Pembina And TC Energy Team Up to Create Carbon Transportation And Sequestration System

Pembina Pipeline (PPL) and TC Energy (TRP) announced a plan on Thursday to develop a world-scale carbon transportation and sequestration solution in Alberta.

The Alberta Carbon Grid (ACG) will be able to transport over 20 million tonnes of CO2 per year, forming the backbone of Alberta’s carbon capture utilization and storage industry.

Pembina’s President and CEO Mick Dilger said, “The ACG highlights our commitment to customers by helping them solve problems and creating new services; communities, by reducing emissions and using existing infrastructure to reduce the impact to the land; employees, through development of an entirely new line of business and job opportunities; and shareholders through attractive incremental capital investment. Pembina is proud of our commitment to all stakeholders and pleased to leverage our expertise to provide a key market solution toward a lower carbon economy with another industry leading partner.”

Pembina and TC Energy plan to modernize existing pipelines and build new systems to connect Alberta’s largest sources of industrial emissions to a sequestration site northeast of Redwater.

The companies say that the construction and operation of the ACG will support economic growth and create high-value jobs throughout Alberta.

Pembina and TC Energy expect the first phase to be operational by 2025. (See Pembina Pipeline stock analysis on TipRanks)

On June 16, National Bank Financial analyst Patrick Kenny kept a Hold rating on PPL while lifting its price target to C$40 (from C$39). This implies 1.8% downside potential.

Consensus among analysts is that PPL is a Moderate buy based on 6 Buys and 3 Holds. The PPL average analyst price target of C$42.80 implies 5% upside potential to current levels.

TipRanks’ Smart Score

PPL scores a “Perfect 10” on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform the overall market.

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