Q3 2019 Earnings Call
Everyone.
I am happy to welcome into T.C. pipelines third quarter 2019 conference call.
Joined today by our President Nathan Brown or V.P. in General manager Jeanine Watson and our principles Financial Officer, Chuck Morris. Please note that a slide presentation will accompany their remarks and it's available on our website at T.C. pipelines L.P. dot com, where it can be found in the investors section under the heading events and presentations.
Nathan will begin the call today with a review of T.C. pipelines 2019 third quarter results together with an overview of our G.T.N. Express project, which was announced last Friday November one.
Janine will provide a commercial update on the partnerships assets in our growth program, following which Chuck will provide a review of or financial results for the third quarter.
Nathan will return and wrap up her remarks with a brief discussion of our growth strategies and close with some key take a ways.
Following the prepared remarks, I will ask the conference operators to coordinate your questions.
Before we begin I would like to remind you that certain statements made during this conference call before we're looking regarding future events in our future financial performance.
I'll forward looking statements are based on our beliefs as well as assumptions made by an information currently available to US. These statements reflect our current views with respect to future events in are subject to various risks uncertainties and assumptions as discussed in detail in or 2018, 10, k. as well as or subsequent filings with the Securities and Exchange Commission.
If one or more of these risks are uncertainties materialize or if the underlying assumptions proving correct. Actual results may differ materially from those described in the forward looking statements. Please also know that we use the non gap and natural measures even death and distributable cashflow. During your presentation, even that is an approximate measure.
Operating cash flow during the period [noise] unreconciled directly to net income and distributable cash flow is presented to provide a measure of cash generated during the period to evaluate our cash distribution capability.
These measures are provided as a supplement to GAAP financial results and we provide a reconciliation to the most closely related GAAP measures in R.S.P.C. filing with that I'll turn the call over to Nathan.
That's right. Good morning, everyone goes for joining us today.
I'm not one was sworn in our news release and looking at slide form I'm pleased to report the T.C. 500, very good corner solid results in our portfolio apart one assets continue to perform management.
Regenerated 56 million dollar in that income during the third quarter 2019, 10% lower than 62 million or in the same price 2018.
Originally due to the partial payout bikers contracts.
Together with lower rates on many of our pipelines emanating from a 2018 for <unk>.
Already to go somewhere lower your over your at 100 million for the quarter compared to 139 2018.
Are distributed cash flow was 78 million from third quarter 2019, compared to the third quarter 2080 word D.C.F. 183 nine.
Primary driver for the decrease <unk> together with German her maintenance capital expenditures, resulting from higher system utilization in response to sustain increase natural gas transportation volumes.
<unk> cost increases were partially offset by increasing distributions from your coin related to the earnings for generated and burgers.
As we expected originals continue to reflect decreases from both our bison contract out as well as the rate decreases resulting from the 2018 per gallon.
Armenians costs, although drawn on distributed cash flow.
Positive environment of her natural gas flow in our pipelines and these costs will be out early days in due course enjoy return on capital for fish cold.
We paid off 47 million a distributions door you holders during the quarter in the same as what we paid out in the third quarter of 2080.
The partnership also declared its third quarter distribution of 65 cents per common you, which is consistent with our first and second quarter 2019 distributions and for each for 28 team.
They believe maintaining this distribution of the current law was prudent in order to continue building, a healthy financial position, which will allow us to cell phone or <unk> as we move for.
Trouble discuss our financial results and more to tell a little later in a call.
We continue to advance our growing organic growth programs that are very excited to have announced Regina expressed project last Friday November 1st or largest project and our 20 or history. This isn't approximately 335 million integrated reliability and expansion project.
Market access for growing natural gas supply out of the western Canadian sedimentary basin and allow additional market penetration along buchanan's pipeline system.
Details of the project on the next slide but first let me go through the remainder of record core highlights.
Also knew this quarter, we're proceeding with a 30 million dollar expansion, our desk or buy one.
Score expresses underpinned by 20 year contract and will transport approximately 15000 decked arms per day.
Will volumes when complete in November 2021.
Or other organic products are progressing well with days to upper Portland, expressing service as well as phase one it was for expressing both providing incremental compassion or P.N.G.T.S. pipeline system in the northeast.
Janine will discuss these and other commercial loans developments in more detail in a minute or two.
During the quarter looking our financial position or back leverage ratio is approximately 2.8 times or distribution coverage also remained very strong approximately 1.7 times for the quarter in in September 30, 2019.
These results are testament to resiliency over at Berkeley oil and it continues access of a commercial strategies just combine to create ongoing dietary animals.
Turned out a slide five or G. and express project is an exciting development for us in for G.G.N.N. shippers.
This isn't approximately 335 million dollar project that consists of both reliability work on the GTN system together with additional from transportation service of up to 250000 Becker per day on full path from Kings Gate, Idaho tumble in Oregon.
In concert with T.C. energies upstream system expansion.
Express will provide our shippers with access to high value downstream markets as well as diversifying supply sources for L.D. season Pacific Northwest.
The project consists of both horse power placement another reliability work together with brownfield compression and facilities at existing stations along with system.
The map on the slide shows a handful of stations they'll be part of the project and all work will be conducted an existing yards and locations.
More than three quarters of the total cost of this project relates to the reliability work and is expected to be recover and recourse rates.
Incremental affirmative action you will be phase going to service through November 2023, as fully underpinned by fix negotiator a contract with an average term access or 30 years.
Capacity than anticipated to generate approximately 25 million annual revenue when fully in service.
In keeping with our so funding objective the project will be funded with new termed a a G.T.N. together with equity contributions from partnership.
Or equity injections will come from existing cash on hand, together with Barnes under our whole and credibility.
Oh and all this project is very positive, though for T.C. pipelines and represents the sort of brownfield long term contracted solid returning project that we can sell fun to provide long term growth in diapers stakeholders.
Oh now turned to call over gene watching or V.P. in general manager provide additional car on our assets or commercial developments together with our market outlook.
[noise], Thanks, Nathan and good morning, everyone.
Moving on to slide effects I will provide a quick overview of the operating performance of our assets.
Are pipelines continued to provide reliable service author footprint generating followed result during the quarter.
Accepting bison are pipelines operated at high levels of availability and utilization encountering no significant operational issues.
In the west demand strong for transportation service in our G.T.M. pipeline.
T N is effectively sold out of and continues to make discretionary sale contributing to this assets continued consistent performance.
T.C. energy progress in D. bottlenecking activities upstream of G.T.N., resulting in approximately 150 15000 deck. There was a day incremental supply capacity into this pipeline coming into service as of this November 1st.
In the northeast P.N.G.T.S. successfully marketed short term services and keys Dream as hot weather in new England drove robust demand for gas to therapy power load.
With our P.X.P. phase two and <unk> Westbrook Express phase one projects coming into service as in the beginning of the month all of P.N.G.T.S. is from capacity is contracted out to 2030 and beyond.
Looking to our equity investments as has been the case for the past few years northern border experienced and strong demand for its capacity operating at very high levels of throughput.
It's from capacity was once again sold out in Q3, and our commercial team took advantage of market conditions degenerate incremental revenue by offering it seasonally available capacity on short term babies.
Bach and we continue to account for more than half of the daily receipt onto this pipeline.
We remain committed to our biking pipeline and continue to explore both a natural gas line <unk>, Adam liquidity purpose thing development opportunity for the South had.
Overall more competent their assets are well positioned geographically with last mile connection thing to keep market centers across North America.
Are pipelines are highly contracted reflecting ongoing demand for their natural gas transportation services.
We have key connections out of the western Canadian sedimentary basin, while the most prolific supply basis in North America through G.T.N., Northern border and Great Lakes, <unk> ear quite and P.N.G.T.S. at the eastern and M.T.C. energy mainline system.
And we're very encouraged by the high utilization rates on our pipeline, which are driving solid revenues in cash flow.
Our business development team is in the process of glistening customer interests in several potential project across P.C.P. footprint designed to meet the deck the man for incremental transportation competitive costs to our customers.
And I will discuss those a little further on the next slide.
Train slide seven.
I keep focus for US is the execution of our organic growth program, where we are seeking execute a portfolio brownfield growth project within our existing footprint and targeting a five to seven times growth multiple.
Are Portland Express project is proceeding on time with Phase one service in late 2018, they tune just last week and phase three in service planned for November one of 2020.
This project is approximately 85 million in total capital costs will add about 183.
Day of capacity to P.N.G.T.S.
We're also proceeding with our Westbrook expressed project at P.N.G.T.S.
This is an approximately 125 million multi phase expansion project designed to help their market in northern New England and Atlantic Canada that have until recently been served by officer sure gas production from stable Islands indie pennock.
Phase one of his project to support it by pressure Threemonth with our upstream affiliated pipeline bring an initial 43000 deck. If there was a day into service starting in November of this year without the need for any construction.
<unk> was placed into service on November the first 2019.
Phase two requires the addition of a compressor and associated facilities at an existing station on the Portland system, and we'll bring a further and 69000 deck in terms of <unk> capacity to this pipeline system.
Intended to be in service by November of 2021.
And the management Committee has authorized the phase three expansion for this pipeline, which will provide capacity for an additional 18000 <unk> per day to be in service by November of 292.
One both these projects are falling service P.N.G.T.S. is <unk> capacity will have almost doubled from 2000 or 210000 deck with arms per day at the beginning of 2018, the close to 400000 Decker therm by the end of 2022.
And as Nathan mentioned earlier, we recently announced that G.P.N. is proceeding with his GTN Express project, which is expected to be fully in service in November of 2023.
This is an integrated reliability and expansion project underpinned by fixed negotiated rates contracts for an average term in excess of 30 years.
In a both a supply push and his band poll project with about 60% of the new contracts supplied by supported by W.C.S. began thinking to diversify it's market access.
And 40% supported by Pacific Northwest utilities, looking to diversify their supply portfolio.
And we are also progressing with our Tuscarora Express project, a smaller 13 million compressor compression project to transport 15000 deck of throughout the day of additional volumes when completed in November of 2021.
This project will service modest demand growth in and around Carson city and provide supply diversity for the area.
Now looking forward and we continue to us past what other opportunities may arise to further take advantage of T.V.P.'s interesting pipeline network.
You can see on the map that we have highlighted for current opportunities being developed.
As we've noted on previous earning calls we are developing the north Baja expressed project an estimated 90 million dollar project to transport additional volumes of natural gas along north Baja mainline system.
The project was initiated in response to market demand to provide from transportation service of up to about 495000 documents per day between Ehrenberg, Arizona and <unk>, California.
A successful open season was conducted in April of 2019 with a potential in service date as early as 2023.
The project is subject to various commercial and other conditions as we move forward.
We currently anticipate an F.I.D. decision on this project in July of 2020 .
No also of note if a potential expansion project on the Iroquois system, which we referred to as the enhancement like compression or the E.X.C. project.
This project has the potential to optimize the Iroquois system to meet current and future gas supply needs to be utility customers, while minimizing the environmental impact to compressor enhancements at existing compressors stations along the pipeline.
It's just that successful the project total capacity is expected to be approximately 125000 deck of Therms per day with an estimated in service state in November of 2023.
Still in the consultation phase and subject to various approval the capital costs of this project is still to be determined as the optimal facility set is finalized over the course of the regulatory process.
This project is intended to be 100% underpinned by contract with 20 year term.
Turning to the Balkan area, we know that there's a significant supply push speaking incremental take away capacity that could be met by our northern border and bison pipeline.
Our business development teams assessing several options, but the one all focus on today is our bison reversal project.
This is a multi lake supply path from northern border Dateline, Watford City receipt point.
Down bison for delivery onto third party pipelines and destined for ultimate delivery to Cheyenne hub.
This project could provide an economic power to market for about 430000, <unk> <unk> a day abalkin production by queue for 2022.
And finally, our business development team is focused on finding opportunities to offer seamless transportation services from Canada to U.S. market via several path, which include aren't great Lakes pipeline.
During the second quarter of 2019 greatly reached an agreement on terms, new long term transportation capacity contract with its affiliate in our pipeline company.
The contracts or for a for a 15 year term from late 2021 to 2036 with a total contract value of $1.3 billion.
And our continues to work to secure a commercial support and regulatory approvals for the proposed service offering.
So in summary, <unk> management is pleased with our progress as we execute on our existing Growed program and we continue to work towards new self funded growth opportunities across P.C.P.T.'s footprint.
I will now from the call over to check Morris or principle financial officer to discuss our third quarter to quarter financial results in more detail.
<unk> good morning, everyone.
Moving on the slide eight on I'll review, the partnerships third quarter 2019 financial results.
No the incoming the third quarter was $56 million don't approximately 10% from $62 million and the third quarter of 2018.
This equates to 76 cents per unit compared to 79 cents per unit in 2018.
<unk> factors in Concord, or two 320, 19 results and then effect of which led to the decrease year over year.
First revenue from Boston was marketed we lower as a result of the election them two of its customers into four of 2018 to build their transportation agreements.
Second as Nathan mentioned earlier, we saw reproductions on several of our pipelines emanating from the 2018 for doctrines.
In addition to earlier decreases on GTN, Great Lakes, Northern border and Uruguay <unk>.
Let's go ahead of schedule, 10.8% decrease effect of August 1st of this year as part of the settlement reaches its customers and 2019.
North long our sales of short term transportation services Russell lower you every year as demand for now to does transportation return.
Holes in California during the period.
Partially offsetting news decreases <unk> revenue was higher into three year over year. Despite the impact of it schedule rate decrease at the start of 2019.
<unk> 2018 revenues were impacted by a one time charge of $9 million related to its rate settlement.
<unk> revenues roles will hire this quarter, primarily as a result of higher discretionary services old during the unseasonably warm summer. This year. In addition to revenues from its P.X.P. phase one project. The went into service laden 2018, partially offset by Lord contracted revenue, resulting from new exploratory absurdum. It's.
<unk> are sort of legacy gone trucks.
We'll discuss the other elements of earnings on the next one.
The purpose should pay distributions of 47 million to common unitholders and the third quarter the same amount, though the speed and the two three of 2018.
As Nathan mentioned earlier would could we declared or third quarter 2019 distribution of 65 cents per common unit.
This is consistent without the third for both the first and second horrors of 29 team and for each of the preceding porters and 2018.
The purpose should be.
As $100 million and the third quarter, 12% lower the amount of the same period and 2018.
Distributed with cash flows for $78 million in the third quarter 2019, $5 million lower year over year.
The decrease was due to the same factors impacting net income together with generally higher maintenance capital expenditure on her pipeline system is trained before.
During the slide nine.
The news from or consolidated pipelines of $93 million were Lawrence over the same period for last December last year for the reasons I've outlined on the on the previous slide.
Equity earnings and the third quarter of 2019 were $3 million lower than the same quarter 2018.
Due to the increase in operating costs are great lakes late into its compliance programs and right away work long up system combined with higher allocated cause from T.C. energy together with your requires scheduled rate reduction emanating from its 2019 read settlement as a result of the 2018 for doctrines.
Operating maintenance and administrative expenses during the third quarter were slightly higher than in the same quarter of 28 team as a result of ongoing <unk> pipeline compliance programs and increased allocated costs from T.C. energy.
Appreciation expense was lower by approximately 24%, resulting from the US an impairment <unk>, which we recognize during the fourth quarter of 2018.
Financial charges were 13% lower in the third quarter of 2019 versus the same period of 2018 do the full repayment over 170 million dollar term loan into four of 2018 and further reductions in are outstanding balance during the year.
Moving no wonder I find or financial position on slide Tim.
Are healthy financial position is reflective of our proactive measures that we have taken over the last year and Uh huh.
Or balance sheet as strong with a solid capital structure underpinned by or high quality energy infrastructure pipeline assets.
Investment grade credit ratings, including our recent one notch upgraded from S. and P. from trouble B. minus the triple be flub provide us with the financial flexibility as we looked organically grown per fully in the future and we believe our ratings reflect our solid financial condition and <unk>.
We look forward to executing on our sweet of organic girls projects on a cell funded basis without the need to access the equity capital markets.
Or liquidity position remains strong the partnership has $500 million of Undrawn and available boring could pass to enter a senior credit facility as of November 7th 2019.
Consistent with their cell funding model in order to build capacity for future organic growth.
Continued to prudently manager outstanding balance.
In that regard, we have reduced or overall done by $115 million. This here today.
Resulting in a bank leverage ratio of 2.8 times.
The bank leverage ratio is expected to migrate to the heights raised a little four times area overtime as the impact that one time items, including the bison contract <unk> roll through the calculation.
In response to the 2018 productions rewrite sized or distribution and 2018 and have maintained it in 2019, resulting in a solid distribution coverage ratio of 1.7 times for the quarter ended September 30th 2019.
Janine <unk> have mentioned earlier, we continue to execute on or organic growth program announcing both the G.P.N. Express and Tuscarora Express projects this quarter with both P.X.P. and Westberg Express projects proceeding on time on budget.
As we continue to use are still in the ground advantage across her pipeline systems to explore additional growth opportunities.
This includes my remarks on the third quarter financial results I know turn the call back over to new from.
Thanks shot on our first slide 11.
As I mentioned at the outset, we had a virgin quarter this year and our assets continue to perform well proving out the resilience and strong position.
We're very excited with the announcement of Argentina Express project a week ago. This project is reflective of the potential organic growth across our sweet of assets. That's our strategy of developing a creative projects that we can sell fun to provide ongoing value for our stakeholders.
Going forward or cash flow will continue to be derived from our portfolio critical natural gas pipeline infrastructure assets on her pen my long term should pay contracts with credit really shippers you.
We continue to prudently manage our financial position and believer actions that resulted in a strong bouchie.
Or bank leverage ratio is currently approximately 2.8 times and our distribution coverages quarter and very healthy 1.7 times.
Healthy metrics or enabling us and self on organic growers are outlined earlier and each of our G.T.N. <unk> in P.G.S. projects.
Longerterm, we are targeting to maintain our bank leverage ratio in the high three and a low four times area distribution coverage ratio of approximately 1.3 to 1.4 times.
We reiterate that we do not need to access the equity capital markets on our current growth program. That's Chuck noted.
Consistent with our cell funding model and in order to build capacity organic growth will continue to pay down debt levels. This year and execute are delivering program.
Or focus remains on the optimization of our asset portfolio and one k. include organic growth over time, such as our <unk> purple the project on GTN test for an Pgts North bought an airport known opportunities.
We continue to about dance other options would fit within our geographic footprint and meter return expectations.
Mine is that our metrics for healthy and we're focused on executing I current potential growth projects in order to drive long term growth continued value to our stakeholders.
Oh, now turn called tackled her on it.
<unk> I would like to open the call. It the questions. Operator. Please go ahead.
Thank you well, we're not big question from the telephone lines. Yeah. The question and you are using a speaker phone peace and ask you hadn't said before making your selection.
Yeah. The question. Please press saw one on your telephone keypad.
Any time, you wish to conceal questions. These supposed to pound find peace press someone at this time, if you're having question there wouldn't be it'd be far far participants, but just a full questions. We can q. fail patients.
Our first question is some Jeremy telling us some J.P. Morgan. Please go ahead.
Oh.
Hey, good morning. This just Charlie on congrats on G.T.N.X. for US I wanted to just ask about they even got contribution there just giving a large chunk of that is associated with the reliability work should we kind of expect to see just a portion that step up and I guess it'd be late 21 early 22, and then the residual and 23.
And then five to seven times that that kind of a good.
Multiple copies for this project.
Yeah. Thanks for question I'd say, that's that's generally what we're got into we obviously or looking through our our regulatory stride. You think we've got a a good basis there and that's when we do have the the rent reset on G.T.N.I.N. like 21, Jan 122, So that's when that's going to roll through we anticipated and yes. We're we're.
Starting at five sometimes.
And how much are you putting at the project level that wise incremental.
Yeah. It's it's Chuck here woeful looked to fund that this opportunity said with a I guess the way to think of it is about 50 per cent down at the outset level.
And 50 per cent of their contribution and coming from T.C. pipelines again through cash flow and if needed a use of the revolver. A T.C.P.. We we would know that from a GTN perspective. It does curious standalone reading it anymore. So again from a you know ratings perspective is a is highly finance will at the the also level.
Okay, Great and then second question on a northern border can you just comment on D.T. levels are this can push higher I think your partner noted a tariff change associated with D.T. levels coming coming next year not trip that's correct.
Ah Yeah, we're we can confirm that were obviously working.
Closely with one okay on that we we know that we are working on on top of changes to address it and are working with point operators on the other side to to address the issue. So yeah moving for that kind of stay tuned on that but it's not it's not impactful just yet, but we definitely have it as a as a focus and we are coordinated with one up.
Okay, Great and then the last one on.
To respect the bison reversal, there I guess, what how much would need to be greenfield pipe would need to be added there to to kind of complete diverse hold down to shine pub.
In terms of pure Greenfield pipe a good question it's a.
Are connected system for us we have bison connected directly into northern border. So insofar as this is a market tuition with with other.
Can't really speak to any off system activity that maybe done to complete it but as far as we're concerned we don't see any any greenfield an hour accent.
Perfect. Thank you.
And sorry, operator, we're hearing a a chime in noise I don't know if it's anything that you can control.
I'm trying to added okay to the noise.
<unk>.
Following question you some <unk> some too dark recurring hold to encode. Please go ahead.
Yeah.
Questions when more on the back in there as the product timeline slipped a little bit there and the 2022 or is this so what you expect I thought the previous guidance is 21.
Yeah, I think it has slipped a little bit there is a is an option for an early in service that may or may not be.
The window, maybe clothing on that.
<unk> no car there and we're looking at 2022.
It seems to be like producers clearly need to take away I mean, we've talked about B.T.U. content et cetera, you guys have the pipe to do it [laughter] key to seek to what seems to be the hold up.
There's certainly within the commercial discussions and ongoing detailed stuff there that we're we're not going to comment on here, but your your point is well taken and certainly doesn't work focused on what they need particularly capacitor and.
I'm just getting all the you know the commercial terms lined up is is the blocking time's getting done it may be pushing schedule, just a little bit, but we're still still working very hard to to get that pay for them.
Yeah, I think for that and then moving on to 2020 here helpful. Just how how you guys looking at <unk> shaping up versus 2019 with you you had mentioned there's a P.X.P. phase one phase two in west Prick phase one down to service and then obviously, there's some offsets there with <unk> action impacts that I think that previous.
<unk> 20 to 30 million so.
He is how it 2020 is is shaping up.
You know, we we <unk> I'll say the the <unk> guns that we had on the impact from the first actions is is in the rear view mirror and it's blending in with the all the other activities we've gone so.
As those changes came through our our our rates. We have we've had additional contracting we've got an additional income commercial optimization of our different systems that it it's really hard to sort of separate that impact out on a on a rolling basis, you know going for it you as you know you'll give any kind of specific guidance on what we're going to be.
Beginning in the future but.
You know working for all of that I think we've got a a good runrate I'm here for for 2020, and as we get the kicks P. projects and excuse me with for express coming into a into the running immediately.
Then we'll have the up look from that and then looking for it in 2021 will have the remainder of the bison projects falling off as we worked through the the rest of development for Poland.
That is it throw anything but you you mentioned, it's immediately so two thirds basically of kicks p. one third of Westbrook, some additional volumes and G.T.N. and then you had mentioned some of the for cash in his blend in that in there that the right way to be thinking about this.
Oh, Yeah, I guess what sir.
And then when my phone is what types of projects are you guys planning for you you had mentioned the fourth one on the on the bullet point there on on the slide of incremental projects of of more market access for the that'd be 50 is that is that on top of the great Lakes. Three contracting are you looking at doing more capacity and great Lakes is curious on your thoughts.
We always look for solutions on great lakes to to effectively filling up it has some term left on on the volume for its existing kind of nameplate capacity.
That can come as a as another kind of an integrated project whether requires any additional capital spend on either side will remain to be seen but it's we remain a good path out of western Canada for gas with with that type underground and access to dawn another storage market. So it continues to be a an appealing pad once those those molecules need to.
You need to find him on it.
Thanks for telling my question.
Thank you.
Following question it from my call Lapidus from Goldman Sachs. Please go ahead.
Hey, guys can you walk me a little bit through T.T.N. Express I, just want to make sure I follow what's going on here.
It seems like a great project by the way yeah, especially if you can attract what's happened in the Pacific Northwest gas prices a couple of times over the last year or so, but if I look at the capital. It's 335 million a capital when you talk about that the new from capacity is getting 25 million, but I assume there's increment.
Revenue. In addition to that 25 million data will be recovered in in the kind of the recourse rate is there a wait kind of back into what data Mount level would be.
Well I think everybody's got their their models and from from our perspective, we have to have to work after a regulatory execution strategy and how we get that calculates are are are recourse rates.
So you know we've we don't we don't publish what we think that's going to be but I'd say in terms of our execution on on regulatory rates were recovered polls.
That's what we're kind of.
We're getting toward an execution similar to what we've been able to accomplish.
Okay, and and am I right thinking about this that the first year that you'll have a full year run right on the project would actually be 2024.
You've got commercial phase in San November 22, and 23.
Yeah.
Great.
Okay talk about the process a little bit for for Iroquois and and just kind of you know what has to happen actually get that project done and just kind of regulatory steps through that.
It's it's a very measuring project certainly with the concerns and in that region.
With the different permits that are required and regulators.
The same.
Structure and scale and scope of the project. It's it's very interested project I'd say going a little more measured pace than one might.
Might have been prototypical in the past.
So yeah, that's why we're sort of more notably hesitant to to get timelines and.
<unk> jumping around it I think.
Four is very compelling the need for a additional capacity into the into the market. It is obvious and this is one that makes a whole lot of sense and we're we're working with with customers.
As well as the regulators to to make sure. This is optimize in a way that is positive for everybody.
Got it thank you and and then last question when you think about 2020.
You think your net debt balance during the course of the year kind of stays flat at the current level expands a little bit <unk>. Some of the growth I'm just trying to think about what a balance sheet 12 months out may look like.
Yeah, that's a good way to think of it in terms of you know the debt reduction that we're going to be seen you know over the course, but also you know the ramp up if you will in terms of the you know they're funding that we're going to be doing for for some of the girls project. So flattening of the doubt for a period here is is really what we're seeing as we went over.
The the first couple of years of the group portfolio program.
Meaning you're basically going to find a lot of the growth Adam existing cash flow. That's left over after you pay the distribution.
That's correct I guess the way to the way to think of it is that you know for each of the expansion opportunities overlooking out here. It was a general rule will group will be looking for 50% of the done to be at the also level and 50% to be contributed by.
If you want to call it equity from T.C.P., but that equity is really in the form of cash available from operations as well as if needed would be boring on the on the revolver at T.C.P.. So again just to reiterate we're not looking at any you know equity to be raised in the market. If you will relative to to the expansion program here.
The exception to that would be we see dead capacity for 100% to be able to find out p. and G.P.S. as well as the smaller.
Though with respect to <unk>.
Got it. Thank you guys much appreciate it.
Thank you once again, please press down one at this sign for any questions or comments.
Following question, if I'm, an ex Kenya from well researched. Please go ahead.
[noise]. Thanks, I guess question just on.
On the kind of <unk> opportunities there is a.
On the kind of some precise I guess, there was a sense of potential <unk> you know delay in permitting I. It is they're kind of any any kind of movement that you could see just based on the timing of of your project or is it just kind of a fixed a you know fixing service state that doesn't really moved depending on what's going on for their downstream.
Yeah, We're we're just way up.
That we've got that we mentioned in next year to see if that lose any if we have a a <unk> then at this point, we don't so until we Italy anything from or Yeah. We we wouldn't say, we're going to run a move anything at this point, but we're we're certainly waiting yeah waiting for all the conditions to come together for that one before we.
Get two more to into too many more specific.
Thanks.
Thank you.
Do some jumped tremendous computes the question an insufficient.
If they are any for the question. Please contact investor relations that T.C. pipeline healthy I wouldn't know turned a corner went to Rhonda.
Great. Thank you every land for your participation today, we certainly appreciate your interest in T.C. pipelines, and that's where we're just speaking with you again yeah.
Bye.
Thank you [laughter] the conference as now and then.
Peace, It's gonna account minds at this time and we thank you for your participation.
This conference is no longer being recorded no hedges promoted coffeehouse at that there won't be.