Pembina Pipeline Corp.’s chief executive officer has stepped down unexpectedly after a year of developments that helped lift the stock price of the Calgary-based company.
Mick Dilger had led Pembina since 2014 and expanded the company through a series of acquisitions. A bid for rival Inter Pipeline this year fell through, but Pembina walked away with a $350-million break fee for its trouble.
Pembina, known for oil and gas pipelines, processing plants and terminals in Canada and the United States, said Mr. Dilger is leaving to pursue other opportunities. Sarah Schwann, Pembina’s vice-president of external affairs, declined to offer more details.
The company named Scott Burrows interim CEO as it searches for a full-time replacement. Mr. Burrows has been chief financial officer at Pembina for seven years.
Mr. Dilger’s departure appeared amicable. He and the company had complimentary things to say about each other in a news release on Monday.
“I am immensely proud of the Pembina team, the culture we have created, and what we have accomplished together,” Mr. Dilger said in the statement. “When I joined Pembina, it was a $2.5-billion entity in a single business and has grown into a roughly $35-billion entity, operating safely and successfully in multiple jurisdictions and in many businesses, with more under way.”
Chairman Randall Findlay lauded Mr. Dilger for the company’s growth during his tenure and its record on environmental, social and governance measures, as well as for “leadership in a lower carbon economy.”
The company said the change at the top would not affect its financial targets, which include its outlook for earnings before interest, taxes, depreciation and amortization of $3.3-billion to $3.4-billion this year.
Shares in Pembina fell about 2.7 per cent to $40.50 on the Toronto Stock Exchange after the announcement. They had been up 38 per cent this year.
“We are surprised by the timing of the announcement, as well as the lack of a defined transition period, which in other instances in the sector has usually been measured in months if not quarters,” Robert Kwan, analyst at RBC Dominion Securities wrote in a note to clients. However, Mr. Dilger’s statement in the release and the company’s reiteration of its targets gave comfort that there were no material financial or operational problems, Mr. Kwan said.
Pembina expanded its size and scope under Mr. Dilger’s tenure. He led the company through the $5.8-billion takeover of Veresen Inc. in 2017 and the $4.4-billion acquisition of Kinder Morgan Canada two years later.
This year Pembina has been active on a number of fronts. It signed agreements with Indigenous groups to advance a bid for the Trans Mountain oil pipeline, currently owned by the federal government, and to propose a liquefied natural gas plant called Cedar near Kitimat, B.C.
The alliances, with Western Indigenous Pipeline Group and Haisla First Nation, respectively, put Pembina at the heart of efforts by Indigenous communities to take more control of their economic prospects through major energy projects – initiatives that remain contentious among some First Nations.
Haisla Chief Councillor Crystal Smith said she did not expect any changes to the Cedar LNG partnership as a result of Mr. Dilger’s departure.
“Every team member is instrumental in regard to the success of the project. But it’s the commitment of the team that’s going to provide success to this project and the commitment from both Haisla and Pembina remains the same,” Ms. Smith said.
Pembina has also teamed up with TC Energy Corp. in a plan for a major carbon transportation and sequestration network in Alberta.
After Inter Pipeline found itself the target of an unsolicited takeover bid from Brookfield Infrastructure Partners, Pembina struck a deal in May to be Inter’s white knight in an $8.3-billion deal. In the end, Inter agreed to accept a sweetened offer from Brookfield, allowing Pembina to pocket the hefty break fee.
Last week, Pembina announced it had set a goal to reduce its carbon emissions by 30 per cent from 2019 levels by 2030. The company said it would factor the target into all its business decisions.
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