Yahoo Finance Pembina (PBA) Signs MoA With Marubeni for Low-Carbon Project
Pembina Pipeline Corporation (PBA) announced that it has signed a Memorandum of Agreement (MoA) with Marubeni Corporation to advance an end-to-end low-carbon ammonia supply chain from Western Canada to Japan and other Asian markets.
The project entails the joint development of a massive, low-carbon hydrogen and ammonia production facility that will be situated on Pembina-owned properties close to its Redwater Complex in the Alberta Industrial Heartland. Alberta is the leading region in Canada for existing ammonia production.
Pembina and Marubeni will make use of their individual strengths to execute the project. While Pembina will leverage its expertise in Western Canadian energy infrastructure development, construction and operations, rail logistics and export, Marubeni will make the most of its marketing and marine logistics capabilities.
According to Stu Taylor, senior vice president and corporate development officer at Pembina, this project represents a transformative opportunity that is highly aligned with Pembina's strategic priorities, including supporting global decarbonization efforts by exporting low-carbon energy derived from natural gas responsibly produced in Western Canada.
The facility will utilize innovative technology to capture associated CO2 emissions using carbon capture, utilization and storage. The low-carbon ammonia will be then transported via rail to Canada’s west coast and shipped to Japan and other Asian markets.
Per Marubeni, the facility's preliminary feasibility studies have been completed, and it is projected to have a production capacity of 1 million tons of low-carbon ammonia annually.
According to the MoA, Pembina and Marubeni are required to concentrate their efforts on completing tasks essential to the project's development, such as preliminary front-end engineering design (pre-FEED), interactions with the governments of Canada and Japan, and commercial activities.
Pre-FEED work is now anticipated to be completed by the beginning of 2024, with a potential final investment decision in the second half of 2025. The operations are expected to begin in 2028.
Zacks Rank & Key Picks
Currently, Pembina carries a Zack Rank #3 (Hold).
Some better-ranked stocks for investors interested in the energy sector are Sunoco LP SUN, Murphy USA Inc. MUSA and RGC Resources Inc. RGCO. While both Sunoco and Murphy USA sport a Zacks Rank #1 (Strong Buy), RGC Resources carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Sunoco, a distributor of motor fuel to approximately 10,000 convenience stores, has a stable business model with sustainable and predictable cash flows. For this year, SUN has witnessed an upward earnings estimate revision in the past seven days.
Murphy USA, a leading retailer of gasoline, operates stations close to Walmart supercenters and sells low-cost, high-volume fuel. MUSA, with more than 1,700 stores, has witnessed an upward earnings estimate revision for 2023 and 2024, in the past seven days.
RGC Resources is a holding company that offers energy and associated products and services through its operational subsidiaries — Roanoke Gas Company and RGC Midstream, LLC. RGCO has thousands of customers through its natural gas distribution companies that serve the Roanoke Valley and Bluefield, Virginia and West Virginia areas. For this year, the company has witnessed an upward earnings estimate revision in the past 30 days.
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