've been very much executing within free cash flow for the balance of the past 5 years. I think we look at that and when you look at whether or not we would go, say, beyond 4x, which we haven't done, but whether we would do that, you sort of have to look at the overall risk profile of the business and the opportunity where we've significantly mitigated all other risks in the business.

I think that gives you some confidence to be able to accept risk in other areas of the business. And so those are the conditions. And I think you need to see a very clear path to getting back towards the middle of your target range, which is where we prefer to operate. But I would say that clearly, we are at a generational point in the industry at the moment and the type of investment opportunities that we're seeing, both in terms of ability, scale and returns are very compelling. And so we really need to take a long-term perspective as we look at these investment opportunities to generate the most value.

Your next question comes from the line of Maurice Choy with RBC Capital Markets.

I just want to start with the West Coast oil pipeline. I suspect it might be too early to talk about customer volumes in the coming years, but maybe you could give us a vision as to what needs to happen between now and FID, whether that be between the industry, the governments before we do see the first customer volumes get contracted.

Sure, Maurice, it's Scott here. I don't think about this too different than any other major project when it comes to FID. I mean, clearly, we'll need to have a regulatory approval with conditions under which we can construct. We need to have a competitive cost estimate and then we'll need a certain level of volumes to underpin the investment. And so all of that's going to happen over the next, call it, 18 months as we advance the project. But I don't see it really any different than any other major projects. So based on what we're seeing and hearing, we do think volumes are going to be there, so we're pretty optimistic.

Got you. And if I could finish off with a question about our -- or more broadly about your growth platform. I think in your press release, you mentioned that Greenlight establishes an entirely new growth platform. And I think, Chris, you mentioned earlier that this Greenlight project, obviously proves out your gas-to-power thesis. I think in the past, you mentioned that you're not looking to grow an IPP within the company. and sure there's future phases of Greenlight on the same site. But could you just talk to any plans to grow this platform beyond Greenlight?

Thanks for the question, Chris. Chris, again. So when we think about what was really attractive to us about this project and about this business. I mean, it really starts with the macro, right? The energy demand growth associated with data centers and AI and all the rest of it. And that demand being served by natural gas-fired power generation is pretty attractive for us. It catalyzes demand in our basin for natural gas.

So that part all holds. Then it's really about can we build it into the type of business that we really like and the midstream construct, we really like. And the nature of Greenlight fits that very well. At this time, merchant power does not fit into that or being an independent power producer does not fit into that. we think there's lots of running room on the model we've proven out here with Greenlight and are not pointed down a path of towards IPP or merchant power.

But just to be clear, but you're okay going down being a contracted IPP in Alberta?

We're contracted going down the path of -- we're confident going down the path of deals that look similar to Greenlight in commercial structure and risk profile.

Your next question comes from the line of Sam Burwell with Jefferies.

Of all the projects that you called out in the April business update that are still pre-FID, which would you say are the nearest and then maybe the furthest away from sanctioning? And I guess, specifically on like the Nipisi pipeline, Clearwater has gotten a lot of momentum, but with a fairly concentrated crew of producers. I was just curious what the progress is on that one in particular.

Thanks for the questions, Chris. Obviously, we've seen tremendous growth out of the Clearwater Basin. The netbacks are phenomenal. And in this price environment, the growth has certainly reflected that. The result of which is it's filling our existing pipe that's there. That's been a tremendous success. If you recall the history on that. We're working with producers today and still to chart a path forward that works for both of us and optimistic about the potential to expand that pipe in the not-too-distant future. But at this stage, it's in commercial negotiations.

Sam, this is Cam here. I'll just chip in on some of those other opportunities. We've talked about the opportunity for butane value enhancement. I think we saw length in the butane market in Western Canada for some time. And I think with what we're seeing as the opportunity in the future with greater crude egress and the flywheel effect of that, that is only growing from there. And so we continue to investigate a solution that involves butane value enhancement.

Likewise, on some of the incremental pipe egress particularly towards Northeast BC, again, I think we continue to work closely with customers around the timing of those needs. And as is usual, people are very much into budgeting season here for the next year and the following years. And I think it's really when, if not, if that occurs. And outside of that, it really comes down to just unlocking just ratable core volume growth as we see through existing capacity.

Okay. Great. And I'll try to sneak another one in on the West Coast pipeline. So it seems like you guys have tremendous optionality and do have some protections on cost. But -- you also stated in the April business update that the max build multiple you consider would be 10x. So I would assume that holds for your potential participation in the West Coast oil pipe. But curious if that contemplates the option to add the extra 10% after project completion or if your returns would be effectively met through just the initial 10%?

It's Cam here, Sam. I think what I would say is when we talked in April -- on April 7 about our history in terms of capital deployment, it was very much historically speaking. And with our current development portfolio, in that 6 to 8x range historically for greenfield-type opportunities. And so when you look at our model, a desire to grow in that mid-single-digit range over the long term, really, it sort of drives towards something that continues to need to be capital investment along those type of parameters with the right risk profile.

So again, we're very focused on both the return and the risk profile of the investment opportunity and the West Coast pipeline is no different. It's a bit preliminary to sort of get into bright lines at this point because we have a lot of work to do on all fronts there. But suffice to say, as Scott said, and just to reinforce the capital allocation decision for that opportunity will be no different than it is for our other portfolio investments.

Your next question comes from the line of Robert Catellier with CIBC Capital Markets.

I just wanted to quickly go back to the NGL picture here. You continue to highlight the strong outlook for the basin and the strong NGL fundamentals. And of course, you have that exposure through your export facility and some contractual export exposure elsewhere. Just when you look at the evolution of the basin and what's possible if oil sands production does grow, as you mentioned, it's going to require more fractionation. I'm just wondering about your views in terms of fractionation and extraction in the field closer to the West Coast export points compared to Redwater where you have so much scale and so many tools already?

Rob, Jaret here. I think you're probably referencing a recent announcement of some incremental barrels going west from Northeast BC. So maybe I'll just take a step back and talk about our fractionation complex. We absolutely believe the size and scale of the Edmonton area does provide the customers with a significant amount of redundancy, storage, rail, egress. You have multiple rail providers to go to different markets depending on if pricing are swing, you can go to Eastern Canada, you can go around States, you can go into international, you can go into Mexico, et cetera.

So we still believe the fundamental thesis is that NGLs coming into the Edmonton Fort Saskatchewan area does provide customers with a lot of advantages. And I will note that just the majority of the barrels that come into that region are kind of like Alberta based. With respect to some niche opportunities going directly to the coast, it's fairly relatively small. I think it works for certain customers in certain regions.

But overall, it doesn't -- it's kind of anticipated in our 5% to 7% CAGR that we put out on April [ 7-- ] and you have to realize that those customers are making a choice long term to dedicate those small barrels to Asia essentially. So it'd be very hard for them to capture in Eastern Canada price for example, but overall, we still think Fort Saskatchewan and Edmonton is extremely competitive and scalable.

Okay. Great. And then I just wanted to move on to Cedar LNG here. It just looks like the construction is going incredibly well. So at this point, what do you see as the remaining risk factor to be able to hit those first cargoes in 2028?

Yes. I think, Rob, the big unknown, and I don't say this as a negative will just be the ultimate hookup and commissioning of the ship. I think everything as of right now, the pipeline is done, as we talked about, the transmission line will be done early. Our third-party compressor station is wrapping up construction. BC Hydro is on track. The ship is tracking slightly early for arrival. So when you stack all of it up, really the unknown, and again, not because I'm worried about it, it just will be the ultimate commissioning of the ship because everything that's in our control or a third parties' control right now is tracking very well.

Your next question comes from the line of Sumantra Banerjee with UBS.

You mentioned that HEP would have -- it was accompanied by amendments to an existing ethane supply agreement with Dow. So I was just curious about if you had any higher level of commentary on what you're seeing in terms of global ethane demand.

The question is around global ethane demand and the relationship to our existing arrangements. Is that right?

That's right.

Yes. Yes. It's Chris. Happy to take that. I mean, obviously, we've seen a lot of a lot of growth in Western Canada on the ethane demand front with Dow announcement. There remains a length in the basin for sure, and others have been out talking about the potential opportunity to get that to Asian markets in particular.

And you can see why if you pay attention to some of the pricing or watch closely some of the pricing have been seeing for ethane sold off the dock in the coast and landed in certain parts of Asia. It's a pretty compelling proposition. We've spent time understanding and continue to spend time understanding the cost structure and all the rest of it associated with getting that product to Asia.

I think we've got great partners in the basin and great partners in Western Canada in the ethane cracking business that we've got tremendous relationships with, and we think there's even potential for more of that in the future. But certainly, some of the global price dynamics are driving some different exploration by different participants.

Got it. That's very helpful. Also just curious if you're noticing anything on the storage front as well in terms of incremental opportunities?

On the storage front? Certainly depends which products. Crude storage in a [ backwardated ] state and at least a little bit of available capacity at the moment has not seen a ton of opportunities associated with it, but there certainly are opportunities popping up there. We continue to take advantage of seasonal and different storage opportunities on the NGL side. We've got a pretty substantial position there. And then no real insights to provide on gas storage.

Your next question comes from the line of Benjamin Pham with BMO.

I just want to go back to the Canadian West Coast pipeline opportunity. Can you flesh out -- I noticed some time lines that have been noted before in the press. I'm just curious about, as we look forward, the key milestones for this pipeline into FID, when your nonbinding becomes binding, what that timing actually means? And then beyond that buying, what other key items to look for?

Happy to. This is [ Sarah ]. Right now, obviously, it's been a very busy month since we made the announcement in June. We're working very closely with our government partners on the key work streams. The first one being -- or a primary one being obviously the definitive agreements and working to support a major project office on their project national interest assessment.

So the first milestone as we look forward is really targeting that October 1 designation under the Building Canada Act. Around that same time, we are anticipating that a definitive agreement will be finished and we will then move into proceeding with the CER, other regulatory applications. that are required that Scott referenced in order to get to an FID decision. So these are the sort of core pieces as we look forward. Obviously, there's a lot of compressed time lines and optimism as we look at this, but we will be pulling it together and targeting early commencement of operations next fall.

Okay. Got it. And just maybe take a step back. I know you've already on oil pipes, you have storage in the mix, you had looked at Trans Mountain in the past, now the Canadian West Coast pipe, you mentioned that you're supporting oil pipes, it benefits your business broadly in the basin. Do you have appetite for anything beyond the Canadian West Coast pipe because there's also a number of other alternatives being proposed out there that may be looking for partners or investments.

No, not right now. This is West Coast oil pipelines are focus.

Okay. Got it. And then maybe just one quick one. It's really been night and day of your cost of capital over the last year. And that's creating a lot of value for organic growth, just given returns have been still quite attractive. How do you think about the M&A landscape today, especially in the U.S. side of things, are there assets you can shake out and maybe build a new footprint there to build on?

Ben, it's Cam. I think it's probably pretty consistent with our comments in the past, which is, one, we're always looking at how we can enhance the business strategically and what fits within the 3C strategy. Obviously, Capture, Connect and Catalyze underpins all of that.

I think our view continues to be as it's been for some time that the opportunity that we see in front of us at the moment and for the near term is really probably more so with respect to tuck-in opportunities as they come and sort of have strong strategic fit with the rest of our business. I think it sort of speaks to the opportunity in front of us organically and what we have.

And as we said, we have a very strong growth profile through the end of the decade and setting up to continue to have that into the next decade. And so our focus would be executing that, executing that well, pointing our company's resources towards doing a really strong execution job on those opportunities just like we have and sort of smaller tuck-in opportunities where they present themselves and fit strategically.

Your next and final question comes from the line of Robert Hope with Scotiabank.

Maybe just going back to the potential for incremental gas tier opportunities. I acknowledge kind of your comments, Terry, on the commercial structure there. But how should we think about the ownership structure if Greenlight is expanded, would that be with Connecticut or if you are looking for other opportunities, could you be a lead developer and 100% owner of those opportunities?

Robert, it's Chris. We're really happy with the [ Canada ] core teams as the team that's getting this for us. We're also really happy with the partnership we have and the partner we have in place. We're seeing lots of alignment across the partners and the execution team to really pursue what we're trying to pursue in this space.

So with all that, we think it really is in support of us having maintained that first-mover advantage. It's really in support of us having all the right expertise and capabilities and financial wherewithal to keep investing in this space. And so yes, like I mean, at this time, that's our team, that's our partnership. We like it, and that's going to be the vehicle we're pursuing these investments in.

I appreciate that. And then maybe going over the West Coast pipeline. So -- is it possible that the new West Coast pipeline could operate as a kind of a common carrier or a common system with the existing Trans Mountain system there, including moving ships to -- in between the docks. When you think about that, could there be an opportunity? Or is there a way to kind of, we'll call it, normalize your ownership interest in not only the West pipeline, but in the broader overall system?

Robert, I would say at this time in stage, you should think about them as two completely dependent projects with independent owners and independent development. So in this 5 minutes, that's not being contemplated.

There are no further questions at this time. I will now turn the call back to Scott Burrows for closing remarks.

Thank you. It was an announcement filled quarter at Pembina, and our successes reflect very strong momentum within the Canadian energy industry. Our ability to capture opportunities, both as a first mover through Greenlight and a trusted project development partner as showcased by the West Coast Oil Pipeline project continues to differentiate us among peers. We are seeing new developments across all commodities within the WCSB, and Pembina's integrated value chain is uniquely positioned to capture this momentum.

Our confidence in the growth outlook both to 2030, but also well into the next decade is continuing to strengthen. We hope you share our excitement as we continue to execute our strategy to capture, connect and catalyze in service of creating value for our shareholders. I'm incredibly proud of our amazing Pembina team and everything we have accomplished the quarter. Thanks for joining us today. Enjoy the rest of summer and we look forward to speaking to you again soon.

This concludes today's call. Thank you for attending. You may now disconnect.

Good afternoon, and welcome to the 2026 Annual Meeting of Shareholders of Pembina Pipeline Corporation. My name is Henry Sykes. I'm Chair of Pembina's Board of Directors. And in accordance with our bylaws, I'll preside over this meeting as Chair.

Before we proceed with the balance of the meeting, I'd like to start with the land acknowledgment, recognizing that we have people joining us today from numerous locations. As Pembina continues to build strong relationships and partnerships with indigenous communities, land acknowledgments are one way for us to communicate our respect for the land that we all share.

Pembina acknowledges our traditional hosts and thanks them for their graciousness in welcoming us to carry out work on their traditional territories. Pembina plays a role in the economic reconciliation with indigenous peoples' and their respective communities where our operations take place. We acknowledge the future generations and the collective responsibility we all have to these lands. Indigenous peoples are the traditional stewards of the lands and waters where each of us work and choose to live.

We further acknowledge that the indigenous peoples have inhabited these lands and waters since time immemorial. The indigenous peoples territory, culture, truth, traditions, teachings and languages are sacred, and we're thankful to be here today as guests.

Now this meeting is being held as a virtual-only meeting this year. Pembina has been and remains committed to maintaining and upholding shareholders' rights, including in respect of our virtual shareholder meetings. Accordingly, we've ensured that this virtual meeting offers shareholders the opportunity to participate, submit questions and vote at the meeting.

Following the formal portion of this meeting, we'll have a question-and-answer session at which time all participants will have the opportunity to ask questions unrelated to the matters to be voted upon at today's meeting. If you do have any questions about Pembina, which don't specifically relate to an item of business to be voted upon at today's meeting, please feel free to submit those questions at any time, and they'll be addressed during the question-and-answer session.

We'll do our best to answer all questions. But if for any reason, we're unable to do so during the meeting, we'll do our best to engage with shareholders after the meeting.

Now with me today on the webcast are Scott Burrows, Pembina's President and Chief Executive Officer as well as a Director; Andy Mah, a Director of Pembina and the Chair of Pembina's Human Resources and Compensation Committee; Jason Metcalf, Pembina's Corporate Secretary; and Greg MacDonald from our auditors, KPMG LLP, who is available to respond to any questions related to their proposed appointment as auditor.

Joining us remotely are a number of representatives of Pembina's executive management team, employees and external advisers. I'd also like to welcome each of the other directors of Pembina who are joining us remotely today.

Now we'll move on to the formal business of the meeting. The meeting will now come to order. In accordance with our bylaws, I appoint Jason Metcalf to serve as Secretary of the meeting. In the unlikely event that we experience any technical difficulty or disruption, and I'm unable to chair the meeting, Jason Metcalf will be appointed with the consent of the meeting in accordance with our bylaws to chair the meeting in my absence so the meeting may continue as planned.

I also appoint Jennifer Oliver, a representative of Pembina's registrar and transfer agent, Computershare Trust Company of Canada, to act as scrutineer for the meeting. I'll now ask Jason to address a few housekeeping matters related to the formal proceedings.

Thank you, Henry. If at any time during the meeting, you experience technical difficulties, please refer to the technical support button on the broadcast section of your screen. The platform we are using today allows our registered shareholders and duly appointed proxy holders the ability to vote online and ask questions during the formal part of the meeting.

We encourage shareholders and duly appointed proxy holders who have specific questions on an item of business to submit your questions as soon as possible by clicking on the question icon on your screen. This will allow us to address your question at the most appropriate time during the meeting. If your question relates to a voting matter, we will answer your question when we reach that item.

When submitting a question, please identify yourself and indicate whether you are a shareholder or a proxy holder. Questions not related to a voting matter will be answered during the Q&A session following the formal part of the meeting.

To ensure the meeting is conducted in a manner that is fair to all shareholders and to address questions from as many shareholders and duly appointed proxy holders as possible, we request each submission be limited to one question. We also request that each question be in one submission within the character limit provided on the screen and not spread out over multiple submissions.

As we may receive multiple questions of a similar theme, we may also exercise discretion in responding to questions, including grouping or paraphrasing questions of a similar theme. While we will try and answer all questions, we will do our best to engage with shareholders after the meeting if there are questions that we are unable to get to during the meeting. To assist us in doing so, please provide your contact information with your question.

Let's move on to voting. All items of business for shareholder approval will be conducted by ballot. If you are a registered shareholder or a duly appointed proxy holder and have already voted in the manner indicated in the meeting materials that were sent to shareholders, you do not need to vote again during this meeting even if the voting item appears on your screen. Any votes you cast at this meeting will revoke your prior vote.

If you are a registered shareholder or a duly appointed proxy holder and have not yet voted, you may vote during the meeting by clicking on the voting icon at the top of the screen and selecting voting options on each ballot option.

The polls will be opened for all items of business for shareholder approval at the start of the meeting. This will allow you to vote on each item immediately or if you prefer, you may wait until the conclusion of discussion on each item prior to casting your vote.

Once discussion is concluded on all items of business, we will pause for a moment to ensure all votes are entered. We will then declare voting closed on all matters of business. The results of the votes will be announced prior to the close of the meeting.

For meeting efficiency, we have asked certain registered shareholders or duly appointed proxy holders to move and second motions proposed at this meeting. This is not intended to limit discussion and registered shareholders and proxy holders should feel free to initiate discussion on any motion at the appropriate time.

Thank you, Jason. I've been advised by Computershare that the meeting materials were duly delivered to shareholders and that a quorum is present today. Accordingly, I declare that the meeting has been duly called and is properly constituted for the transaction of business. Computershare affidavit of mailing and the scrutineer's report on attendance will be filed by the Secretary with the minutes of this meeting.

The reading of the notice of meeting will be dispensed with. I now declare the online polls open on each item of business for shareholder approval. Each person entitled to vote should see voting options displayed at the top of their screen. With that, we'll commence with the formal business of the meeting.

The first item of business is the presentation of the company's financial statements for the fiscal year ended December 31, 2025, and the auditor's report thereon. These materials have been mailed to all registered shareholders and to beneficial shareholders who requested a copy of the materials. No action is required by shareholders on this item.

The next item of business is the election of the directors of the company. In accordance with our bylaws, the Board of Directors has fixed the number of directors to be elected today at 10. Pembina's information circular for the meeting sets forth management's proposed 10 director nominees. Each of the nominees is qualified and has consented to his or her nomination as director today and will serve for a term of 1 year, which expires at the 2027 Annual Meeting of Shareholders or until their successors are duly elected or appointed.

As we didn't receive any additional nominations in accordance with our advanced notice bylaw, I'll ask the Secretary to read the names of those 10 individuals who have been named and described in the information circular to serve as directors of Pembina.

Thank you, Henry. The Management Director nominees are as follows: Henry Sykes, Scott Burrows, Cynthia Carroll, Alister Cowan, Ana Dutra, Maureen Howe, David LeGresley, Andy Mah, Leslie O'Donoghue and Bruce Rubin.

All the director nominees other than Mr. Burrows are independent and all the nominees currently sit on our Board. The nominees bring a diverse set of skills and experience to our Board and further information with respect to each one is set forth in the information circular. The biographies of the director nominees can be found on Pages 18 to 27 of that circular.

Now may I have a motion to elect the 10 nominees as directors of Pembina Pipeline Corporation?

Mr. Chair, I move to nominate the 10 individuals named and described in the information circular to serve as directors of Pembina and to hold office until the next Annual Meeting of Shareholders or until their successors are duly elected or appointed.

I second the motion.

We'll now open the floor to any questions on this item of business. Jason, can you please advise if we've received any questions?

Thank you, Henry. We have received a question from Gaagwiis Jason Alsop, President of the Haida Nation and Vice President of the Coastal First Nations-Great Bear Initiative. And the question is as follows:

A proposed bitumen pipeline in Northwest Canada is making news. This project does not have the support of affected First Nations or the government of BC. As the legally recognized rights and title holders under Canadian and international law, we do not support this oil pipeline and tankers project, and we, with the province of BC have called on the federal government to uphold the Oil Tanker Moratorium Act with no exceptions or carve-outs. No offer of equity or ownership will change our position.

In 2016, Enbridge reported $656 million in costs on a never-built Northwestern pipeline, impairment of $373 million before tax adjustment. We want to proactively save Pembina and its investors from others' past mistakes. Can the Board describe how oversight would be provided to ensure lack of consent from rights and title holders is evaluated and when a risk assessment would be disclosed in the decision-making process on new projects?

Thanks, Jason. To begin with, it's important to clarify that Pembina is not involved or a proponent of the proposed pipeline. We respect the intention of the question and want to assure you that Pembina places significant importance on cultivating respectful, mutually beneficial long-term relationships with indigenous communities. We're proud of the relationships we've built with indigenous communities in the areas where we operate and our partnership with the Haisla Nation on the Cedar LNG project in particular.

On behalf of the Board, I assure you that the Pembina Board of Directors maintains a robust oversight mechanism with respect to capital projects. This includes ensuring adherence to a rigorous governance and risk management framework. This process ensures that comprehensive risk assessments are conducted, regulatory obligations are fulfilled and indigenous rights and title holder positions are respected and thoroughly integrated into our strategic decision-making. Thanks for your question.

Thank you, Jason. If there's no further discussion, I've been advised that sufficient votes have been cast in advance of the meeting to elect the 10 nominees as directors of Pembina. However, in order to comply with our majority voting policy for director elections, we'll now proceed with the voting on this matter. Only registered shareholders or their duly appointed proxy holders can vote by online ballot by selecting the applicable voting options displayed on their screens.

The next item of business is the appointment of KPMG LLP as the auditors of Pembina. May I have a motion that the firm of KPMG LLP of Calgary, Alberta be appointed auditors of Pembina until the next Annual Meeting of Shareholders and that their remuneration be fixed by Pembina's Board of Directors upon recommendation of its Audit Committee.

Mr. Chair, I move that KPMG LLP be appointed as the auditors of Pembina until the next Annual Meeting of Shareholders and that their remuneration be fixed by the Board of Directors of Pembina.

I second the motion.

Thank you both. You've heard the motion, and it is now open for questions. Jason, can you please let me know if we received any questions on this item?

Mr. Chair, we have not received any questions in relation to this item of business.

As no further comments have been received on this motion, I'll proceed to the next notice, the next item of business. And that next item of business is consideration of a non-binding resolution accepting Pembina's approach to executive compensation as disclosed in the information circular. The text of the resolution is set out on Page 16 of the information circular for this meeting.

Now this is an advisory vote, so the results will not be binding on Pembina's Board of Directors. Having said that, the Board will consider the outcome of the vote as part of its ongoing review of executive compensation. If a significant number of shareholders oppose the say-on-pay resolution, the Board will consult with shareholders to understand their concerns and then review our approach to executive compensation with those concerns in mind.

At this time, resolution as set forth on Page 16 of Pembina's Information Circular accepting Pembina's approach to executive compensation.

Mr. Chair, I move that the resolution as set out on Page 16 of Pembina's Information Circular accepting Pembina's approach to executive compensation be approved as a non-binding resolution of Pembina shareholders.

I second the motion.

Thank you. You've heard the motion -- you've heard the motion, excuse me, and it is now open for questions. Jason, have we received any questions?

Mr. Chair, we've received no questions on this motion.

Thank you, Jason. There being no further questions, I will note that this was the final agenda item and the last matter to be voted on at today's meeting. For those of you who have not yet cast your votes, please do so now. I'll pause the meeting for 1 minute before closing the polls.

[Voting]

I have received the scrutineers' report on the ballots required for each of the items of business and the results are as follows. In respect to the election of directors of Pembina, I'm pleased to announce that the election of each of the director nominees has been approved by a majority of the votes cast. Accordingly, I declare the 10 directors nominated hereby elected as directors of Pembina to hold office until the next Annual Meeting of Shareholders or until their successors are duly elected or appointed.

With respect to the appointment of Pembina's auditor, I declare the motion regarding the appointment of KPMG LLP as the auditors of Pembina until the next Annual Meeting of Shareholders to be passed.

Finally, the non-binding resolution accepting Pembina's approach to executive compensation has been approved by approximately 96.56% of the votes cast. Accordingly, I declare the non-binding resolution accepting Pembina's approach to executive compensation to be passed as well.

A report disclosing the number of votes cast in favor, against and withheld from voting in respect of each item of business voted upon at this meeting will be filed on SEDAR+ promptly following the meeting and in accordance with the TSX policies, report on the election of each director will be disclosed in a press release to be issued following this meeting.

As there are no further business -- as there is no further business to be considered at the meeting, may I please have a motion to terminate the meeting?

Mr. Chair, I move this meeting be terminated.

I second the motion.

I declare the formal portion of this meeting terminated.

We will now have a Q&A session during which we'd be pleased to answer any questions that you may have. As a reminder, if you wish to ask a question, please click on the question icon, type in and submit your question. We will pause for a couple of minutes to allow time for questions to be submitted.

Jason, have we received any questions?

Mr. Chair, we have not received any questions.

Thank you, Jason. Now just one thing before we terminate. On behalf of the Board, I'd like to thank Anne-Marie Ainsworth, who's retiring from the Board this year and did not stand for re-election at this meeting. Anne-Marie joined Pembina's Board in 2014, bringing not only her background in engineering and the operation of major energy facilities, but also her passion for all things related to safety, health, the environment and operational excellence.

All these areas became significantly more important to Pembina over the years as our operations expanded into areas beyond pipelines. And Anne-Marie's insight, wisdom and guidance have been critical in our performance in these areas.

Anne-Marie also brought a particular affinity to support the advancement of women at Pembina, and I know many of our employees have benefited from her experience.

On behalf of the Board, I'd also like to thank all of our shareholders for joining us today and for your ongoing support. The Board is committed to working diligently on your behalf. Please stay safe, and have a great weekend.

Ladies and gentlemen, thank you for joining us, and welcome to Pembina Pipeline Corporation Q1 2026 Results.

[Operator Instructions]

I will now hand the conference over to Dan Tucunel, Vice President, Capital Markets. Dan, please go ahead.

Thank you, Jen. Good morning, everyone. Welcome to Pembina's conference call and webcast to review highlights from the first 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 Pembina Management's Discussion and Analysis dated May 7, 2026, for the period ended March 31, 2026, as well as the press release we issued yesterday, all of which 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 first quarter results, which were highlighted by adjusted EBITDA of $1.131 billion. It was a strong start to 2026, operationally, commercially and financially. The fee-based business is tracking to plan and overall results are outperforming budget given the spike in key commodity markets that began in March.

Operationally, we saw volume strength across key systems, including Alliance Pipeline, Cochin Pipeline and the Conventional Pipeline Systems. First quarter results have kept us on track to realize our 2023 to 2026 fee-based adjusted EBITDA per share compound annual growth of approximately 5% and within the target range provided at our 2024 Investor Day.

As Cam will discuss in more detail, due primarily to the stronger marketing outlook, we have updated our 2026 adjusted EBITDA guidance range to $4.35 billion to $4.55 billion. At the midpoint, which is where we are currently tracking to -- this is an increase of $175 million or 4.1%. Supported by continued growth in our low-risk fee-based business, we were pleased yesterday to announce a $0.025 per share or 3.5% increase to the quarterly common share dividend beginning with the dividend to be paid in June.

In addition to strong financial results, Pembina continues to reliably execute its portfolio of projects under construction, realize continued commercial success and advanced projects under development in service of its growth strategy. Highlights of 2026 to date include placing the Wapiti expansion and K3 cogeneration facility into service on time and on budget. In addition, construction of RFS IV, a 55,000 barrel per day propane-plus fractionator at the existing Redwater complex is nearing completion.

The rail facility was placed into service in February and commissioning of the fractionator is underway. The project is trending under budget and the fractionator is expected to be placed into service by the end of May.

And Cedar LNG continues to progress on time and on budget. The construction of the floating LNG vessel is now more than 50% complete, and with winter now behind us, the onshore construction teams have resumed activities with the focus of executing on an eventful 2026 construction season. With many of the onshore teams having only recently returned to site, it's already exciting to witness the progress being made.

Commercially, in 2026 to date, Pembina has renewed existing contracts and executed incremental new contracts totaling approximately 110,000 barrels per day of transportation capacity on the Peace Pipeline, demonstrating the value customers place on a reliable and value-enhancing service provided by our leading transportation network and integrated value chain. And we recently closed an open season for the proposed short-haul point-to-point transportation service of the Canadian segment of the Alliance Pipeline System.

The proposed expansion would provide natural gas delivery to a new meter station in Fort Saskatchewan with an anticipated in-service date in the fourth quarter of 2029. The successful proponents have been awarded capacity conditional on the project being sanctioned. The project continues to progress towards a final investment decision with ongoing work streams focused on regulatory and engineering activities.

On the project development front, Pembina and Kineticor are progressing the Greenlight Electricity Center, a proposed multiphase natural gas-fired combined cycle power generation facility. We are advancing various work streams related to the approximately 900 megawatts first phase. Ongoing activities include finalizing a lump sum EPC agreement, finalizing a commercial agreement with the customer and project financing. A final investment decision is expected by the end of the second quarter of 2026.

Finally, before turning the call over to Cam, I want to quickly recap our recent business update call held on April 7. Amidst the backdrop of expanding market access and growing demand for Canadian energy, we were very excited to provide our thoughts where Pembina is positioned, why its business is advantaged and how the company's strategy can create value through 2030 and beyond.

Our update focused on 3 key themes. The first was reaffirming the company's long-standing commitment to disciplined execution, including strong performance against financial targets, placing billions of dollars of capital projects into service on time and on or under budget, adhering to its financial guardrails and delivering a reliable growing dividend without interruption.

The second was outlining the company's 3C strategy: capture, connect and catalyze, which is underpinned by energy fundamentals and the advantages of its differentiated platform. Pembina is poised to benefit from growing global energy demand, increasing strategic relevance of Canadian energy and emerging demand drivers such as LNG, petrochemical and data center power demand. The advantages of Pembina's integration, scale, superior market access and entrepreneurial approach and track record of execution uniquely position it to further strengthen and extend its unmatched industry-leading value chain.

The third was providing a financial outlook to the end of the decade, including 5% to 7% compound annual fee-based adjusted EBITDA per share growth through 2030. This outlook is underpinned by higher utilization across existing assets, contributions from sanctioned projects entering service and a portfolio of development opportunities designed to extend the franchise. The recent announcement of Shell's proposed acquisition of ARC Resources is a compelling proof point that further validates our outlook for the WCSB and the transaction benefits Shell has highlighted mirrors some of the same themes we covered in our business update.

Shell has identified the Montney Basin as a key growth platform within their global portfolio given its long duration and advantaged cost structure. Similarly, our market update highlighted the importance of capturing volumes from premier high-growth areas and connecting them to the best global markets. There's also focused on the interrelationship between growing oil sands demand for condensate and growing demand for natural gas as being 2 ends of the energy flywheel.

Shell's stated rationale for the ARC acquisition, driven by liquids first and supported by natural gas is a proof point of this concept. As a global energy leader and the #1 LNG operator in Canada, we see in Shell a customer whose model and outlook aligns well with ours, and we look forward to their growing presence in our basin. We encourage those that have not already done so to visit our website at pembina.com to access a replay of our business update call and the related presentation. It was a strong and eventful first quarter that sets us up very well for the remainder of the year and beyond.

I'll now turn things over to Cam to discuss in more detail the financial highlights for the quarter.

Thanks, Scott. As Scott noted, Pembina reported first quarter adjusted EBITDA of $1.131 billion. Relative to the first quarter of 2025, strong operational performance and volume growth across the Pipelines and Facilities divisions was offset by the impact of the new toll structure and revenue sharing mechanism on the Alliance Pipeline as well as lower contribution from the marketing business due to narrower NGL frac spreads. The net result of the first quarter was a $36 million or a 3% decrease over the same period in the prior year.

Looking at quarter-over-quarter results by division. The major factors impacting the quarter in Pipelines included lower net revenue on the Alliance Pipeline of $26 million due to the net effect of the negotiated settlement between Alliance and its shippers, which became effective on November 1, 2025, partially offset by an increase in interruptible and seasonal revenue on the Alliance Pipeline driven by higher demand for natural gas in the U.S. Midwest during the first quarter of 2026 as well as higher revenue on the Cochin Pipeline due to wider condensate price differentials.

In Facilities, factors impacting the first quarter included a higher contribution from certain PGI assets, primarily due to higher volumes. In Marketing and New Ventures, first quarter results reflect the net impact of narrower WCSB and U.S. NGL frac spreads resulting from lower NGL prices combined with higher U.S. natural gas prices partially offset by the benefits from exposure to premium propane prices in Asian markets through West Coast exports.

Finally, in the Corporate segment, first quarter results were lower than prior period due to higher long-term incentive costs, partially offset by lower noncompensation-related expenses. Earnings in the first quarter were $498 million. This represents a 1% decrease over the same period in the prior year. In addition to the factors impacting adjusted EBITDA, the decrease in earnings in the first quarter was primarily due to a lower share of loss from Cedar LNG compared to the same period in the prior year.

Adjusted earnings were $505 million or a 6% increase over the same period in the prior year. Compared to the factors noted previously related to earnings, the change in adjusted earnings excludes the lower share of loss from Cedar LNG, driven primarily by unrealized gains on derivative instruments, partially offset by higher unrealized foreign exchange losses. Total volumes in the Pipelines and Facilities divisions were 3.7 million barrels of oil equivalent per day in the first quarter. This represents an increase of 1% over the same period in the prior year.

Higher first quarter pipelines volumes were driven primarily by higher interruptible and contracted volumes on certain pipelines, primarily driven by favorable condensate pricing and higher demand from colder weather in the U.S. Higher first quarter facilities volumes were driven primarily by higher volumes from certain PGI assets, primarily at the Dawson assets and at the Duvernay complex, largely offset by lower volumes at the Cutbank complex as well as a decrease in Aux Sable volumes due to lower ethane extraction.

Yesterday, Pembina announced a revised 2026 adjusted EBITDA guidance range of $4.35 billion to $4.55 billion. The revised midpoint of the 2026 guidance range, which is where we are currently trending, is an increase of $175 million versus the original guidance, primarily due to the outlook for the marketing business for the remainder of the year. The revised 2026 outlook for the Marketing business includes a stronger contribution from the crude oil marketing business and wider Canadian and U.S. frac spreads.

In particular, Pembina and its customers are benefiting from exposure to premium propane prices in Asian markets through Pembina's 20,000 barrel per day Prince Rupert Terminal and 20,000 barrels per day of long-term contracted capacity at third-party facilities that became effective April 1, 2026. Further, as previously disclosed, approximately 65% of Pembina's 2026 frac spread exposure has been hedged. On a quarterly basis, for the remainder of the year, Pembina has hedged approximately 90% in the second and third quarters and 40% in the fourth quarter.

The lower and upper end of the 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. As a result of the updated outlook for 2026, Pembina now expects the 2026 year-end proportionally consolidated debt to adjusted EBITDA ratio to be approximately 3.5x to 3.7x. Excluding debt related to construction of the Cedar LNG facility, which is expected to enter service in late 2028, this ratio would be approximately 3.3x to 3.5x.

I'll now turn things back to Scott.

Thanks, Cam. In closing, I want to remind you that Pembina will host its Annual Meeting of Shareholders today at 2:00 p.m. Mountain Time, 4:00 p.m. Eastern Time. It will be a virtual-only meeting conducted via live audio webcast. Participants are recommended to register for the virtual webcast at least 10 minutes before the presentation start time. For further information on the annual meeting, please visit the Investors tab at www.pembina.com. Thank you for joining us this morning.

Operator, please go ahead and open up the line for questions.

[Operator Instructions]

Your first question comes from the line of Aaron MacNeil with TD Cowen.

I've been thinking more about the business update. We're starting to see early signs of some pretty meaningful incremental basin egress coming together. And as projects move toward FID, when would you expect Pembina to begin to see the second order impact from that? And which parts of your existing asset footprint are likely to see those expansion opportunities first? And then maybe just to give you some specifics in terms of what I'm thinking about, like how would you position to bring more condensate to Fort McMurray, either via Cochin or Peace as well as how should we be thinking about sort of the alignment with your new partner at PGI when it comes to deploying incremental capital?

Aaron, Jaret here. I'll take the first part with respect to the liquids and the condensate. So if you think about our current expansions that we have ongoing that we announced just recently, we have the Creek-to-Namao pump station increase. That's going to increase our C3+ by roughly 70,000 barrels. That asset today is essentially full. So let's kind of think of that as your first debottleneck from Edmonton going west. Then our Taylor-to-Gordondale asset. So from Gordondale down into Fox Creek, we have a lot of runway for -- currently for -- it's fully built out for our condensate platform and our crude platform. It's where we get constrained is starting to cross the border into Northeast BC where we anticipate a lot of those liquids to be coming from.

So Taylor-to-Gordondale is kind of your first segment and then Birch-to-Taylor is your next segment, and that gives us a tremendous amount of runway as new LNG facilities come on for that gas egress that will allow the condensate and the NGLs to get into the Edmonton market. With respect to Cochin, fortunately, for us, we've been very successful at expanding the capacity of Cochin. Previous owner ran that asset around 90,000 barrels a day. We currently routinely and reliably and safely operate that at about 120,000 barrels a day. Now we're just looking for smaller type optimizations because we really have fully optimized that segment.

With respect to PGI assets, it was recently announced that we have a new owner, Apollo. We've met with them. We're very encouraged with -- we think the relationship is going to be very similar to our previous partnership, very much aligned on growing the business. And one of the areas that PGI, I believe, has advantage not only from their position of where the assets are, but it's also the capabilities.

Pembina has an extensive capability with respect to sour gas processing is one of the largest sulfur recovery facilities in Alberta. K3 is extremely large sulfur recovery. And then we have other various sour processing facilities. Recently, the Wapiti expansion, we just brought that on. I'm very proud of the team. We kind of gloss over it. Scott mentioned that it came into service. That came into service and was up and running and accepting about 60% of nameplate in just a couple of days.

I don't think a lot of operators can say that they can provide their customers with that backstopping. So long story short, we'll be fully built out in our Peace pipeline being able to accept all the NGLs in the Edmonton market, and then we'll continue to grow our processing footprint. And you'll see probably a lot of expansion in that sour area.

I might embarrass myself with the next question. I'm not an expert on this by any means, but there seems to be, I guess, a range of views in terms of solvent-assisted SAGD among the oil sands producers. What sort of technical or commercial proof points do you need to see in order to wrap your head around this butane enhancement opportunity? And what stage are you at in that process today?

It's not an embarrassing question, Aaron, because I think a lot of the SAGD producers have been talking about the solvent opportunities, but they haven't been giving a lot of details. We do believe that butane is a contributing solvent that is being used. Obviously, Alberta is long butane. And so the opportunity is there. So we're honestly just waiting to see how we can provide our customers in a different segment, different types of -- like we produce primarily field-grade butane. Is there opportunities to upgrade that to ISO and normal. But we're just honestly in the early stages of seeing how these pilots are going to work out and how we can supply those customers the product that they need to enhance their oil recovery, which ultimately will require more condensate and you get back into Scott's flywheel comment earlier.

Your next question comes from the line of Jeremy Tonet with JPMorgan.

Your next question comes from the line of Saumya Jain with UBS.

I was just wondering, it was reported this week that PM Carney planning changes to the process for natural resource projects, including the pipelines. Could you provide any color on how you have seen the permitting process change since you've come in office and the sorts of discussions you are seeing in regards to project time lines and if that impacts the way you guys are looking into projects down the line?

Yes. Scott here. To date, I can't say that we've seen any material change. A recent example of that was our Taylor-to-Gordondale that took the full time line to get permitted. So we haven't seen it necessarily in action yet, but we are optimistic changes are coming. When we think about our strategy and where our focus is long term, it's really on LNG on the West Coast. And so any incremental LNG that can be built out would be positive as well as some of the proposed pipelines for crude oil will also have a knock-on second order effect on our base business.

So we would like to see those projects go. Like I said, we haven't seen changes yet, but if there are changes, I think we would welcome those and view them very positively.

Okay. Great. And then I just wanted to ask on the LPG market with global tensions right now. Could you provide some color on the sorts of discussions you're having with customers and how shipping time lines, costs have changed for vessels? And how are you seeing demand for propane specifically at Prince Rupert?

It's Chris. Yes, obviously, a topical question with everything that's going on in the market. Scott -- sorry, pardon me, Cam mentioned it earlier, we've got export capacity through our own facility, obviously, at Prince Rupert as well as third-party facilities. And both of those opportunities are doing very well in this environment. Far East pricing has been very strong, especially relative to Edmonton and North America. So those positions have served us really well.

We've got freight certainty for some time. So we don't have any exposure to some of the price increases and sort of compression that's coming into certain areas as a result of that freight increase. And so we're in good shape on that front for some time and really taking advantage of the opportunity.

Just a quick reminder, like our Prince Rupert facility has vessels dedicated to a handy size. At the moment, we'll be upgrading those to midsized carriers. And in both cases, we've got long-term certainty on that pricing and then our third-party facilities have similar arrangements.

Your next question comes from the line of Robert Catellier with CIBC Capital Markets.

Congratulations on the quarter and the dividend increase. That came in a touch higher than we expected. But looking forward, the 3.5% increase is below what you're expected to generate in terms of your fee-based CAGR. And obviously, you'd want to keep it that way to some extent just for margin of safety. But I'm just -- once you get beyond the sort of the inflection in spending in '26 and '27, how should we be looking at that sort of medium or long-term dividend growth rate? Because it seems to me there's enough momentum at Pembina specifically and in the industry in general to increase the capital project roster.

Robert, it's Cam here. Really good question. And as you pointed out, the dividend increase for 2026 at 3.5% is slightly below the 5% to 7% that we talked about from 2026 to '30, although I would say that it aligns well with the sort of more near-term profile. And as a reminder, going back to what we said in our April 7 business update, we did signal that growth throughout that period would be slightly shallower in the next couple of years and then obviously, slightly above that range for the '28 to '30 period and obviously sort of working out to the 5% to 7% over the period.

And so we would see this increase for 2026 is aligning very closely with the growth in our fee-based business. And I think as we look forward to the future, that continues to be a major anchor for our dividend policy and our capital allocation policy. I think we're always mindful of, one, the value that our investors are placing on the dividend. And so that has, in the past, caused us to add some color around that. If we think that's not being rewarded, obviously, we want to be thoughtful about it.

And secondly, also the extent to which our capital program is relative to our free cash flow profile. And I think you make the comment that the outlook is clearly improving and the backlog across the industry is growing. I think we're thoughtful about that as we think about what cash flow we need to retain to continue to fund those projects accretively but ultimately, the primary anchor continues to be that fee-based cash flow growth with adjustments as I described.

So I would tend to think about it and orient it that way as we get towards the latter half of this decade, recognizing we're also trying to create stability as well and sort of not big erratic changes year-to-year. Consistency and predictability is big as well.

Yes, that's a prudent perspective. And then just as my follow-up, the flip side of the coin is to your fee-based growth is, of course, risk management. And so you have a long history of bringing your projects on time and under budget. I'm just curious how you're thinking about construction and cost inflation risk today versus where we were 12 to 18 months ago? And how that's impacted how you approach risk management on those major projects?

Rob. Jaret. Yes, when you think of kind of the short term, we're obviously seeing pressures on consumables like diesel, et cetera. A large portion of our contracts, that's recoverable, but we're always trying to focus on offsetting inflation for our customers on all of our operating assets regardless of the contract. When I think about where I start to get asking a little bit more questions is kind of on your critical spares, your long lead items, electrical equipment and materials that you need for future construction, steel for pipelines and those types of things.

I'll break it into 2 buckets, the way we're thinking about it. If I think about our Lator pipeline, our Birch-to-Taylor, our Taylor-to-Gordondale, the majority of those materials have been procured and the construction services have also been negotiated.

Feeder obviously is well in flight. That was 70% lump sum. But now when I'm starting to think about the new backlog, that's really where our teams -- we set up a couple of years ago kind of inventory management and a forward-looking amount of capital that we put aside to start really getting ahead of some of these long lead items and procure costs prior to inflation that our supply chain teams were forecasting.

So it's an area that is hyper focused, and it is going to take some innovation from our execution teams to be able to maintain margins not going to lie. We're going to see continued cost in that area, but we're confident that we will be able to maintain our margins by different partnerships, different contracting strategies, and it's going to take some work from the owners of Pembina.

Your next question comes from the line of Robert Hope with Scotiabank.

Two questions on some project outlooks. Yellowhead wasn't in the initial release. Can you maybe provide an update on how you're thinking about the Dow project, the Yellow project or as well or other ethane opportunities?

Rob, it's Chris. Yes, I mean, that project continues to progress along. I mean, I think in general, I'd say we're really pleased with the entirety of the BD backlog, but those projects we've talked about, the deal we're doing with Dow, how -- yet fits into that as well as Greenlight are all really trending where we want them and on pace to progress here nicely through this quarter. Not in a position yet to announce anything there, obviously, or we wouldn't, but we're really close and excited about what's coming here shortly.

I appreciate that. And then maybe a similar question. The Alliance expansion, looks like the open season was sufficient to move it forward to the next gating item. Can you maybe update us on the timing of when you think this could be sanctioned as well as potential capital cost?

Rob. Yes, like Scott said in his opening, we did have a successful open season that closed on the 20th. I can't speak to the commercial specifics, obviously, at this time, but we are continuing to advance engineering and regulatory. Obviously, this is a CER regulated project. So we'll have to go through that. And then once we get a little bit more clarity on the time lines there, we'll be able to give a little bit more color on when we FID.

But I will say we're highly confident of the process. The demand is required. It's being extremely supported by everyone. All new natural gas consumption in order to generate liquids is obviously well supported by governments and municipalities and our customers, et cetera. So we're confident that expansion will go forward, actually with or without Greenlight. We see a lot of industrial demand in the Alberta Industrial Heartland, and we believe that this is going to be required.

Your next question comes from the line of Maurice Choy with RBC Capital Markets.

Since you mentioned Greenlight, I'll start there. You highlighted that there is a potential FID at the end of this quarter. I guess just taking a step back, as this journey towards an FID approaches an end and you start looking back at the journey thus far, what has been the part of the process that's taken most time, it's been the most complex? And if there's anything you could have done differently?

Maurice, it's Chris. Yes, we mentioned it in the intro and you touched on it, things are progressing nicely there, looking to get more out this quarter for sure. When we look back, we think there's some things that have gone exceptionally well on the project. We positioned ourselves really strategically in the market with how we position ourselves vis-a-vis land, interconnects, acquiring existing capacity on the system to facilitate the project. When you think about projects of this size in this nature, honestly, when it comes to the engineering and the project development side and it comes to the commercial, they're not off the shelf. They're not vanilla, and they just simply take time.

We're all in all, pretty -- or I should say, very positive on the progress we've made. We'll, of course, take learnings and apply that to the next one. We don't control the data center build-out. We don't control the fiber build-out. I remind everyone that those aren't the businesses we're in. We're the power generation piece. And so we don't have control over the entirety of the time line. Our customer needs to progress those work streams as well. And that's all coming together nicely here in Q2, and we're on pace.

And maybe just a quick follow-up on that thought. Like I guess you mentioned the future phases, is it then fair that the additional learnings that you get should lead to better returns in the future phases?

Yes. So what I'll say is I think we're positioned well for future phases. I think that leadership position we've developed in this space is really in service of having success here on the first phase and positioning us to have that opportunity to do future phases. There'll undoubtedly be synergies between them and advantages as you continue to layer that on. That's been consistent across our business, and I don't think this is any different, in particular, when you start to think about some of the integrated components.

I'd certainly expect that as we move into the next phase, we'll see continued improvement in the economics and the advantage of the integrated business.

And maybe, Maurice, it's Cam. I'll just add one thing to that. I think one of the things that we see as we really gain a foothold in this type of opportunity and hopefully do more of it is like we've done in other situations, when we step into a new market or a new business, we're looking to mitigate risk in a bunch of different ways. And just like we did with Cedar and we're looking at here, part of that is the capital cost risk through a lump sum EPC. In the future, if you think about no additional phases, one opportunity for margin and return improvement is obviously as we get comfortable with the construction, doing something which obviously has a little more risk in it and not pursuing a lump sum. But obviously, the trade-off is not paying that lump sum premium. And so potential there for us to improve margins by doing that.

Makes sense and good to know. If I could just finish off with a comment you made earlier about the recent upstream M&A within the basin. I wonder if you could expand that a little bit more and talk about direct or indirect impacts to Pembina given your commercial relationships with those parties, if any at all?

Yes. Maurice, I don't have the exact numbers. But if you look back at some of the recent upstream deals, whether it was CNRL going into the Duvernay, some of the comments we've seen out of Ovintiv with their recent acquisitions, and there's probably a few examples that I'm forgetting about. We've generally seen production increase quite quickly after acquisitions close. Most people aren't making acquisitions to just hold production flat. So we're pretty optimistic that history will prove itself out here going forward. And as people enter the basin and merge or buy new companies, we've seen that volume growth increase. So we're pretty optimistic about that.

Your next question comes from the line of Ben Pham with BMO.

I'm just wondering with the Western Canadian gas production rising at the LPG and the NGLs as well. And part of that is also the ethane side of things, which doesn't seem to have a big home right now other than the [indiscernible] of things. Is there opportunity then for Pembina to maybe capitalize on that opportunity? Or do you think it's more going to be reinjection into the gas stream part of it?

It's Chris. I think there's undoubtedly opportunity in that. When you look at how our business has built up over time and you look at the wave of gas production that's coming, condensate production and associated gas and NGL, I think there's a huge opportunity to continue to extract and capture that -- those liquids in the province and continue to grow our core business on the back of that. So our expectation and certainly, the efforts we're putting in, in and around the core business are in service of capturing that growth on the liquids side along with the gas growth.

Okay. Got it. And I know it's early days with your new partnership with the PGI, but anything you can share qualitatively in terms of the business there, your expansion plan, just where you're plan to allocate capital in that partnership?

No. I think as the deal -- so first of all, the deal hasn't closed. But based on our conversations and getting to know our new partners, we're really optimistic, and we know they want to grow the business, and we want to grow the business as well. So we're pretty excited to work together with them.

There are no further questions at this time. I will now turn the call back to Scott Burrows for closing remarks.

Well, thank you, everyone, for taking the time to listen to our call, and thank you to our employees, customers, contractors and communities for a strong start to the year. Like I said, the AGM is this afternoon, so please feel free to dial into that, and we'll chat soon. Thanks.

This concludes today's call. Thank you for attending. You may now disconnect.

Hello, everyone. Thank you for joining us, and welcome to the Pembina Pipeline Corporation Business Update. [Operator Instructions] I will now hand the conference over to Dan Tucunel, Vice President of Capital Markets. Dan, please go ahead.

Thank you, Elizabeth. Good morning, everyone, and welcome to Pembina's conference call and webcast. As outlined in the press release issued this morning and available at pembina.com, today's call will provide a broad business update, including our views on the industry, our business and our path forward through the end of the decade and beyond. The presentation we are using today is available on our website. Before we begin, I would remind listeners 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. These statements are subject to risks and uncertainties that could cause actual results to differ materially from what we discuss today.

Certain information we reference also relates to non-GAAP measures. For further information on forward-looking statements and non-GAAP measures, please refer to our quarterly and annual disclosure available on pembina.com, SEDAR+ and EDGAR. On the call today, we have Scott Burrows, President and Chief Executive Officer, along with Pembina's full officer team, which includes Cameron Goldade, Chief Financial Officer; Jaret Sprott, Chief Operating Officer; Sarah Schwann, Chief Legal, People and Corporate Affairs Officer; and Chris Scherman, Chief Marketing and Strategy Officer.

With that, I will turn the call over to Scott.

Thanks, Dan, and good morning, everyone. Thank you for joining us for this update. Today is an exciting opportunity for us to step back from the quarterly cadence and speak more directly about our macro outlook, where Pembina is positioned, why we believe our business is advantaged and how we expect our strategy to create value through 2030 and beyond. Pembina has been part of the North American energy infrastructure landscape for more than 70 years. Over that time, we have evolved with the basin, built an integrated platform and developed a track record of solving customer needs across the hydrocarbon value chain. We believe that matters even more today.

Canadian Energy is entering a period of expanding market access, growing demand and improving strategic relevance, and Pembina is very well positioned at the center of this opportunity. Today, we will highlight where we are going as a company, why we will be successful and the growth and value creation we expect to deliver to our investors through the end of the decade and beyond. There are 5 messages we want you to take away from today. First, our success has and will continue to come from something simple but powerful. We do what we say we will. Our growth and reputation have been built on delivering on our promises and earning the trust of our customers, communities, investors and employees. Our credibility has been built on execution. Second, Pembina's advantage is based on 7 years of strategic investments and solutions that continue to serve an ever-evolving energy industry.

Our integrated platform gives us connectivity, scale and flexibility that we believe are very difficult to replicate and combined with our entrepreneurial spirit, positions us to win in the future. Third, our 3C strategy, capture, connect and catalyze. It is a refreshed strategy that is driven by global and domestic fundamentals, and it is designed to grow our core franchise, extend our value chain and create new platform demands where we have structural advantages. Fourth, the Canadian energy industry is driven by global demand and is growing across all products. Canada is blessed with an abundance of premier resources and has the expertise and capabilities to get those resources to the best markets. Growing export capacity, petrochemical demand, data center demand and the supportive policy momentum are all driving the exciting growth outlook for the Western Canadian Sedimentary Basin.

And fifth, through our strategy, supported by operational excellence, commercial success and project execution and development, we are committed to delivering 5% to 7% fee-based EBITDA per share growth through 2030 with marketing torque on top of this. At Pembina, credibility begins with execution. At our 2024 Investor Day, we set out a target of 4% to 6% fee-based adjusted EBITDA per share growth from 2023 to 2026. Despite developments we cannot fully anticipate at that time, including the Alliance toll review, our current 2026 guidance positions us at approximately 5% growth, right in the middle of that range. We are also on track to place approximately $2 billion net of projects into service from 2024 through 2026 on time and on budget.

At Cedar LNG, we moved quickly after sanction to remarket capacity on a long-term basis. We said we would do the right deal, not the fastest deal, improving the project's economics while keeping the structure aligned with our financial guardrails. We are also participating in upside capture without downside commodity exposure. We have continued to strengthen the resilience of our core business, including contracting over 200,000 barrels per day of Peace pipeline capacity in 2025, covering substantially all volumes that expired in those years. More recently, we have also begun to advance new opportunities in the Alberta Industrial Heartland, including Greenlight, where we have been a first mover in developing a contracted gas to power solution for data center customers. Stepping back and looking at our longer-term history, Pembina has always met its annual financial guidance, consistently increased its dividend, always operated within its financial guardrails, never suffered a material cost overrun and maintain our investment-grade credit rating.

The point is straightforward. Our strategy is grounded in execution, not aspiration. You can trust us to deliver. Our ability to realize our vision will stem from the advantages of our fully integrated wellhead to market infrastructure and our ability to service customers across the full hydrocarbon value chain. Our business is built on solving problems and meeting the needs of our customers, and we are unique in the range of products we handle and the services we provide. Quite simply, no other Canadian midstream service provider does what we do. We handle crude, condensate, NGLs and natural gas. We connect producing basins to domestic demand, North American demand and global markets. We do that through a combination of scale, connectivity, market access, commercial relationships, project expertise and financial capacity. That gives us 2 important advantages. First, it allows us to create more value for our customers because we can offer integrated solutions rather than stand-alone services.

Second, it gives us the ability to extend our businesses into adjacent opportunities where our existing footprint, capabilities and relationships create a low-risk entry point. That is what we have done historically. Some examples include being the first to integrate gas plants, pipe and frac in 2012, building the first large-scale frac complex in over a decade in 2016, the Hythe Sour expansion in 2021 being the first large-scale sulfur recovery facility in decades, having the only LPG unit train loading capability. And that is what we are doing today with Cedar LNG, the largest indigenous-led joint venture and first floating LNG facility in North America. It is also what we intend to do with opportunities like greenlight and the broader Heartland build-out. While competitors may challenge our incumbency and attempt to recreate the Pembina of the past, it is our unique advantages that will allow us to remain an industry leader, forging new paths and chasing new opportunities. And that brings me to our strategy.

Pembina's vision is that together with our many stakeholders, we will shape the future by connecting North American energy to the world. To execute against that vision, we are focused on 3 strategic priorities: capture, connect and catalyze. Capture means growing and strengthening our franchise in premier resource plays. In practical terms, that means additional pipe capacity, gas processing and fractionation where customer demand supports investment. Connect means extending our core commodities to higher-value markets. That includes LPG and LNG exports, expanded market access and infrastructure that improves egress from a constrained basin, reaching coast to coast to coast. Catalyze means developing new demand platforms in the markets where we operate.

Our innovative and entrepreneurial teams will endeavor to spark what comes next. That includes gas to power solutions for data centers, petrochemical opportunities and other infrastructure that creates incremental demand for the products that move across our integrated system. These are not separate ideas. Together, they form the blueprint of how we intend to deliver the next phase of growth to the end of the decade and beyond. Our strategy is grounded in macro fundamentals. First, global energy demand continues to grow and oil and gas remain essential to long-term supply. Natural gas, in particular, is expected to play an increasingly important role. Second, we believe Canadian energy is becoming more strategically important. Geopolitical developments, trade considerations and a more constructive policy environment are all improving the case for greater global market access.

Third, LNG and data center power demand are emerging as durable sources of new demand and Canada has meaningful competitive advantages, including low-cost natural gas and attractive West Coast access to Asia. Fourth, the Montney and oil sands remain among North America's premier basins on inventory depth and economics. Pembina is the premier service provider in both. And fifth, decarbonization remains important, but the pace and capital opportunities around it are evolving. We believe disciplined capital allocation matters more than ever and emissions reduction opportunities must compete appropriately against other uses of capital. These global fundamentals play out in the WCSB as a call on Canadian energy. Growth in the WCSB is being spurred by recent and upcoming developments. Our export capabilities are expanding rapidly.

Recently, both the TMX expansion and LNG Canada have come into service, providing nearly 600,000 barrels per day of new egress for Canadian crude oil and 2 billion cubic feet per day of new egress for Canadian natural gas. Additional oil pipeline expansions, along with new or expanded LNG and LPG facilities will drive further demand and growing production of all products throughout the end of the decade. Additional demand drivers include expanding petrochemical facilities and growing power demand. Dow's Path2Zero petrochemical project will result in an estimated 120,000 barrels per day of ethane demand, which will also result in incremental production of propane and butane.

The proposed new data centers will drive about 180 million cubic feet per day of natural gas demand for each gigawatt of electricity needed to power those centers. In combination, these developments are poised to represent new demand for Canadian energy products that would result in significant volume growth across Pembina's systems, which help fill existing assets and lead to further expansions. And these are only the projects that have come into service already or that have good visibility to drive near-term growth. Taken together, these developments support growing volumes across all products. And because Pembina is integrated across those products, we expect to benefit along the value chain. Beyond the projects already in motion, policy momentum adds longer-term upside. Federal and provincial governments are increasingly focused on growth in LNG, petrochemicals, data centers and energy infrastructure.

Governments have outlined aspirational targets that include growing LNG exports up to 100 million tons per year, attracting data center investments in Alberta up to $100 billion and expanding Alberta's petrochemical hub and building a new 1 million barrel per day oil pipeline to the West Coast. We are not underwriting our business to every aspirational target on this slide, but we do believe the direction of travel is very constructive and even partial realization of these ambitions would support a stronger growth profile for the basin, for Pembina and for our country. The growth of the WCSB is not limited to any one product. In fact, each product must work in unison with the others. Oil sands crude growth drives condensate demand, liquids-rich production supports condensate and NGL supply.

LNG creates gas egress for the incremental gas supply. LPG export improves propane market access and petrochemicals create a new outlet for ethane. This matters because Pembina is not exposed to one part of the system. We are positioned across the system. And here is where it's exciting for us. We are the only one with the breadth of services across the value chain touching all of these products. At the center of that system is our asset base. We lead in many of the services our business -- our customers require, including gas processing, transportation and fractionation with growing LPG and LNG businesses. At this footprint overlays some of North America's most resilient resource plays that have the depth of inventory and competitive economics to serve demand markets globally and at home for many years to come.

The combination of our industry-leading capabilities across the value chain, along with the resource strength of premier plays like the Montney, Duvernay and heavy oil sands shape our long-term value proposition. Simply put, we have the right assets in the right place at the right time. And so what does this all mean for Pembina? The execution of our 3C strategy designed to capitalize on growth in the WCSB gives us confidence in our ability to deliver fee-based EBITDA per share growth of 5% to 7% to 2030 and line of sight to future beyond that.

We are committed to delivering on this through 3 primary avenues: higher utilization and volume growth across our existing assets, sanctioned projects already moving towards in service and projects under development that extend our value chain. We also expect other organic and inorganic opportunities to emerge over time as we turn ideas into reality as we have in the past. We believe this target is ambitious but realistic. It is supported by visible building blocks, a strong core business and a disciplined approach to risk and capital allocation.

With that, I'll turn the call over to Jaret to discuss the operational and execution foundations that support that growth.

Thanks, Scott. When we talk about Pembina's growth story, it's easy to focus on the visible outcomes, new assets, new markets, increasing cash flow, but sustainable growth only works if the foundation underneath it is strong. For us, that foundation rests on 3 pillars: number one, operational excellence; number two, commercial success through volume capture; and number three, disciplined project execution. Let me start with operational excellence because this is the foundation underneath everything else we do. For Pembina, operational excellence means running our assets safely, reliably and efficiently and doing that at scale. The first proof point on the slide is safety. In this graph on the top right, you can see a consistent reduction in 2 safety metrics, potential for serious injury or fatality and serious injury or fatality from 2022 through 2025.

That improvement reflects strong frontline ownership, clearer expectations and safety being embedded as an operating discipline, not just a value statement. For investors, strong safety performance is a leading indicator of strong, stable operations. The second proof point is asset optimization. The bottom right graph shows how when customer demand has warranted it, we've safely exceeded nameplate capacity across parts of our system. That only happens when assets are well designed, well maintained and well operated. The consolidated capacity created by the optimization of these 3 assets alone exceeds 70,000 BOE per day, and the majority of that capacity is being utilized today by our customers. This flexibility allows us to capture incremental volumes and support customers often with little to no incremental capital, translating directly into higher quality cash flows.

Lastly, to sustain this performance, we've also made deliberate organizational structure changes and have implemented a new management system. We've clarified accountability, better aligned operations, maintenance and technical teams and simplified decision-making. The goal is consistency, the same standards and discipline across the entire portfolio. That's how we continue to progress towards becoming a best-in-class operator. This operational foundation is what enables our commercial success and our ability to capture volume, which I'll turn to next.

Building on that operational foundation, our second pillar is commercial success. This slide illustrates commercial success and volume capture across the Western Canadian Sedimentary Basin. The headline here is straightforward. Pembina's growth continues to match basin growth, and we're doing that while achieving record throughput across our systems. Starting on the left with gas processing and extraction, you can see our physical volumes tracking and in many cases, exceeding underlying Western Canadian natural gas growth. This reflects our position as the largest third-party processor in the basin with roughly 6.7 billion cubic feet a day of capacity. Just as important, these are long-term producer-backed relationships and infrastructure partnerships designed to grow with our customers over time. That allows us to capture basin growth in a way that's durable and repeatable.

To the right, you'll see the same story playing out in the conventional pipelines. As Scott mentioned, over 7 years of strategic investment, more than 20,000 kilometers of pipe and a fully integrated system from wellhead to end market allows us to grow with the basin. Because we're connected and integrated, incremental volumes naturally flow in our system, support a higher utilization and stable cash flows under long-term contracts. So when you take a step back, commercial success at Pembina is about being in the right places with the right assets, serving long-term customers and capturing volume with discipline. And that commercial signal is what ultimately drives our capital decisions. That brings me to our final pillar in the foundation of growth, superior project execution.

Project execution is about capital discipline first, delivering exactly what customers need, no more and no less. The headline on this slide says it well, capital efficient, safe, on time and on budget expansions to meet customer demand. On the left, you'll see a snapshot of our current execution portfolio across our enterprise. These are not speculative projects. These are expansions to our existing footprint, driven by clear customer commitments and basin-led demand. You also noticed a range of project sizes from smaller brownfield expansions through to larger developments, which helps us balance risk, capital and execution capacity. Since our 2024 Investor Day, we've sanctioned over $1 billion of new pipeline and facilities projects on a net basis. More importantly, we're on track to deliver approximately $2 billion of projects between '24 and 2026, approximately 5% under budget.

That's not just good execution, that's disciplined capital management. The portfolio of projects and industry-leading execution allows Pembina to place $1 billion to $1.5 billion per year into service, generating competitive returns and supporting our current and future growth targets. Before I wrap up the foundation of growth, I want to leave you with one more execution proof point, Cedar LNG. Cedar is an important project for Pembina, not because it's large, but because it reflects how we execute complex capital-intensive projects with discipline. We've moved from sanctioned to advanced construction with a very deliberate focus on safety, indigenous ownership and execution certainty. For a project of this complexity, progress to date reflects strong upfront planning and governance. Here is an illustrative rendering of what the facility will look like when it comes into service.

As you can see, the actual onshore footprint is quite small given the floating nature of the project. The marine terminal facilities are currently under construction and the vessel construction in the shipyard in South Korea is progressing extremely well. These images show what Cedar looks like today, real work, real progress. The top left photo is the team executing the Cedar LNG pipeline, which is an approximately 8-kilometer pipeline connecting the Cedar facility to Coastal GasLink pipeline. The bottom photo on the bottom left is an aerial shot of the marine terminal where the floating vessel will dock. The scope shown here is primarily related to utility services such as power and other service requirements. The 2 photos on the right are the top side and the hall of the floating LNG vessel being constructed in the shipyard in South Korea.

Overall, we've made material progress and are pleased that the Cedar project continues to progress. 2026 is the highest spend year for the project as we plan to reach several key milestones with our EPC and onshore teams. Additionally, inception to date, the project is approximately 50% spent and approximately 80% committed while still on time and on budget. On the right, you can see our key milestones that have been and will be achieved from vessel construction through to sail away, arrival in Kitimat and ultimately in service in 2028. A few specific milestones we are looking forward to and which should provide the investment community with comfort as they think of any incremental risk are: the vessel in South Korea will move from dry dock to wet dock mid this year. It will set sale in 2028, and it will come online in late 2028.

Recall approximately 70% of the project is structured under fixed price EPC arrangement, which significantly limits cost overrun risk. This is exactly how we want large projects structured and managed. Economically, the structure is equally disciplined, a fee-for-service model that secures base cash flow with the ability to participate in upside. Pembina will generate USD 220 million per year in fixed fees from Cedar's customers. In addition, we'll have the opportunity to generate incremental asymmetrical upside through additional volumes and commodity upside participation. This is a result of recent contracting through which Pembina has the opportunity to increase its return under certain commodity price scenarios. As an illustrative example of the potential upside, given the current energy disruptions and the impact on pricing, if Cedar was in service this year, our net share would generate USD 300 million of EBITDA through fixed fee commitments and commodity price participation, excluding the potential incremental cargoes.

Importantly, Cedar further integrates Pembina across the value chain from gas processing through to global markets. We see this project as a value chain expansion, which provides incremental egress to a constrained basin. We are proud to have this project backed by 3 leading producers, ARC Resources, Ovintiv and PETRONAS. All 3 are valuable customers to Pembina today, and this project allows us to provide them services beginning from gas processing all the way through to end markets. So when you step back, Cedar is a strong example of the foundation we talked about today, operating discipline, commercial alignment, capital-efficient project execution. That foundation positions Pembina extremely well for what comes next.

With that, I'll turn it over to Chris, who will walk you through how we're translating this foundation into future growth opportunities.

Thanks, Jaret, and good morning to everyone on the call. Whereas Jaret covered our existing core business, which provides the foundation of our 2030 growth target, I'm excited to share some of the future opportunities that our teams are advancing and importantly, why we're confident in our growth outlook. Across Pembina, we see a strong backlog of development opportunities. These are on strategy. They're customer and market-driven infrastructure opportunities that are aligned with our risk return framework, not only in our core business, which includes additional pipes, fractionators, gas plants and export terminals, but also by continuing to develop new growth pathways and extend our value chain.

Scott touched on it earlier, Pembina is uniquely positioned to benefit from the convergence of markets, policy and our capabilities. I'll show how we're translating that convergence into durable growth and executing upon our 3C strategy, capture, connect and catalyze. Before I review specific opportunities, I want to start with our history. Pembina's history is a story of entrepreneurship and disciplined expansion. Building businesses is in our DNA. Over the last 20 years, we've repeatedly entered into adjacent businesses where our capabilities, infrastructure and commercial relationships gave us an advantage. There are 3 common themes across this history. First, we deeply understand market and customer needs. We anticipate those needs and invest proactively to address them. Second, we invest in scalable growth platforms and establish ourselves as the market leaders across those platforms.

And third, we integrate businesses into the Pembina store, driving incremental value and enhancing our customer offering. This slide includes several examples that highlight these themes. We built the marketing business to capture inherent commercial value in our assets. We expanded into gas gathering and processing, fractionation, long-haul natural gas transportation and oil terminaling to capture growth and expand our service offering. We invested in LPG export and now LNG export to connect to high-growth, resilient global markets. And most recently, we're extending again into gas to power infrastructure, creating a new growth pathway while catalyzing demand. My point is simple. Our history is not one of isolated projects. It is one of building integrated and scalable businesses over time. Now let's have a look at what we're pursuing next.

Clearwater is a good example of how that model continues to work. The Clearwater formation has become one of the most attractive resource plays in North America with strong production growth, compelling returns and favorable decline characteristics. Pembina already had the right-of-way and infrastructure footprint in the area through our Nipisi Pipeline. We anticipated the emerging growth and when the play materialized, our legacy positioning created new value. Since reactivating Nipisi in late 2023, volumes and EBITDA contribution have increased by more than 50% versus 2020. A pipeline that went empty is now fully contracted and with activity and customer demand continuing to grow, evaluating expansion options, including twinning and pump station upgrades. Clearwater demonstrates a broader point. In midstream, optionality embedded in existing assets is highly valuable.

The Nipisi Pipeline is a great example of how our commercial insight and asset positioning create opportunities to build a durable business around evolving circumstances. That same concept of exploiting optionality is what we're doing at Heartland, just on a larger scale. As we look forward to 2030 and beyond, some of our most significant development opportunities are benefiting from Alberta's ability to attract billions of dollars of investment in petrochemical and data center projects. This growth focus is and will drive hydrocarbon demand within Alberta. That's benefiting Pembina's existing business and supporting our new growth pathways. Pembina's Industrial Heartland position located near Edmonton provides a compelling value proposition for new investment, particularly as it relates to Alberta's vision to become a data center and petrochemical leader.

The region has several structural advantages, industrial land, water access, supportive regulation, labor availability, grid connectivity, low cost natural gas, available ethane supply, transportation infrastructure and proximity to carbon solutions. We've been positioning ourselves around these structural advantages for some time and are now seeing the payoff in the form of several exciting growth opportunities. Pembina is distinguished by an advantage we spent 70 years building. Leveraging this advantage allows us to build businesses with economic synergies unlike any of our peers. This slide brings that together. Our existing Heartland position includes Canada's premier fractionation complex at Redwater, industrial land, hydrocarbon supply access and strong downstream connectivity.

On top of that, we're advancing 2 new opportunities. The first is Greenlight, a contracted gas to power solution for a large-scale Canadian data center development. And the second is the Yellowhead extraction plant, which will support our ethane commitments to Dow while also increasing C3+ volumes available to Redwater and our broader NGL system. Additional future opportunities that leverage this platform include the Alliance Regional expansion and the Alberta Carbon Grid. One platform, 2 growth vectors, all within our right to win, integrated and scalable.

Now let's have a look at a few of the specific opportunities in front of us. I want to start with Greenlight. Greenlight is a good example of how we think about catalyze within our 3C strategy. It's a proposed 900-megawatt combined cycle natural gas power facility that we're developing with our partner, Kineticor, to serve data center demand. Strategically, it extends our natural gas value chain into a durable and growing end market. And I want to make 3 important points. First, this is not a move into merchant power. Our objective is to secure a long-term contracted infrastructure profile consistent with Pembina's typical risk and return standards. Second, Greenlight will create incremental demand for natural gas and associated liquids, which enhances our core business and provides the potential for an Alliance regional expansion. And third, consistent with our history of building businesses, Greenlight is another example of an integrated, scalable growth platform for the future.

Over the past year, we made significant progress on Greenlight, which supported our customers' bid process. We sold land, secured turbine availability, advanced permitting and progressed EPC work. We're targeting a final investment decision in the second quarter of this year and in service in 2030. We're in the process of finalizing our commercial terms that will be largely consistent with the typical contracted Pembina infrastructure project, including a 20-year agreement backed by investment-grade counterparty. The other major Heartland opportunity I want to talk about is petrochemical supply. Pembina already has a leadership position in C2+ extraction, transportation and fractionation, including as a leading supplier of ethane in Alberta.

Looking forward, we have a 50,000 barrel per day ethane supply agreement with Dow and the proposed Yellowhead extraction plan is one of the ways we can support that commitment while also creating incremental value from associated C3+ production. This is attractive. It combines a visible customer need with broader system benefits across extraction, transportation, fractionation and marketing. So what does it all look like within our broader growth funnel? This slide ties together the growth path we've outlined today with identified opportunities. Between sanctioned projects and projects under development, Pembina has a visible pipeline of opportunities to support our 5% to 7% fee-based EBITDA per share growth target through 2030. That includes capture opportunities, which are growing and strengthening our franchise in premier resource plays with pipeline processing and fractionation expansions. It includes extending our core commodities to higher-value markets via connect projects such as Cedar and export optimization.

And it also includes catalyzing demand by developing new demand platforms in the markets where we operate, including projects such as Greenlight and Yellowhead. This morning, we're very focused on 2030 for the purposes of this financial outlook update. However, continuing our history of building businesses and capitalizing on the opportunity in front of us across policy, markets and our capabilities, we have built a project backlog that extends beyond 2030. The projects I've spoken about today are investments in growth platforms that support growth to and beyond 2030.

We're investing around the best resources, highest growth and most meaningful durable trends in the energy sector. Specifically, we continue to see the potential for additional optionality across Cedar optimization and expansion, further gas to power, additional basin debottlenecks and carbon infrastructure in the future. To be clear, we do not need all of these opportunities to deliver on our 2030 growth targets that we've shared today. But it does reinforce our confidence that Pembina's growth runway extends beyond the projects directly in front of us.

With that, I'll turn the call over to Cam to review our financial outlook.

Thanks, Chris. You've heard today about our strategy, the operating foundation that supports it and the portfolio of projects poised to deliver continued long-term low-risk per share growth. I want to focus on the financial framework that underpins all of that. Growth is only valuable if it's pursued with discipline. Our objective is not simply to grow. It's to grow in a way that strengthens the franchise, maintains our financial guardrails, supports the dividend and enhances value. Foundational to our strategy and by extension, our long-term outlook is capital allocation. The key message is consistency and discipline backed by a long track record of doing what we say we'll do. First, in our capital allocation hierarchy is balance sheet strength.

This is anchored in maintaining a strong BBB rating, which we have done now for 13 consecutive years. We are 1 of only 5 North American midstream peers without a negative rating action in the last 10 years. Our disciplined and prudent approach to leverage anchored in a target range of 3.5x to 4.25x proportionately consolidated senior debt-to-EBITDA has served us well historically. It has afforded us the ability to fund growth, manage risk and seize attractive opportunities when they arise. The second priority is our dividend, which is the foundation of Pembina's investment proposition. Our objective is to deliver sustainable, reliable and growing dividends. Our track record here is very strong, 4% compound annual growth over the last 25 years, and we've never cut our dividend.

Third, we deploy accretive growth capital. We invest in projects that align with our strategy, enhancing capabilities, extending our franchise, diversifying the business and increasing the duration of our cash flows. Projects must fit our risk appetite framework and generate returns which create economic value commensurate with the risk. Importantly, accretive growth capital must always compete against other discretionary uses based on risk-adjusted returns. Finally, we consider discretionary capital. This includes debt reduction, share repurchases or incremental dividends. We make this allocation decision after evaluating the risk-adjusted returns of all potential uses considering internal and external inputs.

For example, we may choose to retire debt when interest rates rise or repurchase shares when there is a dislocation in the markets. We've done all of these in recent years and remain disciplined to allocating capital where it drives the highest value for investors. A moment ago, I talked about accretive growth capital within our allocation priorities. The message here is that we have a track record of accretive capital deployment with a low-risk underpinning, and we expect that to continue. Between 2021 and 2025, Pembina's adjusted EBITDA grew by over $850 million. Over that same period, capital in service increased by nearly $6 billion. Using simple return on invested capital math, the return on that capital was 14.3% in 2025. This implies a 7x EBITDA to capital multiple. Equally important is the cash flow quality.

In 2025, Pembina's business was 90% fee-based with the vast majority of that being low-risk, take-or-pay or cost of service cash flows. Looking forward, the projects that you've heard about today reflects more of the same, both in terms of risk and returns. Build multiples across the sanctioned and underdeveloped portfolio vary by project type, however, average approximately 7x. The cash flow composition in 2030 is similar to today, demonstrating our consistent approach to risk. We prioritize projects with one or more of the following attributes: being adjacency to our existing footprint, strong customer pull, durable contractual support, attractive capital efficiency and a clear strategic fit within our integrated value chain. The project portfolio includes a mix of brownfield opportunities, system debottlenecks and selective greenfield developments.

Importantly, our footprint often helps us drive greenfield projects to generate higher brownfield-like returns through integration. Our strategy and the execution component discussed today support compound annual fee-based EBITDA per share growth of 5% to 7% from 2026 to 2030. Fee-based EBITDA per share captures the performance of our core business and helps normalize the year-to-year variability of our price-exposed marketing business. Starting from the midpoint of our 2026 guidance, the first building block to 2030 is higher utilization and volume growth across our existing assets plus the contribution from approximately $5 billion of sanctioned projects.

Together, we expect these pieces to add between $650 million and $700 million in additional fee-based adjusted EBITDA over the period, generating approximately 4% compound annual growth from this component alone. It's important to note that our margin assumptions for existing assets in this outlook are conservative. We can deliver this plan with only a fraction of the per unit margin growth we've achieved in the recent years. Our recent and sustained commercial and contracting success, which Jaret spoke of earlier, supports this outlook. The second component is approximately $5 billion of projects under development, including opportunities such as the Nipisi expansion, the Alliance Regional expansion, Greenlight, Yellowhead and other developing projects.

Including these projects takes our compound annual growth rate up to 6% by 2030. Keeping in mind, 2030 incorporates only a partial year contribution from the Greenlight project, so the benefit extends beyond that horizon. It is also worth clarifying our expectations around the shape of this outlook, which is influenced by customer activity and the time lines of our projects. Based on our current expectations, we forecast growth to be concentrated in the 2028 to 2030 period and therefore, at or above the 5% to 7% level in that time frame. Conversely, we expect growth below the 5% to 7% level in 2027. This profile is primarily informed by the timing of our sanctioned project portfolio.

As we showed back on Slide 17, assets in service increased by roughly $1.4 billion in 2026, then another $1.1 billion in 2027 and then another $2.9 billion in 2028. The projects in our underdevelopment grouping are by nature also concentrated in the 2029 to 2030 time frame. The final component reflects additional organic and inorganic opportunities that we expect to emerge as we move through the period. Our track record has demonstrated that there is inherent option value in our business, and we have consistently seen new opportunities emerge as we move through the years in our long-range planning horizon. Lastly, because we are speaking to per share growth, share count also matters. Our base plan does not assume any share buybacks in this period.

But with that said, in our capital allocation framework, buybacks remain an option for residual cash flow. Growth capital, including additional organic and inorganic opportunities, will always be evaluated against buybacks in service of the highest risk-adjusted returns to investors. Up to now, we focus mostly on our fee-based business, but it's also important to recognize the role of marketing in our business model. Marketing is an important value-enhancing overlay across our integrated business. It helps us to optimize our assets, improve customer and proprietary product netbacks and enable growth of our infrastructure. Our goal is to create asymmetric upside in our business through marketing and our commercial approach is oriented that way.

Finally, marketing offers a strategic hedge to our fee-based business, allowing us to mitigate or benefit from temporary or transitory market dislocations. Today, our marketing business has 3 core components being crude, Western Canadian NGLs and U.S. NGLs. In the future, we see additional upside as system volumes grow and we have more volumes to market as new projects come into service such as Cedar and as legacy commercial arrangements evolve, including the post 2030 expiry of the third-party marketing agreement at Aux Sable. Over the past 3 years, we have seen a variety of market conditions and the results reflect that. As the heat map shows, 2024 saw exceptional performance as most business drivers were in line or above 5-year averages. By comparison, our 2026 guidance reflected the mirror opposite with most drivers in line or below 5-year averages.

While the focus of today is very much about the long-term outlook, it would be a miss to not acknowledge the world events of the moment and their impact on commodity markets. As it remains difficult to predict the longevity of the conflict in Iran and the follow-on implications, it's premature to formally reanchor our 2026 marketing outlook today. That said, based on the prevailing forward prices, it's clear the outlook has improved meaningfully from our original 2026 guidance. We've also taken advantage of this pricing environment to layer in additional hedges for 2026 over the last 5 weeks and raise the floor on our 2026 outlook. As it stands today, our 2026 frac spread exposure is now 65% hedged at a weighted average price of $35.41 per barrel. In funding this growth, our approach is straightforward. We live within our means.

At our 2024 Investor Day, we committed to fund $4 billion of capital investment with cash flow, and we are on track to deliver on that commitment. Looking forward, our philosophy is consistent. From 2026 to 2030, we expect to generate between $16.5 billion to $18 billion in total cash flow from operating activities. After funding a growing dividend, we have roughly $7 billion to $8 billion of cash flow available to invest or roughly $1.5 billion per year on average. This matches very well with the roughly $7 billion of remaining capital to be invested in our sanctioned and under development projects. The outcome is a program which delivers 6% per share growth on a self-funded basis with a strong balance sheet and leverage below current levels in all cases. Outcome of an already strong balance sheet and self-funded growth is that we grow and our leverage metrics strengthen further.

Alternatively, we can access incremental debt while remaining squarely within our target leverage range, roughly $3 billion in this outlook. This debt capacity stands available to fund other organic and inorganic opportunities as they become available, taking us to the upper end of the growth target of 7%. Just as importantly, the staged nature of the capital program helps us manage execution, timing and financing needs over the period. Finally, no discussion about financial policy at Pembina would be complete without reviewing our financial guardrails. Since pioneering them in 2016, the guardrails have served as Pembina's risk parameters for executing strategy. Again, the message is simple and straightforward. Our track record informs the future. The guardrails have remained intact, unchanged and without exception since 2016. So to wrap up, let me just repeat. As with many things you've heard today, we do what we say and our track record shows it.

And with that, I will turn the call back to Scott.

Thanks, Cam. Let me close with a few final observations. Pembina enters the close of this decade from a position of strength. We have a durable core business, a differentiated integrated platform, a visible growth path and a disciplined financial framework. We are operating in a basin with improving fundamentals and expanding market access. We have projects already moving into service, projects under development that extend the franchise and additional opportunities beyond that. Most importantly, we have a track record of executing well. Pembina's value proposition is straightforward and disciplined. We execute our 3C strategy: capture, connect and catalyze to deliver sustainable growth and long-term value for shareholders.

We capture advantaged resource opportunities to strengthen our core business. We connect those commodities to premium coast-to-coast markets through a fully integrated value chain, and we catalyze new demand platforms in the markets where we operate. How we do this matters? We lead with operational excellence, industry-leading project execution and a clear consistent risk appetite. We maintain strong financial guardrails, innovate how we work with customers and pursue both organic and inorganic growth, always with discipline.

The result is a resilient low-risk business model. We generate visible fee-based EBITDA per share growth, fund accretive projects within cash flow and rely on long-term predominantly take-or-pay contracts. And importantly, we have a proven track record of delivering projects on time and on budget. That's what gives us confidence in Pembina's ability to continue creating value through cycles and why we believe Pembina remains a compelling long-term investment.

Thank you for your time. And with that, we'll move to Q&A. Operator, please go ahead and open up the line for questions.

[Operator Instructions] Your first question comes from the line of Aaron MacNeil with TD Cowen.

First one is on the sort of unsanctioned growth projects. I can appreciate the big puzzle piece is greenlight. And I know in your prepared remarks, you mentioned you don't need all of them to go ahead. But the regional expansion of Alliance is sort of related. Yellowhead sort of needs to go ahead if you satisfy the Dow commitment. And if you assume sort of higher utilization and volume growth, it's also likely that Taylor-to-Gordondale goes ahead as well. So is it fair to assume that most of these projects under development bucket go ahead? And maybe to ask a bit differently, what's sort of foundational to the guide? And what would you sort of characterize as optional?

Aaron, it's Cam here. Let me start. I invite my peers to pile in afterwards. I think it's a fair question and a good one in the sense that clearly, first of all, we've presented a range for that bucket of the projects under development between $0.40 and $0.65 a share on a fee-based EBITDA per share basis. When we look at that project portfolio and you've highlighted them, obviously, there are some projects where we are more advanced in kind of the execution time line. If I think about where we are on greenlight today relative to, say, a potential Nipisi expansion, we're probably further along there. Likewise, you do acknowledge that some of those projects are related in some way, shape or form.

I would say, obviously, that we started off with the bottom end of that foundation to reflect and obviously, you take the bottom end of that foundation to get to the 5%, which we've anchored as the bottom end. We do have a high degree of confidence that we will achieve those types of projects. Obviously, they're not sanctioned today, and we wanted to distinguish between those and the ones that obviously are sanctioned and in execution. But if we didn't have a degree of confidence around at least that bottom end moving forward, we wouldn't be including that. So I do think we see that.

Okay. Fair enough. Obviously, I see the spend profile. And as you noted, Cam, a lot of the in-service dates are towards the end of the period. Can you give us a bit more detail in terms of where you calculate peak leverage? And can you say a bit more about what you think about marketing performance over the time period as you think about corporate leverage more holistically?

Yes, happy to, Aaron. So going back, I mean I think what we see firstly is we talked about 2026 being sort of the peak spend year for Cedar. That informs one major data point. And then clearly, as you think about where we move in that range, it obviously has to do with capital and business performance to state the obvious. I would say right now that when we look forward through this profile, you heard me say that we deleverage in each year through the end of the profile relative to current. And I think that's probably pretty straightforward and intuitive.

When we look forward to 2027, 2027 is another significant year of Cedar spend, albeit lower than 2026, and we're incorporating new projects. So you could conceivably see leverage kind of at similar levels to 2026 -- in 2027, potentially moving up slightly in our target range, recognizing, of course, we've talked historically for a long time about that target range and a strictness to staying within it. And then I would say, as you think about the rest of that implication for 2027, it ultimately comes down to your view on the marketing outlook. Notwithstanding the strength that we're seeing in the near term in 2026 in the forward prices, there's always backwardation in the curve.

And so if you take the forward prices as a given, it is, again, a softer year in comparison to 2026. And so that goes into the leverage calculation. But all that to say, as you start to see 2028 through 2030 come online from those projects, you see significant deleveraging, which obviously gives you the opportunity to deleverage sort of towards or below the bottom end of our target range or obviously, as we present in this forecast, continue to recycle that back into new investment opportunities and maintain leverage within the lower half of our leverage target range.

Your next question comes from the line of Theresa Chen with Barclays.

Would you expect the FIDs of Greenlight and the Alliance expansion to occur simultaneously or within short order of one another? And as far as additional phases of Greenlight beyond this initial one, would you expect to pursue additional expansions of Alliance as well? And in that vein, are there any capacity limitations for Alliance over time that we should keep in mind?

Theresa, it's Chris. Thanks for the questions. The 2 FIDs we expect to be approximate to each other, but not exactly necessarily on exactly the same time line. They're not necessarily mutually exclusive, although obviously beneficial if we can get that integrated. As far as future opportunities with Greenlight, which I think was the second part of the question, we certainly see the opportunity to do more than Greenlight one. And anything we do beyond here, we'd like to have integrated in the same fashion as we're doing the base plant and the base deal. There ultimately will be limitations on Alliance, but we've got lots of running room. We've got lots of running room there, at least through a few phases. So it's not something we're concerned about at this point.

And to the earlier commentary about new markets of focus with petchem in mind, in particular, and tying that into your comments about pursuing integrated and scalable projects, what salient data points or thoughts can you share with us at this point about the next phase of growth for Pembina to serve this end market?

And I assume you're referencing ultimately petrochemical supply. We continue to see the province -- yes, yes, we continue to see the province be long ethane. We think there's incremental opportunity even beyond what's happening today. Obviously, we're very focused in the near term on satisfying the growth rate in front of us with Dow and optimizing our portfolio around that growth. But we think there's potential even beyond that in the future.

Your next question comes from the line of Jeremy Tonet with JPMorgan Securities LLC.

Just wanted to dive into the guidance a little bit more and see what was baked in for overall volume expectations for the base business, what that growth looks like, how that compares to basin growth? And I guess, how you think about Pembina's market share changing over time?

Jeremy, it's Cam here. I'll take a stab at that one. I think A little bit of a theme today was obviously sort of the history informing the future. And I think if I'm going to answer that question in that vein, I sort of look at our history in terms of the basin growth in that sort of low single-digit type range. And obviously, it depends on products, obviously, gas and NGLs versus crude oil in some cases. But when we look back at our history sort of across the business and so forth, we sort of look at something in the 2% to 3% range on aggregate. And obviously, that varies per business.

When you look at our sort of forward look at that, I think we conceivably see something similar across the board. And like we've said in the past, I mean there are obviously areas where we're running at very high utilizations, and there is opportunity, obviously, should we have more capacity, and we're looking at ways to do that to drive more. The natural gas value chain is the clearest one in my mind.

But there are other areas, obviously, where we have excess capacity. And part of what's embedded in this forecast is us obviously increasing utilization, as we mentioned in the prepared remarks, and leveraging that highly accretive -- those highly accretive margin barrels to fill the growth. But that said, I think you can sort of -- if you're trying to understand what's underpinning this growth forecast in terms of sort of a basin level volume look, it would be a similar growth rate in sort of that low to mid-single-digit level.

Got it. That's helpful. And I just want to come back, I guess, to the builders -- building blocks to potentially 7% in that last bucket there, that other bucket. I was wondering if you might be able to peel back a little bit more on what that could be and what's, I guess, more likely than not if something were to materialize there?

Yes, happy to, Jeremy. Again, it's Cam here. And I think a couple of things we pointed out. In the prepared remarks, again, we mentioned the sort of the inherent option value that exists in this asset base because of its connectivity, its breadth and its scale. And I think one thing I'll point to is if you go through the projects that make up the preceding 2 buckets, what you don't see a lot of there is any opportunities in the gas services bucket. And so I think as you've seen the commercial success in that business since we set up PGI in 2022, we've added close to $2 billion of new capital on a gross basis, on a PGI basis, so take 60% of that for Pembina's contribution in a 3-year time frame basically.

And so as we look out at a 5-year time frame looking forward, I would say that based on both the opportunities that we have visibility to, and we do have visibility to opportunities, significant opportunities, which are not embedded in any of the preceding buckets as well as just opportunities that we think will come from our connectivity and ability to serve customers in a different way over the 5-year time frame, that's one piece of it. And then that could range anywhere from the organic and frankly, the inorganic bucket.

The second piece I would say is that when we look at the inorganic piece, obviously, based on the scale of that wedge, it's probably more focused on tuck-in acquisitions, small kind of bolt-on acquisitions, it does feel like there will be opportunities for that in the next 5 years. And the fact of the matter is when you unpack the math on that at any kind of a reasonable return multiples, you really only need about $1.5 billion of incremental capital to sort of generate the high end of that range. And frankly, in history, based on what I said before, I think that's a readily achievable number for us.

Yes. The only thing I'd add there, Jeremy, is the other thing about that we haven't modeled is upside from new assets coming into service. And we've talked a lot about how you don't get to do brownfield expansions or debottlenecks if you don't start with greenfield. And so when I look out over this time frame, we'll have incremental pipeline capacity, new pipe in the ground, we have RFS IV, Cedar and LPG optimization, all the kind of base economics are in this plan.

But history would show you that as we put new assets into service, we find ways to optimize them, as Jaret highlighted, which are generally capital-light and very efficient opportunities. And that could form part of the 6% to the 7%, but none of that is in the 4% to 6%.

Got it. That's very helpful. And then just to be clear on the inorganic, we're talking about PGI bolt-ons as opposed to PPL acquiring incremental stake in PGI?

I was referencing, yes, PGI bolt-ons as opposed to incremental acquisition of PGI, correct.

Your next question comes from the line of Sam Burwell with Jefferies.

Can you hear me okay?

I can.

Beautiful. So I just wanted to clarify a few things on the CapEx associated with the second and third buckets. So like Slide 33 says $5 billion for projects under development, but Slide 36 say something a little bit lower. And I think, Cam, you've spoken to lower numbers. So I mean is it fair to say that there's like, call it, $2 billion of CapEx associated with the projects under development, and then there's $3 billion that's tied to the future upside opportunities? I'm just trying to get a sense of what the CapEx numbers imply in terms of like a build multiple, especially for the second bucket.

Yes, that's about right, Sam. I think you got to remember, obviously, we're talking about projects between -- that go into service between 2026 and 2030. And obviously, some of the spend has already been incurred for those projects. So we're talking about the full capital stack or full sort of assets in service to try and delaminate the build multiples. But when we talk about the funding picture of what's left to spend, obviously, it's a different number.

I think I'd obviously point I'd point back to Slide 33, as you referenced, where we look at the portfolios of the sanctioned and the projects under development around the build multiples, sort of both at around 7x, and that reflects obviously the totality of the -- both the fee-based, but also some of the commodity exposed components where there will be some of those projects, which do have some commodity upside. And obviously, that's aligned in that number as well.

Okay. Understood. And then maybe unpack one thing we haven't discussed yet, I don't think the butane value enhancement, is that tied to Yellowhead? Or is that some other brownfield opportunity? And I guess, just sort of high level, would that be a large or relatively small piece of the projects under development bucket?

Sam, it's Chris. Yes, so that's a distinct opportunity from Yellowhead. It's an opportunity to pursue, as it says, butane value enhancement. We're pretty simple in the way we think about working our way through the commodity stack. We've got our strategies and plans for everything all the way from C1 to crude. And this is an opportunity we have to add value to the butane stream and the butane supply that's coming through our facilities today, and we think is certainly going to increase into the future. Right now, we can't share any of the specifics around scale or structure just given some of the commercial sensitivities with where we're at on that one, but looking forward to being back in front of you all with more details before launch.

Sam, I'll just sort of point out that the contribution of that to that bucket would be less than 10% or around 10% at most to that individual bucket. So there's obviously a whole grouping of projects which make up that, and it's not a disproportionate share by any means to that.

Your next question comes from the line of Ben Pham with BMO.

I have a question on the selection of duration of your guidance. I'm just thinking a few years back, 2024, you used 2023 as a starting point. I'm curious, just thinking the thought process around the 4-year CAGR guidance. And similarly to why didn't you go to 2031 when you only put in potentially half of the contribution of Greenlight.

Yes. I think there's a couple of things there, Ben. The first thing I'd point out is, obviously, 2026 reflects a bit of a run rate on the business. So obviously, we've got a full year of the Alliance settlement in 2026, and it sort of represents a natural grounding rate. Going back to 2025, for example, starts to cloud that. And so we're really trying to sort of show a same-store sales kind of growth rate.

And obviously, as we were thinking about the duration of the growth, we weighed a number of things. One is, I think the inherent message is that the fact that we're going out to 2030 demonstrates or is a proof point around the durability and the confidence in the low-risk nature we have in our business. And so of course, there are always uncertainties in any 5-year planning horizon. But as you've heard multiple times from us today, we're really big on doing what we say. And so we have a high degree of confidence that both our ability to sort of continue our commercial success, but also the assumptions that we're embedding in this outlook are highly achievable. And so that gives us a high degree of confidence.

I think as we start to get out beyond that 2030 time frame, it's obviously always a balance between the visibility we have within the core business and the tailwind or the benefit from sort of new capital. And so we weigh that. We thought that 2030 was ultimately a very competitive time horizon. And we were capturing much of the projects that we have in our visibility today, but balancing the right level of sort of longevity with certainty.

And maybe just to also add one point, Ben, which you point out, which may be lost in this analysis is you're right, it only has a half year of Greenlight. If you actually annualize Greenlight for 2030, it's about another 40 to 50 basis points.

Okay. Got it. And maybe a detailed question, you mentioned a place order for $5 billion of projects under development in the guide. Is there a portion of that? I would think like part of that Greenlight that -- and how much of that is not contributing to your guidance through 2030? I would think a portion of it benefits post 2030 time frame?

Everything with the exception of greenlight hits run rate by the time we get to 2030.

Your next question comes from the line of Robert Catellier with CIBC Capital Markets.

Thank you for the presentation, in particular, the long-term growth outlook here. You've answered most of my questions on the project side. I'm just curious about the execution. In particular, it looks like we could enter a period where maybe the funding volatility is increasing and I would argue even the EPC cost risk increasing. So maybe you could just walk through that, what you're thinking in terms of your approach to risk management on projects, including the use of EPC lump-sum contracts and where you see the pricing for those items.

Rob, maybe I'll break it down into just a couple of buckets. So when Cam -- when we talk about kind of our base, execution of pipeline expansions, gas plants through PGI, fractionation complex type infrastructure. We think we have fairly great positive partnerships with contractors here in Western Canada that can execute all of that. And we don't see a lot of material pricing increases in that space with other ongoing projects in Western Canada.

When you start talking about the EPC lump sums, it definitely is specific to the types of work you're doing under those lump sums. For example, the 2 large ones that we've been talking about right now would be Cedar LNG facility and then also Greenlight. We won't get into the specifics of the types of risk profile that those organizations are taking. But what I would say is there's a hunger out there for organizations to enter the Canadian market, specifically in Alberta to be working with organizations like ourselves to be building those. So long story short, we're seeing people to be able to step up and not -- and yes, that hunger to work with us.

So if I could summarize, you really haven't changed your approach to how and when you use EPC and you haven't yet seen cost increases or you're confident there?

Correct. Correct.

Yes. And then last question for me. You mentioned bolt-on acquisitions, which I think you have a long history of that. But you also have a history of more significant acquisitions along the way. So clearly, your growth outlook here doesn't need it, but I'm curious about what your appetite and outlook is for, maybe a more substantial M&A?

Rob, I guess I'd just go back to the fact that we're obviously highlighting the potential for bolt-on acquisitions in our framework. I think as you hear our strategy, obviously, it's a very complete strategy around the 3Cs and the integration with the existing business. I don't think we see any holes today in our business. Obviously, it's our job to look at opportunities to enhance our business, and we will always look at opportunities to enhance our business if we see them. But obviously, as you've mentioned, what's embedded in this forecast, which we believe is a very competitive growth profile, obviously, with a lot of low-risk components to it, does not include any major M&A.

Your next question comes from the line of Robert Hope with Scotiabank.

I want to dive a little bit deeper into the projects under development. I appreciate the incremental clarity on Q2 or the reiteration that Greenlight will be sanctioned in Q2. Maybe moving over to the Yellowhead extraction plant. What hurdles are remaining for this facility given the fact that it does look like the customer commitments are secured there? Like would you need to be sanctioning this in 2026 to hit that 2029 in-service date?

It's Chris. Thanks for the question. So I mean the hurdles with this one are pretty consistent with traditional Pembina project hurdles, right? We continue to progress the engineering. We need to be comfortable with exactly where that's at. We need to be comfortable with all the commercial items. It's progressing nicely. I'm certainly optimistic that we'll have it formalized in FID in '26 for sure.

All right. And then maybe a broader question. As you were revisiting your strategy, did you take a look at other geographies? Or do you think you have enough runway in Western Canada to keep you busy beyond 2020 -- or 2030, sorry?

Rob, it's Scott here. When we looked at our strategy, we absolutely took a North American view. I mean I think based on the materials you see today, it's not really about regions. I mean North America has continued to be an integrated hydrocarbon value chain. So we absolutely did, especially from today versus 3, 4 years ago with 100% of Alliance/Aux Sable, we obviously have more interest in the U.S. in terms of assets. And so that formed part of the strategy. I would say based on this plan out to 2030 to deliver, you can tell that it's clearly Western Canadian Sedimentary Basin driven. But as we look out kind of beyond 2030, we do see opportunities in the U.S. as well.

Your next question comes from the line of Patrick Kenny with NBCM (sic) [ National Bank Financial ].

Just on the build multiple range and the average of 7x being maintained going forward. But with a pretty wide range there of 4 to 10x depending on the project. I was just wondering what types of opportunities you would consider sanctioning? I guess, what sort of attributes you would need to see in order to go ahead with an investment with perhaps a double-digit build multiple?

Sorry, Pat, it's Cam here. Are you talking about the sort of the underdevelopment projects or just sort of beyond that group?

Yes, it could be basically within the unsanctioned bucket. It appears as though it could be anywhere from 4 to 10x. So I'm just kind of curious as to how those projects would stack up in terms of investment attributes and what you need to see in order to sanction at the higher end of that range going forward?

Yes. Got it. Sorry. Thanks for clarifying. I mean I think one thing that we've talked about throughout this presentation today is the concept of risk-adjusted returns. And so obviously, we look at things on that basis. I think, obviously, you can see if you want to use Cedar as sort of a litmus test or an example on this, the risk-adjusted returns on a purely contracted basis for Cedar are obviously at the higher end of that range. And I would say that reflects the parameters that it's a 20-year facility with cost protection, both on the capital cost, but also on the operating costs, and it comes with investment-grade counterparties, obviously, to high demand market. So we would see that as a very low-risk project. Similarly, obviously, that's a greenfield type project. And so those facilities by nature, tend to have, on average, higher build multiples.

That said, we also have the ability to integrate those facilities down the line longer term and also capture some upside as we've done on Cedar. And so I think we have the ability to bring those types of return profiles down closer to the average in time, which whether it be our history with acquisitions or with greenfield projects, we've always endeavored to do that. And I think that would be -- if you want to think about what conditions would sort of lead us to sanction capital with those kinds of returns, it would be that. One would be extremely low risk, but also the ability with time to bring those multiples down through integration.

Okay. That's super helpful. And then I guess within the connect bucket of future growth opportunities, I wonder if you guys could provide just a bit more color on the other LNG and LPG export opportunities. I know it's probably early days for both, but just wanted to get a better sense of what your vision looks like for your LNG and LPG export platforms longer term, in terms of size, scale and even location, if possible.

Pat, it's Chris. Thanks for the question. Maybe I'll break it down into a few areas around the specific items listed on the slide. But first and foremost, you nailed it, not at the spot where we can share specific details. But it's really no secret. The market is calling for more of those products off the West Coast, our federal government, provincial governments, everyone is aligning behind trying to make that happen. And we've got existing positions there today, both in LNG and LPG, LNG, obviously under construction, LPG in service.

So when we think about Cedar, Cedar LNG optimization that got referenced earlier when Jaret was talking about some of the economics. We have the opportunity to potentially put additional cargoes through that facility. And so there's some optimization through incremental gas vis-a-vis that construct. Obviously, we're interested in expanding Cedar to the extent that's possible. That's in the works. We're working out the details of how that might be able to happen.

And then very interested in other opportunities off the West Coast. We think we've got a tremendous base to build off of there, both from stakeholder relationships as well as included in that our customer relationships we've built through Cedar. So we're looking to build off of that.

Very similar story on LPG export. We don't think the LPG export story is done on the West Coast, and we continue to pursue those opportunities.

Your next question comes from the line of Praneeth Satish with Wells Fargo.

I guess if I look at Page 34 of the deck, the fee-based EBITDA is growing from $3.9 billion in 2026 to $5.2 billion in 2030. So that implies a 7.1% CAGR. So just trying to reconcile that with the 5% to 7% long-term growth target and just make sure we're interpreting the numbers correctly.

Yes. Sure, Praneeth. Great question. It's Cam here again. I think when we think about building up that range, we sort of think about -- if you're very right, if you were to take the high end of each of those bars, so you take the midpoint of 2026, you add the $1.20, you had the $0.65 and you add the $0.30, that obviously gets you to 7%. Recognizing that it's a plan. And as we said earlier in this presentation, there are some things which we're more or less advanced on or have more or less visibility to today, we wanted to present a range.

And so if you look at the bottom end of those ranges in each bar, so the $6.76, the $1.10, the $0.40, that actually gets you to the 5%. I think what we're ultimately trying to communicate with that is that we have a lot of certainty around achieving a 5% growth rate through that, and we have very good visibility to achieving a 7%, both of which we think are quite compelling in the construct of the market today.

Got you. That's helpful. And maybe just turning to the Alliance open season. So it looks like it's 350 million cubic feet per day. So on paper, that's larger than a 900-megawatt data centers, probably 110 MMcf per day of gas needs. So should we interpret that as potentially sizing the Alliance expansion to support not just the Phase 1, but Phase 2 at Greenlight? Or are there other downstream demand opportunities? And then tied to that, can we assume, I guess, based on kind of the guidance, the slide deck on Page 34, can we assume that the combined project, which would be Greenlight and the Alliance expansion kind of fits in that 7x build multiple range that you're targeting?

I'll take the first part of that question and maybe hand it over to Cam. Chris mentioned earlier in one of the questions around the runway that we have on the Alliance Pipeline. This -- you pointed out the 350 million, that does give us incremental runway to do more than the roughly 900 megawatts. But it also is just in the overall methane demand in and around the Alberta Industrial Heartland continues to grow. So it's not just Greenlight, other gas to power, there is other industrial demand that is in behind that.

And Praneeth, just to address your second question, what I would say firstly is that the commercial negotiations on that project or both of those are sort of -- not sort of formally buttoned down at this point. So forgive me for the way I answer this. But I guess what I would say is that, obviously, those projects do make up a meaningful part of that underdevelopment portfolio and obviously do influence that. I think we've long talked about those -- that type of opportunity sort of in a typical midstream-like build multiple or return kind of framework. So I'll sort of put those 2 data points together for you. And obviously, the math sort of has to work a certain way, but I think it's probably pretty consistent with what we said historically.

There are no further questions at this time. I will now turn the call back to Scott Burrows, CEO, for closing remarks.

Well, thank you, everybody. Thank you for your time today, and we look forward to continuing the discussion. Have a great day.

This concludes today's call. Thank you for attending. You may now disconnect.

Hello, everyone. Thank you for joining us, and welcome to the Pembina Pipeline Corporation Q4 2025 Results Digital Conference Call. [Operator Instructions]

I will now hand the call over to Dan Tucunel, Vice President of Capital Markets. Please go ahead.

Thank you, Jade. Good morning, everyone. Welcome to Pembina's conference call and webcast to review highlights from the fourth quarter of 2025. On the call today, we have Scott Burrows, President and CEO; 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 management discussion and analysis dated February 26, 2026, for the period ended December 31, 2025, as well as the press release Pembina issued yesterday, which are all available online at pembina.com and on both SEDAR+ and EDGAR.

I will now turn things over to Scott.

Thanks, Dan. Yesterday, we reported our fourth quarter results, which included earnings of $489 million, adjusted EBITDA of approximately $1.075 billion and adjusted cash flow from operating activities of $731 million or $1.26 per share.

For the full year, we delivered earnings of $1.694 billion and adjusted EBITDA of $4.289 billion. We achieved record annual volumes across our Pipelines and Facilities divisions, which represented a 3% increase over 2024. Full year results also included adjusted cash flow from operating activities of $2.854 billion or $4.91 per share.

Each year, I'm always proud to look back and reflect on our team's many accomplishments. 2025 was no exception. In addition to solid financial and operating results, we also advanced strategic projects and strengthened our long-term competitive positioning. I'm particularly proud that Pembina continues to deliver on its promises, including providing safe and reliable operations, meeting its financial targets, constructing major projects on time and on budget and continuing to execute its strategy with an improved risk profile. Several notable achievements in 2025 and early 2026 stand out.

Safety is a core value and the foundation of Pembina's operations and culture. While the journey never ends, I am pleased with our strong safety and environmental performance that exceeded our internal 2025 targets, highlighted by improved performance across key indicators relative to our 3-year averages. We advanced construction of several growth projects, including the RFS IV propane-plus fractionator at the Redwater Complex, the Wapiti natural gas processing expansion and the K3 cogeneration facility. All 3 projects are trending on time and on or under budget. The Wapiti expansion and K3 cogen are currently in the commissioning phase and are expected to be in service in the next few weeks, and we look forward to the RFS IV expansion coming online during the second quarter.

Additionally, under previously announced funding agreements, PGI in collaboration with certain producer customers expects to place approximately $725 million of new infrastructure into service throughout 2026, all supported by long-term take-or-pay agreements. approximately $725 million of new infrastructure into service throughout 2026, all supported by long-term take-or-pay agreements. We supported our long-term resilience through extensive recontracting across the business. These contracting successes support continued utilization of our assets, help ensure our stable cash flow stream and create the foundation for future opportunities.

In 2025, we renewed existing contracts and executed incremental new contracts totaling over 200,000 barrels per day of conventional pipeline transportation capacity. This includes successfully recontracting substantially all available for renewal on the Peace Pipeline system under contracts expiring in 2025 and 2026. We look forward to providing further contracting updates throughout 2026.

As part of the toll review at Alliance Pipeline, we significantly extended Alliance's long-term contractual profile as shippers elected a new 10-year toll option on approximately 96% of available capacity. And we contracted the remaining capacity available on the 100,000 barrels per day Nipisi pipeline, which was reactivated in 2023 to serve the growing Clearwater heavy oil play. Having fully contracted Nipisi, we are now focused on opportunities to increase egress capacity to respond to strong customer demand for incremental services.

In response to growing demand for condensate and NGL transportation, we progressed development of conventional pipeline expansions to reliably and cost effectively meet rising transportation demands from growing production in the Western Canadian Sedimentary Basin. In late 2025, Pembina announced that it is proceeding with its Fox Creek-to-Namao Expansion of the Peace Pipeline system, which will add approximately 70,000 barrels per day of market delivery capacity to the Peace Pipeline system. And yesterday, we announced 2 additional expansions of our Northeast BC pipelines, the Birch-to-Taylor Expansion and the Taylor-to-Gordondale Expansion. In total, these 3 expansions represent $625 million of investment to ensure Pembina's continued ability to service growing volumes in Northeast British Columbia and Alberta.

We took steps to significantly enhance our propane export capabilities through a new 30,000 barrel per day LPG export agreement with AltaGas at its West Coast terminals and the sanctioning of the Prince Rupert terminal optimization project. Through these 2 initiatives, Pembina ensured access to 50,000 barrels per day of highly competitive propane export capacity to premium priced markets, including Asia for Pembina and our customers' propane.

On the Cedar LNG project, we advanced construction of a floating LNG vessel to over 35% complete and significantly progressed the onshore construction activities. Further, Pembina met its commitment to investors by completing the remarketing of our 1.5 million tons of annual Cedar LNG capacity by signing long-term agreements with PETRONAS, a global LNG industry leader and Ovintiv, one of the largest liquids-rich natural gas producers in Canada. In addition to increasing Pembina's expected financial contribution from the project, these agreements further validate the Cedar LNG project and highlight the strong demand for global export capacity given the clear advantages of Canadian West Coast LNG, including competitively priced feedstock and advantaged shipping distance to Asian markets.

Finally, Pembina and its partner, Kineticor made significant progress on the development of the Greenlight Electricity Center, securing the required power grid allocation for the proposed third-party innovation center, which was subsequently assigned to a potential customer of Greenlight and completed a land sale agreement with the customer. We also ensured the availability and delivery timing of 2 turbines to support the approximately 700 -- 900-megawatt first phase of Greenlight. Greenlight represents an extension of Pembina's existing value chain and an opportunity to enhance growth by investing in long-term contracted infrastructure with an investment-grade counterparty while diversifying its customer base and would create incremental demand for natural gas and associated liquids production within Western Canada. Pembina and Kineticor continue to progress various work streams, including finalizing a commercial agreement with the customer, engineering, procurement and regulatory activities and expect to make a final investment decision in the first half of 2026.

It was a busy and productive year for the Pembina team, and I look forward to building upon our momentum from 2025 as we strive for even greater success in 2026. We are planning to hold a webcast and conference call on April 7, where Pembina's officer team will provide a general business update and long-term outlook. Additional details will be communicated in the coming weeks.

I will now turn things over to Cam to discuss in more detail the financial highlights for the fourth quarter and full year.

Thanks, Scott. As Scott noted, Pembina reported fourth quarter adjusted EBITDA of $1.075 billion. This was a $179 million or 14% decrease over the same period in the prior year, which primarily reflects a $118 million lower contribution from marketing and new ventures, the impact of a new toll structure and revenue sharing mechanism on the Alliance Pipeline and a $37 million period-specific capital recovery that impacted 2024 with no similar impact in 2025. These factors were partially offset by volume growth and solid performance across the Pipelines and Facilities divisions.

Looking at quarter-over-quarter results by division, the major factors impacting the quarter in Pipelines included higher volumes on the Peace Pipeline system, lower operating expense on the Cochin pipeline, lower revenue on the Canadian portion of the Alliance Pipeline as a result of reduced long-term firm tolls and impacts from the new revenue sharing mechanism under previously announced settlement, offset by higher demand on seasonal contracts, lower revenue on certain pipeline assets due to period-specific impacts of capital recoveries recognized in the fourth quarter of 2024 and lower interruptible volumes on the Cochin pipeline due to narrower condensate price differentials.

In Facilities, factors impacting the fourth quarter included lower revenue related to period-specific impacts of capital recoveries recognized in the fourth quarter of 2024 on certain PGI assets and higher operating expenses as well as higher contribution for PGI assets, primarily due to higher volumes and the impact of the acquisition of a 50% working interest in Whitecap's Kaybob Complex during the fourth quarter of 2024.

In Marketing and New Ventures, fourth quarter results reflected the net impact of narrower NGL frac spreads, partially offset by realized gains on NGL-based derivatives and lower realized gains on crude oil-based derivatives due to lower volumes and narrower price spreads.

Finally, in the Corporate segment, fourth quarter results were lower than prior period due to higher long-term incentive costs, partially offset by lower noncompensation-related expenses. Earnings in the fourth quarter were $489 million. This represents a 15% decrease over the same period in the prior year.

In addition to the factors impacting adjusted EBITDA, the decrease in earnings in the fourth quarter was primarily due to the net impact of higher depreciation and amortization expense in pipelines, lower other expenses recognized in the share of profit from PGI as 2024 included costs related to asset disposals, higher share of profit from Greenlight due to a gain on sale of land to a third-party potential customer and various unrealized gains and losses on derivatives, a gain recognized by Pembina on a sale of land to a third-party potential customer of Greenlight, combined with lower net finance costs and lower acquisition and integration costs, offset by higher restructuring costs, and finally, lower income tax expense.

Total volumes in the Pipelines and Facilities divisions were 3.7 million barrels of oil equivalent per day in the fourth quarter. This represents an increase of 1% over the same period in the prior year. Higher fourth quarter Pipelines volumes were driven primarily by higher interruptible and contracted volumes on the Peace Pipeline system, an increase in volumes on AEGS as the fourth quarter in 2024 was impacted by third-party outages, an increase in contracted volumes on the Nipisi pipeline, lower interruptible volumes on the Cochin pipeline due to narrower condensate price differentials and the sale of the North segment of the Western Pipeline in the third quarter of 2025.

Higher fourth quarter Facilities volumes were driven primarily by the acquisition of Whitecap's Kaybob complex in the fourth quarter of 2024, higher volumes at the Dawson assets due to higher natural gas prices, higher volumes at the Duvernay Complex and a decrease in Aux Sable volumes due to lower ethane extraction.

The fourth quarter contributed to solid full year results that included earnings of $1.694 billion, adjusted EBITDA of $4.289 billion, cash flow from operating activities of $3.301 billion or $5.68 per share and adjusted cash flow from operating activities of $2.854 billion or $4.91 per share.

During the fourth quarter, Pembina announced a 2026 adjusted EBITDA guidance range of $4.125 billion to $4.425 billion. The midpoint of the 2026 guidance range represents 2023 to 2026 fee-based adjusted EBITDA per share compound annual growth of approximately 5%, positioning Pembina to deliver on the target we originally provided at our 2024 Investor Day. Based on Pembina's existing strong financial position, the 2026 year-end proportionately consolidated debt to adjusted EBITDA ratio is expected to be approximately 3.7 to 4.0x. Excluding debt related to the construction of the Cedar LNG facility, which is expected to enter service in late 2028, this ratio would be approximately 3.4 to 3.7x.

With 2026 serving as the peak investment year for Cedar LNG, 2026 is also expected to represent the peak year for Pembina's proportionally consolidated debt to adjusted EBITDA ratio. With incremental cash flow from projects entering service and a significant ramp down in Cedar LNG spending post 2026, Pembina's leverage is expected to return to the lower end of its target range of 3.5 to 4.25x.

I'll now turn things back to Scott.

Thanks, Cam. Doing what we said we would do is core to Pembina's leadership team, and I believe our 2025 accomplishments and our longer track record as a company speak to that. We continue to focus on providing safe, reliable, responsible and cost-effective energy infrastructure solutions. I believe we are uniquely positioned to capture incremental new volumes in the growing Western Canadian Sedimentary Basin and connect our customers to high-value global markets while unlocking new opportunities beyond our strong legacy business. Our entire organization is focused on ensuring the long-term resilience of our business and providing investors with visibility to attractive growth throughout the end of the decade and beyond.

Thank you for joining us this morning. Please go ahead and open up the line for questions.

[Operator Instructions] Your first question comes from Aaron MacNeil of TD Cowen.

I'm hoping you can sort of give a bit more detail on the decision not to pursue the full Taylor-to-Gordondale Expansion. And I realize this could very well be my own misinterpretation, but my impression was that this would likely go ahead once the permits were in place. So either way, I guess I'm just wondering, has anything in terms of your outlook changed? Are you opting for maybe a lower risk approach? Has ARC's decision to remove the second phase of Attachie sort of caused you to pause this a bit? Or is it the commodity outlook? Or maybe I'm just overthinking it, and this was always the strategy. So just any insights there would be helpful.

Aaron, it's Jaret. Thanks for the question, and I think it's a really good one. So like we said in our press release, we've got 3 projects on the go on the pipeline -- conventional pipeline side, our Fox Creek-to-Namao, which we talked about there a few quarters ago, our Birch-to-Taylor and then our Taylor-to-Gordondale kind of like, we'll call it Phase 1. All of this capital, 100% is being driven by really Canada unlocking our egress constraints. We have our oil constraints being alleviated, which is driving more demand for condensate. Our condensate import pipelines are fairly tapped, ours and third party. So that's going to drive a lot of condensate domestic growth.

And then obviously, with that condensate comes natural gas and that egress constraint is also being lifted with LNG Canada being ramped up, Cedar coming online, other projects, et cetera. So that's really driving the need for condensate and NGLs. And I know you know that, but I think it's important to ground ourselves that a lot of that growth is coming from, obviously, the Montney, but specifically up in that neighborhood of, I'll call it, north of Taylor BC up into that north of Fort St. John, Fort Nelson geographic area, a lot of it is coming from there. That really drives to the Birch-to-Taylor project, if you think about it that way.

So first off, I want to say that, that project, the collaboration and the consolidation of the industry, the indigenous communities and our partners, the BC government and the BC regulator, that was a tremendous outcome for us getting all of our hurdles in place and behind us collectively. That project really is allowing us, number one, it's going to grow our condensate and natural gas liquids, specifically C3+ capacity. It's really to meet their needs, the growth demand that I talked about for all those other reasons.

I think also, Aaron, sanctioning that project now and bringing that online kind of the end of '27 into '28, it really -- it shows the -- we've been really good at project execution. We pride ourselves on our safety record. We pride ourselves on working with local communities and subcontractors, et cetera. And I think really getting focused on making this project a cost focus and a safety-focused project versus a schedule-driven project because we all know our customers can drill significantly faster than we can build long linear assets. So that's kind of Birch-to-Taylor.

Now I'll get into actually your question. So like you said, February 10, we did receive our federal permit for Taylor-to-Gordondale. And I really think about Taylor-to-Gordondale as growth in the Montney in 2 other specific regions geographically. I'm going to call it the Dawson Creek area. So southeast of Taylor, we're seeing a lot of growth in the Montney in that neighborhood. And you're seeing -- it's the condensate and the C3+ once again. And then on the Alberta side of the border, you're seeing a lot of growth in the Montney in what some refer to as the Peace River Arch in and around that Gordondale and up to the western side of the Alberta border. Ultimately, that -- getting that permit was also a tremendous amount of work. We did have some, I would say, objectives, commercial objectives, but I think our team persevered and got that. We will need that project full stop one day. The condensate, and it's in the near future due to all the exact same demand. The condensate is growing in that area, the C3+ is growing in that area.

But what I will say is one of the things about Pembina is not only our ability to build projects on time and on budget. We also our flexibility of our infrastructure and our people. Our people really took a step back and work collaboratively with operations, our engineering hydraulics teams, and they came up with a little bit more of a capital-light solution. All of this capital we required for the full build-out, but a capital-light solution, which really is a prudent deployment of capital, which Cam gives me a high five for all the time. And it still allows us to meet our customer needs and meet their egress demand, almost like as they grow, it's almost on demand, we can go out and build this.

So hopefully, that provides you a little bit of color. We don't see this due to overall certain customers talking about production profiles and condensate is growing, natural gas is going to come with it. Pembina's ability to grow with our customers is, I think, better than anyone else in the basin.

That's a lot more detail than I was expecting. I can -- maybe second question. I can appreciate that marketing fundamentals have been challenging year-to-date, but we've seen Canadian gas prices decrease in the last few weeks. Liquids pricing is on balance up since you released the guidance, which should sort of improve the frac spread and other marketing strategies. So I guess I'm just wondering if you'd characterize your previously disclosed marketing outlook is maybe a bit better on the margin now than you previously thought as we get sort of closer to that annual recontracting window?

Yes. Aaron, thanks. It's Chris Scherman. I think we've all seen significant volatility to start the year. Obviously, we're only 60 days in. And you just referenced it, we're happy to see the price outlook for the remainder of the year improve, especially sort of over the last week. And I think all in all, things are actually looking positive for us for the remainder of the year. I'd highlight the first 45 days of the year. We definitely saw some headwinds on U.S. frac spread, primarily as a result of U.S. weather, which drove up Chicago gas prices. But given those U.S. frac spread headwinds to start the year, combined with the improved outlook for the remainder of the year, right now, we're still looking to be slightly ahead of the midpoint on our marketing guidance for the full year.

I'd highlight there's still a lot of year left to go. I'd also highlight that given those headwinds earlier in the year, we can probably expect a little bit of a reshaping of the profile through the full year, but we're optimistic and sort of remain on plan for the full year.

Aaron, I'll just -- maybe -- it's Jaret here. Just on the flip side of that, obviously, with really high Chicago gas prices, that puts pressure on our frac spread business. But it also -- the AECO to Chicago spread drives fee-based business to offset some of that noise. And then obviously, I think Cam might talk to it, but we're seeing some fairly strong fluctuations in FX just over the last 60 days, et cetera.

Your next question comes from Jeremy Tonet from JPMorgan Securities.

Just wanted to go to the Tourmaline contract extension, if I could. And just wondering how that looks -- how that shakes out economics versus prior. Just wondering with the market right now, how it's developing, does it look similar on a same-store basis there? Or how are things evolving?

Jeremy, it's Jaret. So first off, really pleased to extend our partnership with Tourmaline. They're obviously one of our largest customers and one of the largest producers in Western Canada. And it always kind of -- it warms my heart to see that the Cutbank Complex, which is Pembina's original acquisition in the gas processing back in '09 that we're continuing to see flat production, growing production in and around that area.

So with respect to tolls, we won't get into the details on that. But obviously, I'll break it down into a couple. Pipe and frac tolls, you'll see those consistent with the rest of our business. It wouldn't be specific to this customer in this area. And then on the PGI side of our business, the gas economics and the overall netbacks in and around this area, they are strong because of the liquids production that comes out of it that supports the overall netback for our customers. So in this area, you don't have to see a lot of toll erosion in order to meet the customers' needs on the processing side.

With that said, although we're extremely excited to extend this partnership, you recall in Q3, we recorded a small write-down with respect to one of our processing contracts that didn't get extended in a different geographical area of the Deep Basin. So -- but with that said, since that date of that press release and talking about that expiry, our teams who are focused on filling our assets every day have essentially recovered 60% of that value, and we'll continue to backfill that portion of the business. Also, Jeremy, that has been fully baked into our -- the recontracting and the Q3 announcement that has fully been baked into our 2026 guidance and our overall long-range plan.

Okay. Great. Great to hear on that recovery there. I was just wondering if we could step back a little bit, take a higher view of the basin, kind of picking up with the current commodity price outlook and how that, I guess, impacts the driller activity expectations for your customers. We've seen volatility out there. Just wondering what's the latest conversations you're having with customers, ARC and others and how you expect, I guess, activity to change over time?

Yes, Jeremy, it's Scott here. I would just caution that, like Chris said, it's the increase in commodity price has happened pretty rapidly here. And let's break that down. I mean it's really been on the crude oil price. I mean, we still have seen a ton of volatility in AECO and AECO and Station 2 today are kind of where we started the year, if not slightly below. Propane has kind of remained flattish. So it's very commodity specific, and the crude oil run-up here has just happened very shortly.

So I would say this short-term run-up, I don't know that it's been sustained enough to say that producers have changed their activity from the start of the year. There's also been a fair bit of M&A to end last year. And I think as people work through closing those transactions, hopefully, over the next couple of weeks or months here, we'll see kind of revised drilling plans. This comment is not specific to the recent M&A because, obviously, you can't talk about that.

But historically, what I would say over the last 2 years, as we've seen some of the consolidation happen, we've actually seen an acceleration of volumes most people don't buy another company to keep production flat or decline it. Typically, we've seen growth. So we're excited to see what could come out of some of the consolidation, but I can't speak specifically to that just yet.

Maybe just further to that, when I break it down into the different geological formations, I'll start with like in the old school Drayton Valley area, we're also seeing these prices even at $60, we're seeing a tremendous amount of drilling. And even as you talk about the South Duvernay, et cetera, our system out in that area, obviously, is seeing strong volumes. If you move up into kind of that Peace River Arch area again that I talked about, you are seeing a lot of companies talk about Charlie Lake oil. That's continuing to grow and Pembina has oil assets in the area to capture those volumes into the Edmonton market.

If you go kind of north, back up our Clearwater area, the Nipisi pipeline, based on all of the connections we have today and the pumps we have in place, you're seeing the upstream customers really talk about the recovery factors increasing the drilling results, how economic they are. You can continue to see Nipisi capture more and more of those volumes, and we're working on -- I talked about the optimization we did at Taylor-to-Gordondale. Our teams are driving some really cool cheap expansions on the Clearwater -- for the Clearwater customers on the Nipisi pipeline.

And then when you think about the Montney, I think I touched on it, but our customers, they have so much land across so many geographical areas and Pembina's system obviously expands a significant geographical area. Our customers, if they're having some challenges or they're maxed out on capacity in one area or constrained by natural gas egress in an area, they can always redeploy capital. Like I said, the oil sands needs condensate. The import pipelines are fairly full. It has to come from somewhere and our customers, the Alberta innovation or the Western Canadian Energy innovation, it will unlock this condensate. And I think our system is pretty primed to capture it. So things are in good shape.

Your next call comes from Theresa Chen from Barclays.

Now that Dow has provided a revised time line for Path2Zero with Phase 1 expected by year-end '29 and Phase 2 by year-end '30. Could you provide an update on the different options you're evaluating at this point and infrastructure investment necessary to supply the 50,000 barrels per day of ethane for your commitment?

Thanks for the question. It's Chris. So obviously, we're very pleased to see the project moving ahead in line with really our expectations. As we've touched on Dow before and you're referencing, the minor delay in the project has allowed us to reevaluate how best to serve the customer here, what the most efficient capital-efficient infrastructure options are to serve the customers' needs. We will be out this year clarifying that. That work continues. We keep pointing down that path.

So we look forward to making FID on these additional infrastructure this year, but we can't provide any more detail today on the call. Obviously, Dow, a valued partner to us, congratulate them on the progress they made on the project, and we look forward to getting more details out to the market and progressing.

Understood. And turning to Greenlight, given the progress there, the grid allocation, land sale and turbine availability, what are the key next steps and decision points from here? What is the expected time line for contracting FID and in-service thereafter?

You bet. So Chris again. Obviously, we've made significant progress since forming that JV. You referenced it, right, in 2025. We secured the 907 megawatts of AESO allocation, which we subsequently assigned to our potential customer, entered into agreements on turbines, locked those up, got where we needed to be in the queue for those, closed our land sale to set our customer up for success. both on the base project as well as a bunch of growth. So as we're looking forward now, we're targeting an FID in Q2. We're positive on that time line and really focused on 3 work streams between now and then.

Number one, commercial. So we continue to work through negotiations with our potential customer. We're in the middle of those negotiations. So obviously, limited details on that at this point. But I'd say they're going as expected. Time lines are going as expected, and we have confidence we're going to reach a midstream-like long-term contract to underpin this commercially.

Secondly, regulatory, we're making great progress. We don't view this as a high-risk work stream for the project, and we're not part of the discussions between the customer and the government, but we understand those are going really well. There's more information that's come out on the levy and the rest of it, which is, I think, positive and in line with expectations.

And then finally, third work stream engineering. So we're working through our FEED. We've got top-tier global engineering partners in that. That's progressing well, all pointed towards Q2 FID targets. So Scott spoke about it in his opening remarks, but I think things are going as we hoped on this. We think the project remains a tremendous on-strategy extension of our business, and we're excited to get it across the line here in Q2.

Your next question comes from Sam Burwell from Jefferies.

I wanted to see if you could give an update on the Alliance short-haul expansion project. I think back in 3Q, you talked about running an open season during the first quarter of this year. So curious if there's any update on the progress you're making there?

Jaret here. So we continue to see strong demand in the Alberta Industrial Heartland area for natural gas to progress other industries. There's still a few days left in the quarter, and you should expect to see an announcement fairly shortly.

Okay. Great. And I guess just like one quick clarification on the Tourmaline deal. Was all of that renewals of existing business effectively? Or is there anything incremental on the transport side or the frac side?

No, it was all -- essentially all of it was renewal, same volumes.

Your next question comes from Robert Hope from Scotiabank.

Just want to maybe dive a little bit deeper into the timing of the April 7 presentation. Is there anything specific driving that? Do you think you'll have some incremental clarity on some of the projects that you're progressing? Or is it April 7 just to kind of make it a stand-alone event rather than giving we'll call it, longer-term guidance today?

Robert, it's Cam here. Yes, really, I mean, honestly, a couple of factors. One, we recognize there's a window here for market participants that works better or worse. And so as we get into March, we start to interfere with potentially other commitments. But I think probably more presently, things are moving fast, obviously, with certain of our key growth opportunities. And so our objective when we release the long-term guidance is to give you and our investors as much granularity and as much concreteness to that buildup as possible.

And so I think our objective this time around, whereas in 2024, we generally gave a growth outlook and some pieces, which would support that. we're really trying to provide the market with a really robust buildup to that. And so we'd love to be in a position to have obviously the most certainty possible around that buildup. And that's the biggest factor that aligns with the sort of post Q1 timing.

I appreciate that. And then you've touched on most of the kind of, we'll call it, the $4 billion bucket of potential projects, but PGI infrastructure was one that was highlighted as an opportunity set that you're advancing. Can you maybe expand a little bit further what opportunities you could see as the next phase of growth for PGI?

Rob, Jaret here. Yes, you know what, PGI is going to continue to grow their business. We obviously step one with respect to that business is filling white space. So some of the announcements we made with the infrastructure build-out we're doing with Whitecap in and around the Lator area, that's really all designed to, one is fill existing white space at some plants in and around that area, but also then to grow the liquids volumes on to Pembina's Peace Pipeline system and the NGLs into Fort Saskatchewan and Pembina's Redwater facilities. After that, we're looking at continuing to build out organically. There are opportunities out there that we're evaluating. So probably more to come on that.

And then lastly, there's always the inorganic stuff. I think PGI out of any one of the gas processing businesses in Western Canada has been ahead of its time with respect to creativity. And being on the board with KKR, we continue to encourage and press the team on to come back to us with more and more of those creative ideas. So that's kind of how we see the business there.

Your next question comes from Spiro Dounis from Citi.

First, let me congratulate you all on your silver medal in hockey, hard fought. Sorry if that's too soon. Going to the questions, I'll keep them above the belt here. Maybe just going to contract renewals. Scott, you mentioned over 200,000 barrels a day contracted last year and more to come in 2026. So maybe could you provide a broader commercial update on what you're expecting this year? Is it similar to 2025? And any reason we can expect different outcomes, either positive or negative?

Yes. Thanks for the question, and I'll ignore the comment. Maybe next quarter, we can talk about it. But yes, I think we did try to highlight it, obviously, a very, very successful 2025. We feel like we started off the year strong, as Jaret mentioned, both with the Tourmaline recontracting, but as well as the success on Alliance and Nipisi.

And so in terms of specifically to 2026, again, we're not going to get into specific contract profiles. It's obviously a competitive dynamic. But what I will say is that we would expect to have a little more granularity on this on our April 7 update and talk a little bit about more where we're at year-to-date and what our expectations are. So good question, but I don't want to front run our April 7 update.

Yes. I totally respect that. Second question, maybe just going back to Taylor-to-Gordondale. Just curious how you're thinking about the cadence and the timing for the remaining expansion phases, how you think you're going to break it up? And I ask because it looks like the CapEx guidance is unchanged here. And so do the remaining phases FID in '26? It sounds like it could be after that.

Yes, great question. I also put your comments behind me while I answer your question. Yes, so the short haul or the Phase 1, pardon me, the short-hauls Alliance Phase 1, that's fully baked into our 2026 capital guidance right now. And with respect to FID timing, obviously, it will be shortly in the future. You'll probably hear a little bit more on April 7 with respect to that. But it's really -- we have some flexibility now to go and be very focused on project execution on this Phase 1 and Phase 2 will be coming really as we start to fill up these next phases.

And like I said earlier to my question to Aaron -- or answer to Aaron was really, it's almost like an on-demand ability for us to grow with our customers. And then also, we'll be we have ordered our pipe, and we have ordered obviously, some of the aboveground equipment like pumps and all that stuff. So that's all part of the process and for the full build-out. So we will just deploy that capital as required.

Your next question comes from Praneeth Satish from Wells Fargo.

Maybe just turning to Greenlight. So I understand the commercial details, they're still being finalized. But can you provide any high-level guardrails on maybe the minimum IRR that you'd look to achieve here? And also whether this would be a take-or-pay or cost of service like contract? And then as a follow-up, I guess, if you were to FID greenlight, considering it's got an in-service date pushing into the next decade, would this influence your long-term EBITDA CAGR guidance that you plan to give in April? And I guess, how far out do you think you could reasonably guide if you get this project?

It's Chris. I'll take the first part on greenlight and then maybe turn it over to Cam to talk about guidance. As I mentioned, we're in the middle of negotiations. So unfortunately, Cam provide limited guidance. But what I can say is it's a long-term contract. It's a long-term contract with midstream-like attributes. It looks a lot like our core business, and we're really pleased with the fact that we've been able to do that.

I think when it comes down to it, if you think about it on a build multiple basis, it's going to look a lot like other Pembina greenfield projects that we've been doing under long-term contracts with ancillary benefits down the road as we think about integrating gas supply and the other components into it, looking to drive that down over time, consistent with how we've pursued other projects in our core business.

Yes. I'd just add a little bit of color. Obviously, we have a partner on the file and therefore, a private equity partner and therefore, would need to project finance the project, which when you stack those 2 things up, you can assume that there would be a low-risk EBITDA profile in order to support a project finance.

And Praneeth, it's Cam. I'll just pick up on one thing that Chris said around the structure. And that is want to reiterate and make sure everyone understands that while the project in its own right is a really interesting project. One of the things that really sells it for us or really gets us excited about it is the integration with the rest of our business. And so you've heard us talk about it, and I think we'll be in a position to talk more about it or more succinctly about it as we get to our April 7 presentation.

But in summary, I mean, there's a ton of integration potential around the Alberta Industrial Heartland. And I think the so what of that is it really starts to take a greenfield-like return profile and really turn it into a brownfield-like return profile ultimately for Pembina. And so that's what gets us really excited about that, and you couple that with a low-risk contract structure. Growth outlook, obviously, as we've said before, once these types of opportunities get built and certainly has been the precedent on the southern side of the border, they tend to cluster. And I think as we walked our Board through yesterday, we have a ton of advantage in terms of our Alberta industrial Heartland position, everything that comes along with that. And so getting the first one in the ground gives us a huge advantage in terms of building a business out of this.

Got you. That's very helpful. And then you kind of touched on this, but I guess with the Nipisi pipeline, running full. Can you walk us through, I guess, some of the next phases of potential expansion, what that might look like? Is that -- it sounds like you're adding incremental capacity through additional pump stations, if I heard correctly, so at a low CapEx cost. But I guess how much more of that can you do? And yes, and how should we think about the likely commercial structure here? Is this kind of fee-based or cost of service, some of the expansions that you're looking at?

Thanks. So as Jaret touched on, and he can provide a little bit more color, we are going through some debottlenecks, which can add, as you pointed out, some very reasonable both from a return and from a time-to-market debottlenecks. I think the bigger picture here longer term is we have an opportunity to expand portions of that pipe to add significant capacity. And so we're right now doing the engineering and continuing to advance the engineering on what that might look like and are having commercial discussions. So we kind of have a 2-phased approach. We have the early debottlenecks and then we have a larger potential winning of the pipe. Jaret or Chris, anything there you guys want to add?

I would just add that when we say right now that -- so commercially, we're contractually full for the base asset, but we do have a third party that's going to be making connection in the next few months that will get us to physically being full on a physical basis. And then the debottleneck projects I talked about will give us about 20% to 30% incremental torque on that asset. And that truly is through drag-reducing agent that we use every day on our Cochin pipeline. We're very familiar with how that works, and we'll try to work in installing that and then just some minor horsepower upgrades to get that capacity.

Cameron?

It's Cam. I just want to -- yes. I just want to chime in one more piece here. And I think it's worth noting that the history on this asset is something that we're quite proud of and I think speaks to our business and our commercial attitude overall, which is, obviously, this asset was in a different form of service with a different customer pre-2021, and it was underpinned by a long-term contract at this point. We obviously took out a service because we thought that was the right thing to do in light of the options. And as we sit here today, the EBITDA that this pipe will generate in 2026 is materially above what it did in the former service under the foundational contracts like to the tune of 50%. So -- and we see significant growth opportunity on top of that. So we're really pleased with our approach to that. And I think it speaks to both the diversity and the optionality in our business.

Your next question comes from Maurice Choy from RBC Capital Markets.

Just wanted to start with your capacity to do these projects. You sanctioned a few more projects today. It sounds like you've got at least to Dow and Greenlight projects to come later this year. How would you characterize your remaining investment capacity for the remainder of, say, this decade that you can actually self-fund before your debt-to-EBITDA perhaps moves meaningfully closer to your [ $4.25 billion ] limit?

Yes. Great question, Maurice. It's Cam here. So I'd say I'd go back to some things we said in the past, which is our track record and our intention has been that we obviously seek to fund capital with cash flow after dividends. And at our level that we're at today, we can think about that as roughly plus or minus about $1.5 billion a year in any given year for round numbers. And I would say, obviously, this year, we've talked about how it's the peak year for Cedar. We are running a slight free cash flow deficit in 2026. But as we look forward to 2027 and beyond, we begin to generate meaningful free cash flow, again based on our currently sanctioned project opportunity profile.

As we think about larger opportunities and if you want to think about what might come on top of it, like let's dream for a moment around Greenlight and that becoming a reality and multiple opportunities on top of that. I think that's where we start to like the structure that we have today, which is obviously a partner, and we have that in other parts of our business. We like the opportunities within our business and honestly, look at various financing opportunities, which will enable us. But when you do the really simple math around deploying $1.5 billion at historical return multiples that Pembina has done, you can pretty clearly get to a mid-single-digit growth number for Pembina into a very long term.

And so we like that. We have that investment capacity. And not only just the financial capacity, I think we have the execution capacity. Clearly, we have a really solid track record of executing projects on time and on budget, and we're applying that to projects in our core business as well as some of these ones which are on the face of it new for us maybe, but realistically very similar to what we've done in the past in many other ways and taking a similar strategy. So we're managing the risk from that perspective.

Understood. And if I could just finish up by following up on the 3 streams you discussed on the Greenlight project. I accept that these things are complex, does involve a lot of work. But is there anything material here that is out of your control or your counterparty's control that you see may derail this FID or even the timing of it?

Okay. I'll chime in, and Chris, feel free to add anything. But I think to answer that question, I mean, we are obviously in control of our project and the negotiations with our customer, but we don't control our customers' ultimate decision to FID their innovation center. So there's 2 pieces to this to the puzzle. And I think that's potentially what you're getting at. So there's obviously our piece and then there's the innovation center piece, and that's not obviously within our control.

Your next call comes from Robert Catellier from CIBC Capital Markets.

Just a quick one here on the new pipeline. I'm just curious on the commercial impetus to use a cost of service agreement on the Birch-to-Taylor Expansion.

That's just the legacy of that pipeline. That's how that pipeline has been underpinned for 10 years as soon as since we put it into service. So that's just been the initial contracting, and that's how that pipeline is structured.

Okay. And then I just wanted to turn to LNG and some maybe longer-dated questions here. As you're aware, there's been some media reports about the owners of LNG Canada potentially monetizing their stakes in Phase 1 to -- or partially monetizing in order to fund a Phase 2. And given Pembina had a history of developing export options, I'm just curious on your view or interest in participating in an existing operating LNG facility other than the one you're building.

The second part of that is, if you look ahead and the possibility of a Cedar LNG Phase 2, I'm wondering if there's enough pipeline capacity for Coastal GasLink as is or if it expands to be able to support a Cedar LNG Phase 2 down the road?

Yes. I think on your first question, our understanding from media reports is that it's simply a financing to help fund Phase 2. So that's not something that we're currently participating in. We don't want to be a passive investor in something. So nothing to see from a Pembina perspective on the rumors of a sell-down.

And then on the second part of the question, I mean, we have positioned Cedar to potentially take incremental gas, whether it's the Cedar Link pipeline or a few of the other onshore facilities. And so we would love to do a Cedar 2. But as you pointed out, it's solely dependent on gas supply. And what I would say is right now, our partners at LNG Canada, I think, are pretty focused on getting Phase 1 up and running and engineering Phase 2. So I think until they're through some of those decisions, we won't have a line of sight to that. But we stand ready, willing and able if that's a possibility.

Your next question comes from Benjamin Pham from BMO.

Just on the topic of the value chain extensions and opportunities. I mean Pembina has been pretty good at that part of it. You added gas and LNG and then now power. My question specifically on the power side, is that from your advantage now, is that more getting your feet wet through the DC Greenlight opportunity to do a couple of cogens? Or is there a much more broader potentially per scaled growth allocation that Pembina is looking at?

It's Chris. Well, here's what I'd say. I'd say we definitely see the potential for significant growth in the gas-to-power space, in particular, to power data centers. We think that the Alberta market and the Alberta is ripe for growth in that space, and we think we're really well positioned with our current project with our partners. And so for us, it is one of the growth pathways that we're pursuing, frankly, and see an opportunity to grow into.

We're not looking to grow into the merchant power space. That's not a space we're going to go to. You mentioned cogens, I mean, cogens, integrated cogens associated with existing infrastructure and deals are certainly in play. But as far as the meaningful growth pathway, it's really that behind the meter gas to power to support innovation center growth, which we see a lot of potential.

And I'll just add to that, Ben. If you think about -- I mentioned earlier in the call that gas egress is obviously one of the biggest constraints for Canadians to produce condensate and get it up to the oil sands. A full build-out of Cedar is roughly -- pardon me, a full build-out of Greenlight is roughly 75% of the same gas consumption that Cedar would be. So obviously, driving that for our customers, allowing them to fill our value chain in other areas is pretty key for Pembina.

Okay. Got it. And then the value chain side of things, what's Pembina's current view on the oil side of things, whether it's organic or inorganic?

Well, I think from our perspective, we remain bullish on oil growth. As Jaret mentioned a few times in his comments, we're excited about all the potential debottlenecks on the Enbridge system and on TMX for a couple of reasons. That's obviously going to drive growth in the oil sands, which should have a pull on condensate, which should be good for our overall system.

In terms of Pembina's specific investments as it relates to oil, right now, our -- I'd say our 2 main focuses would be on the Nipisi pipeline, which we've talked to at length today. And then as Jaret also mentioned earlier, the Charlie Lake oil play on our conventional system. So that's really where we're focused from a direct oil exposure, but we are excited and bullish on oil growth in the oil sands and therefore, condensate.

Your next question comes from the line of Sumantra Banerjee from UBS.

Just a quick general one on capital allocation. I know you discussed your comments on leverage and the previous question on investment capacity before. But I just wanted to ask if you had any more color you could add on 2026 capital allocation priorities.

Yes, it's Cam here. I guess I'll just reiterate that for 2026, we're really focused on project execution. And so obviously, we are sustaining a free cash flow deficit in 2026. So barring a material change in our business performance, free cash flow is going to be directed towards capital execution in 2026. Outside of that, we expect to continue. We've had a long track record of a growing dividend, and so anticipate to continue to deliver that in line with our historical trend in 2026 and beyond that. And outside of that, it continues to be just execution all around. Obviously, we continue to reassess things should market fundamentals change drastically. But as we see the world right now, it's sort of steady as she goes in the way we've laid it out in our guidance.

Your next question comes from Patrick Kenny from NBCM.

I was just wondering if we can get an update on the Yellowhead extraction opportunity, assuming that the pipeline starts construction here in a few months. Curious what the timing could look like for your extraction opportunity. And then you talked about how tight the condensate market is, but I guess with Redwater 4 coming online so I just wanted to get an update on how you're thinking about a Redwater 5 based on C3+ fundamentals.

Pat, it's Chris. I'll take the Yellowhead question and then turn over to Jaret. So continue to progress Yellowhead, remain excited about that project. expect something this year, frankly, as far as an announcement if we can keep everything on track and get to where we want to get it.

And Pat, with respect to RFS V, I'll just point out, RFS IV is not on yet, but I'm just kidding. It really will come down to incremental frac capacity, either be it regional or in the Fort Saskatchewan area. Pembina, obviously, we believe we have a great product for our customers today. We have unit train capacity. We have ample storage. We have high reliability and availability. And we do -- RFS IV is being executed at a -- on a dollar per barrel basis, significantly better than any other frac expansions in Western Canada right now.

With all that said, NGL frac capacity is really going to grow with new gas egress. So as we get more and more light and see that LNG Canada Phase 2 or other projects becoming real and in service, that's really -- because that gas demand has to find a home, then the NGLs will get extracted. So I kind of always think of it as frac capacity will continue to grow with gas stress constraints getting unlocked. But we are in a tremendous position to be building V.

Okay. Great. And then maybe for Scott, just high level here as it relates to the grand bargain MOU. Obviously, we're waiting for clarity on carbon policy this spring. I was just curious your thoughts on what industry would need to see in order to support projects like Pathways or even your Alberta carbon grid. Just overall, what needs to happen to support that next major wave of oil sands growth?

Well, I think when we just highlighted a couple of times today, we have what I'll say is some very economic and fast-to-market expansions up to 700,000 barrels. I mean those numbers have been floating around slightly higher, slightly lower on TMX and Enbridge. And to me, that feels like the first wave that's going to be unlocked, and we're pretty excited about that. It's great to see the governments coming together and working in a more constructive manner. I think we're pretty optimistic about what could come out of that.

Specifically as it relates to carbon price, I think just as we've highlighted over the last several years, certainty and regulatory certainty will be a huge impact on whether some of these carbon activities go ahead or not. One of the things that we've talked a lot about -- we haven't talked about our ACG project for a while, but that's not because we haven't been working on it in the background and we continue to progress it. But it's hard to contract it when you don't know what the carbon price is. And I think as we get more clarity on long-term carbon price, that will allow companies to make the decisions that they are going to make around capturing carbon or not. So I'm pleased to see that we're making some progress and optimistic as we move towards April that the governments are going to come together and come up with a plan that works for everybody.

At this time, there are no further questions. I will now turn the call back to Scott Burrows, CEO, for closing remarks.

Thank you for all the questions today and the interest in Pembina. I'd be remiss after talking about all the accomplishments in 2025, if I didn't thank all of our hard-working staff and contractors and communities that we work with. So thank you, everyone. And I think you heard on the call today, we're pretty excited and optimistic about 2026 and beyond. Have a good rest of your day.

This concludes today's call. Thank you for attending. You may now disconnect.

Good morning, ladies and gentlemen, and welcome to the Pembina Pipeline Corporation Q3 2025 Results Conference Call. [Operator Instructions] This call is being recorded on Friday, November 7, 2025. I would now like to turn the conference over to Dan Tucunel, VP of Capital Markets. Please go ahead.

Thank you, Danny. Good morning, everyone. Welcome to Pembina's conference call and webcast to review highlights from the third quarter of 2025. On the call today, we have Scott Burrows, President and CEO; and Cameron Goldade, Senior Vice President and 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 management's discussion and analysis dated November 6, 2025, for the period ended September 30, 2025, 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 our third quarter results, which were highlighted by quarterly adjusted EBITDA of $1.034 billion. We remain on track to deliver full year results within our original 2025 adjusted EBITDA guidance range. And as Cam will discuss in more detail and as we are 3 quarters of the way through 2025, we have updated and narrowed our guidance range to $4.25 billion to $4.35 billion.

As we highlighted in the release yesterday, Pembina continues to execute its strategy through which we strive to do 2 things: one, ensure the long-term resilience of our business; and two, provide investors with visibility to attractive growth through the end of the decade and beyond. The execution of Pembina's strategy is highlighted by a number of recent developments. First, earlier this week, we were pleased to sign a 20-year agreement with PETRONAS for 1 million tonnes per annum of Pembina liquefaction capacity at the Cedar LNG facility. PETRONAS is a global LNG industry leader and one of the largest gas producers in Canada. We are very excited to expand our relationship with them and see this as an important development in Pembina's ongoing expansion of its export business.

Pembina previously signed a 20-year take-or-pay liquefaction tolling service agreement for 1.5 million tonnes per annum of LNG to support the final investment decision on Cedar in June of 2024 and ultimately maintain key project timing and economic parameters within the expectation of remarketing the capacity at a later stage. By remarketing our Cedar capacity, we are fulfilling Pembina's commitment to its financial guardrails and ensuring that the company's expansion into the LNG business is done within the risk profile of its existing business, characterized by its predominantly long-term, highly contracted fee-based cash flow stream.

We expect to reach definitive agreements for the remaining 0.5 million tonnes of our capacity by the end of 2025. Meanwhile, the project itself remains on time and on budget. Construction of the floating LNG vessel, including the hull and topside facilities remain on schedule. And Cedar LNG has significantly advanced the onshore construction work. Pipeline construction is ahead of schedule, including the completion of all horizontal directional drill crossings. This is a major achievement and derisk that portion of the project.

Second, during the quarter, Pembina and its partner, Kineticor, had an exciting announcement on the advancement of the Greenlight Electricity Center, a proposed up to 1.8 gigawatt natural gas-fired power generation project designed to advance Alberta's innovation economy. Recent achievements include securing a 907-megawatt power grid allocation, which was subsequently assigned to a potential customer of Greenlight to enable development of the customers' innovation infrastructure development as early as 2027 prior to the start-up of Greenlight in 2030. In addition, a recently signed agreement with a reputable equipment manufacturer provides certainty of availability and delivery timing of 2 turbines to support the approximately 900-megawatt first phase of Greenlight. Pembina and Kineticor continue to progress towards a final investment decision in the first half of 2026.

We see Greenlight as an on-strategy extension of Pembina's existing value chain and an opportunity to enhance growth by investing in long-term contracted infrastructure with investment-grade counterparty, while diversifying our customer base. Greenlight would create incremental demand for natural gas and associated liquids production within Western Canada, and we believe Pembina is well positioned to leverage the assets and capabilities of our current core business to further support the project and serve customer demand for gas egress and liquids handling and transportation. Most notably, the proximity of Pembina's Alliance Pipeline offers a potential accretive expansion opportunity to supply natural gas to Greenlight.

Third, we continue to realize contracting successes that are strengthening the core business. In our conventional pipeline business, we now have recontracted substantially all volumes available for renewal under contracts with expiry dates in 2025 and 2026. In addition to the previous updates we have provided around various recontracting successes, we recently signed new transportation agreements on the Peace Pipeline system for the renewal and addition of volumes totaling approximately 50,000 barrels per day with a weighted average term of approximately 10 years.

Approximately 80% of the volumes are currently being serviced today and 20% are new volumes taking effect in 2026. Within our transmission business unit, recent shipper elections on Alliance Pipeline has significantly strengthened its long-term contractual profile with shippers taking an average of a 10-year toll option on approximately 96% of the 1.325 Bcf per day of firm capacity available.

Fourth, we continue to deliver on our capital projects on time and on or under budget. In total, Pembina and Pembina Gas Infrastructure are nearing completion on approximately $850 million of projects that are expected to enter service throughout the first half of 2026. RFS IV, the new fractionator within our Redwater Complex has progressed to approximately 75% complete. It continues to trend under budget, and we have narrowed the expected in-service date to the second quarter of 2026.

PGI's Wapiti Expansion, which will increase natural gas processing capacity at the Wapiti Plant is trending on budget, and we have narrowed its in-service date to the first quarter of 2026. And PGI's K3 cogeneration facility is now trending under budget, and we have narrowed its in-service date to the first quarter of 2026. Finally, we are progressing numerous accretive investment opportunities to meet growing demand for pipeline and transportation services.

Pembina is well advanced on the development of approximately $1 billion of conventional pipeline projects to enable WCSB growth and position Pembina to win new liquid transportation opportunities. These investments would be supported by a combination of long-term take-or-pay agreements, a cost of service structure and the land and facility dedications. Engineering activities are ongoing and subject to regulatory and board approval, Pembina expects to move forward with the Fox Creek-to-Namao Expansion of the Peace Pipeline system, a Taylor-to-Gordondale Project a Birch-to-Taylor Northeast BC System Expansion. As well, we continue to observe continued growth from the Clearwater area and strong customer demand for incremental services on the Nipisi Pipeline.

Following successfully recontracting Nipisi over the last few years, Pembina expects it to be highly utilized in 2026 and is currently evaluating opportunities to increase egress capacity. Alliance Pipeline previously solicited nonbinding expressions of interest for a new short-haul point-to-point transportation service on the Canadian segment of its system in Northwest Alberta. The proposed expansion would provide natural gas delivery to a new meter station in Fort Saskatchewan for up to 350 million standard cubic feet per day of incremental capacity with an anticipated in-service date in the fourth quarter of 2029. Based on the results, Alliance Pipeline is planning to launch a binding open season in the first quarter of 2026 for all interested parties.

Pembina continues to differentiate itself as the only Canadian energy infrastructure company with an integrated value chain that provides a full suite of midstream and transportation services across all commodities, natural gas, NGL, condensate and crude oil. Our scope, scale and access to premium North American and global markets uniquely positions us to capture incremental new volumes while unlocking new avenues for growth. I will now turn things over to Cam to discuss in more detail the financial highlights of the third quarter.

Thanks, Scott. As Scott noted, Pembina reported third quarter adjusted EBITDA of $1.034 billion. This represents a 1% increase over the same period in the prior year. In Pipelines, major factors impacting the quarter included higher demand on seasonal contracts on Alliance Pipeline, higher revenue on the Peace Pipeline system due to increased tolls mainly related to contractual inflation adjustments, higher interruptible volumes on the Peace Pipeline system, higher contracted volumes on the Nipisi Pipeline and lower firm tolls on the Cochin Pipeline due to recontracting in July 2024 and lower interruptible volumes due to narrower condensate price differentials, offset by higher contracted volumes.

In facilities, factors impacting the quarter included higher contribution from PGI, primarily related to transactions with Whitecap Resources, higher capital recoveries and higher volumes at the Duvernay Complex. In Marketing & New Ventures, third quarter results reflect the net impact of lower net revenue due to a decrease in NGL margins as a result of lower NGL prices, coupled with higher input natural gas prices at Aux Sable, higher NGL marketed volumes, including no similar impact of the 9-day outage at Aux Sable in 2024 and lower realized gains on crude oil-based derivatives, partially offset by lower realized losses on NGL-based derivatives.

Finally, in the Corporate segment, third quarter results were higher than the prior period due to lower incentive costs driven by the change in Pembina's share price in the period compared to the third quarter of 2024. Earnings in the third quarter were $286 million. This represents a 26% decrease over the same period in the prior year. In addition to the factors impacting adjusted EBITDA, the decrease in earnings in the third quarter was primarily due to the net impact of the recognition of a gain on sale of the North segment of the Western Pipeline, higher depreciation and amortization due to a decrease in the estimated useful life of an intangible asset, a share of loss in PGI due to an impairment on certain PGI assets and higher depreciation expense, partially offset by the recognition of a gain in net finance costs and lower losses on the interest rate derivative financial instruments and commodity-related derivatives.

And finally, lower share of loss from Cedar LNG, primarily due to the impact of hedging activities on the credit facility. Total volumes in the Pipelines and Facilities divisions were 3.6 million barrels of oil equivalent per day in the third quarter. This represents an increase of 2% over the same period in the prior year, primarily driven by higher contracted volumes on the Nipisi Pipeline and the Peace Pipeline system, higher volumes at Redwater and Aux Sable due to no similar outages, which occurred in the third quarter last year.

Now turning back to the full year. As Scott mentioned, we tightened our 2025 adjusted EBITDA guidance range to $4.25 billion to $4.35 billion, which reflects year-to-date results as well as the current commodity price outlook for the remainder of the year. I'll now turn things back to Scott.

Thanks, Cam. As we have summarized today, we have delivered solid quarterly and year-to-date results, both operationally and financially. We remain on track to deliver full year 2025 adjusted EBITDA within our original guidance range and look forward to providing our outlook for 2026 with the release of our guidance and capital budget update in mid-December. As we work successfully to close out 2025 and plan for 2026, we cannot be more excited of what is ahead for Pembina and its stakeholders. Developments within the WCSB are providing tremendous opportunities to strengthen and grow our business. Thank you for joining us this morning. Please open up the line for questions.

[Operator Instructions] Our first question comes from Theresa Chen of Barclays.

Given your updated guidance range and the mention of the current commodity outlook, can you share what you're seeing or hearing from your producer customers as far as the read-through to your pricing outlook as well as your volumetric expectations, not just for the remainder of this year, but also 2026?

Theresa, Jaret here. Yes, right now, obviously, commodity prices are a little lower, hovering around that $60 WTI. So what we're really doing right now is just meeting with all of our customers, really listening to what their short term, the latter half of year the end of '25 and what they need for transportation services going into '26. So we'll have a much more refined outlook with respect to 2026 when we do our guidance and capital press release in December. But right now, we're just really in listening mode and going to really try to meet our customers' needs.

And then maybe just adding on to that from a direct Pembina exposure. Obviously, as we look forward, we're seeing propane prices lower than we saw last year. There is some weakness in propane if you look at where inventory levels are, coupled with a strengthening AECO price, which is, obviously, the opposite of that is good for our customers, but a high price does put pressure on our frac spreads. So we are seeing a little weakness compared to, say, last year in our outlook for frac spreads for Q4, just given those dynamics.

And in relation to Greenlight and your partnership with Kineticor, what are the next steps from here? And if Alliance were to be a source of supply for gas, what kind of uplift would you expect?

Theresa, Chris Scherman, thanks for the question. As we shared in October, we're continuing towards the first half 2026 FID schedule. We're really continuing our commercial discussions with our customer, continuing our FEED work to get our engineering in line in hopes of that first half next year FID. As far as uplift associated with the pipe, I mean, they really are 2 separate projects, but we think each can stand alone on its own 2 feet and really support solid economics.

Your next question comes from Jeremy Tonet of JPMorgan.

I want to go to Project Greenlight a little bit more. I believe last quarter, there was talk about potential for 2029 entering service. And just want to see, I guess, latest thoughts on how you see this unfolding with all the unfolding of the interconnection queue. It seems like there might be some concern in the market. So just wondering if you could provide a little bit more color there.

Sure. Again, it's Chris. So I think there has been maybe a little bit of confusion that's entered the market, right? I think it's worth taking a second to maybe separate the 2 projects and clarify what's happening there. Our customer is progressing their innovation center, and that's really where the grid connections rest and the associated DTS arrangements. I know there have been some disclosure that referenced 2030. Our understanding is that's really an outside date, and they're still pushing towards as early as 2027 for that first phase. The innovation center and the associated grid connections are really our customers' projects. And since we assigned or sold our land and secured those allocated those megawatts to our customer, that's really between them and the AESO. But as far as our project, the related project, we're progressing our 1,800-megawatt gas-fired power generation facility. The first phase of 900 megawatts is, as you referenced, planned for 2030, and all of that remains on track.

Got it. That's very helpful. And just want to touch on the guidance tightening a little bit. It seems like the midpoint moved down just a little bit there. I was wondering if you could dive in a little bit more on the drivers there and just what trends you see coming out of '25 into '26 and how we should think about that?

Jeremy, it's Cam here. No problem. The first thing I'll mention and obviously, to step back for a second, as I think one of the things we anchor on is a very stable and resilient business. And I would say, notwithstanding a ton of variability in the market over the course of 2025, we remain squarely in the heart of our original guidance range from a year ago and continue to be anchored on that in a material sense for the year. When we looked at our outlook back in August for the balance of the year, I would say that based on where we were at that point, we likely expected some option value to come in the second half of the year and particularly the fourth quarter through the marketing business.

We probably expected a little bit more than we've now expected we've seen. So on the margin, we've tightened that guidance range a little bit, obviously, to just to give the market a bit of direction in terms of what we're seeing. At the same time, what I would say is that while it's early, the results in the core business outside of marketing are continuing to trend strong. I would say that from what we're seeing in terms of early results from our October volumes, they continue to be at or exceeding plan. So we're seeing a lot of constructive signs outside of the marketing business. At the end of the day, we saw a little bit -- a little less optionality in that commodity business. So we tightened it up a bit. But materially, we don't see a lot changing in our business.

Your next question comes from Saumya Jain of UBS.

Could you provide more color on the brownfield opportunities you're looking at in the sour gas space? How is sour gas infrastructure currently positioned in the basin? And how would Pembina benefit from it?

Saumya, Jaret. Great question. So yes, as the demand for condensate as oil sands production grows, as oil egress pipelines get debottlenecked out of Western Canada, more and more condensate is going to be required. And a lot of that condensate is coming from the Montney, which does have associated sour gas with it. PGI through our Hythe facility, our K3 facility, Kakwa River, I'm probably leaving a couple off the list, but we have an extensive network of sour gas processing, sulfur recovery and also acid gas injection.

Pembina has successfully -- we're the only entity who's actually built a sulfur recovery unit here in the last -- 25 years, and we did that on time and on budget. So I think our project execution, our understanding of operations in that space and the platform and the footprint that PGI offers, I think we're in a really good spot to enhance the customers' needs and continue to allow them to grow that sour gas production in face of condensate demand.

Okay. Great. And then on the regulatory side, what progress are you seeing at the federal or provincial level? And are there any policies or changes that will especially impact Pembina in the near term?

Yes. I think overall, we're definitely seeing a constructive tone from the federal government. We like what we're seeing. We're seeing it, I think, on the ground in terms of our interactions as well. I think it's a little too early to comment on what new projects may or may not come out of that, but certainly a constructive and supportive tone from the federal government.

Your next question comes from Aaron MacNeil of TD Cowen.

It's great to see Pembina continue to announce contract renewals on conventional pipe. The question we always get is on pricing. I can appreciate that you're not going to get into specifics here. But given the emergence of a competitive alternative, how should we think about renewal pricing and your ability to maintain current margins on a per barrel basis?

Aaron, yes, thanks for the question. So our most recent announcement of the 50,000 barrels of recontracting is a tremendous outcome for Pembina. And why I want to say that is 100% of those volumes are within the competitive alternative transport area. 20% of those volumes flow to the alternative today. And upon reconnection, they will be -- once that project is complete, they'll be flowing on the Peace system. And essentially, all of the volumes, I can tell you, maintained current contracted toll. There's obviously a lot of things that go into a transportation agreement. A lot of different things are important to our customers. Toll is obviously one of them. But there are other factors that go into that negotiation. And in this particular instance, we were able to maintain that.

Obviously, in some areas, at certain receipt points, we will discount our tolls if it's prudent to do so. But those are very calculated decisions that we make. I would point out that I know we don't externally show this information, but since the inception of the alternative pipeline, the EBITDA per barrel of our conventional business actually has been increasing. And the factors that go into that, there's a few of them that I want to outline for you. The first one is we've been extremely focused on lowering our cost structure, providing safe, reliable, cost-efficient operations through our supply chain strategies and through our continuous improvement in our operational excellence journey that we've been on here internally at Pembina. Additionally, as we move west further away from Edmonton market, obviously, that garners a higher toll just due to the proximity and the distance into the market. And then thirdly, the majority of all of our contracts on the pipe side have CPI inflators built into them.

So -- and then finally, what I would leave you with on how we maintain margin is our industry-leading project execution and our ability, and I said it earlier, safe, reliable, cost-efficient operations continue to be a competitive advantage. We basically can allow our commercial teams to go out there, maintain the internal expectations of Pembina. Teams are bringing our projects on time and under budget. And that really allows them to have some flexibility with the customers to meet their needs, but also maintain our margin and our internal financial expectations. Hopefully, that answers your question.

Yes. That was more detail than I expected. For my follow-up, I got to ask on PGI. You've previously talked about the benefits and the capital efficiency of owning 60% but 100% would also likely add benefits such as perfect alignment on incremental capital, just given that you had -- like KKR doesn't have the downstream benefits that you do. So again, to sort of get you on the record one way or another, can you speak to your potential appetite to want to consolidate that remaining 40%?

Yes. I think as a general concept, we generally don't comment on specific M&A situations. But what I can -- what I will say in this specific situation is the fact that we still like the partnership. We like how it was set up, and we believe it's delivering what it was originally intended to do. So we're happy with it.

Your next question comes from Spiro Dounis of Citigroup.

I wanted to go back to the outlook quickly. So you've got the Alliance CER process out of the way. You've now got some Peace recontracting done. So I addressed a lot of maybe the larger unknowns headed into 2026. At the same time, you've got some tailwinds coming from M&A, headwinds from commodity. But just curious in the context of that original fee-based EBITDA you provided back in 2024 for 2026, how do you think a lot of these moving items and factors play into that original range?

Spiro, thanks for the question. And it's a really good one because I think that's one of the things we're most proud about. As we set out about 1.5 years ago and put that guidance range out at our 2024 Investor Day, we obviously had a lot of confidence in that range and frankly, a lot of confidence in being in the upper end of that range, continue to execute along the same ways that Jaret just talked about through the core base business, through the commercialization as well as some really, really accretive and attractive sort of bolt-on M&A opportunities across our business. And obviously, what we've seen is, is on one hand, a couple of headwinds, primarily related to the revised Alliance CER settlement. But what we've also done, as Jaret mentioned, is really taken a keen eye to our business and looked for opportunities to operate differently, to operate more efficiently to focus on work that is higher value add versus lower value add.

And I would say that without sort of getting ahead of our 2026 guidance outlook, which will come in about a month's time, I would say we maintain a lot of confidence in obviously achieving that range and achieving a range or a spot in that range, which would reflect something consistent with our own expectations and the market's expectations. So we feel really good about that. We're working really hard on that. And I think, again, we continue to tell the resilience of our business in many ways and the benefits of the diversity of it, the exposure to multiple commodities, the place that we play in the Western Canadian Sedimentary Basin, and we think that performance even in light of headwinds, which they come in business demonstrates that.

Got it. That's helpful color, Cam. Second one, going back to Greenlight as well. Could you maybe put a finer point on when we can expect to start to see cash flows from this project to Pembina? And when it comes to the phases, I think this initial phase is about half that total capacity envisioned, but I know I think you guys have mentioned 4 potential phases in total. Just maybe remind us again how you're thinking about the remaining phase scope and then the time line?

So the original phasing was 4 phases of $450 million. We are now talking about 2 phases of roughly $900 million. So again, we've gone from kind of a first phase of $450 million to a first phase of $900 million, if that makes sense. We would expect, based on our current time line and current estimations that cash flow would occur in 2030.

Your next question comes from A.J. O'Donnell of TPH.

Maybe if I could just sneak one more in about Greenlight. As the data center innovation center conversations continue to pick up momentum, I'm curious, is there a way to bridge the gap further? Have you guys explored potential like mobile or module power solutions? Is that something that you guys have looked at before?

A.J., thanks for the question. I mean we've looked at a variety of different modes and means to facilitate this business. I think from our perspective, what we have in place, the type of facilities and structure we have in place today is scalable and really, really effective for what our customers are looking for. And so that's really what we stay focused on.

A.J., it's Cam here. I would just add on top of that. I think our experience has been when we've looked at other developments as this occurs, once you get the base, the core assets in place, they do tend to cluster. And obviously, as we think about the advantages that our utilities, our access to water, all of the embedded advantages, we do see benefits, and we do see that being an advantage in our offering for the future. So we think there's opportunity beyond this.

Okay. Great. Appreciate the detail there. And then maybe if I could just go to Cedar real quick. There was an amendment filed for the increase of feed gas capacity from 400 to 500 mncf -- curious what the read-throughs are there, if you could speak to some of the details and potentially, does that equate to more volumes or more marketing upside for Pembina?

It's Stu Taylor. I'll maybe try to provide some clarity. So when we originally were scoping out the project and looking at the size, we did permit the project for 3 MTPA, 400 million cubic feet per day. As we were going through engineering design, we've seen an opportunity to, for very minor dollars, increase that capacity from 3 MTPA to 3.3 MTPA. And so we undertook that spend and our current -- we are currently designing and building to the 3.3 and our announced capital actually incorporates that size. We knew we would have to go back from an amendment to the permits. And so we did that. And again, there's no change to the scope of the project or any of the capital cost estimates. Again, as you go through these projects and you continue to work with engineering, we've seen, again, engineers don't design rate to the exact capacity. They do at FAT in their facilities and infrastructure. And so we've looked at since we were going for the amendment, we believe the facility has the opportunity for -- on days, particularly cold weather days, there will be an opportunity for incremental throughput through the facility.

And so as we were looking to do the amendment, we did increase that size of the amendment and increase it from 400 to 500 mncf. Obviously, we need incremental gas supply. These are potential volumes as we go forward. We will be working on that on a go-forward basis. And pardon me, these will be incremental cargoes -- sorry, beyond what we have contracted. We have only contracted the facility to the 3 MTPA size. So any incremental gas or incremental cargoes are upside for us.

Your next question comes from Maurice Choy of RBC Capital Markets.

If I could just start with a question about project execution. When I think about how globally resources are being directed towards supporting the AI sector, and this could obviously lead to inflationary pressures globally in the coming years. I know that you've highlighted your project execution track record and capability. So just wondering what you tend to do in these early years before those pressures arrive? What actions you tend to take to kind of get ahead of the curve?

Maurice. Yes, so I think the question was really about future pressures in certain areas. And one of the things that we're really focused on and we're really aligned with our Board and they ask us about is creating long-lasting partnerships with Tier 1 contractors and obviously, indigenous communities. So I think that's part of our overall strategy is not always going for the lowest dollar, but committing ourselves to the safest, making sure that we have the A teams. We're aligned from the top with respect to our safety messaging and our project execution and the services that we'll be providing. So I think we've made material ground with respect to that. I think internally here, I've talked about it before. I think we just have a culture of one team, one Pembina when we're approaching these projects. And I think it's something that we've been cultivating and we're really good at.

And if I could finish off with a question on balance sheet in general. Again, just I just want to know philosophically, what is the comfortable or optimized cushion for you versus the 4.25 maximum debt to EBITDA? And where do you see that being by the year-end and peaking next year due to Cedar LNG CapEx?

Maurice, it's Cam here. Yes, I think good question because we've talked about that. And obviously, first thing worth reminding everyone is that is a proportionately consolidated number. So that reflects not only the debt that we carry at the Pembina level, but debt that is included in the PGI credit stack, notwithstanding the fact that it's recourse as well as at the moment, construction debt associated with Cedar LNG, which is obviously, again, nonrecourse, but carried at that level. So as we see exiting 2025, obviously, we see that in the sort of the mid-3s range because of the timing and really remember that 2026 is the peak investment year for Cedar LNG, obviously, without any of the commensurate earnings along with it. So if we go back and remind ourselves of our message from our 2024 Investor Day, we obviously talked about that 3-year outlook for capital being largely free cash flow neutral with some shape to it throughout those individual 3 years, and this would be consistent.

We obviously are expecting free cash flow positivity in 2025. We saw free cash flow positivity in 2024, and we would expect to see some free cash flow negativity in 2026. However, on the long term, we feel obviously that we set our balance sheet up to be able to handle that. And obviously, as we move through 2026, we would expect that to moderate back down to the type of range that we've been comfortable with longer term. Ultimately, that comfort zone is largely 3.5x to 4x. Could we go above that? It's not where we would intend to go in the near term. So that's the way we think about the balance sheet at the moment.

Our next question comes from Robert Catellier from CIBC Capital Markets.

Rob Catellier from CIBC. A lot to talk about given all your contracting this quarter. Maybe I can start with the mechanics on the synthetic liquefaction agreement with PETRONAS. Maybe you can walk us through that and the circumstances you need to see to generate that incremental value enhancement.

Yes. I'll talk about the contract in general, and then I'll turn it over to Chris to provide some further details. I think as you can appreciate, we're still finalizing the other 0.5 million tonnes. And so given the status of that, we're going to stay away from specific details. But what I can tell you is that we were very pleased with the outcome of that negotiation. And maybe, Chris, I'll turn it over to you to talk about the contract.

And then as far as contract structure, it's effectively synthetic tolling. I mean we are taking the obligations we have with Cedar and almost entirely pass those on to our customer. And then in addition to passing the terms on, we've been able to capture some participation in the upside of the market. So to the extent the [ arb ] is open and attractive between Canadian AECO gas and the part East, we'll have an opportunity to capture some of that upside and participate in that.

Okay. Just generally speaking, in terms of contracting the capacity at Cedar, have you been able to leverage that into other business with PETRONAS or otherwise? And I'm thinking downstream gathering, liquids, fractionation, et cetera?

Yes. I mean I don't think we can get into that right now. But what we will say is we think we have a very strong relationship with PETRONAS that we're building on with this arrangement. And our hope is to continue to build on that and do much more together.

Robert, it's Cam here. I guess I would just add on top of that, that I think, obviously, achieving a partnership with an entity of the prominence in the LNG space like PETRONAS is, I think, really important for us and essentially really validates Cedar LNG in the global scale from an LNG project in terms of both the competitiveness of it and the reality of it. I think what we would see is we already had a relationship with PETRONAS on the upstream side, dating back to the middle of the last decade in terms of servicing them on the Northeast BC side.

But we would certainly love and see this as a beachhead to continue to try and expand that. We have a ton of respect for them as an organization. I would say likewise that as we think about the remaining balance of Cedar and future LNG ambitions, obviously, we've had lots of interest from customers in our core business, looking to achieve diversity of market access for their volumes and say that there is a view that Cedar is a scarce resource and can continue to drive value both for them, but for Pembina in win-win type solutions. So I would say to answer your question pointedly, yes, we are seeing that type of value accretion through the rest of the core business.

Okay. That's good detail. And then just a couple of quick ones here. Just given the RFS IV revised time line, it looks like a second quarter in-service date. I'm wondering how that interplays with the upcoming NGL contract here? In other words, do you have any available capacity to market there? And will you be able to market it into the upcoming contract here given the service state seems to be tight with the start of that year?

Rob, Jaret here. Yes, you nailed it, like we're working really closely with our execution team to bring that on as close as we can to the NGL season. Frac capacity is very tight in the IV right now. And so it does give our commercial teams a lot of flexibility to work with customers and bringing them in the closer we can get to April 1. But yes, you nailed it.

Okay. And finally, I'm just curious on the Alliance recontracting and the onetime option for term extension. You're now, I think, 96% of your firm capacity is contracted. I wondered if there was any contracts there with the marketing affiliates.

No.

Our next call comes from Ben Pham with BMO.

Ben here. I had a couple of questions on Peace in the conventional business segment. And I'm wondering if you can characterize or comment on the volume trends in convention this year. Is it -- it looks to be more in that 2% to 3% context versus the 6% to 7% plus before I know you flagged a bit of a phased pickup in the volumes. But can you comment up us on that? And what's the thought process into 2026 with new contracts in the broader business environment?

Yes. Ben, it's Cam. I'll start and then maybe pass it over to Jaret. I think one thing I would mention is that, obviously, if you stand back for a moment and look at our volumes that we report in our conventionals, those are obviously, as we said before, always the revenue volumes, which reflect our physical volumes plus take-or-pay contracts that we have in excess of that. And as you go through and try and look at the quarterly trend, it is a bit -- it can be a bit misleading if you sort of trying to make meaning out of that on a really narrow time frame, meaning quarter-to-quarter. If I stand back for a second and look at what our conventional volumes did in Q3 versus Q2 sequentially, those physical volumes would have been up about 4% quarter-over-quarter.

So we think if you sort of look at that relative to the industry, if you look at that relative to other basins, that reflects very competitive and consistent growth. I think as we sit and look at 2026, it's kind of the, I'll say, the heart of that budgeting season right now for everybody. And I think what we expect to see longer term is continued growth in that single-digit range. And that's all supported by, obviously, continuing demand growth from the oil sands. I think we continue to see other infrastructure debottlenecks by our peers. We continue to see the large operators talking about incremental debottlenecks on their projects to drive incremental supply. And we also see incremental gas demand outlet and incremental supply opportunities on the natural gas side, which, of course, drives the condensate and the NGL volumes.

So longer term, we are very, very confident in the continued growth in that -- at least in that single-digit level. I think in the near term, we have to be mindful that in the new business environment that our producers operate in, where returns and value are paramount over simply volume growth. They are making decisions to optimize their longer-term profiles and taking a longer-term perspective. So in any given year, the growth may be more producer-specific versus broad-based or it may be simply timing related. But longer term, we continue to see that. And I think if you look around our major producers, many are demonstrating growth in that same level. Some are choosing to defer some, but longer term, we continue to see growth in that single-digit level.

Yes. And just to add to that, Ben, I think some of the recent announcements you would have seen, the Ovintiv, NuVista transaction, the CNRL, Chevron transaction, although we talk about some customer consolidation sometimes puts some compression on our business, it also results in an acceleration of product being produced. So when Cam talks about specific producers accelerating or staying flat, we have a great relationship with Ovintiv and with NuVista. They're both very large and dedicated customers to Pembina. And so that transaction, Ovintiv talked about accelerating production and drilling and those types of things on those lands because they have available capacity. That stuff gets us excited, seeing those consolidations. It's sad to see one of our great customers go, but it's also exciting to see them talk about filling the gas plants faster with 600 million a day of incremental gas processing -- or sorry, of 600 million a day of contracted processing.

PGI, for example, has approximately services about 80% of that. So super excited to see those types of things. And really, we got to listen to our customers and kind of go through this. But overall, the macro trend is oil sands is growing, condensate demand is growing. Import pipelines are essentially getting really full. So that condensate has to come domestically, and we're in a great position to support our customers to get to Edmonton and up to the oil sands.

There are no further questions at this time. I will now turn the call back over to Scott Burrows, President and CEO. Please continue.

Great. Thank you, everyone, for your time, and we look forward to updating you in the middle of December with our 2026 outlook.

Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now disconnect.