Pembina enters new toll and revenue-sharing agreement for Alliance Pipeline

FORT ST. JOHN, B.C. — Pembina Pipeline has entered a new agreement for revenue sharing with shipping companies taking advantage of a pipeline that carries natural gas from the Peace region all the way to Chicago.

The company issued a press release on Friday, July 25th, confirming that it had reached a ten-year agreement with shipping companies to allow them to use the Canadian portion of the Alliance Pipeline, which runs for 3,848 kilometres from Fort St. John to the midwestern United States.

The agreement updates and changes the toll rates companies are required to pay Pembina in order to use the pipeline, and also includes a clause that will see some of the pipeline’s revenue shared 50/50.

The new agreement came after the Canadian Energy Regulator (CER) ordered Pembina in 2024 to submit either a detailed explanation of its current tolling policies and how they follow regulations, or create new ones.

The process of negotiating the agreement involved several months of discussions with a ‘Shippers Committee’ representing dozens of companies interested in using the pipeline, according to Pembina president and CEO Scott Burrows.

“The negotiated tolls are competitive and will provide toll certainty to shippers,” Burrows said. “The settlement is fair and equitable to [the pipeline] and all shippers.” 

Pembina reportedly expects the new agreement to lead to a $50 million per year reduction in revenue for the Alliance Pipeline, on top of an extra estimated loss of roughly $40 million annually due to the revenue-sharing portion of the agreement. 

The agreement is now awaiting approval from the CER. The full application to the CER can be viewed here.