Pembina Pipeline reaches settlement with Alliance Pipeline shippers

Pembina Pipeline Corporation (TSX: PPL; NYSE: PBA) announced that its Alliance Pipeline Limited Partnership has reached a negotiated settlement with shippers on the Canadian portion of the Alliance Pipeline and filed an application with the Canada Energy Regulator seeking approval.

The settlement follows a November 2024 order from the Canada Energy Regulator requiring Alliance to submit a detailed toll application or justify its current tolling methodology. The regulator ordered current tolls be deemed interim until resolution.

The 10-year settlement, effective November 1, 2025 through October 31, 2035, establishes a revised toll schedule that includes a new 10-year toll and reductions to existing 1-year, 3-year and 5-year tolls. The new tolls are expected to reduce existing long-term firm tolls by an average of 14 percent on a volume weighted basis.

Under the agreement, revenue from transportation service for volumes above long-term firm capacity of 1.325 billion cubic feet per day will be shared equally between Alliance and shippers. Alliance will return approximately C$95 million currently held as liability on its balance sheet associated with recoverable costs.

The Shipper Committee, consisting of over 30 members, supported the settlement through a vote on July 23, 2025. Alliance has requested Canada Energy Regulator approval by September 15, 2025.

Pembina expects the settlement will reduce Alliance's long-term firm service revenue by approximately C$50 million per year over the next 10 years, plus impacts from the new revenue sharing provision. The company estimates the revenue sharing provision impact at approximately C$40 million assuming an AECO-Chicago natural gas spread of C$1.50 per thousand cubic feet.

Separately, Alliance is soliciting expressions of interest for a new short-haul transportation service to Alberta's Industrial Heartland, studying up to 350 million cubic feet per day of capacity with anticipated service beginning in late 2029.

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