Q3 2019 Earnings Call
I would now like to turn the meeting over to Mr., Jeremy <unk>, Vice President Finance and Investor Relations of Inter pipeline. Please go ahead mr. repairs.
Thank you Judy and good morning, everyone on the call with me today, or Chris Bill <unk>, President and Chief Executive Officer, wherein handy Chief Financial Officer, Jeff Porsche Senior Vice President of Transportation, and Jim Badger, <unk> Senior Vice President of NGL processing.
Today's call, Chris will discuss our third quarter highlights and Brett will conclude with some remarks on the financial performance.
To start to what I'd like to remind you that certain information on this conference call may contain forward looking information that involves risks uncertainties assumptions.
Information all considered reasonable binder pipeline at this time me later prove incorrect and actual results may differ materially from most stated or implied by our comments today.
Undue reliance should not be placed on such information.
Discussion.
Lane at risk factors, uncertainties and assumptions is available under Mdna, which you can find on the web site or at Cedar Dot com.
Please go ahead Chris.
Thanks, Jeremy and good morning, everybody.
Third quarter of 2019 very active for in a pipeline included a number of milestones related to the expansion central Alberta system as well as Hartland petrochemical complex.
Typically during the quarter, our pipeline continue to execute its face expansion central Alberta system.
He's one remains on track and in October we successfully at a 10000 barrels a day of truck unloading capacity at the seller terminal.
Two new 130000 barrels storage tanks, which represent the final component of phase one.
Our expected to be completed by the spring 2020.
The phase 200 million dollar watching connector is also underway, which will link our board River and Central Alberta pipeline systems. When complete the first time alternative Viking producers will have pipeline access to preferred different end markets.
During the third quarter of 2019 additional transportation agreements were entered into underpinning the investment what fixed term contracts ranging from five to 10 years.
Ultimately, we expect to attract an incremental 10 to 15000 barrels a day of conventional volumes. Once it's completed during the first half of 2020.
Moving to the Heartland petrochemical complex I'm pleased to report that the project continues to track well during the quarter, we invested 338 million on HPC successfully erected first structural steel from polypropylene facility.
As well as installed the first major components of the country utility block.
We also completed our final major left the bridge bank, which was installed in September .
We're continues to progress well on the propane dehydrogenation facility, which is expected to be mechanically complete by the end of 2020, approximately a year before the complex is projected to enter service.
[noise] today, we have invested approximately 1.9 billion on the project have depressed approximately 60%. The total project costs and we expect to exit the year, 65% of cost de risks through the successful execution of lump sum contracts.
Purchase orders and substantially completed time in materials works.
In addition to our growth initiatives during the quarter. We also completed our scheduled maintenance at the Redwater olefin fracturing fractionator as well as the pioneer one and two off gas facilities.
As previously communicated maintenance was performed during planned turnarounds at producer upgrading facilities are off gas operations for impacted for approximately three weeks all operations have returned to know.
Next work, we are continuing to explore the potential sale, our European bulk storage business.
However of course, there is no assurance that transaction will result from the process and a definitive timeline has not been set.
Finally, we were very pleased to announce during the quarter, an important screener partnership with women building futures.
We will be investing approximately 600000 to support their efforts and raising awareness and providing pre or apprenticeship training for women and apart as heartland area.
Women are generally and represent underrepresented in construction and operations within our industry and this partnership it's a great opportunity to assist women with entering the trades and unlocking rewarding careers.
So now I'll turn things over to Brian provides additional details on our financial results.
Thank you, Chris and good morning, everyone.
Expected dinner pipelines Q3, 2019 consolidated results were lower than historical averages 204 million and funds from operations are all SAS transportation franchise continues to be the foundation of our business generating 153 million an f. all consistent with the comparable period in 2018.
Financial results and our NGL processing segment were impacted by lower sales volumes and higher costs, resulting from the scheduled turnarounds that are off gas plants as well as weaker frac spread pricing realized during the quarter.
Our conventional pipelines business generated quarterly F., all 40 million compared to 54 million in Q3 2018.
Conventional results were impacted by lower volumes transported on our central Alberta, and Memphis catch on pipeline systems as well as a reduction in midstream marketing contribution.
Midstream marketing activity generated 8 million, an adjusted EBITDA during Q3 2019 compared to 14 million in Q3 2018.
Our midstream marketing operations.
Continued to benefit from attracted butane pricing in the quarter was impacted by lower volumes as well as a prior period adjustment of approximately 3 million.
For full year 2019, midstream marketing is expected to generate approximately 35 million of adjusted EBITDA.
We're also introducing our 2020 guidance and expect to generate between 30 million and 50 million and adjusted EBITDA, which is subject to pricing differentials volume and corporate cost allocations.
Our bulk liquid storage business generated strong results during the quarter with half up over 31 million double the comparing comparable period in 2018.
16 million increase reflects additional cash flow from the Newstar acquisition as well as higher storage demand, particularly in Denmark.
Consolidated utilization rates have continued to increase since the beginning of the year, an average 92% on the third quarter 2019 up from 74% in Q3, 2018, and 83% last quarter.
Finally, we remain committed to operating in a financially prudent and flexible manner.
Yes, 13th we entered into a new one year 500 million term facility with proceeds of directed towards repaying amounts under our existing 1.5 billion revolving credit facility. This term facility carries lower borrowing costs and our revolver and provides us with over 1.2 billion of available borrowing capacity as at September .
32019, we also ended the period consolidated net debt to total capitalization ratio of 46.5% well below our bank covenant level at 65%.
So this concludes the formal portion of the conference call and I would now like to turn the meeting back to Jody to open the par for questions. Thank you.
And thank you as a reminder to ask a question you want me to press Star one on your telephone.
Withdraw your question press, the pound or hash key.
Well, we compared to Q and a roster.
And our first question comes from the line of Jeremy Tonet of Jpmorgan. Please go ahead. Your line is open.
Hi, good morning.
Just wanted to start off with the.
The mid sketch system, there seemed like a that's up down a bit versus the last quarters just wondering.
If you could provide a little bit more color on what's happening there.
Things stabilized or what should we expecting here.
Yes, Jeff I'll take a shot at that we've seen.
Some consistency over the year quarter over quarter in our overall volumes bone in mid SAS. We of course have that competitive situation secure pipeline that piece has been relatively consistent mid sask was down about 32000 barrels a day from.
Quarter last year.
The competitive aspect impact on that is about 74% of that number around 24000 barrels a day the balance of it is really weather related and individual producers taking on a bit of a different capital spend so we've seen some drilling slow down out there, but mainly weather as we got closer to the fall.
Q3 is really what impacted volume so we expect to see a pretty consistent run rate to what we've seen in in Q2, albeit Q3 being down a little bit.
Got it that's helpful and then for the Viking connector. You. Initially mentioned that you had secured a third of the shipments for that.
Could you give us any updates on on how that's progressing and what the outlook is there.
Yeah. The connector is progressing really well actually we just finished welding pipeline.
Got 75 kilometers of pipe as well that up it's going to connect our strong station on Bowl River to our Central Alberta system. There are stettler expect to our Stettler station, where that expansion is currently underway as Chris mentioned.
We do have a few different producers signed up ranging in contract terms from five to 10 years, we're not going to get into too many details under those contracts, but suffice to say we are.
Lining them up and are targeting that 10 to 15000 barrels a day once we're fully operational.
That's very helpful. Thanks, and then just a couple house keeping items on the accounting side, if I could just wanted to see with the NGL processing with the turnarounds. There does that run through Opex or was that was that capitalized during the quarter just wanted to be clear there and then also with HPC with the.
Employees hired in a bad is that something that shows up as an expense or is it capitalize at this point just for modeling purposes that'd be helpful. Thanks.
Jeremy its Jim here with respect to the turnarounds there is about five five and $7 million and turnarounds that hit our expenses and then another 13 and a half million that was capital.
And that compares to last year, where we had about 1.7 million and.
And turnaround costs.
So.
Hopefully that answers that question.
Jeremy its brand share loss I'll speak to the DTC and maybe also just sort of comment at the same time on the overall quarter over quarter.
The increase in DNA. So, yes, HPC is going to start coming into both of our DNA expenses and.
And our operating costs.
Fairly minimal this year.
And as we get into 2020 will will provide more detail as to how those costs are impacting our DNA in operating costs. When you look at.
This quarter over the prior quarter, we had an increase of about 10 million overall energy any half of that is related to costs.
For the potential sale of inter terminals and the other half is directly related to help with the increase in our share price.
That's very helpful. I'll stop there. Thank you.
And our next question comes from the line of Linda Ezergailis of TD. Please go ahead. Your line is open.
Q.
I'm wondering if you could help us with some capital allocation and financing decision, making thoughts and priorities.
If we're thinking of.
Pressed commodity price environment.
That we've seen in the past.
And if that continues if there was a kind of systemic low cash flows from NGL processing for prolonged period of time.
Got you think of.
Considering other financing scenarios beyond retained cash flows and similarly, if for some reason you were not to complete a sale of your European storage business would there be other less core assets that you could partially or fully sell or might you or is your base plan already to.
Continue on the premium drip for part of the construction process or all the way through two HPC commissioning in 2021.
Hi, Linda its brand to your all I'll respond to that so when it comes to our financing really what are our plan is right now.
Really first up is to be looking at the potential sale of enter terminals. I think is what we've discussed in the past its probably the best source of funding that we have in front of us.
At this time, yes, as you pointed out.
You know NGL.
Pricing and commodity prices are much lower.
So you know really right now were will be keeping the P. Drip on a until.
We do if we do have a sale of the.
Enter terminals business that sale would allow us to turn off the P. Drip.
We do not conclude a sale what we'll do as we'll update the market at that time as to what our financing plans would be for for HPC.
Yes, Linda it's Chris.
Hey, Bill to set a few thoughts to that as well you know.
When we fight deed the Heartland project. It was never predicated on outsized NGL profits as a fundings as a source of funding I think we actually had a relatively conservative view of the cash flow from that business.
It up significantly outperformed the NGL business last year, which provided us with.
Frankly, a lot more cash.
Distributed cash would put it in the into the investment that we actually planned on.
So.
Even with let's call it modest profits that we're experiencing today.
Our financing plan is fully intact I really want to emphasize that any sale of the okay for storage business is opportunistic.
If if we don't feel we're getting fair value for the business, we will retain it.
We will continue with what I would call planned eight which as you.
Yeah.
Technically tapping the hybrid debt markets.
Using what we hope is relatively modest.
Common equity injections into the investment through the drip.
And and using the rest of our balance sheet to fund the project and we are in the in the second half of this project now we're getting through the bulk of the construction of where we see the finish line in front of us here.
And would there be any other assets sales maybe some small.
Pipelines that might be of higher value to someone that you would use as part of a financing consideration and even if.
They weren't required for financing.
There'll be opportunities to potentially surface value if you considered JV being.
Your assets or businesses.
To.
Partners that might have a lower cost of capital.
We're not actively looking at monetizing any other assets in the business right now.
The the one thing we're looking at historic.
Okay. Thank you.
And just maybe as a follow up on your Heartland project.
Any.
Substantial construction work process. These remaining that could delay the project that are dependent on hitting certain weather construction windows or anything like that or that are dependent on procuring parts that Mike.
He tied up in some sort of trade issues or anything like that.
Well, it's good question Linda no no I'm not aware of anything that's any critical major piece of equipment or printing processing.
Equipment.
That is particularly exposed to that we.
The big things for us to get done that were particularly weather related where the major lifts and as we as we said in the quarter Weve completed the last major lift so.
Certainly our a lot of things that have to get done correctly to hit our schedule, but but we feel pretty good about.
The project as it stands today.
Okay. Okay. Thank you ill jump back in the Q.
And our next question comes from the line of Rob Hope of Scotia Bank. Please go ahead. Your line is open.
Good morning, everyone.
One of start off with a question on the storage business, we've seen the utilization tick up their nicely, which actually bodes well.
For sale.
Can you talk about what's driving the higher utilization if it is IMO 2020, and then as you look into Q4 and into 2020 is a are these tailwinds are expected to be sustainable.
Sure Robbins Bren Higgins I'll take that question, Yes, you know where we're seeing.
The increase in utilization happening, it's being primarily driven in Denmark, which is really a good news story and yes, you're correct and is being driven by IMO 2020, but we're also starting to sign up some other contracts that are supporting the business.
As far as you know tailwinds in that Yeah. I think you know we're in a pretty good spot talking to our folks over there.
The line of sight on contracting is actually looking pretty good. So it's nice to see the results improving in Europe .
Thanks for that and then as a follow up I know, we continue to see increasing volumes for gas out of Alberta ever the western side.
So just want to get a sense of how you're thinking about cochran.
Especially as Transcanada increases capacity the through the or around the plant.
Maybe ill pick that one Rob you know we.
Excuse me.
I really like the position we're in a Cochrane right now nowhere, where bypassing generally a reasonably material amount of gas by the plant, which also means for plant can run at full capacity all day everyday.
Where we have looked at ways to potentially expand cochran to be able to extract even more liquids from the gas its bypassing.
But as I think I've said this a number of times not interested in making investment that will simply produce another commodity based cash flows free so.
Right now we would only undertake an investment to expand Cochran, if we could get a more fee based contracting structure to underpin it.
They all MCO why that's that's challenging in this marketplace to get people to step up essentially do toll processing through facility like that because it would be a multi hundred million dollar investment.
But.
Well be patient on that front. Meanwhile, we'll we'll have one of the largest gas plants in North America running flat out.
Alright, thanks for the color.
And our next question comes from the line of Robert Catellier of RBC Capital markets. Please go ahead. Your line is open.
Hey, Thanks for taking the questions I wanted to know.
Both the powerful perfect frac spread it looks like they were slightly negative in the quarter. So I wondered if you could describe what.
Impact the turnaround at Redwater had on that.
And what ability the company has to mitigate negative spreads.
I'm thinking things like Reinjection or storage.
Times, a week prices or are you really contractually obligated.
And that limits your ability to mitigate.
Sure Robert It's Jim here and there is multiple.
Assets to the story you're up at all is going to walk you through here to start off really with the propane story first and foremost because that was probably the most significant.
So early in Q1, we did make some contractual commitments for the summer propane season, which was April 1st to September Thirtyth, which the market at the time saw some elevated differentials to.
And end to end compared to Conway, which which were basing their price off of.
And this year. It was also relatively unique in that we had a larger portion of our sales volume contractor over the summer period.
And we did this really because we had a propane cavern at Arbor Wesco out of service the summer for integrity testing and we need to ensure that we keep the propane moving and thats keep the entire plant running with with minimal propane storage.
Compounding issue on the propane side, so obviously, the conway pricing for propane.
Dropped fairly significantly throughout the year here, and particularly when compared to last year.
So with that I can reassure you that we had.
No short term smart deals in Q3, because of the pricing and no cavernous back in service, we are utilizing that as best we can.
To minimize any impacts.
Negative pricing.
Now on a butane front, we also saw some weak pricing in Q3. However in this scenario was a little different and that we didn't have storage available. So we are in absorption fairly large percentage were using production in Q3 and only selling our contracted volumes.
That said that caused us to incur the production cost associated with that but not to sales and revenue associated with it.
Again, we didn't do any spot sales butane at the low pricing.
Instead in that situation did exactly what you referred to we put into storage right now so with the outages.
The way.
There were done safely on time and on budget.
Hopefully looking forward to more normalized.
Rates and hopefully pricing and the future.
Okay, I'm just a follow up.
I want to make sure I understand if you have any ability operationally to reinject.
On the upper offends when the spreads are weak.
The second part my question would be.
Now what drives the widening of the benchmark differential.
As far as Reinjection, it's very limited because ultimately our reinjection is back into our caverns. So we have to protest to come out at some point in time so.
If we do do it it's for a short time period.
As far as whats driving really benchmark.
There's a variety of different things volumes plays a huge impact and with the turnarounds. We we sold significantly less volumes and that was probably the biggest impact to or.
Benchmark price adjustments.
Okay, and then a question for for Brent here, just directional guidance on the Oh and the January you gave some of the composition.
I would imagine that there were some items that might be considered more onetime in nature during the quarter, but.
At 48 six.
So for Q3.
How does that compare to a run rate we might expect.
2020.
Sure Robert So let me talk about 2019 first I think are we kind of coming in around 180 million.
And then I would say reasonable run rate for annual Genie for 2020 is going to kind of looks like about 190 to 200 million and you do have to remember this goes back to my previous comments, we're going to start seeing.
The impact.
Well all the work that we're doing to get ready for the successful commissioning in the full operations of HPC. So thats, primarily what's going to be the driving that.
Yeah, I guess, so before I move on I I'm, a little surprised.
More of that isn't capitalized, but what I'm getting from your messaging here is that it's not.
It's it's not a surprise as part of the.
Hi, good you're building a HPC.
No that's exactly right Robert and of course.
Oh, yes, maybe there is an expectation that all of these costs get capitalized, but the way that the accounting rules read.
Some of these costs when they are actually related to getting ready for operations. You you do need to expand some so this is not a surprise to us.
Okay. My final question then.
I think we can say that construction has gone well.
With the major lifts done, but im wondering what we could look to as construction milestones in 2020.
Well in 2020, well the biggest milestone will be late 2020, the full mechanical completion of PDH plant, which which is as I said before his board the larger and more complicated the two facilities.
And as we've said many times that is going extremely well. We are we are about nine months six to nine months ahead of schedule on that project.
And the cost continue to track well.
And then we will see the ongoing mechanical execution of the pp plant, which remains on schedule for full operations in the fall of 2021.
And finally, the completion of the Cubs facility, which that's a central utility block, which is not an inter pipe asset of course, it's up but we are managing the construction of that facility will we should see that Kevin can complete and commissioning starting in <unk>.
Early 2021.
So what you'll hear from us quarter after quarter is.
Is essentially just the ongoing progression of de risking the project in terms of securing the capital cost.
And as you see it rises about well this year, it's going to rise up 65% by the end of the year will continue in 2021.
2020, I should say.
Okay fantastic. Thank you.
Our next question comes from the line of Robert Kwan of RBC Capital markets. Please go ahead. Your line is open.
Great. Good morning, if I can start bulk liquid storage. There was some commentary earlier, just about the increasing utilization rates and not being in Denmark, but I'm just wondering as it relates to dollars and the quarter.
Was the quarter operating margin Queen Anne.
Yes.
Kind of rates stay about the same and utilization stays about the same is this kind of a run rate we can expect in future quarters.
It's it's brand here, yeah, I'm not too sure would you say in terms of running clean but.
Oh.
My comment would be out there there's sort of nothing unusual that is kind of happening in the quarter.
So yes things couldn't can always change, but right now with the visibility, we have and and bulk liquid storage. Yeah. I think the kind of operating margin that we're seeing right now.
Theres nothing that would cause us to think that thats going to change in the future based on what we know right now.
Okay, and just with that commentary to have Denmark.
Improving.
I'm just wondering.
What drove than the goodwill impairment for those assets is it related to some of the valuations you've been getting and as part of the sale process.
No it's not.
So the way that the accounting rules read as we always have to look for indicators of impairment. So what that is is we actually have to develop a forward looking cash flow.
For that business, so even though we had a really good better quarter for Denmark.
What we do is we do have to put together a brand new cash flow forecast and we really did that as part of when we're looking at the potential sale of inter terminals and we went through quite a rigorous buildup of that and so on a forward basis. When you do these impairment testing.
We have two to dial down that capital forecast again.
So that's what really drove it and if you look in the notes to our financial statements, we actually get into quite a bit of detailed there as to what the accounting rules read but it's just really is taking a look at that forward cash flow.
Okay. So I guess like if we think about the depth of 2018 for that business you would have had an even more optimistic.
Kind of cash flow deck than you might have today.
Yeah, I would have said, maybe we're carrying something that was maybe a bit more slightly optimistic.
But also to.
As part of when you're looking at the potential sale here going through that whole process. You know, we always do a scrap we particularly took a hard look at that business and and.
That just call it a little bit of bringing down.
That castle forecast looks like in the future.
Rob maybe it's Chris maybe that maybe I'll just said you know I think.
We.
Couldn't ignore what happened in Denmark in 2018 that was a pretty bleak year for that business.
So I think it was just prudent for us to take a little bit more conservative view on on the variability of cash flow for Denmark, and it's nothing more than that so with that just kind of entered our thinking more in the long term basis.
Maybe just to finish up on on book liquid storage and and the sale process I just want to kind of clarify Chris you mentioned about it's going to be opportunistic so it's really price.
Almost the only factor.
At this point as to whether you're going to move forward or not before.
That's a resounding, yes, yes, yes.
Okay. I can just finished then with it.
A question just generally are you how you're thinking about.
Your business and the share price coming out of say the roller coaster you had at the beginning of August it starting to settle back to where you where you obviously have to buck liquid storage process. I'm. Just wondering is there anything else that youre looking at.
To surface value in the share price or is it really just a focus on.
But your head down complete heartland on time on budget and the share price will eventually reflect what you see is fair value.
But.
Yes, as you can imagine of.
Well I always give a lot of thought to what's going on in the business at all.
I'll tell you what with this quarter tells me you know I think we're continuing to show that our oil Sands transportation business is just bullet proof.
We're also talking at length about.
Numerous strategic investments, we're making to expand our conventional gathering business will start to yield results.
Excuse me.
Particularly in 2020.
Our European starts recovering nicely and we're clearly benefiting from a strategic Newstar Europe acquisition.
And frankly, we're on track to about double our EBITDA starting in two years, three HPC and that's a project thats going well.
And and yes, you know our NGL profits are largely exposed to variable commodity prices that's nothing new.
I want to emphasize that is why or dividend is fully covered by cost of service and fee based cash flow and any NGL profits larger small or sold we used to reinvest back in the business. So frankly, I see lots to like in the story and if you if you like creating long term value.
So it's really the latter then just.
Do you what you need to do business wise.
That.
Like I like my answer very let's say, it's just the latter but yes.
Well because as the other argument I'd like you talked about oil sands being bullet proof and certainly we've been seeing that in the numbers and we've also been seeing the amount of private capital that is chasing.
For core assets like that and the valuations that are being paid so.
Is there something out there to sell even in minority interest and not and getting a spectacular valuation versus where you're effectively selling your stock by the drought.
We have we're halfway through a four year build outs. So we like I said earlier, we see the light at the end, but total here.
I think we are.
Philosophically reluctant to make a permanent decision to divest of something that could be a more strategic asset.
To to solve what is more of a short term challenge.
Okay. Okay. Thanks very much.
Our next question comes from the line as Patrick Kenny of National Bank Financial. Please go ahead. Your line is open.
Yeah, Hey, guys.
I'll take a shot at book liquids as well.
I know you can't provide any specific timeline for the sales process, but.
Would you say you're at least somewhat closer to the finish line today relative to where you were in August .
I was just given the higher utilization rates across the business I guess another way to look at it is this healthy performance simply raises the valuation bar internally.
Could make it tougher for bidders to hit the Mark or I guess do you view these improving results isn't that positive for the process.
Yeah, well clearly, we're we're closer to making a decision that we were in August just through the passage of time, but.
Yes, I don't know how to answer that really I think we just have to really carefully evaluate what the offers are and obviously, we compare that against what or keep value is and yeah. I would say our keep valued does slightly change.
As the business improves.
We've always taken a long term view on the cash will generate potential of the business and what it was doing in the summer of 2019.
With that run rate.
Our long term forecast with for the business with far exceeded that so.
I think we just just need to be a bit patient here and but the process unfold and then.
Our board will make a decision.
In the I'd say the medium term.
Okay, Great appreciate those comments, Chris and then switching gears it because experienced any indirect operational impact from the Keystone outage, Mr. Gross your conventional business.
Then also on the flip side do you see any incremental volumes or marketing opportunities.
Into 2020 from the incremental egress set to come down the main line and the express pipelines.
Patrick It's Jeff I'll I'll take a shot at that that's what the first part of question is no not not materially in any way of we've seen any impact given the timeline that thats been on.
Going forward, though we certainly are keeping abreast of the conversations and the progress like everybody else is.
In particular, when it comes to our oil Sands business as you guys know, we've got a well built health system.
That step number of years ago and are sitting there with a fair bit of capacity that we can deploy so projects out there like Imperials Aspen project as well known to be somewhat on hold while the grass question is addressed and there are number of other projects out there that are certainly.
Shelf ready show, so we see and are definitely anticipated to move forward when the egress starts to materialize and we're certainly not really good position to take advantage of that and our spending time with those folks to make sure we're ready to help them if and when they decide to go forward.
Okay, that's great.
Lastly, guys I know your plate is full right now with HPC doubled from a funding in manpower perspective, but just wondering if you still might have an appetite for applying for additional royalty credits under.
The next round of the petrochemical diversification program.
The short answer is yes, we we have.
Our long term strategy to further expand our infrastructure based petrochemical investments and.
Excuse me, we're working hard on that.
I will say that.
Just given the nature of some of these potential opportunities we're looking at.
The timeframe, if we were to actually action any of them would not.
Materially overlap with HPC.
So it's more about building the second wave of.
Of high quality investments.
So we don't really see an issue there.
Okay, that's great thanks very much.
And our next question comes from the line of John Butler shareholder. Please go ahead. Your line is open.
Okay. Yeah I was wondering why do we couldn't have had the city Dole are also priced presented to the shareholders. Because you price is way below $30. Second question I was wondering if you could get a hotly and complex stick deploying.
Well this is Chris speaking ill answer that question you know.
Theres. Unfortunately, John there's nothing that we can really say about.
The article that was in the globin mail beyond what we already said back in August we're just.
For selective disclosure reasons, we're really prevented and our heads are tied on that topic. So we have nothing more to say on that topic.
The Heartland is it fair question to ask why as a.
Energy infrastructure company involved in an investment like that we we do view heartland as not as a petrochemical investment per se, but really what we're doing is making it energy infrastructure investment to turn propane, which is pretty standard hydrocarbon into a high value plastic which is polypropylene.
And we do intend to do it on using an energy infrastructure.
Contracting philosophy, which is largely underpinned by take or pay contracts, which will give us a very stable cash flow.
Much like our pipeline operations.
So could it is still out instead of.
Some of your other assets.
Well, it's strictly on the investment in call it the future the way, we view, particularly the Alberta landscape.
Is it's not going to get easier as time goes on to build major export infrastructure thats required to get.
Hi, higher value prices for our products, whether its oil or gas.
So that means we have to do things differently in the province to a degree we still have to pursue the export pipelines, obviously, that's very central.
He also need to create more value added services in the province, and the way to do that is through petrochemical investments.
We don't think this typical I don't know I don't know sets what.
It feels mid to do on transmission company basically.
Transmission and storage.
No we are in energy infrastructure company.
That broad mandate does include the investments we are doing like HPC.
Okay, we'll think series for anyway.
Welcome.
And our next question comes from the line of Linda Ezergailis Ltd. Please go ahead. Your line is open.
Thank you.
I realize there's a commercial sensitivities around discussing your HPC contracting, but I'm wondering if you could help us understand if there's the potential maybe to accelerate completion of that process in advance of.
The end of 2021.
And is the nature of those discussions a shifting anyway or or any sort of commentary around that process would be appreciated.
Yes, it's Chris again, Linda Yep.
Appreciate this is very tough conversation for folks given that we.
We provide very little insight to what's going on I.
Okay.
Hi, all I can say is I'm confident in how we're approaching these contracts and I can very clearly say, we are making progress.
So we just need people to be patient as we complete the work.
And again once again, we're not guaranteeing we're going to hit our threshold by the time. It goes in service, but I have confidence that we will.
And we'll just let it progress.
Okay. Thank you and just is that more of an operational follow up.
Is it are you able to share any sort of forward pricing you're seeing on the NGL side in terms of frac spreads or anything like that.
Hi, certainly when Thats, Jeremy just on the on the call can C plus frac spread for 2020 and 2021, we're seeing about 44 cents.
For us gallon.
Both of those years.
And that compares to what is it today or this quarter to date today, it's about 43 cents.
Thank you.
There are no further questions at this time I will turn the call back over to Mr. real bearish.
Okay, well, thank you for participating or comes company and we certainly look forward to discussing our fourth quarter and year end 2019 results with you on February the 20.
20.
Yes.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.