By Robb M. Stewart

Pembina Pipeline will increase ethane sales to Dow with its decision to push ahead with a 570 million Canadian dollars (US$412.4 million) extraction plant in Western Canada.

Pembina said Monday it is proceeding with the Heartland Extraction Plant, a new 750 million cubic feet a day straddle plant to extract natural gas liquids that is expected to enter service in late 2029.

With the decision, the Canadian company said it signed a long-term agreement to supply U.S. chemicals company Dow with ethane beginning in late 2029, scaling up to 22,500 barrels daily by the end of 2030.

Pembina also amended an existing supply deal with Dow and said that it will provide 35,000 barrels daily of ethane starting with the start-up of Dow's Path2Zero project in Fort Saskatchewan, Alberta, which is expected to enter into service in 2029. Pembina plans to source the ethane from its existing supply portfolio.

Including the new agreement at its Heartland Extraction Plant and the amended supply pact, Pembina will supply Dow with a total of 57,500 barrels a day of ethane--15% over the original agreement between the companies.

Following extraction at HEP, an "ethane-plus" mix will be processed at a combination of Dow's Fort Saskatchewan facility and Pembina's Redwater Complex.

Pembina said it will retain the associated propane-plus production at the project and will benefit from downstream fractionation and marketing of up to 9,500 barrels a day of propane-plus natural gas liquids.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

May 25, 2026 08:01 ET (12:01 GMT)

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