Pembina expects $90m annual loss after 50/50 pipeline revenue deal approved

FORT ST. JOHN, B.C. — The Canada Energy Regulator (CER) has approved Pembina Pipeline’s new revenue-sharing agreement with companies taking advantage of its pipeline stretching from the Peace region to Chicago.

Pembina announced the CER approved its new 10-year tolling agreement for the Alliance Pipeline on Tuesday, September 16th.

The agreement, submitted for approval in July, changed the toll rates companies need to pay to use the pipeline and included clauses that split the pipeline’s revenue between Pembina and the shipping companies 50/50.

This comes after the CER ordered Pembina in 2024 to either update its Alliance Pipeline tolling policies or submit a detailed explanation of how the existing agreement followed CER regulations.

Company president and chief executive officer Scott Burrows said he was pleased to see the CER quickly approved the new deal.

“Pembina looks forward to continuing to deliver exceptional customer service and maximizing the value of this critical and highly differentiated North American energy infrastructure asset,” Burrows said.

The Alliance Pipeline runs for 3,848 kilometres from Fort St. John to the midwestern United States.

Pembina 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 CER website has more details on the full decision.