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After providing a mid-year business update that volumes across its pipelines and facilities segments began to grow significantly in 2021, surpassing the pre-COVID levels, Pembina Pipeline Corporation PBA reached a new 52-week high in yesterday’s trading session to close at $33.82. Shares of the company have soared 43.5% in the past 52-week period.
Pembina anticipates a 3% increase in physical throughput during the second quarter of 2021 from the first-quarter results, matching the pre-COVID levels. Also, persistent growth in physical volumes on its conventional pipelines is expected for the remainder of the year.
Physical throughput of the Cochin Pipeline reached above 100,000 barrels per day in April, making it one of the greatest average volume months in the pipeline's history. Meanwhile, the physical throughput of Veresen Midstream surpassed the budget predicted at all its facilities. Pembina's gas services business is doing better than what it was before the COVID-19 had struck and it projects to end the year with record average physical volumes.
Around $400-million assets have become operational so far this year, such as the Prince Rupert Terminal, a northeast British Columbia terminal and the extension of the Vancouver Wharves terminal with another $1-billion being under development.
Earlier this month, Pembina made an all-stock offer to Inter Pipeline Ltd. (IPL) whereby it will acquire the latter's all issued and outstanding shares for C$8.3 billion. Per the terms of the deal, which is unanimously approved by both companies' board members, IPL shareholders will receive 0.5 Pembina common stock for each IPL common stock they hold. Should the deal go through, Pembina stockholders will own 72% interest of the combined entity while the rest will be owned by the IPL stakeholders.
The IPL deal will expedite and de-risk accretive investment possibilities across diverse value chains, allowing money to be deployed to projects at attractive rates of return, resulting in more free cash flow and greater yield for investors across the market. Pembina intends to raise its monthly dividend by 4.8% to 22 Canadian cents per share shortly after the deal closes.
Pembina is honored to have been selected as the industry partner in the creation of the Chinook Pathways Partnership by the Western Indigenous Pipeline Group. Chinook Pathways is an Indigenous-led collaboration seeking a cluster of First Nation communities to acquire ownership of the Trans Mountain Pipeline once the Trans Mountain Expansion gets completed.
Also, recently, Pembina inked a partnership deal with The Haisla Nation for developing the planned Cedar LNG Project. The project is well-positioned to utilize Canada's enormous natural gas supply and British Columbia's expanding liquefied natural gas (LNG) infrastructure to churn out industry-driving carbon neutral, affordable Canadian LNG for cross-border transactions. The project located on The Haisla Nation-owned land in the Douglas Channel will be Canada's largest First Nations infrastructure project with one of the cleanest environmentally-friendly profiles in the world.
Founded in 1954, Pembina is a Canada-based vertically integrated operator of energy infrastructure assets. Headquartered in Calgary, Alberta, the company is active throughout the hydrocarbon value chain, offering a complete range of midstream and marketing solutions. Pembina’s extensive network of conduits covers some of North America’s most prolific basins.
Zacks Rank & Other Key Picks
Pembina currently carries a Zacks Rank #2 (Buy). Other top-ranked players in the energy space include Sprague Resources LP SRLP, SilverBow Resources Inc. SBOW and Oasis Petroleum Inc. OAS, each presently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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Pembina Pipeline Corp. (PBA) : Free Stock Analysis Report
Oasis Petroleum Inc. (OAS) : Free Stock Analysis Report
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