Pembina Pipeline and Marubeni Corporation Join Forces to Launch Low-Carbon Ammonia Project

CALGARY, Alberta: Pembina Pipeline Corporation has recently 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 involves the collaborative creation of a large-scale, low-Carbon hydrogen and Ammonia production plant (the "Facility").

Stu Taylor, Pembina's Senior Vice President & Corporate Development Officer, stated that this initiative presents a game-changing opportunity that aligns closely with Pembina's strategic priorities. These priorities include assisting in worldwide decarbonization endeavors by exporting low-Carbon energy derived from responsibly produced natural gas in Western Canada. The Project exemplifies Pembina's capacity to capitalize on its existing asset base and core competencies to develop fresh integrated value chains. Among them are carbon capture, utilization, and storage ("CCUS") technologies, as well as low-Carbon energy sources like Hydrogen and Ammonia, which can serve as fuel and Hydrogen carriers. Marubeni brings critical expertise to the Project, making them an indispensable partner in advancing global efforts towards greater use of low-Carbon Ammonia, reinforcing Japan's decarbonization strategy.

The demand for low-Carbon Ammonia in Japan and other Asian markets is predicted to rise significantly, given its suitability as a hydrogen carrier and use as a low-Carbon fuel source. Ammonia is a widely manufactured synthetic chemical globally with well-established production technology and handling. Alberta is the leading Canadian region in Ammonia production, and this Project offers another opportunity to reinforce the development of a low-Carbon economy and Hydrogen.

The Project will capitalize on available infrastructure and benefit from Canada's abundant natural gas supply, highly accessible West Coast shipping to Asia, and the fast-growing Carbon capture and sequestration industry. Pembina has a long-standing history and a robust reputation as a top Canadian energy infrastructure provider. Work together with Marubeni as partners in creating a low-Carbon fuel supply chain from Canada to Japan.

Feasibility studies for the Facility have been completed, and the plant is expected to have a design capacity of up to 185 kilotonnes per annum of low-Carbon Hydrogen production. This hydrogen will be converted into roughly one million tonnes per year of low-Carbon Ammonia. The Facility will use advanced technology to capture a significant portion of CO₂ emissions, with the possibility of integrated transportation and sequestration on the proposed Alberta Carbon Grid being developed by Pembina and TC Energy.

Pembina and Marubeni will collaborate and leverage their individual strengths to develop and implement the Project. Pembina's expertise in developing, constructing, and operating Western Canadian energy infrastructure, rail logistics, and export will be combined with Marubeni's capabilities as a leading independent power producer and integrated trading conglomerate in marketing and marine logistics. Marubeni intends to procure ammonia offtake from the Facility to fuel power plants that it owns, as well as other Japanese utilities.

Under the MOA, Pembina and Marubeni will concentrate on critical work needed to advance the Project. This includes preliminary Front End Engineering Design ("pre-FEED"), engagement with various stakeholders such as governments in Canada and Japan, and commercial activities. Investment-grade counterparties are anticipated to be part of the infrastructure-style, fee-based business model for the Project. Pre-FEED work is scheduled for completion by early 2024.

According to reports, the Project is poised to play a pivotal role in furthering Pembina's long-term objective of cementing its novel growth platform - the Pembina Low Carbon Complex. With more than 2,000 acres of undeveloped land located in the Alberta Industrial Heartland, Pembina aims to develop an industrial complex for low-Carbon energy infrastructure. This will enable Pembina and third parties to undertake projects while minimizing costs, reducing emissions, and mitigating risks.

The PLCC will concentrate on attracting and fostering investment in emerging energy transition technologies, sustainable fuels, and chemicals, particularly low-Carbon Hydrogen and Hydrogen carriers such as Ammonia and Methanol. Projects within the PLCC will have access to one or more of the following necessities to support the construction and operation of large-scale clean energy initiatives: land, low-Carbon Hydrogen, clean power, natural gas and industrial gases, water, CCUS, and rail assets to facilitate product transportation.

Pembina will lease land to third parties and provide infrastructure, logistics, and shared services to tenants within the PLCC, depending on their specific requirements, using standard Pembina commercial models. Direct investments in projects are also being contemplated by Pembina. Discussions are ongoing with several potential tenants and strategic partners, and Pembina anticipates providing updates in the future.