HomeNewsPembina greenlights 750-MMft3d Heartland Extraction Plant to provide ethane feedstock to Dow Chemical

Pembina greenlights 750-MMft3d Heartland Extraction Plant to provide ethane feedstock to Dow Chemical

5/28/2026

Pembina Pipeline Corporation announced that it is proceeding with the Heartland Extraction Plant (HEP) and provided an update on its ethane supply agreement with Dow.

The sanctioning of HEP represents a capital efficient, low-risk monetization of Pembina's liquids extraction rights on the Yellowhead Pipeline, with future growth potential. Through new and amended agreements, Pembina and Dow reached a mutually beneficial solution that has increased the overall ethane supply commitment, better aligned the volume profile with Dow's revised Path2Zero project schedule, and supported the economics of the HEP project. As previously disclosed, Pembina pursued an optimized ethane portfolio solution in support of its Dow supply commitments and is excited to sanction this project, which also provides Pembina the economic benefits of propane-plus natural gas liquids (NGL) production. Additionally, sanctioning HEP is another important step towards realizing Pembina's recently announced 5-7 percent fee-based adjusted EBITDA per share growth target to 2030.

Heartland Extraction Plant Project Highlights

  • A new 750 million cubic feet per day straddle plant to extract NGL under Pembina's extraction rights on the Yellowhead Pipeline.
  • This upsized project is an evolution of the previously disclosed Yellowhead Extraction Plant project. HEP now includes incremental capacity to accommodate future additional opportunities on a capital efficient basis, enhancing Pembina's Alberta Industrial Heartland footprint.
  • Pembina has signed a long-term agreement at HEP to supply Dow with ethane beginning in late 2029, scaling to 22,500 barrels per day (bpd) by the end of 2030.
  • Following extraction at HEP, ethane-plus mix will be processed at a combination of Dow's Fort Saskatchewan facility and Pembina's Redwater Complex.
  • Pembina will retain the associated propane-plus production related to the project and will benefit from downstream fractionation and marketing of up to 9,500 bpd of propane-plus NGL.
  • HEP has an estimated cost of approximately $570 million, and an anticipated in-service date in late 2029.
  • EBITDA generated from the project will consist of both fixed-fee revenue and frac spread exposure. Using long-term average historical pricing, the EBITDA build multiple for the project is expected to range from 5-7 times.

Dow Ethane Supply Agreement Update. In connection with the new firm volume commitment at HEP, Pembina and Dow have amended the terms of their previously announced ethane supply agreement. Under the amended long-term agreement, Pembina will supply Dow with 35,000 bpd of ethane commencing with the start up of Dow's Path2Zero project, which is expected to enter service in 2029. Pembina will source the 35,000 bpd of ethane from its existing supply portfolio, leveraging its integrated value chain, including deep cut gas processing plants, ethane-plus transportation franchise, and fractionation capabilities.

Including the new agreement at HEP (22,500 bpd) and the amended supply agreement (35,000 bpd), Pembina will supply Dow with a total of 57,500 bpd of ethane, representing a 15 percent increase compared to the original agreement of 50,000 bpd.

"This outcome further demonstrates Pembina's ability to find win-win solutions with our customers. We have strengthened our relationship with Dow while advancing Pembina's strategy and ability to deliver capital-efficient growth," said Scott Burrows, President and Chief Executive Officer of Pembina. "By aligning volumes with Dow's needs and leveraging our existing asset base, we are enhancing the value of our NGL franchise and catalyzing hydrocarbon demand in Western Canada."

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