Pembina Approves Greenlight Power Project for AI Data Centers

Pembina Pipeline Corporation PBA has officially approved the final investment decision for the Greenlight Electricity Center (“GLEC”), marking one of the most significant energy infrastructure developments in Alberta in recent years. The project, developed in collaboration with Morgan Stanley Infra…

Pembina Pipeline Corporation PBA has officially approved the final investment decision for the Greenlight Electricity Center (“GLEC”), marking one of the most significant energy infrastructure developments in Alberta in recent years. The project, developed in collaboration with Morgan Stanley Infrastructure Partners and Kineticor Asset Management, will deliver dedicated electricity to a major hyperscale data center while creating a new long-term source of fee-based earnings for this Canada-based Oil and Gas Storage and Transportation company.

Located in Sturgeon County within the Alberta Industrial Heartland, the GLEC will combine modern natural gas power generation with long-term commercial agreements to support Canada's expanding digital economy. As investments in artificial intelligence (“AI”), cloud computing and digital infrastructure continue to accelerate, reliable electricity generation has become an essential requirement for large-scale technology projects. Through Greenlight, PBA is extending its expertise beyond traditional midstream operations into a rapidly growing energy market.

GLEC Supports Alberta's Growing Data Center Industry

Alberta has emerged as one of Canada's most attractive destinations for data center investment. Competitive energy markets, abundant natural gas resources and a business-friendly regulatory environment have encouraged technology companies to consider the province for large-scale digital infrastructure.

Unlike conventional industrial facilities, hyperscale data centers require uninterrupted electricity around the clock to support cloud services, AI processing and advanced computing workloads. These operations cannot tolerate extended outages or unstable power supplies, making dedicated generation increasingly valuable.

The GLEC has been designed specifically to meet these requirements by supplying electricity directly to its customers through a dedicated behind-the-meter arrangement. This approach reduces dependence on Alberta's public electricity grid while ensuring dependable long-term energy availability.

Advanced Combined Cycle Technology Improves Efficiency

The GLEC will use highly efficient combined cycle generation technology that maximizes energy output from every unit of natural gas consumed.

The facility will feature two Siemens Energy SGT6-8000H gas turbines working alongside two SST6-5000 KN steam turbines and matching generators. Instead of allowing exhaust heat to escape, the combined cycle process captures that thermal energy to produce additional electricity through steam generation.

This design significantly improves fuel efficiency compared with traditional simple-cycle gas plants while lowering operating costs and enhancing overall performance.

Another important advantage is future scalability. The project site has already been permitted for expansion to approximately 1,864 megawatts, allowing additional generating capacity to be developed as electricity demand continues increasing across Alberta.

Long-Term Commercial Agreement Provides Revenue Stability

One of the strongest aspects of the GLEC is its commercial structure.

The project will operate under a long-term Electrical Energy Supply Agreement structured as a tolling arrangement. Under this model, the customer pays for available generating capacity while reimbursing operating costs such as fuel and maintenance.

This predictable payment structure reduces exposure to fluctuations in wholesale electricity prices, creating stable, long-term revenues. It also aligns closely with PBA's established fee-based business model, which emphasizes reliable cash flows supported by long-term customer contracts.

Commercial operations are expected to begin during the second half of 2030.

Disciplined Investment Approach Strengthens Project Economics

Large infrastructure projects require careful financial planning and Greenlight reflects Pembina's disciplined investment strategy.

Construction costs are estimated at approximately C$4 billion, while total project expenditures, including financing costs during construction, are expected to reach roughly C$4.6 billion.

Pembina's net investment is expected to total approximately C$2.1 billion, after accounting for proceeds from the sale of project land to the customer.

The partnership has also significantly reduced construction risk by securing approximately 85% of project costs under fixed-price contracts. This approach improves budget certainty while minimizing exposure to inflation and unexpected cost increases during construction.

Once operational, Pembina expects its ownership interest in Greenlight to generate approximately C$310 million in annual run-rate adjusted EBITDA, supporting the long-term earnings growth.

Reliable Natural Gas Supply Forms the Foundation of the Project

Consistent fuel delivery is essential for any large-scale power generation facility.

The GLEC will require approximately 150 million cubic feet of natural gas per day to operate at full capacity. To support this requirement, long-term transportation arrangements have already been secured through multiple pipeline systems, including the Alliance Heartland Expansion Project and the TC Energy Nova Gas Transmission network.

Using multiple transportation pathways provides operational flexibility while reducing supply risks. It also creates additional demand for Western Canadian natural gas production, benefiting producers as well as existing midstream infrastructure.

Because Pembina already operates an extensive natural gas network, the project naturally complements its broader infrastructure portfolio and strengthens utilization across several business segments.

PBA Continues Expanding Canada's Energy Infrastructure

Beyond Greenlight, PBA is pursuing additional opportunities to strengthen Canada's energy transportation network.

The company recently entered into a non-binding Heads of Agreement with the Government of Canada, the Province of Alberta, Trans Mountain Corporation, and the Alberta Petroleum and Marketing Commission regarding a proposed nation-building crude oil pipeline and export corridor connecting Alberta with Canada's West Coast.

Pembina's role would focus on providing development expertise, project execution support and operational experience while maintaining its disciplined investment standards. Any future participation will remain subject to detailed evaluation and final investment approval.

This measured approach reflects the company's commitment to balancing growth opportunities with responsible capital allocation.

Greenlight Creates a Strong Foundation for Growth

The GLEC represents more than a new power generation facility — it establishes a strategic platform for PBA's next phase of expansion.

By combining efficient power generation technology, long-term commercial agreements, experienced development partners, secure natural gas supply and disciplined financial management, the project is positioned to generate stable returns well into the future.

As demand for digital infrastructure continues growing across North America, investments that connect dependable energy with advanced technology will become increasingly important. Through the GLEC, PBA is strengthening its diversified infrastructure portfolio while supporting Alberta's emergence as a leading destination for data centers, industrial investment and long-term economic development.

PBA's Zacks Rank & Key Picks

Currently, PBA has a Zacks Rank #3 (Hold).

Investors interested in the energy sector might look at some better-ranked stocks like Liberty Energy LBRT, Paramount Resources PRMRF and Cenovus Energy CVE, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Liberty Energy is valued at $3.97 billion. It is a leading U.S. oilfield services company that provides hydraulic fracturing and advanced well completion solutions for oil and natural gas producers. Liberty Energy stock has gained approximately 103.8% over the past year.

Paramount Resources is valued at $2.77 billion. It is a Canadian energy company focused on the exploration, development, and production of natural gas, crude oil and natural gas liquids. Paramount Resources stock has delivered a 18.2% total return over the past year.

Cenovus Energy is valued at $45.58 billion. It is a Canadian integrated energy company engaged in the production of crude oil and natural gas, as well as refining, upgrading and marketing petroleum products. Cenovus Energy operates across Canada, the United States and the Asia-Pacific region.

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