Pembina Pipeline Corporation announced the signing of a Memorandum of Agreement with Marubeni Corporation, to progress an end-to-end, low-carbon ammonia supply chain from Western Canada to Japan and other Asian markets. The Project includes the joint development of a world-scale, low-carbon hydrogen and ammonia production facility to be sited on Pembina-owned lands adjacent to its Redwater Complex in the Alberta Industrial Heartland near Fort Saskatchewan, Alberta. Demand for low-carbon ammonia in Japan and other Asian markets is expected to grow substantially given its efficiency as a carrier of hydrogen and use as a low-carbon fuel source.

Ammonia is one of the most widely produced synthetical chemicals in the world and the production technology and handling are well understood and established. Alberta is the leading region in Canada for existing ammonia production and the Project is another opportunity to support development of a hydrogen and low-carbon economy. Initial feasibility studies have been completed and the Facility has an anticipated design capacity of up to 185 kilotonnes per annum of low-carbon hydrogen production, which will be converted into approximately one million tonnes per year of low-carbon ammonia.

The Facility is contemplated to utilize innovative technology to capture a significant amount of the CO2 emissions with the potential for integrated transportation and sequestration on the proposed Alberta Carbon Grid being developed by Pembina and TC Energy. The low-carbon ammonia would be transported via rail to Canada's West Coast and shipped to Japan and other Asian markets. Pembina and Marubeni will utilize their complementary strengths to develop and execute the Project.

Pembina brings its expertise in Western Canadian energy infrastructure development, construction and operations, rail logistics and export. Marubeni, a globally leading independent power producer and integrated trading conglomerate, will leverage its marketing and marine logistics capabilities, and is expected to contract for offtake from the Facility, which will be used to supply Marubeni-owned and other Japanese utility power plants. Under the MOA, Pembina and Marubeni will focus on completing work critical to the development of the Project, including preliminary Front End Engineering Design ("pre-FEED"), engagement with various stakeholders, including governments in Canada and Japan, and commercial activities.

The Project is expected to be structured as an infrastructure-style, fee-based business with investment grade counterparties. Pre-FEED work is currently expected to be completed by early 2024.