Pembina Pipeline Approves Final Investment Decision for $4.6 Billion Greenlight Power Project
Pembina Pipeline Corporation, alongside Morgan Stanley Infrastructure Partners (MSIP) and Kineticor Asset Management, has reached a positive final investment decision (FID) for the Greenlight Electricity Centre (GLEC), a major natural gas-fired power generation project designed to supply electricity to one of Canada’s largest planned data centre developments in Alberta.
The Greenlight Electricity Centre will be a 932-megawatt combined-cycle natural gas power plant located in Sturgeon County within Alberta’s Industrial Heartland. The project has been developed to meet the rapidly increasing electricity demands created by artificial intelligence (AI), cloud computing, and large-scale digital infrastructure while providing dedicated, behind-the-meter power to a major data centre customer under a long-term agreement.
The investment represents one of the largest dedicated gas-to-power projects supporting Canada’s digital economy and establishes a new business platform for Pembina as it expands beyond its traditional midstream operations.
Supporting Alberta’s Growing Data Centre Industry
Demand for data centres has accelerated worldwide as AI applications, cloud services, and digital infrastructure continue expanding. These facilities require continuous, reliable electricity, making dedicated power generation increasingly important.
Alberta has emerged as an attractive destination for data centre investment because of its abundant natural gas resources, established energy infrastructure, competitive regulatory environment, and supportive provincial policies.
The Greenlight project is among the first large-scale facilities in Canada specifically designed to provide dedicated electricity directly to a data centre, reducing pressure on Alberta’s public electricity grid while ensuring uninterrupted power supply.
The project demonstrates how natural gas infrastructure can support the province’s digital economy while creating new demand for Canadian natural gas production.
Major Investment with Long-Term Revenue
Greenlight carries an estimated capital cost of approximately CAD 4 billion, with total project costs expected to reach approximately CAD 4.6 billion after including financing expenses and interest during construction.
Pembina’s share of the investment totals approximately CAD 2.3 billion, although proceeds from the previously announced sale of project land to the customer reduce the company’s net investment to roughly CAD 2.1 billion.
Approximately 85 percent of construction costs have already been secured under fixed-price contracts, significantly reducing execution risk and providing cost certainty during construction.
Once operational, the project is expected to generate approximately CAD 310 million in annual adjusted EBITDA attributable to Pembina.
Commercial operations are scheduled to begin during the second half of 2030.
Long-Term Commercial Agreement
Unlike merchant power plants that depend on fluctuating wholesale electricity prices, Greenlight will operate under a long-term tolling agreement with its data centre customer.
Under this arrangement, Greenlight will receive stable revenues through:
- Fixed capacity payments
- Usage-based payments covering fuel costs
- Operations and maintenance cost recovery
This commercial structure closely aligns with Pembina’s existing fee-based midstream business model, providing predictable cash flows while minimizing exposure to electricity market volatility.
The agreement also introduces a new investment-grade global customer to Pembina’s business portfolio, further diversifying its customer base.
Strategic Expansion Beyond Midstream Operations
Pembina views Greenlight as an important extension of its long-term growth strategy.
The company has increasingly focused on expanding into adjacent infrastructure businesses that complement its existing natural gas transportation, processing, fractionation, and marketing assets.
The Greenlight Electricity Centre creates a new demand source for Canadian natural gas while strengthening Pembina’s existing operations across Western Canada.
As electricity generation increases, higher natural gas consumption is expected to support greater throughput across Pembina’s processing facilities and pipeline network.
The project also aligns with Pembina’s long-term target of delivering 5–7 percent annual fee-based adjusted EBITDA per share growth through 2030.
Highly Efficient Combined-Cycle Technology
The Greenlight facility will utilize modern combined-cycle natural gas technology designed to maximize fuel efficiency while lowering emissions compared to conventional gas-fired generation.
The plant will feature:
- Two Siemens Energy SGT6-8000H gas turbines
- Two SST6-5000 KN steam turbines
- Two SGen6-3000W generators
Combined-cycle technology captures waste heat from gas turbines to generate additional electricity through steam turbines, significantly improving overall efficiency.
Greenlight has secured turbine supply through a fixed-price agreement with Siemens Energy while also signing a long-term maintenance agreement covering future operations.
Reliable Natural Gas Supply
The power station will consume approximately 150 million cubic feet of natural gas per day once fully operational.
To ensure uninterrupted fuel delivery, Greenlight has secured long-term transportation capacity through multiple pipeline systems, including:
- Pembina’s proposed Alliance Heartland Expansion Project
- TC Energy’s Nova Gas Transmission system
- Additional commercial transportation arrangements
The diversified transportation strategy provides operational flexibility while minimizing supply risks.
Construction and Project Delivery
Greenlight has selected a consortium consisting of Aecon Group and Técnicas Reunidas to perform engineering, procurement, and construction (EPC) services under a fixed-price contract.
Pembina will oversee project construction, drawing upon its experience delivering large-scale energy infrastructure projects across Canada.
After completion, day-to-day operations will be handled by a specialized third-party operator under a long-term operating agreement.
The project has already received all major regulatory approvals required for construction.
Ownership Structure
Following recent ownership changes, Greenlight will be jointly owned by:
- Pembina Pipeline – 47.5%
- Morgan Stanley Infrastructure Partners – 47.5%
- Kineticor Asset Management – 5%
Morgan Stanley Infrastructure Partners acquired a 50 percent ownership interest from OPTrust, while Kineticor retained a smaller strategic stake and continues supporting future development opportunities.
Future capital expenditures will be shared equally between Pembina and Morgan Stanley Infrastructure Partners.
Financing Plan
Approximately 60 percent of project costs will be financed using project-level debt.
The remaining 40 percent will come through equity contributions from the project partners.
Pembina expects to contribute roughly CAD 1 billion in equity over the construction period, while debt financing will support earlier phases of development.
Construction spending during 2026 and 2027 will primarily utilize project financing, with partner equity contributions increasing between 2028 and 2030.
Opportunities for Future Expansion
The Greenlight Electricity Centre has been designed with expansion potential.
Although the initial facility will generate 932 MW, the site has regulatory approval to ultimately expand to 1,864 MW, effectively doubling its generating capacity.
Pembina and its partners are already evaluating:
- A second phase of Greenlight
- Additional dedicated power plants for future data centres
- New gas-to-power developments across Alberta
- Integration with Alberta’s proposed Carbon Grid
- Future carbon transportation and sequestration infrastructure
These opportunities could establish a scalable midstream power generation business serving Canada’s rapidly expanding digital economy.
Benefits for Alberta’s Economy
Provincial leaders have welcomed the investment, highlighting its potential to strengthen Alberta’s economy through new industrial development.
The project is expected to support thousands of jobs during construction and operation while generating significant provincial revenues.
Because Greenlight provides dedicated electricity directly to its customer, it allows major industrial growth without placing additional demand on Alberta’s public electricity system.
The development also supports Alberta’s “bring your own power” strategy for attracting large-scale data centre investments by encouraging private electricity infrastructure alongside new digital developments.
Positioning for Long-Term Growth
The Greenlight Electricity Centre represents more than a standalone power plant. It establishes a new growth platform combining natural gas infrastructure with electricity generation to serve one of the fastest-growing sectors of the global economy.
For Pembina, the project expands its traditional midstream business into dedicated energy infrastructure supporting AI and cloud computing while creating additional demand for Canadian natural gas production.
With long-term contracted revenues, fixed-price construction agreements, strong financing arrangements, and significant expansion potential, Greenlight positions Pembina and its partners to play a leading role in supplying reliable power to Canada’s future data centre industry while supporting broader economic growth across Alberta.
Source Link: https://www.businesswire.com/
