Q2 2023 Enbridge IncEarnings Call

Speaker 1: Ladies and gentlemen, welcome to the Enbridge Incorporated second quarter 2023 Financial Results Conference call. My name is Abby and I will be your operator.

Ladies and gentlemen, welcome to the Enbridge incorporated second quarter 2023 financial results Conference call.

Name is Abby and I will be your operator for today's call.

Speaker 1: At this time, all participants are in a listen-only mode.

At this time all participants are in a listen only mode.

Speaker 1: Following the presentation, we will conduct a question and answer session for the investment community. If you would like to ask a question during that time, simply press the star key, followed by the number 1 on your telephone keypad.

Following the presentation, we will conduct a question and answer session for the investment community.

If you would like to ask a question during that time simply prestige Starkey followed by the number one on your telephone keypad.

Speaker 1: If you would like to withdraw your question, press star 1 a second time.

If you would like to withdraw your question Press Star one a second time.

Please note that this conference is being recorded.

Speaker 1: Please note that this conference is being recorded. And I will now turn the call over to Rebecca Morley, Director of Investor Relations. Rebecca, you may begin.

And I will now turn the call over to Rebecca Morley director of Investor Relations. Rebecca you may begin.

Speaker 2: Good morning and welcome to the Enbridge second quarter 2023 earnings call. My name is Rebecca Morley and I'm the Director of the Investor Relations.

Good morning, and welcome to the Enbridge second quarter 2023 earnings call. My name is Rebecca Morley and I'm. The director of the Investor Relations team. Joining me. This morning are Greg Evo, President and CEO Pat Murray.

Speaker 2: Joining me this morning are Greg Evil, President and CEO , Pat Murray, Executive Vice President and two-sanancial officer, and the heads of each part business units, Colin Grunding, like with pipelines, Cynthia Hansen, Gas Transmission and Mistreme, Michelle Herodins, Gas Distribution and Storage.

I can give vice president and Chief Financial Officer.

And the heads of each of our business units, calling grunting liquid pipelines, Cynthia Hansen gas transmission and midstream Michel inheritance gas distribution and storage.

Speaker 2: and Matthew Ackman, Renewable Power. As per usual, this call is being webcast and I encourage those listening on the phone to follow along with the supporting slides.

And Matthew Ackman renewable power.

Per usual this call is being webcast and I encourage those listening on the phone to follow along with the supporting slides. So I'll try to keep the call to roughly one hour and in order to answer as many questions as possible, we will be limiting questions to one plus a single follow up if necessary.

Speaker 2: We'll try to keep the call to roughly one hour, and in order to answer as many questions as possible, we will be limiting questions to one plus single follow-up if necessary. We'll be prioritizing questions from the investment community. So if you're a member of the media, please direct your inquiries to our communications team, who will be happy to respond.

We'll be prioritizing questions from the investment community. So if you're a member of the media. Please direct your inquiries to our communications team, who will be happy to respond.

Speaker 2: As always, our Investor Relations team will be available following the call for any follow-up.

As always our Investor relations team will be available following the call for any follow up questions.

Speaker 2: On to slide two, where I'll remind you that we'll be referring to forward looking information during today's presentation and question and answer period.

On to slide two where I'll remind you that we'll be referring to forward looking information during today's presentation and question and answer period.

Speaker 2: By its nature, this information contains forecast assumptions and expectations about future outcomes, which are subject to the risks and uncertainties outlined here and discussed more fully in our public disclosure final.

By its nature. This information contains forecasts assumptions and expectations about future outcomes, which are subject to the risks and uncertainties outlined here and discussed more fully in our public disclosure filings. We'll also be referring to non-GAAP measures summarized below and with that I'll turn it over to Greg evil.

Speaker 2: will also be referring to non-get measures summarized below. And with that, I'll turn it over to Gregie.

Speaker 3: Thank you, Rebecca, and good morning, everyone, and thanks for joining us. I'm excited to be here today to review our strong second quarter results and provide a business up.

Thank you Rebecca and good morning, everyone and thanks for joining us I'm excited to be here today to review, our strong second quarter results and provide a business update.

Speaker 3: I'll start off by doing a mid-year check-in on some of our key priorities that we laid out for you at our end.

I'll start off by doing a mid year checking in on some of our key priorities that we laid out for you at our Investor day.

Speaker 3: I'll then take you through some updates from our four businesses and provide highlights from our 22nd annual sustainability report.

I'll then take you through some updates from our four businesses and provide highlights from our 22nd annual sustainability report.

Speaker 3: I'll also highlight how our industry leading diversified cash flow profile underpins our strong balance sheet and will continue to support Enbridge as a first choice investment opportunity.

To highlight how our industry, leading diversified cash flow profile underpins, our strong balance sheet and we will continue to support Enbridge as a first choice investment opportunity.

Speaker 3: That will then walk you through the financial performance, our capital allocation priorities, and growth at...

We will then walk you through the financial performance, our capital allocation priorities and growth outlook.

Speaker 3: Lastly, off-clones with a few key takeaways. And as always, the Enbridge team is here to address any questions you may have.

Lastly, I'll close with a few key takeaways and Thats always the Enbridge team is here to address any questions you may have.

Speaker 3: Q2 was a really good quarter for Enbridge. We saw high utilization across our assets and had strong financial results, consistent with our expectations.

Q2 was a really good quarter for Enbridge, we saw high utilization across our assets and had strong financial results consistent with our expectations.

Speaker 3: This performance puts us on track to meet our full year EVA DAW and DCF per share guidance.

This performance puts us on track to meet our full year EBITDA and DCF per share guidance. Our balance sheet is in great shape, we have a high investment grade credit rating and we exited the quarter at four five times debt to EBITDA. The very low end of our targeted range of four five to five times.

Speaker 3: Our balance sheet is in great shape. We have a high investment grade credit rating, and we exited the quarter at four and a half times debt to EBITDA. The very low end of our target range of 4.5 to five times.

We are pleased to have reached a settlement in principle with shippers on the mainline tolling early in the quarter.

Speaker 3: We are pleased to have reached a settlement in principle, which shippers on the mainline tolling early in the quarter, which was great news for us, our customers, and the industry overall.

Which was great news for us our customers and the industry overall.

Speaker 3: We will provide an update on next tips when we discuss our business.

We will provide an update on next steps when we discuss our business units.

Speaker 3: on growth, we make good progress on our US Gulf Coast crude oil strategy by extending and upside.

On growth, we made good progress on our U S Gulf coast crude oil strategy by extending and upsizing Flanagan South open season, where we saw very strong interest for customers for that pipeline service.

Speaker 3: where we saw very strong interest for customers for that pipeline service.

Speaker 3: We also sanctioned new storage capacity with Enbridge Houston oil term for yacht, enhancing the competitive profile of remain-line system to deliver Canadian oil to the US Gulf Coast.

We also sanctioned new storage capacity with Enbridge Houston oil terminal.

Enhancing the competitive profile of our mainline system to deliver Canadian to the U S Gulf Coast.

Speaker 3: We have filed a partial settlement on our utility rebasing application, which includes important matters and has been verbally approved by the panel. We expect a final outcome on 2024 rates by.

We have filed a partial settlement on our utility Rebase and application, which includes important matters and has been verbally approved by the <unk> panel we.

We expect a final outcome on 2020 for rates by Q4.

Speaker 3: This will provide benefits to our investors and customers and will support Ontario's population growth, energy affordability and economic growth.

This will provide benefits to our investors and customers and will support Ontario's population growth energy affordability and economic growth in the province.

Speaker 3: We continue to see growth opportunities in our renewable business and anticipate reaching FID on certain U.S. unsure development projects by your end.

We continue to see growth opportunities in our renewable business and anticipate reaching the uncertain U S onshore development projects by year end.

Speaker 3: and we're pleased that next decade reached FID and phase one of their Rio Grande LNG facility.

And we're pleased that next decade reached up idea on phase one of their Rio Grande LNG facility.

Speaker 3: We are in the process of obtaining necessary permits and regulatory approval for our real Bravo pipeline project and plan to start construction in

We are in the process of obtaining necessary permits and regulatory approval for our Rio Bravo pipeline project and plan to start construction in 2025.

Speaker 3: We've executed over a billion dollars of accretive tuck-in M&A year-to-

We've executed over $1 billion of accretive tuck in M&A year to date and liquids, we increased our ownership in acquired operator ship of Gray oak pipeline, which delivers crude to a world class export facility at Ingleside.

Speaker 3: In liquids, we increased our ownership and acquired operation of Grail Pipeline, which delivers crew to a world-class export facility adding...

Speaker 3: and gas transmission. We enhanced our North American LNG export strategy by closing the trace plashes natural gas storage acquisition and acquiring Akin Creek natural gas storage facility, which we expect to close in.

In gas transmission, we enhanced our north American LNG export strategy by closing the Tres Palacios natural gas storage acquisition and acquiring Aiken Creek natural gas storage facility, which we expect to close in Q4.

Speaker 3: Lastly, we continue to sustainably return capital to our share.

Lastly, we continued to sustainably return capital to our shareholders.

Speaker 3: All in all, a great start to the year. And as mentioned, we are in track to achieving our financial guidance and we are making good progress on our growth commitments, which include all forms of energy across our premier, French.

All in all a great start to the year and as mentioned we are on track to achieving our financial guidance and we are making good progress on our growth commitments, which include all forms of energy across our premier franchise.

Speaker 3: We continue to believe that all forms of energy will be required for years to come. Natural gas and oil will remain critical components of our energy supply in all energy transition scenarios that balance the energy trillum of reliability, sustainability, and affordable.

We continue to believe that all forms of energy will be required for years ago natural gas and oil will remain critical components of our energy supply in all energy transition scenarios that balance the energy trilemma of reliability sustainability and affordability.

Speaker 3: Our asset network is large, diverse, and unmatched, providing opportunities to grow each of our base businesses.

Our asset network as large diverse and unmatched providing opportunities to grow each of our base businesses, while our customer relationships diversified asset footprint and capabilities open up new opportunities for lower carbon investments.

Speaker 3: diversified asset footprint and capabilities open up new opportunities for lower

Speaker 3: Now let's take a closer look at some of the recent highlights in our business.

Now, let's take a closer look at some of the recent highlights in our business units, which support our low risk pipeline utility model.

Speaker 3: which support our low-risk pipeline utility model. Let's start with look.

Let's start with liquids and.

Speaker 3: In liquid pipelines, the mainline system remains highly competitive. We saw record volumes in the first half of the year and extended and upsized a binding open season for the Flanagan South Pipes.

In liquids pipelines the mainline system remains highly competitive we saw record volumes in the first half of the year and extended and Upsized a binding open season for the Flanagan South pipeline.

Speaker 3: FSP will approach being 90% long-term contracted, reinforcing strong utilization of main line infrastructure, delivering barrels into Chicago, and downstream infrastructure serving the US Gulf Coast, including the Seaway Pipeline, and Enbridge Houston Oil.

S. P will approach being 90% long term contracted reinforcing strong utilization of mainline infrastructure delivering barrels into Chicago and downstream infrastructure, serving in the U S Gulf coast, including Seaway pipeline and Enbridge Houston oil terminal.

Then the liquids system really is one of the card it provides attractive transportation access to approximately 75% of north America's refining capacity.

Speaker 3: The milkwitz system really is one of a kind. It provides attractive transportation access to approximately 75% of North America's refining capacity.

Speaker 3: As mentioned, we reach the win, win, win, mainline totally agreement, in principle with our

As mentioned, we reached a win win win mainline totally agreement in principle with our customers in may.

Speaker 3: This was the result of committed engagement and negotiation by both our team and the Shipper representative.

This was the result of committed engagement and negotiation by both our team and the shipper Representatives. The settlement will provide utility like returns at alliance with customers' desire for safe reliable service at a competitive tool.

Speaker 3: Settlement will provide utility-like returns and aligns with customers' desire for safe reliable service at a competitive toll

Speaker 3: A key feature of the agreement is a performance color that will allow in-bridge to earn a return on equity between 11% and 49.5%. On a capital stretch, you're of 50% equity and 50% debt.

A key feature of the agreement as a performance culture that will allow enbridge to earn a return on equity between 11% and 14, 5% on a capital structure of 50% equity and 50% debt.

Speaker 3: This collar mechanism incentivizes us to control costs and maximize throughput to earn in the upper part of the ROE range, while also providing some downside protection in the event of extreme volume disruption.

This call our mechanism incentivize us to control costs and maximize throughput to earn in the upper part of the ROE range. While also providing some downside protection in the event of extreme volume disruptions.

Speaker 3: Cash flows generated by the asset will be protected. From inflation with ONA and power expense escalators, set to begin in mid 2024 with annual increases their act.

Cash flows generated by the asset will be protected from inflation with O&M and power expense escalators set to begin in mid 2024 with annual increases thereafter.

Speaker 3: In terms of next steps, we expect to jointly finalize the settlement with industry and submit an application for its approval to the Canadian Energy Regulator by October , with the expectation that the new tolling settlement could be approved and implemented later this year.

In terms of next steps, we expect to jointly finalize the settlement with industry and submit an application for its approval to the Canadian energy regulator by October with the expectation that the new tolling settlement could be approved and implemented later this year.

Now aligns five just made a few headlines over the past few months. So I thought I would spend a few moments addressing our position on what's happening in Wisconsin.

Speaker 3: Now, line five has made a few headlines over the past few months. So I thought I'd spend a few moments addressing our position. And what's happening was, come.

Speaker 3: We were pleased that the federal district court agreed that Line 5 continues to operate safely and is critical infrastructure delivering life-saving energy to millions of consumers downstream.

We were pleased that the Federal District Court agreed that line five continues to operate safely and as critical infrastructure delivering life saving energy to millions of consumers downstream.

Speaker 3: Three years ago, we filed for a 41-mile reroute in Wisconsin to relocate the pipeline off the Bad River Band's land.

Three years ago, we filed for a 41 mile reroute in Wisconsin to relocate the pipeline off the bad River band plan.

Speaker 3: We believe the pipeline can be relocated in the three years provided regulatory approvals are obtained in a reasonable timeframe. And as a reminder, the new mainline tolling agreement also provides support for investment in both the line-fibre of plan in Wisconsin and the tunnel project proposed submission.

We believe the pipeline can be relocated in the three years provided regulatory approvals are obtained in a reasonable timeframe and as a reminder, the new mainline tolling agreement also provides support for investment in both the line fiber plant in Wisconsin, and the tunnel project proposed in Michigan.

Speaker 3: Line 5 continues to operate safely and reliably, and we look forward to working with the bad river band regulators and other stakeholders to relocate Line 5 with no service disruption expected.

<unk> continues to operate safely and reliably and we look forward to working with the Bad River Bank regulators and other stakeholders to relocate line five with no service disruption expected.

Speaker 3: Looking at our Permian strategy, the emberage angle side energy center is turning out to be an all.

Looking at our Permian strategy, the Enbridge Ingleside Energy Center is turning out to be an all purpose Swiss army knife. It is indeed, a one of a kind terminal with the largest crude export capacity in North America onsite storage and a suite of lower carbon development opportunities, including renewable power.

Speaker 3: It is indeed a one-of-a-kind terminal with the largest crude export capacity in North America. On site storage and a suite of lower-carving development opportunities.

Speaker 3: We've seen record quarterly volumes of the facility and our gray oak pipeline confirming our belief that a full-pass service for our customers from the Permian to tidewater is a highly attractive competitive option.

We've seen record quarterly volumes at the facility and our Gray oak pipeline confirming our belief that a full pass service for our customers from the Permian to Tidewater is a highly attractive competitive offering.

In March we signed an LOI with euro to jointly construct a blue ammonia production facility, adding a site that is backed by a long term off take agreement.

Speaker 3: In March, we signed an L.O.I. with Yara to jointly construct a blue ammonia production facility adding a size that is backed by a long term off-take.

Speaker 3: We're also planning to construct a carbon capture and see frustration of.

We're also planning to construct a carbon capture and sequestration of in region as part of our previously announced partnership with Oxy low carbon ventures.

Speaker 3: as part of our previously announced partnership with OxyLowCub.

Speaker 3: A key competitive advantage of the terminal is ownership of two pipelines, cactus two and gray oak, that deliver tarminine crude to the facility.

A key competitive advantage of the terminal is ownership of two pipelines cactus II and gray oak that deliver Permian crude to the facility.

Speaker 3: We are looking to expand gray of pipeline by up to 200,000 barrels per day with an open season plan for later this year.

We are looking to expand gray oak pipeline by up to 200000 barrels per day with an open season planned for later this year.

Speaker 3: Additional capacity will provide customers with access to low cost, integrated value chain that provides operational synergies, and the lowest cost to tidewriters from the permits.

Additional capacity will provide customers with access to low cost integrated value chain that provides operational synergies and the lowest cost of tidewater from the Permian.

Now, let's move on to some of the exciting developments in our gas transmission business.

Speaker 3: Now let's move on to some of the exciting developments in our gas transmission.

Speaker 3: In the US, we are excited about next decade announcing a final invest-

In the U S. We are excited about next decade announcing a final investment decision on the first three trains to export LNG from their Rio Grande LNG facility at the Port of Brownsville.

Speaker 3: on the first three trains to export LNG from their Rio Grande LNG facility at the port of Brunsville. Now. So.

Now.

This allows us to advance our Rio Bravo pipeline project, which will supply 100% of the feedstock guests to the terminal as a key part of our U S. Gulf Coast strategy. We are in the process of obtaining necessary construction permits and notice to proceed from FERC further project with commercial operations expected in 2026.

Speaker 3: supply 100% of the feedstock gas to the terminal is a key part of our US Gulf Coast

Speaker 3: We are in the process of obtaining necessary construction permits and notice to proceed from FERC for the project with commercial operations expected in 2026. We recently closed our acquisition of the 35 DCF trade plashes gas storage facility further supporting LNG customers along the Gulf Coast.

We recently closed our acquisition of the 35 Bcf trade flashes gas storage facility further supporting LNG customers along the Gulf Coast.

Speaker 3: We've seen recontracting rates move significantly higher and permitting is underway to expand the facility by up to 6.5 BCF. And we will work with our customers to deliver more capacity in the next 12 to 24.

We've seen re contracting rates move significantly higher in permitting is underway to expand the facility by up to six five Bcf and we will work with our customers to deliver a more capacity in the next 12 to 24 months.

Speaker 3: Currently, we provide service for 15% of the export capacity on the Gulf Coast through four energy facilities operating in the region. And we expect to grow that position to about 30% of the market share by 2030.

Currently we provide service for 15% of the export capacity on the Gulf Coast through four LNG facilities operating in the region and we expect to grow that position to about 30% of the market share by 2030.

Speaker 3: In the US Northeast, we've identified significant and scalable expansion capability on Texas Easter, which cuts through the heart of the-

In the U S northeast, we've identified significant and scalable expansion capability on Texas, Eastern which cuts through the heart of the Appalachian shale.

Speaker 3: Our Appalachia to Market Projects are a perfect example of this. And we look forward to helping Appalachia gas reach the growing markets for all gas in all directions.

Our Appalachia to market project Alright, Perfect example of this and we look forward to helping Appalachia gas reached the growing markets for all gas in all directions.

Speaker 3: In Canada, the engineering work on WITFiberLNG is progressing on schedule. And we expect the set of preferred returns early next year.

Canada, the engineering work on wood fiber LNG is progressing on schedule and we expect to set our preferred return early next year.

Speaker 3: On our West Coast pipeline system, we're progressing $5 billion of investment on the T-North and T South systems to feed West Coast LNG terminals and

On our West Coast pipeline system, we're progressing a $5 billion of investment on the T North and T systems to feed West Coast LNG terminals and other industrials in the Pacific Northwest.

Speaker 3: And T North will be looking to relaunch a binding open season for a second expansion of that BC pipeline.

On T north will be looking to relaunch a binding open season for a second expansion of that BC pipeline system by year end.

You'll recall that we were acquiring Aitken Creek gas storage closing is on track to occur later in 2023. This asset is well positioned and will enhance our service offering to our customers and support our LNG export strategy in British Columbia.

Speaker 3: You recall that we were acquiring a concrete gas storage. Closing is on track to occur later in 2023. This asset is well positioned and will enhance our service offering to our customers and support our LNG export strategy in British Columbia. So now let's see.

So now let's take a look at our gas distribution business. We are expecting another strong year of customer growth. We're on track to achieve more than 42000, new customers with 21000 added year to date.

Speaker 3: We are expecting another strong year of customer growth. We're on track to achieve more than 42,000 new customers with 21,000 added year to date.

Speaker 3: Ontario's population is expected to grow by over 2 million people over the next ten

Ontario's population is expected to grow by over 2 million people over the next 10 years, making natural gas critical to meeting customer energy demand.

Speaker 3: making natural gas critical to meeting customer energy demand.

Speaker 3: On the industrial side, there are few economic alternatives to natural gas to meet demand. And we're seeing tremendous growth opportunities.

On the industrial side, there are a few economic alternatives to natural gas to meet demand and we're seeing tremendous growth opportunities across all sectors on.

Speaker 3: On the rebasing application, we have held the supplement hearing for our new incentive rate application for the period of 2024 to 2028. We negotiated a partial settlement on important matters such as operating rate based and operating costs with recommended approval by the OEP staff.

On the <unk> application, we have held the hearing for our new incentive rate application for the period of 2024 to 2028, we negotiated a partial settlement on important matters, such as operating rate base and operating costs with recommended approval by the <unk> staff.

Speaker 3: There are still some important items that need to be settled, including equity thickness and appreciation. But we expect a regulatory decision by year end and plan to enact new rates on January 1, 2024.

There are still some important items that need to be settled including equity thickness and depreciation, but we expect a regulatory decision by year end and plan to enact new rates on January one 2024.

Speaker 3: are focused on cost optimization and reliable services, has allowed us to consistently achieve above the base RRE as you can see in the chart on the right.

Our focus on cost optimization and reliable service has allowed us to consistently achieve above the base ROE as you can see in the chart on the right.

Speaker 3: We have a long track record of working under incentive rate mechanisms, providing quality.

We have a long track record of working under incentive rate mechanisms providing quality.

Speaker 3: safe service and predictable rates for our customers. Well also allowing us to achieve premium returns within the parameters set by the regular.

<unk> service and predictable rates for our customers, while also allowing us to achieve premium returns within the parameters set by the regulators.

Speaker 3: The Ontario government recently announced that I quote, natural gas will continue to play a critical role in providing Ontarians with a reliable and cost-effective fuel supply for space heating, industrial growth, and economic prosperity.

The Ontario government recently announced and I quote natural gas will continue to play a critical role in providing <unk> with a reliable and cost effective fuel supply for space heating industrial growth and economic prosperity.

Speaker 3: With developments in energy efficiency and low carbon fuels such as RNG and low carbon hydrogen, the natural gas distribution...

With developments in energy efficiency, and low carbon fuels, such as R&D and low carbon hydrogen.

Natural gas distribution system will help contribute to the provinces transition from higher carbon fuels in a cost effective way and quote we agree with the Ontario government and believe renewables will also grow rapidly and be critical to meeting global emissions targets, but renewable growth cannot be sustained without being closely intertwined.

Speaker 3: will help contribute to the provinces' transition from higher-carving jewels in a cost-effective way, in close. We agree with the Ontario government and believe renewables will also grow rapidly and be critical to meeting global emissions targets. But renewable growth cannot be sustained without being closely intertwined with the natural gases and intermittency and peak fail-safe for consumers.

With the natural Gas's, Intermittency and peak fail safe for consumers speaking of renewables, let's take a look at some of the developments in our renewable business.

Speaker 3: Speaking of renewables, let's take a look at some of the developments in our

Speaker 3: or making good progress on our French and offshore wind projects under construction over one gig a lot of new generation is expected to be online by 2025. As they comp, the first turbines have been installed, and at Providence Ground Large, all floaters have been secured.

We're making good progress on our French offshore wind projects under construction over one gigawatt of new generation is expected to be online by 2025.

Let's say comp the first turbines have been installed and are Provence Grande large all floaters have been secured.

Speaker 3: We are tracking on time and budget with both projects expected to be fully in service by the first quarter of 24.

We're tracking on time and budget with both projects expected to be fully in service by the first quarter of 'twenty four.

Speaker 3: Galvados continues to make good progress and is tracking on time.

<unk> continues to make good progress and is tracking on time and budget.

In North America, we have more than four five gigawatts of onshore projects in development a portion of these projects will come online by 2025 with some expected to reach out to US later this year.

Speaker 3: In North America, we have more than 4.5 gigalots of onshore projects in development. A portion of these projects will come online by 2025, with some expected to reach FIDs later this year.

Speaker 3: All projects have to pass our strict risk return parameters. So don't expect us to make undisciplined investments just for the sake of growth.

All projects have to pass our strict risk return parameters. So don't expect us to make undisciplined investments just for the sake of growth or.

Speaker 3: our behind-the-meter strategies continuing to gain traction. Our first solar self-power project came online in 2021, and we now have six in service, three of which came online in 2023, with more than 30 megawatts. Good bye.

Our behind the meter strategy is continuing to gain traction our first solar power project came online in 2021, and we now have six in service three of which came online in 2023 with more than 30 megawatts of capacity.

Speaker 3: with technology improvements, rising renewable energy credits, prices and tax incentives, more of these developments are producing stronger turns and help reduce our emissions foot.

With technology improvements rising renewable energy credits prices and tax incentives more of these developments are producing strong returns and help reduce our emissions footprint.

Speaker 3: On that note, we published our 22nd annual sustainability report. So let's move on to that.

On that note, we published our 20 <unk> annual sustainability report so let's move on to that next.

Speaker 3: The report highlights our long standing focus on sustainable practices and our industry leading performance across environmental, social and governance issues.

The report highlights our long standing focus on sustainable practices in our industry, leading performance across environmental social and governance issues.

Speaker 3: We've expanded our methane reporting included more detail on scope three emissions. Enhanced our climate lobbying.

We expanded our methane reporting included more detail on scope three emissions enhanced our climate lobbying reporting and outline progress made on our indigenous reconciliation plant.

Speaker 3: and at line progress made on our Indigenous reconciliation plan.

Speaker 3: We're making good progress on the targets we laid out. To date we reduced our GHG emissions intensity by twenty seven percent compared to a twenty thirty target of thirty five percent and have achieved eighteen percent of our net zero emissions goal for twenty.

We're making good progress on the targets we laid out.

To date, we have reduced our <unk> emissions intensity by 27% compared to 2030 target of 35% and have achieved 18% of our net zero emissions goal for 2050.

And our workforce diversity inclusion remain a focus with 31% identifying as women and 25% as racial and ethnic groups and we're making good progress on these priorities and remain committed to such improvements.

Speaker 3: in our workforce, diversity, inclusion, remain a focus with 31% identifying as women, and 25% as Rachel and...

Speaker 3: We're making good progress on these parties and remain committed to such improvements.

Speaker 3: On governance, our board is more diverse than ever. Our chair is Pam Lakarder, an accomplished black woman who brings extensive experience from the found business judge.

On governance, our board is more diverse than ever our chairs Pamela Carter and accomplished black women, who brings extensive experience in the sound business judgment.

Speaker 3: Across the company, we have integrated emission reductions considerations, into our day-to-day operations, capital allocation processes, and aligned executive compensation to performance against RISG strategy.

Across the company, we have integrated emission reductions considerations into our day to day operations capital allocation processes and aligned executive compensation to performance against our ESG strategies are.

Speaker 3: Our low-risk business model continues to deliver predictable results in all market cycles. So let's walk through our

Our low risk business model continues to deliver predictable results in all market cycles. So let's walk through our first choice value proposition.

Speaker 3: And bridge has an industry leading cash flow profile which supports our resilient business.

Enbridge has an industry, leading cash flow profile, which supports our resilient business model.

Speaker 3: our cash flows to diversify it across four large businesses. And approximately 98% of our expected 2023 of Adal is underpin by regulated assets or long-term taker pay.

Cash flow is diversified across four large businesses and approximately 98% of our expected 2023, EBITDA is underpinned by regulated assets or long term take or pay contracts.

Speaker 3: About 51% of that is what we call take or pay plus. Meaning the assets are underpinned by long-term agreements with inflation protection and cost-sharing provisions.

51% of that is what we call take or pay plus many of the assets are underpinned by long term agreements with inflation protection and cost sharing provisions.

Including the new mainline totaling settlement, which will now have a colored floor early about 40% to 7% of our EBITDA is low risk and utility like with limited variability.

Speaker 3: including the new mainline tolling settlement, which will now have a call it floor hourly, about 47% of our EBITDA is low risk and utility-like with limited varies.

Speaker 3: Hernings from these regulated assets have a prescribed greater return on Dean Decker.

Earnings from these regulated assets have a prescribed rate of return on deemed equity thickness.

Speaker 3: So our high quality cashflow profile has little to no commodity exposure and volume.

Quality cash flow profile has little to no commodity exposure and volume risk, while having a high degree of assets, earning regulated returns with cost pass throughs.

Speaker 3: while having a high degree of assets earning regulated returns with cost tax through.

Speaker 3: This underpins our low risk business model, which is very similar to a utility, allowing us to carry somewhat higher leverage than our pure midstream peer.

This underpins our low risk business model, which is very similar to a utility, allowing us to carry somewhat higher leverage than our peer midstream peers, 95% of our customer base is investment grade and 80% of our EBITDA comes from assets with built in inflation protection against rising cost.

Speaker 3: 95% of our customer base is investment grade and 80% of our EBITDA comes from assets with built-in inflation protection against rises.

Speaker 3: This cash flow predictability supports our strong access to capital and allows us to maintain our strong investment grade credit.

This cash flow predictability supports our strong access to capital and allows us to maintain our strong investment grade credit rating.

Speaker 3: Financial conservatism remains a key priority and it's a hallmark of how we've delivered consistent returns for shareholders. We'd actually deliver

Financial conservatism remains a key priority and is a hallmark of how we've delivered consistent returns for shareholders.

We've actually delivered an attractive total shareholder returns of approximately 12% per year for more than 20 years, driven by capital appreciation and consistent dividend growth and.

Speaker 3: of approximately 12% per year for more than 20 years during my capital appreciation and consistent dividend growth. And as we just highlighted, our diversified low-risk pipeline utility model produces reliable caseloads to support these returns, maintain a strong balance sheet, and extend our dividend growth track.

And as we just highlighted our diversified low risk pipeline utility model produces reliable cash flows to support these returns maintain a strong balance sheet and extend our dividend growth track record over.

Speaker 3: Over the medium term, we expect to grow EBITDA by about 5% per year by incorporating conventional infrastructure investments, as well as finding lower carbon opportunities.

Over the medium term, we expect to grow EBITDA by about 5% per year by incorporating conventional infrastructure investments as well as finding lower carbon opportunities throughout the business.

Speaker 3: The standardly returning capital to shareholders is also a key part of our value proposition, and we expect that.

Sustainably returning capital to shareholders is also a key part of our value proposition and we expect that to continue in the future.

Speaker 3: So now let me turn things over to Pat to walk you through our quarterly financial results, our capital allocation priorities, and our groups.

So now let me turn things over to Pat to walk you through our quarterly financial results, our capital allocation priorities and our growth outlook.

Speaker 4: Thanks, right? Thank you, morning, everyone. I'm excited to walk you through our second quarter results. Strong operational performance resulted in an 8% increase in EBITDA year over year.

Thanks, Greg and good morning, everyone I'm excited to walk you through our second quarter results.

Strong operational performance resulted in an 8% increase in EBITDA year over year.

Speaker 4: In liquids, the mainline performed well again. We hit a new record for Q2 throughput with X-tretyne volumes averaging almost 3 million barrels per day, up over 200,000 from the same quarter in 2022.

In liquids mainline performed well again.

Hit a new record for Q2 throughput ex Gretna volumes, averaging almost 3 million barrels per day up over 200000 from the same quarter in 2022.

Speaker 4: The main line also benefited from the recognition of a lower provision against the in term CTS I GT toll. This quarter is compared to the same period last.

The mainline also benefited from the recognition of a lower provision against the in term Cts IGT tool this quarter as compared to the same period last year.

Speaker 4: after we came to agreement and principal on the mainline tooling and knew the exact impact on the intern toll.

After we came to agreement in principle on the mainline tolling and knew the exact impact on the interim toll.

Speaker 3: We didn't need to crew as much of a provision in the second quarter as we had previous.

Didn't need to accrue as much of a provision in the second quarter as we had previously.

Speaker 3: Finally in liquids, contributions from higher ownership and the gray oak and cactus two-pipe line increased US Gold Coast and Mid-Totnet Result.

Finally in liquids contributions from higher ownership and the Gray oak and Cactus II pipeline increased U S Gulf Coast and mid continent results.

Speaker 3: At GTM, our lower ownership interest in DCP midstream as a result of the transaction with Phillips 66 impacted our results year over year. This was partially offset by the acquisition of the trace Palacios storage facility and favorable recondracking on our U.S. gas transmission and storage assets. Our utility.

J T M. Our lower ownership interest in DCP midstream as a result of the transaction with Phillips 66 impacted our results year over year. This was partially offset by the acquisition of the Tres Palacios storage facility and favorable re contracting on our U S gas transmission and storage assets.

Our utility business was down in the quarter, but this was primarily due to the timing of storage and transportation margin as.

Speaker 3: But this was primarily due to the timing of storage and transportation.

Speaker 3: As noted in Q1, this is reversing some favorability from earlier in the year and will continue into the back end.

As noted in Q1. This is reversing some favorability from earlier in the year and will continue into the back half of this year.

Our renewable business benefited from Saint Nazaire coming into service at the end of last year, but that was partially offset by slightly lower wind resources and lower European power pricing.

Speaker 3: Our renewable business benefited from St. Nizere coming into service at the end of last year. But I was partially upset by slightly lower wind resources and lower European power.

Speaker 3: at Energy Services, a number of our transportation commitments expired during Q1, and Markford Foundation has improved compared to the same period in 2022.

At energy services, a number of our transportation commitments expired during Q1 and Mark with Backwardation has improved compared to the same period in 2022.

Speaker 3: Below the line, higher interest rates on floating right depth and timing of maintenance capital, as well as higher controlling interest distributions from our strategic new partnership with the APA BASCA Indigenous Investment Group, partially offsets the stronger operational

Below the line higher interest rates on floating rate debt and timing of maintenance capital.

Higher controlling interest distributions from our strategic new partnership with the Athabasca envision us investment group, partially offsets the stronger operational performance of the business.

Speaker 3: Our results are driven by the diversity and scale of our assets and highlight the low-risk nature and predictability of our financial and operational performance.

Our results are driven by the diversity and scale of our assets and highlights the low risk nature and predictability of our financial and operational performance.

Speaker 3: So with a great first half of the year, let's talk about how we're tracking to our guide.

So with a great first half of the year, let's talk about how we're tracking to our guidance.

Speaker 3: I'm pleased to be reaffirming our 2023 financial guidance again this quarter. We expect strong utilization and operating performance across all of our businesses to continue.

I'm pleased to be reaffirming our 2023 financial guidance again this quarter.

We expect strong utilization and operating performance across all of our businesses to continue.

Speaker 3: However, as we expected, the lower mainline toll coming in effective July 1st and higher financing costs due to increased interest rates will be minor headwinds. And we expect these to play out primarily in the third quarter.

However, as we expected the lower mainline tool coming and effective July one and higher financing costs due to increased interest rates will be minor headwinds and we expect these to play out primarily in the third quarter.

Speaker 3: As we think about the rest of the year, let me remind everybody about the seasonality in our business. Q1 and Q4 are typically our strongest financial quarters due to higher gas flows during winter on both our gas transmission and distribution.

How do we think about the rest of the year, let me remind everybody about the seasonality in our business Q1, and Q4 are typically our strongest financial quarters due to higher gas flows during winter on both our gas transmission and distribution systems.

Speaker 3: as well, we experience higher deliveries on our liquid system outside of turner.

As well, we experienced higher deliveries on our liquids system outside of turnaround season.

Speaker 3: In terms of risk management, we've had almost all of our US dollar DCF exposure at around 137. And our floating rate debt exposure is much less than 5%.

In terms of risk management <unk> have almost all of our U S. Dollar DCF exposure at around 137, and our floating rate debt exposure, it's much less than 5% now.

Speaker 3: This increases our confidence and our financial projections for the balance of the year. Now let's look beyond this year.

This increases our confidence in our financial projections for the balance of the year.

Now, let's look beyond this year to our medium term outlook.

Speaker 3: We're also happy to reaffirm our medium turn out look. And there is no change to what we laid out in our investments.

We're also happy to reaffirm our medium term outlook and there is no change to what we laid out at our Investor day.

Speaker 3: The first bucket of growth will be a big focus of our company over the next little while. We recently settled on new tolling frameworks for BC pipeline and Texas Eastern, where the process of finalizing the main tolling agreement and the utility rebasson is expected to be in place for January 2024. Although these agreements are

The first bucket of growth will be a big focus of our company over the next little while we've recently settled on new tolling frameworks for BC pipeline and Texas Eastern.

In the process of finalizing the main tolling agreement and the utility Rebased and is expected to be in place for January 2024.

Although these agreements are similar to their predecessors were incentivized through all of them to optimize under each agreement, which will help us to achieve our low capital growth rate.

Speaker 3: We're incentivized through all of them, optimized under each agreement, which will help us to achieve our low capital growth.

And the second bucket, we are advancing opportunities to build out our secured organic growth projects.

Speaker 3: In the second bucket, we're advancing opportunities to build out our secured organic growth.

Speaker 3: With next decade, reaching FID on Rio Grande LNG, we added the Rio Bravo pipeline to our secure back.

Next decade, reaching up idea on Rio Grande LNG.

Out of the Rio Bravo pipeline to a secured backlog.

On the open season front, we advanced our FSP and Texas Eastern open season, and are still planning a T north one by year end.

Speaker 3: On the open season front, we advanced our FSP in Texas each on open seasons and are still planning a T-North one by year end.

Speaker 3: Finally, we continuously look at opportunities for both organic growth and opportunistic tuck-in M&A.

Finally, we continuously look at opportunities for both organic growth and opportunistic tuck in M&A.

Speaker 3: We continue to execute the strategy put forward an ember's day and will effectively allocate capital to deliver growth. So let's talk about those.

We continue to execute the strategy put forward at Enbridge day, and will effectively allocate capital to deliver growth.

So let's talk about those capital allocation priorities.

Speaker 3: As I step into the CFO role, I want to reiterate that our account file case and strategy is unchained.

As I step into the CFO role I want to reiterate that our capital allocation strategy is unchanged.

Speaker 3: Our number one priority is maintaining a strong flexible balance sheet. Q2 depth to ebit it was 4.5 times. Let me expect to exit 2023 within a lower half of our target.

Our number one priority is maintaining a strong flexible balance sheet Q2 debt to EBITDA was four five times and we expect to exit 2023 within the lower half of our target range.

Speaker 3: Leaving us room to execute our secured capital program.

Giving us room to execute on our secured capital program.

Speaker 3: We continue to return capital to shareholders through a sustainable and growing dividend and opportunistic share reperto-

We continue to return capital to shareholders through a sustainable and growing dividend and opportunistic share repurchases.

Speaker 3: Our financial flexibility and predictable cash flow provides us with approximately 6 million a year of investment capacity and will allocate capital only to the best opportunities in front of us. So let's turn.

Our financial flexibility and predictable cash flow provides us with approximately 6 billion a year of investment capacity and we'll allocate capital only to the best opportunities in front of us.

So, let's turn to that secured growth program.

Today, our secured growth program sits at $19 billion. It is diversified across our businesses and the regions that we operate and is expected to be deployed over about the next five years, which helps to mitigate against inflationary cost pressures.

Speaker 3: Today, our secured growth program sits at 19 billion. It is diversified across our businesses and the regions that we operate. And it expected to be deployed over about the next five years, which helps to mitigate against inflationary costs.

Speaker 3: New to our backlog this quarter is the addition of the real brable pipeline with construction expected to begin in 2025.

New to our backlog. This quarter is the addition of the Rio Bravo pipeline with construction expected to begin in 2025.

Speaker 3: Next decade's FID on the first three liquefication trains of Rio Grande LNG was the trigger for us to continue construction planning on this project.

Next decades.

The first three liquefaction trains Rio Grande LNG was the trigger for us to continue construction planning on this project when.

Speaker 3: When we announced this project, our original cost estimate of 1.2 billion was for a two-trained build. We're currently refining our three-trained engineering estimate and expect to update our capital cost by year end.

When we announced this project our original cost estimate of $1 2 billion was for a two train build we're currently refining our three train engineering estimate and I expect to update our capital costs by year end.

We expect to place approximately $3 billion of capital into service for 2023.

Speaker 3: expect to place approximately 3 billion of capital into service for 2023. It already announced 1.1 billion of tuck in M&A year to date with the final one closing that being a concrete later this year. Now it's.

The announced $1 $1 billion of tuck in M&A year to date with a final one closing being a Greek later this year.

Now I'll turn it back to Greg to wrap up.

Speaker 3: Thanks Pat. As we wrap up here for questions, I wanna leave you with a few key takeaways. Emberages, results.

Thanks, Pat now as we wrap up here for questions I want to leave you with a few key takeaways.

Enbridge is resilient low risk business model is supported by our scale diversification and high quality cash flows which positions us to withstand market volatility and deliver predictable results.

Speaker 3: is supported by our scale, diversification, and high quality cash flows, which positions us to establish market volatility and deliver predictable results.

Speaker 3: Returning capital shareholder remains a key focus through sustainable dividend growth and opportunistic show.

Returning capital to shareholders remains a key focus through sustainable dividend growth and opportunistic share repurchases.

Speaker 3: We're confident in our ability to achieve our growth outlook by optimizing the business, adding to our visible growth backlog and executing additional tuck-in M&A. Our premium growth profile, incorporating conventional infrastructure investments and lower carbon opportunities, supports dividend growth, long-term shareholder returns, and positions us as a first choice investment opportunity. Thank you, and now let's...

We're confident in our ability to achieve our growth outlook by optimizing the business, adding to our visible growth backlog and executing additional tuck in M&A are.

Our premium growth profile, incorporating conventional infrastructure investments and lower carbon opportunities supports dividend growth long term shareholder returns and positions us as a first choice investment opportunity.

Thank you and now let's open the lines for your questions.

Speaker 1: Thank you. We will now begin the question and answer session. As a reminder, if you would like to ask a question, press star one on your telephone keypad. If you would like to withdraw your question and remove yourself from the queue, press star one a second time. And we will pause for just a moment to compile the Q&A roster. All right, those are three lines with the question there.

Thank you.

We will now begin the question and answer session.

As a reminder, if you would like to ask a question press star one on your telephone keypad.

If you would like to withdraw your question and remove yourself from the queue Press Star one a second time and.

And we will pause for just a moment to compile the Q&A roster.

And we will take our first question from Jeremy Tonet with J P. Morgan Chase Your line is open.

Speaker 1: And we will pick our first question from Jeremy tonight with JP Morgan Chase. Your line is open.

Speaker 3: Hi, good morning. Morning, Jeremy.

Hi, good morning, good morning, Jeremy.

Speaker 5: Just wanted to track, I guess, you know, results this year. Seems like a strong first half where there was about just almost a point five billion of EBITDA. And wanna square that versus the guide of, you know, 15.9 to 16.60. She used to use self tracking the high end of the guidance or above, or should we be thinking about items in the second half?

Just wanted to track I guess result, this year it seems like a strong first half.

Where there was about just almost $8 5 billion of EBITDA and wanted to square that versus the guide.

$15 nine to $16 six do you see yourselves tracking the high end of the guidance or above or should we be thinking about.

Items in the second half.

Speaker 3: They would make the second half lower than the first half and anything to think about this.

It would make the second half lower than the first half anything to think about there.

Speaker 4: Yeah, maybe I'll start there, Jeremy. Good question. Yeah, it was a very strong first half of the year. I think it's pat laid out. We've got a few little Edwin's for the last half of the year. So I think being right in the middle of that range is the right place for us. Remember, the fourth quarter is a big quarter for us. So whether it's weather or volume.

Yes, maybe I'll start there Jeremy good question, yes, well, that's a very strong first half of the year I think as Pat laid out we've got a few little headwinds for the last half of the year. So I think being right in the middle of that range is right place for US remember the fourth quarter is a big quarter for us so whether it's weather volumes those will impair.

Speaker 4: Those will impact where we finally land. So don't want to get ahead of the fourth quarter of Mother Nature, but feeling good about the quarter where we are for the year, these projects coming in. So I think sticky in the middle of that range is probably the right place to be today. But again, let's see how the fourth quarter goes that can be a benefit sometimes. So

Check, where we where we finally land so don't want to get ahead of the fourth quarter of mother nature.

But feeling good about the quarter, where we are for the year. These projects coming in so I think sticky in the middle of that range is probably the right place to be today, but again, let's say on the fourth quarter goes.

That can be a benefit sometimes.

[noise].

Got it thats helpful. There.

I apologize go ahead.

Speaker 3: Just one more question if I could. We've seen some big moves in the kind of the midstream landscape, strategic action by competitors, consolidation among others. Just wondering if you have any updated strategic views for Amberge moving forward, anything to call out there.

Just one more question if I could we've seen some some big moves in the kind of the midstream landscape strategic action by competitors consolidation among others.

Just wondering if you have any updated.

Strategic views for Enbridge moving forward.

To call out there.

Speaker 4: Well, you know, Jeremy, I think we're in a great spot. I think what you're seeing out there is that, you know, breadth matters, size matters, the portfolio matters. I think increasingly you're starting to see that the premier valuation should go to companies that can play all parts of the energy evolution. So, you know, we've got the liquids business, we've got the gas transmission business and the distribution business.

Well Jeremy.

Jeremy I think we're in a great spot I think what youre seeing out there is that.

Breadth matters size matter the portfolio matters I think increasingly.

Youre starting to see that.

Your valuation should go to companies that can play all parts of the energy evolution. So we've got the liquids business, we've got the gas transmission business and the distribution business and renewables and increasingly some new energy technologies those are increasingly both vertically and horizontally connected.

Speaker 4: and renewables and increasingly some new energy technology. Those are increasingly both vertically and horizontally connected. And we think that's gonna matter more and more. So you think about the renewal of the businesses, we said it doesn't survive without a good strong gas business of which is, you know, we serve 2025% of the volumes. The liquids business increasingly connected not only on the export side, but things like...

And we think that's going to matter more and more so you think about the renewal of the business as we said it doesn't survive without a good strong gas business of which as you know we serve 2025% of the volumes the liquids business increasingly connected not only on the export side of things like.

Speaker 4: ammonia and blue ammonia and CCS. That's important to have that all together. The LNG export business you need transmission on that front and then on the distribution side of things, things like hydrogen or renewable natural gas.

Bonior Blue ammonia at Ccs, that's important to have that all together the <unk>.

LNG export business, you need trance transmission on that front and then on the distribution side of things things like hydrogen renewable natural gas not only a benefit on the transmission side, but also for GDS. So I think there may be some companies. There are definitely some companies that do not have that type of portfolio breadth.

Speaker 4: not only a benefit on the transmission side, but also for GDF. So I think, you know, there may be some companies, there are definitely some companies that do not have that type of portfolio grant.

Speaker 4: But when you do I think you're in a sweet spot there. So I wouldn't read too much into you know some people fell in After some steps

But when you do I think you are in a sweet spot there. So I wouldn't read too much into some people sell an asset some states such I don't think people have the same type of portfolio setup that we have and I think the market is coming to us from that valuation perspective.

Speaker 4: I don't think people have the same type of portfolio setup that we have. And I think the market's coming to us from that valuation perspective.

Got it so just to be clear no split and the outlook going forward here.

Speaker 3: Got it. So just to be clear, no, no split in the out walk out going forward.

Speaker 4: Look, we're always looking at that, but I do not see again. I'd go back, that doesn't seem to be a disenergy for a company like Enbridge, which actually again has that complimentary aspects of multiple parts of the business. So again, the liquid business has elements that are actually connected to things like ammonia and CCS and the gas.

Look we're always looking at that but I do not see again I'd go back that doesn't seem that seem to be it just synergy for a company like Enbridge, which actually again has that complementary aspects of multiple.

Parts of the business. So again the liquids business has held them. So they are actually connected to things like ammonia in Ccs in the gas business and the distribution businesses has connections to new energy technologies. So I do not see that of course, we're always looking at making sure that we've got things structure to get premium.

Speaker 4: and the distribution business has connections to new energy technologies. So I do not see that. Of course, we're always looking at making sure that we've got things structured to get premium valuation. But I think the market has recognized we deserve a premium valuation because of that vertical and horizontal integration that goes on today. If that change we'd look at it, but I just don't see that today for a company of our Brent size and diversity and frankly low risk diversification as well. Thank you very much.

But I think the market has recognized we deserve a premium valuation because of that vertical and horizontal.

Integration that goes on today does that change we'd look at it but I just don't see that today for a company our of our breath size and diversity and frankly low risk diversification as well.

Got it thank you very much.

Thanks, Paul.

Speaker 1: And we will take our next question from Robert Cattelier from CIBC Capital Markets. Your line is open.

And we will take our next question from Robert <unk> from CIBC capital markets. Your line is open.

Speaker 6: Hi, good morning and thanks for the presentation. I just wanted to focus on the liquid side a little bit here and specifically how the angle side terminal is being leveraged to

Hi, good morning, and thanks for the presentation I just wanted to focus on the liquid side, a little bit here and specifically how.

Single site terminals being leveraged to.

Speaker 6: effectively to pull through volumes from the rest of the system. And maybe you could just touch on the competitive situation for the export term.

Effectively the pull through from the rest of the system and maybe you could just.

Touch on the competitive situation for the export terminals. Please.

Speaker 4: I'm just going to turn it over to Carl. Sure. Thanks, Robert. Yeah, you're exactly right. So the English side terminal is our kind of our flagship anchor asset for a premium strategy meant to be differentiated highly competitive.

Collins right here, so I'm, just going to turn it over to call sure. Thanks, Craig Thanks Robert.

Yes, exactly right. So the ingleside terminal as our kind of our flagship anchor.

Asset for our Permian strategy.

I meant to be differentiated highly competitive.

Speaker 7: from a number of reasons, as you know, dredged depths, distance to blue water, loading rate, we're now dredged and we can load the VLCC up to 1.6 million barrels per day. So that at all just draw up to nickels and dimes.

From a number of reasons as you know dredge depths.

Distance to blue water loading rate.

We're now dredged and we can load VLCC up to one 6 million barrels per day. So it all just.

Drops nickels and dimes off the.

Speaker 7: the marginal barrels and competitive net back for our customers. And then we've got capacity as we've talked about to expand the storage and the docs there. That's all in our plan. And then the vertical integration, which Greg just kind of spoke about more broadly, we've got that going on in the per munis wall with great help now. We've taken operation of a great help. We've expanded a little bit with God.

The marginal barrel.

Competitive netback for our customers and then we've got capacity as we've talked about too.

Expand the storage and the.

The docks there.

That's all.

In our plant and then the vertical integration, which Greg just kind of spoke about more broadly we've got that going on in the Permian as well with with Gray Oak now we've taken operation with grant we've expanded a little bit with Scott.

Speaker 4: We're going to have offerings in the market here in Q3 at both Ingleside and Greyoke for expansions. Watch for them.

A lot of offerings in the market here in Q3 at both Ingleside and Gray oak for expansions.

Watch for those.

<unk>.

Speaker 7: and got our eye out for further tuck-ins along the value chain. So I think during the quarter, angle side exported a quarter of US.

And got our eye out for further tuck ins along the value chain. So.

I think during the quarter ingleside exported a quarter of U S.

Oil and record volumes. So it's it's all trending.

Speaker 4: oil and record volumes. So it's all trending favorably rubber.

Favorably Robert.

Okay.

Speaker 6: So gone just to clarify I'm curious the extent to which the possible offerings in the market for Ingolside in the second half are continuing on a successful line against self-opens season.

So just to clarify.

I'm curious the extent to which the.

Possible offerings in the market for Ingalls side in the second half are contingent on a successful one against <unk> open season.

No there are disconnected.

Okay. Thank you.

Speaker 4: Yeah, I think you'll find largely being driven by the Permian right and fine again largely by the Canadian crew. So you might be thinking about Eha at Robert, which we're we've sanctioned. We're going to build that at the terminus of C-way, which we interact with, uh, Flanagan South and C-way.

<unk> largely being driven by the Permian right.

Alright, fine again, largely by the by the Canadian crude so you might be thinking about ehealth, Robert which where we have sanctioned we're going to build that determined this of seaway, which.

Interact with Flanagan, South and Seaway.

Okay.

Alright, thank you.

Thanks Robert.

And we will take our next question from Linda <unk> with TD Securities. Your line is open.

Speaker 1: And we will take our next question from Linda Isagalis with TD Securities. Your line is open.

Okay.

Speaker 8: Thank you. Just looking forward to the second half of the year and thinking about your investment to capacity, you've announced about 1.1 billion of M&A and the now the real bravo pipeline. Do you expect to announce approximately a six billion of new secured capital opportunities this year? And if not, might that inform what level of opportunistic share buybacks?

Thank you.

Forward to the second half of the year and thinking about your investment capacity you've.

You've announced about $1 $1 billion of M&A and then now the Rio Bravo pipeline do you expect to announce.

<unk> 6 billion of new secured capital opportunities this year.

And if not might that inform what level of opportunistic share buybacks or do you expect those <unk>.

Speaker 8: or do you expect those capital commitments to be a little bit lumpy year over year, some years more over 6 billion versus less?

Capital commitments to be a little bit lumpy year over year, some years more over $6 billion versus less.

Speaker 4: Yeah, I think the way to think about that Linden Packen chime in here too.

Yes, I think the way to think about that Lin and Pat can chime in here too as you're right. We've got the $6 billion of capacity on.

Speaker 4: You're right, we've got this $6 billion of capacity.

Speaker 4: on the balance sheet each year. Half of that's going to already the secure project. So think about that in future years, that's good or real. That doesn't...

On the balance sheet each year half of that is going to already the secured projects. So think about that in future years that go to Rio that doesn't go against the $3 billion of capacity, we have to do things like opportunistic share back buybacks, which we did a little bit of that in the second quarter or acquisitions like the 1 billion.

Speaker 4: go again to the $3 billion of capacity we have to do things like opportunistic shareback by back, so we did a little bit of that in the second quarter or acquisitions like the billion dollars we've done here today. But inevitably the first $3 billion on secured projects is going to be a little bit bumpy. But

We've done year to date, but inevitably the first $3 billion unsecured projects is going to be a little bit lumpy, but I would separate a day more in that sense. So think about $6 billion three for secure projects and three for other opportunistic pieces, Pat I don't know if you'd add anything.

Speaker 4: I separated out more in that sense. So think about $6 billion.

Speaker 4: three first secure projects and three further opportunistic pieces. Pat, I don't know if you'd add anything to that. Yeah, I think going on that to that is in that kind of second bucket of three billion.

Yes, I think I'd add to that is it.

And that kind of a second bucket of $3 billion.

Speaker 9: You know, those will be a little bit lumpy, opportunistic as we go through them. And we're not going to do anything just to fill that bucket. We're going to make sure we pick the best project.

Those will be a little bit lumpy opportunistic as we go through them and we're not going to do anything just to fill that bucket. We are going to make sure. We pick the best projects you think the Rio Bravo, which we just added that spend will be a couple of years out primarily so it's not really impacting our capacity in the current year.

Speaker 4: You know, you think the real problem, which we just added, that spend will be a couple of years out primarily, so it's not really impacting our capacity in the current year. And so we'll continue to look at various capital allocation purposes to see where we can spend some of those dollars. But it can be a little lumpy-linda, just one of the opportunities out there and what's the timing of spending as we go forward.

So we'll continue to look at various capital allocation purposes.

You see where we can spend some of that some of those dollars, but it can be a little lumpy Linda just what are the opportunities out there and what's the timing of spend as we go forward.

Speaker 8: Thank you. Just to follow up quickly, what are you seeing in terms of opportunistic tucking acquisitions in terms of volume, quality, pricing, nature, where they are on the value chain and geography, any observations in terms of how things are trending on that front would be appreciated?

Okay. Thank you just as a follow up quickly what are you seeing in terms of opportunistic tuck in acquisitions in terms of <unk>.

<unk> quality pricing.

Nature.

They are on the value chain and geography, any any observations in terms of how things are trending on that front would be appreciated.

Speaker 4: Yeah, well, fortunately, given our size and breadth, and as to talk about this balance portfolio, we can see everything. I mean, people come to us and show us as it's all the time, which allows us to be really picky and make sure that anything we do actually fits right down that fairway of low risk, pipeline utility, like cash flows and solid returns and accretion. So we're seeing everything. Now, you know,

Well, Fortunately, given our size and breadth announced or talked about this balanced portfolio, we get to see everything.

People come to us and show US assets, all the time, which allows us to be really picky and make sure that anything we do actually fits right down that fairway of low risk pipeline utility like cash flows and solid returns and accretion so we're seeing everything.

Speaker 4: You saw in the first half of the year picking up pieces from joint venture partnerships, things like Grey Oak and Cactus II, we picked up pieces and then the two storage assets, very complimentary as well. Some of those are being told by corporate, some of them are being sold by...

You saw in the first half of the year picking up pieces from joint venture partnerships things like Gray Oak and Cactus II, we picked up pieces and then the two storage assets are very complementary as well.

Those are being sold by corporate some of them are being sold by <unk>.

Speaker 4: by PEs that maybe need a monetization or...

Maybe need a monetization or our liquidity events.

Speaker 4: or liquidity event. And we've got that, as you mentioned, that $3 billion a capacity to be able to execute on those. So I'd say they're right across the board. I don't think there's any part of the energy value chain where people aren't trying to think through how to...

And we've got that as you mentioned that $3 billion of capacity to be able to execute on those so I'd say the right across the board I don't think there's any part of the energy value chain, where people aren't trying to think through how to.

Speaker 4: how to trade out assets. Sometimes they need to do that. That's opportunistic for us as well from a pricing perspective. And then of course, as long as it fits into that value proposition that we have low risk utility pipeline side, we feel we've got the ability to go out next to you.

At a trade out of assets, sometimes they need to do that.

That's opportunistic for us as well from a pricing perspective, and then of course as long as it fits into that that value proposition that we have low risk utility pipeline side we.

We feel that we've got the ability to go out and execute.

Thank you.

Thanks Linda.

Speaker 1: We will take our next question from Robert Cuom with RBC Capital Market. Your line is open.

We will take our next question from Robert Kwan with RBC capital markets. Your line is open.

Good morning.

Speaker 10: Morning. Where are you going to start on cap? Morning. So just about you start with cap to the allocation. So you push back previously on the need for end desire for large scale deals, but.

Good morning, Brian just start on time.

Good morning, So just wanted to start with capital allocation. So you pushed back previously on the need for and desire for large scale deals but.

Speaker 10: Just on the tuck-in, M&A, and you have executed on that this year. Do you see the tuck-in acquisition?

On the tuck in M&A and you have executed on that this year do you see the tuck in acquisitions solely being linked to that $3 billion of discretionary annual capital allocation or could you see that.

Speaker 10: solely being linked to that 3 billion of discretionary annual capital allocation. Or could you see that those tuck ins in aggregate being at a level that would require external equity?

Those tuck ins in aggregate being at a level that would require external equity.

Yeah, well I guess I'd say.

I I don't think that's been our focus to date look we've got that $6 billion in investment capital a year.

Speaker 4: I don't think that's been our focus today. Look, we've got that $6 billion in investment capital a year, and some of which can be used for acquisition. And that gives us a lot of flexibility to do the transactions that we've seen too.

And some of which can be used for acquisition and that gives us a lot of flexibility to do the transactions that we've seen to date.

Speaker 4: that made that low risk your creative pipeline utility like deals. I don't see us doing big corporate to corporate deals, but...

That made that low risk accretive pipeline utility like deals I don't see us doing big corporate to corporate deals but.

Speaker 4: And I guess we're always open to things, but I think the tuck-in route to date has been the right one for us.

I guess, we're always open to things, but I think the tuck in route to date has been the right one for us.

Okay.

Speaker 10: If I can turn to guidance and so you're highlighting that the lower mainline toll is a headwind, but then you also noted in the results that you took a lower provision against the mainline IJT in the second quarter. Can you just talk about the dynamic there? And if the lower toll is a headwind for Q3, why is it not for Q4 and for that matter into 2024?

Got it.

I can turn to guidance and youre, highlighting the lower mainline toll.

He is a headwind, but then you also noted in the results that you took a lower provision against the main mine.

In the second quarter can you just talk about.

The dynamic there and if the lower tall as a headwind for Q3.

Why is it not for Q4.

Matt or into 2024.

Speaker 4: So I think maybe I can take that Robert is Pat. So on the provision side of things, if you think about the timing of when the agreement principle kind of came to be in April , end of April , time frame.

So I think maybe I can take that Robert is pop.

So on the provision side of things if you think about the timing of when the agreement in principle.

Aimed to be in that April end of April timeframe, we got more clarity on kind of what the in term toll amount would be and as a result of that we were pretty well provided by the end of Q1. So it didn't have to book is bigger provision for Q2 here before the toll.

Speaker 4: We got more clarity on kind of what the intern toll amount would be. And as a result of that, we were pretty well provided by the end of Q1. So didn't have to book as big a provision for Q2 here before the toll goes down a little bit at Don's alive first. So that was really just getting us kind of screwed up so what that difference would be in relation to the intern toll.

It was down a little bit.

On July one so that was really just giving us kind of true up to what that difference would be in relation to the interim tool.

Speaker 4: And then as you talk about go forward, if you step back to when we announced the actual trend action, it was well within where we were looking for this year, we kind of laid out a waterfall to help understand how we get to the level we have. It'll be a little bit lumpy this year, like you're noting in that the toll goes down a bit for 2, 3, 2, 4. Really, probably all we're noting in 2, 3 specifically is like 2, 3, 10 to be a little bit of a lower volume variant as well, but 2, 4 will usually pop back up. And then the agreement was right in line with what our views were of 24 and 25 when we guided back in.

And then as you talk about go forward, if you step back to when we announced the actual transaction.

It was well within where we were looking for this year, we kind of laid out.

A waterfall to help understand how we get how we got to a level, we have it'll be a little bit lumpy. This year like youre, noting the total go down a bit for Q3 Q4 really you probably all were noting in Q3, specifically that Q3 tends to be a little bit of a lower volume period, as well, but Q4 won't usually pops back up.

And then the agreement was right in line with what our views were up 24 and 25, when we guided back in I guess it was early December last year.

Speaker 4: I guess it was early December last year.

Okay, that's great maybe I'll take that offline. Thank you.

Speaker 10: Okay, that's great. Maybe I'll take some that offline. Thank you.

And we will take our next question from Theresa Chen with Barclays. Your line is open.

Speaker 1: And we will take our next question from Kareesa Chen with Barclays. Your line is open.

Speaker 11: Morning. I wanted to touch on your trace policy expansion. And just generally your long-term outlook for natural gas storage, especially in the US Gulf Coast. How much can you further expand by, how do you see yourself positioning in this integral, in the portion of the value chain as we go forward? And you see more talking opportunities here.

Good morning.

Touch on.

Cross sell expansion and just generally your long term outlook for natural gas storage and especially in the U S. Gulf Coast, how much can you.

Either expand by and how do you see yourself positioning in the interim.

And a portion of the value chain as we go forward and do you see more tuck in opportunities here.

Speaker 4: Yeah, we're big storage fans for sure. It's a good question and a simple thing you want to take that.

Yes, we're big storage fans for sure. So good question Cynthia you want to take that.

Speaker 2: Sure, thanks, Theresa. We're, of course, very excited about the opportunities. We have the ability, currently, to expand trace plashes by 6.5 BCF. There's an expansion, one of the caverns that's coming into service this fall, so that positions up well. As you mentioned, in that...

Alright, Thanks Theresa.

We of course.

Very excited about the opportunities we have the ability currently to expand trade flashes by six five Bcf.

There is.

And one of the Catherines Thats coming into service. This fall so that positions us well as you mentioned in that.

Southern Texas area these assets.

Speaker 2: southern Texas area, these assets, you know, this is the southernmost salt storage dome in that area. The other thing we really liked about the trace-polished assets was the header system that ties in and that interconnectivity that that gives us into that market.

The southern us.

Storage down in that area. The other thing we really liked about the tree Plaza assets was the header system that ties in and the Interconnectivity that that gives us into that market.

Speaker 2: When it comes to that ability to continue to expand, we are looking at that. We're also looking at how we can optimize with the rest of our assets and how we'll operate the trace splashes on us. So how can we do wheeling, how can we do parking loans, that kind of thing, as we look to optimize the operations there? And we'll continue to look at whether we can do some small

When it comes to our ability to continue to expand we are looking at that we're also looking at how we can optimize with the rest of our assets and how we will operate the tree splashes of Isa <unk>.

How can we do really have we do loans that kind of thing as we look to optimize the operations there and we will continue to look at whether we can do some small.

Speaker 2: Upgrades is existing. I'm so sure they're to increase our storage capacity as well. So the other thing that as we've noted before, we've seen is that the pricing has started to be a little bit more positive and storage. So we're continuing to monitor that. And we think in the long term, there will be incremental opportunities to invest in incremental storage in Texas and Virginia.

Great.

Existing infrastructure in there to increase our storage capacity as well so.

The other thing that as we've noted before we.

<unk> seen is that the pricing has started.

Yeah, a little bit more positive in storage. So we're continuing to monitor that and we think in the long term there will be incremental opportunities to invest.

Invest in incremental storage in Texas in particular I.

Speaker 4: Yeah, you know, I think that's big ambient temperature swing that the LNG players have to manage is really starting to show the value of storage or two. So, you know, if you talk to the cheneers and folks like that, I think they'd verify just the thesis that they've sent you just laid out. So, good time to have.

I think that big ambient temperature swing.

Got it.

The LNG players have to man is just really starting to show the value of storage there too. So if you talk to the snares and folks like that.

I think they'd verify just the thesis that that Cynthia just laid out so good time to have.

Speaker 4: Bot those assets in, good doubt the flexibility to do that. And I think it's gonna match up really nice with a lot of sentious assets. The other thing I think you can think about storage assets as we move to forward with carbon caption and sequestration. That's gonna put premium valuation on storage as well too. So like the assets that we have in the several hundred BCF of storage that we've got right across North.

But those assets in good to have the flexibility to do that and I think it's going to match up really nice with.

With a lot of Synthes assets. The other thing I think you should think about storage assets as we move to forward with carbon caption and sequestration thats going to put premium valuation on storage as well too. So like the assets that we have in the several hundred Bcf of storage that we've got right across North America.

Hi.

Speaker 11: Thank you. And then turning to the liquid side, can you talk about the timeframe for the gray expansion? So you're running open season in the fall, and I believe it's primarily pump work. How quickly can the 200,000 barrels per day come online? And are you still contemplating a further extension from sweet meat to the Houston area?

Thank you and then turning to the liquid side.

Can you talk about the timeframe for the Grand expansion that Youre running open season in the fall and I believe is primarily pump work how quickly can the 200000 barrels per day come online and are you still contemplating further extension from the sweeny to Houston area.

Yes, Theresa colon, yes so.

Speaker 4: Yeah, Theresa Cullen. Yeah, so I think you're right. We've been sounding the market on quantum and destination. Recall, Greo is a bit unique. It's not a straight ball, I think it's both corpus and.

I think youre right.

We've been sounding the market on quantum and destination recall Gray oak is a bit unique is straightforward and it goes both core percent.

Speaker 4: and the Houston-Sweeney Area, so it's kind of unique that way. We plan to launch that officially here in Q3, so that's still on track. And, uh...

And the Houston Sweeney area, so it's kind of in that way.

We plan to launch that officially here in Q3, so thats still on track and.

Speaker 4: you know up to I think 200,000 Braille Day expansion and we're looking at in service dates in early 2025.

Up to I think 200000 barrel a day expansion and we're looking at in service dates in early 2025.

Thank you.

Speaker 1: We will take our next question from Patrick Kenney with National Bank Financial. Your line is open.

Thank you.

We will take our next question from Patrick Kenny with National Bank Financial Your line is open.

Speaker 12: Yeah, good morning. I'm wondering if you could provide any comments on Alberta's announcement here to pump the brakes on improving renewable power projects and whether or not you're seeing a growing trend of political and regulatory pushback across some of the other jurisdictions in which you operate. And if this heightened focus on affordability.

Yes. Good morning, I was wondering if you could provide any comments on Alberta as announcement here to pump the brakes on improving renewable power projects.

Whether or not you are seeing a growing trend of political and regulatory pushback across some of the other jurisdictions in which you operate.

And if this heightened focus on affordability and <unk>.

Speaker 12: Grit of reliability might cause any slowdown in reaching FID on your renewable backlog or on the flip side, you know, increase your desire to own natural gas fire generation assets going forward.

Grid reliability might cause any slowdown in reaching <unk> on your renewable backlog or.

On the flip side increase your desire to own natural gas fired generation assets going forward.

Speaker 13: Yeah, definitely, in Matthew's on the phone, so I'll get him to respond. But I think you've kind of just made a thesis yourself, where you want to have all aspects of this energy value chain. And also, my governments are really giving a thoughtful approach about how are they going to be able to manage this transition. So I believe Matthew, you're right here. So why don't you take that one.

Yeah, definitely and Matthew was on the phone so I'll get him to respond, but I think you've kind of just made that thesis yourself or why do you want to have all aspects of this energy value chain and also why governments are really given us a thoughtful approach.

How are they going to be able to manage this transition so.

I believe Matthew.

You are right here, so why don't you take that one.

Speaker 14: Hey Pat, thanks for the question. Yeah, we don't have anything in Alberta under late development that gets held back by this. And so it doesn't affect the FIDs. Those would be in the US, where we have a very robust late development program. And the next up there would be in the ERCOT area.

Hey, Pat Thanks for the question.

Yes, we don't have anything in Alberta under late development that gets held back by.

By this.

And so it doesn't affect the <unk> those would be.

In the U S, where we have a very robust late development program.

<unk>.

Next up there would be.

ERCOT area.

Speaker 10: But you know, bigger picture, I think, for the renewable business you're right, I think.

But bigger picture I think for the renewable business Youre right I think.

Speaker 10: Some of the reclamation and timelines issues aren't just in Alberta, I mean other places. So I think there's going to be a real advantage for larger companies with scale and financial strengths, which is what we've got. And so I think that positions us well. Reliability is another theme and yeah, I mean we're going to be more battery storage, but also gas-fired power. We don't have any intentions to invest in that.

Some of the reclamation and timelines issues.

Arent just in Alberta, and other places so I think theres going to be a real advantage for larger companies with scale and financial strength, which is what we've got.

And so I think that positions us well I think reliability.

<unk> is another theme.

I mean, we're going to be more battery storage, but also gas fired power, we don't have any intentions to invest in that but.

Speaker 10: You can't take gas-fire power out of the equation. You need it for backup and reliability for a long time, and I think just more generally.

You can't you can't take gas fired power out of the equation you needed it for backup and reliability for a long time and I think just more generally.

Speaker 10: This just shows the pace of transition is not unconstrained. So that's why we love our renewable business, but obviously like Greg said, it's great to be diversified across conventional, which has a very long life and the renewables.

This just shows the pace of transition is is not unconstrained. So that's why we love our renewable business, but obviously like Greg said, it's great to be diversified across.

Conventional which has a very long life and and the renewable stuff.

Speaker 13: You know, the only thing I'd add is, in, you know, Collins business is one of the largest power users and just about any jurisdiction we operate in. So this focus on affordability is really important to us and makes our liquids lines increasingly competitive and, you know, even where there's elements, which things like the main line, there's elements of past room.

Greg.

The thing I'd add is.

<unk> business is one of the largest power users in just about any jurisdiction. We operate in so this focus on an affordability is really important to us and makes our liquids lines increasingly competitive.

Where theres elements, which things like the mainline theres elements of pass through on our we want to make sure that whatever that power is however, it comes that its cost competitive cross jurisdiction in North America. So.

Speaker 4: We want to make sure that whatever that power is, however, it comes that it's caused competitive cross jurisdiction in North America. So I think this boughs the approach of governments and starting to focus on affordability.

I think this balanced approach of governments and starting to focus on affordability security and reliability makes sense and again I just want to reiterate that's exactly how we've structured the company for a long time to be able to react to those pieces and create value read across that value chain.

Speaker 4: Security and reliability makes sense. And again, I just want to reiterate that's exactly how we've structured the company for a long time to be able to react to those pieces and create value right across that value chain.

Speaker 13: It has called me a general practitioner to you this couple of examples. So, so liquid pipelines in our acts with 75 utilities across a bunch of provinces and states. And we see this tension everywhere, right? Affordability, competitiveness. But we also want to green the grid.

Pat is Colombia I'll jump in just a couple of examples so liquids pipelines interacts with 75 utilities across provinces and states and we see this tension.

Everywhere right affordability competitiveness, but we also want to green the grid.

Speaker 4: So yeah, we get a front row seat to that

So, yes, we get a front row seat to that.

Everywhere.

Speaker 12: Okay, that's great. Thanks for all those comments. And then just a quick one for Pat, you're just on the rising financing costs. Cheers how you're thinking about your rate reset preface shares within your capital stash if there might be any refinancing opportunities coming up or perhaps other levers. You might be able to pull to help mitigate the headwinds on distributable cash flow.

Okay. That's great. Thanks for all those comments and then just a quick one for Pat here just on the.

The rising financing costs curious, how youre thinking about your rate reset press shares within your capital stack, if there might be any.

Our refinancing opportunities coming up or perhaps other levers you might be able to pull to help.

Mitigate the headwinds on distributable cash flow.

Yes, I mean, it's a fair question with rates continuing to go up.

Speaker 9: Yeah, I mean, it's a fair question with race continuing to go up.

Speaker 9: We get something we look at, the optimization of our overall capital structure overall interest cost. You know, we have a

We looked at the optimization of our overall capital structure overall.

Interest costs.

We have a pretty.

Speaker 9: discipline hedging program that we use to make sure that we're risk managing what the out years of our plan with Michael continue to do that. We'll look for opportunistic times to to hedge like we saw a bit in Q1 when there was a bit of an upset in the banking market. New US was a great time to put some hedges on it, but probably is a lower rate.

Disciplined hedging program that we use to make sure that we're risk managing what the out years of our plan with vehicle continued to do that we will look for opportunistic times to to hedge like we saw a bit in Q1, when there was a bit of upside in the banking market in the U S is a great time to put some hedges on it would probably has a lower rate than we had expected, but we will look at.

Speaker 9: than we had expected. But we'll look at the whole set, patches to see what the most opportunistic and most efficient way of managing our capital is, and what's the press will play into that, or the high groups. And Pat, just to remind you that, that bread across most of our businesses.

A horse up.

Pat just to see what the most opportunistic and most.

<unk> way of managing our capital as well as the press will play into that are the hybrids and patent just to remind you that great across most of our businesses.

Speaker 4: you know, definitely in things like the gas pipelines in the west coast, gas transmission, or gas distribution.

Definitely.

Things like the gas pipelines.

The west coast gas transmission or gas distributions.

Speaker 4: Collins business many places we have interest Paths crews, right? So yeah, there's always a little bit on that front But we've got a lot of coverage. There may be a little timing lag, but ultimately it goes into that Regulated rate of return that's so prominent across the portfolio

Collins business many places we have.

Interest pass throughs right. So, yes, there's always a little bit on that front, but we've got a lot of coverage there may be a little timing lag, but ultimately it goes into that regulated rate of return on that so prominent across the portfolio.

Thanks, everybody and I'll leave it there.

Yeah.

Sure.

Speaker 1: We will take our next question from Rob Hope with Scotia Banks. Your line is open.

We will take our next question from Rob Hope with Scotiabank. Your line is open.

Yeah.

Speaker 15: Good morning, everyone. Just one for me. In the prepared remarks, you mentioned expansion of Texas A during the through-appalachia that made the demand in all regions. As you take a look at the increasing LMG demand off the Gulf Coast as well as increasing the congested pipelines, how do you view your pipeline's ability to continue to draw volumes from the northeast all the way down to the Gulf Coast and what expansions are you looking for?

Hi, Good morning, everyone just one for me.

In the prepared remarks, you mentioned expansion of Texas Eastern through Appalachia to meet demand in all regions as you take a look at the increasing LNG demand off the Gulf coast as well as increasingly congested pipelines.

How do you view your pipelines ability to continue to draw.

Volumes.

Kind of the northeast all the way down to the Gulf Coast and kind of what expansions are you looking for.

Yeah. Thanks for that question Ross.

Speaker 2: Yeah, thanks for the question, Rob. You know our assets, they're in a great location and we are supporting both in the US, or the East as well as the Gulf Coast.

But there aren't any great.

Great location, and we are supporting the U S northeast as well.

Gulf Coast.

Speaker 2: We continue to look at how we can optimize that infrastructure. Greg pointed out the Appalachia to market two that we're currently doing to optimize in Pennsylvania. We had an open season that we're still working with the customers on Appalachia market three. So that's all I did.

We continue to look at how we can optimize that infrastructure.

Greg pointed out the Appalachia to market too.

Two that we're currently doing John Martin, Pennsylvania, We had and hopefully season, we're still working with customers on Appalachian market, Sri Sevastopol idea of continuing to look at these.

Speaker 2: brownfield opportunities where you can optimize the system with a little bit of looping, some changing of the compression, that kind of opportunity. And we're always working with our customers when it comes to how do we make sure the infrastructure that we have is optimized. And there will be opportunities to look at how we can put those incremental volumes in at some point.

<unk> field opportunities, where you can optimize the system with you know a little bit with game changing of the compression.

J D.

We're always working with our customers.

When it comes to how.

Do we make sure the infrastructure that we have is optimized and there will be opportunities to.

Look at how we can.

Those incremental volumes and at some point, we will see.

Both with the increased demand for LNG export.

Speaker 2: both with the increased demand for LNGX Board, a need for new pipe insustructure. Fortunately in that area in Louisiana and Texas, there will be opportunities that you can pipe that infrastructure in. In the US Northeast, we'll continue to look at how we can optimize the overall capacity when it comes to providing that flexibility, particularly for people.

The need for new pipe infrastructure, Fortunately in that area in Louisiana, and Texas, there will be opportunities that you can that pipeline infrastructure in the U S. Northeast will continue to look at how we can offer.

Optimizing the overall.

Cassidy when it comes to providing that flexibility, particularly through <unk>. So there are opportunities.

Speaker 2: So there are opportunities for, you know, the winter storage with small projects there. So a lot of work to look at how we can optimize our infrastructure and add warmth capacity.

Our winter storage yet.

Mall projects there so a lot of work to look at how we can optimize their infrastructure and add more.

Cassidy.

Thank you.

Speaker 1: And we will take our next question from Pranith Satish with Wells Fargo. Your line is open.

And we'll take our next question from <unk> Satish with Wells Fargo. Your line is open.

Speaker 16: Good morning. If I look at the CAPEX backlog, I mean, clearly the focus here is on natural gas and renewables CAPEX. There's kind of less spending here and marked for mainline. So I guess just how do you think about conceptually the desire to maintain rate base at mainline versus letting it decline and spending that capital elsewhere? I know you have the ROE caller that protects you, but just curious how you think about that. ok

Thanks, Good morning, if I, if I look at the Capex backlog I mean, clearly the focus here.

Is on natural gas and renewables Capex, there is kind of less spending earmarked for mainline. So I guess, just how do you think about conceptually the desire to maintain rate base that mainline versus letting it decline in spending that capital elsewhere.

You have the ROE color that protects you, but just curious how you think about that.

Yes, pretty Thats colony, so I think.

There is ongoing.

Rate base investments, we probably haven't built the mill on this this chart per se, but I mean, a good example would be.

Speaker 7: rate-based investments. We're probably having built them all out in this chart per se, but I mean, a good example would be...

Speaker 4: The line five, uh, reroute that we talked about earlier in Wisconsin and, uh, Michigan, those will be included in, in rate base. And I think we disclose that as part of the main line, tolling agreements. So that's a pretty, pretty good example. So they'll be keeping the investment along.

The the line five reviews that we talked about earlier in Wisconsin, and Michigan also be included in rate base and.

And I think we disclosed that as part of the mainline tolling agreements that's a pretty.

Pretty good example, so there'll be continued investment along the way it maintenance capital.

Yeah.

Speaker 4: thats what you remember.

Gross capital in that regard.

Speaker 4: I think there's also opportunity to expand the main line here again.

I think there is also opportunity too.

Expand the mainline here.

Again.

Speaker 4: We withdrew those from the mainline negotiation, but we'll bring those back to the fore here once we've.

We.

Withdrew those from the mainline negotiation.

But we will bring those back to the fore here once we have.

Speaker 4: approved the, or the regulators approve the main line deal. I think whether you think about as an insurgency grasp or just actual egress.

Approved the regulators.

Our regulators approved the mainline deal I think.

Whether you think about it as an insurance seagrass or just actual egress.

Other systems should go down and we've seen what happens to net backs in debate in the basin when that happens so that's still very much.

Speaker 4: other systems could go down and we've seen what apples, the netbacks and the base and when that happened. So that's still very much...

Speaker 4: a strategy we have and our customers are interested in that as well.

Our strategy, we have and our customers are interested in that as well.

It is.

Speaker 4: We still strong believers that through the end of the decade, you're going to see

Still strong believers that through the end of the decade youre going to see.

Speaker 4: 500,000 barrels a day call it in that growth out of Western Canada. Our pipeline has come points out, travels by 75% of all the refineries. We can get people to the Gulf Coast. I think there's going to be plenty of opportunity. And...

500000 barrels a day call it in the gross out of Western Canada, our pipeline is column points out.

<unk> by 75% of other refinery as we can get people to the Gulf Coast, I think theres going to be plenty of opportunity.

Speaker 4: You know, obviously we're gonna do those in the most capital-efficient way that serves the customer. But I...

<unk>.

Obviously, we're going to do those in the most capital efficient way that serves the customer.

But.

Speaker 4: I have no doubt we're going to continue to see that growth, particularly when the alternatives they don't have as competitive a toll structure, and we have a lot more difficulty in adding incremental volumes versus what we can do with that system.

I have no doubt, we're going to continue to see that growth, particularly when the alternatives.

Don't have as competitive a toll structure and we have a lot more difficulty in adding incremental incremental volumes versus what we can do with that system.

Right.

Speaker 16: That's helpful. And then as my follow up, when you look at your Permian strategy, you mentioned a couple times the potential for tuck-ins, I guess what gaps do you see in your strategy at this point where you feel like you need to do additional M&A? And what would acquiring an asset do for you versus contracting for space on third party lines?

That's helpful.

And then as my follow up when you look at your Permian strategy, you mentioned, a couple times the potential for tuck ins.

What gaps do you see in your strategy at this point, where you feel like you need to do additional M&A in and what would acquiring an asset do for you versus contracting for space on third party lines and saving on that Capex I guess, maybe if you could just talk through the benefits of acquiring versus leasing capacity at this point.

Speaker 16: and saving on that catback so I guess maybe if you could just talk through the benefits of

Speaker 16: acquiring versus leasing capacity at this point.

Speaker 4: Yeah, I think both can work. I think we generally like operators ship. I'll tell you.

Yes.

Both can work I think we generally like operator ship I'll tell you.

Speaker 9: Obviously you see that in things like picking up pieces of gray oak and taking on the operator ship I think that allows us to optimize across the value chain both for our investors But even equally important not more important for our customers So I think we prefer to do that. You could see I mean, totally we like large large diameter pipe But I guess you could get back we don't have as much gathering, but you know, we're pretty careful on that type of

Obviously, youll see that in things like picking up pieces of of Gray oak and taking on the operator ship I think that allows us to optimize across the value chain, both for our investors, but even equally important if not more important for our customers. So I think we'd prefer to do that you could see I mean generally we like large loss.

<unk> diameter pipe and I guess, you could get back we don't have as much gathering, but you know we're pretty careful on that type of.

Speaker 9: type of investment on the Permian side.

Type of investment on the.

On the Permian side.

Speaker 4: We can also look at, you know, can you do more out of angle stuff? Can you do some on the NGL side or other products from an export perspective? Again, making sure we don't get caught up in any commodity risk and we can structure this pipeline. But, and that'd be my initial take calling. Yeah, you got it. The lease option's very much on the table. We could lease our way into the Houston market. We're currently still thinking about.

You can also look at <unk> can you do more out of Ingleside could you do some on the NGL side or are there.

Alex from an export perspective, again, making sure we don't get caught up in any.

Any commodity risk and we can structure this pipeline, but and that would be my initial take Colin.

And the lease options very much on the table, we could lease our way into the Houston market.

Currently still thinking about.

Speaker 7: Connecting gray oak over to e-hawed, but yeah, I think I think you're right. You know, we're not Help meant to spend capital. We're interested in returns on Capital so learning get learning gaps per se Um, but we're gonna we're gonna optimize the system and grow and

Connecting gray oak over too hot, but yeah, I think I think I think youre right.

Hell bent to spend capital where interested in returns on.

Capital, So turning to get there any gaps per se.

But we're going to optimize the system.

Growing.

The franchise.

Thank you.

Speaker 1: We will take our next question. Pardon me, we will take our next question from Ben Femme with BMO. Your line is open.

Thank you we'll take our next.

Pardon me, we will take our next question from Ben Pham with BMO. Your line is open.

Speaker 17: I think the morning, or maybe start off on a good morning. I'm maybe start off on on funding and maybe you can potentially rank order the sources of capital. If you do, hypothetically, you can see that a $6 billion in that's an opportunity.

Hi, Thanks, good morning.

To start off on Hey, good morning, maybe to start off on.

<unk>.

Maybe if you can potentially rank order the sources.

On top of it all if you hypothetically exceed that at $6 billion.

That's an opportunity.

Speaker 4: Sure, I'll start with you know first obviously organic growth along our system.

Sure I'll start well.

First obviously organic grows along our system is probably.

Speaker 4: is probably our best return, you know, if we can add...

Our best return if we can add.

Speaker 4: Waves to increase the volume with that putting a ton of capital work right across our entire system, whether it's on the liquid side, the gas transmission side, or even on distribution.

Ways to increase the volume without putting a ton of capital to work right across our entire system, whether it's on the liquid side, the gas transmission side or even on distribution.

Speaker 4: you know, or renewables, repower. So if I would say that's the first call because that's got the greatest return, then, you know, if you, then our major projects that you've got the large secure projects, now they take a longer time to go from investment to cash flow, so we want to back.

Our renewables Repower Joseph I would say that's the first call.

Because that's got the greatest return.

And then you know a few that are major projects that you've got the large secure projects now that you've taken a longer time to go from investments to cash flow. So we want to balance those and then you look at the type of M&A. We've done to date stuff that is complementary additives and that we can do at a value enhancing price and <unk>.

Speaker 4: And then you look at the type of M&A we've done today. Stuff that is complementary, additive, and that we can do in a value enhancing price and mix it into our...

It into our system.

Speaker 4: the way that we've been able to do with a lot of assets and I would point to everything going back to Ingleside to

The way that we've been able to do with a lot of assets and I would point to everything going back to Ingalls side to the Permian pipelines to trace and they can creek, we've got a long history of being able to do that and then if we can't find those are where the values are compelling.

Speaker 4: the Permian pipeline to trace and they can create. We've got a long history of being able to do that. And then if we can't find those or where the values aren't compelling.

Speaker 4: We look at things like buy back stock. So that's kind of the kind of hierarchy in way I would look at it and it all starts with where do we think we can get the biggest bang for our buck in terms of return on capital and growing the business and extending out

We look at things like buying back stock.

So that's kind of the the kind of hierarchy and way I would look at it and it all starts with where do we think we can get the biggest bang for Buck in terms of return on capital and growing the business and extending out and enhancing that low risk utility like pipeline like.

Speaker 4: and enhancing that low risk utility like pipeline like acid base.

Asset base so.

Speaker 4: That's the way we look at it. That's the way everything gets filtered through and I think it's been pretty successful in attracting that premium valuation.

That's that's the way we look at it that's the way everything gets filtered through and I think it's been pretty successful in attracting that premium valuation pattern. I don't know if you want to add more well I think from a funding perspective, one thing I think Ben we can think about it.

Speaker 4: I don't know if he'd wanna add more. Well, I think from a funding perspective, one thing I think then we can think about is, you know, it could be a little lumpy, a little bit higher, one year a little lower in another year. We're right at the bottom of our debt to even arrange, gives us the capacity to do some things.

Be a little lumpy, a little bit higher than one year, a little lower in another year, we're right at the bottom of our our debt to EBITDA range, which gives us the capacity to do some things so that mix that craig's talking about helps the funding as well because we've got some that will be dragged out over a few years, maybe back ends of our plan. We can do some things.

Speaker 4: So, you know, that makes the great talking about helps the funding as well because we've got some little bit...

Speaker 4: drag out over a few years, maybe back into our plan. We can do some things earlier in the year through these kind of tucking acquisitions. So we feel really good.

Earlier in the year through these kind of tuck in acquisitions. So we feel really good about the funding plan we've got.

Speaker 4: the funding plan we've got and the optionality and we'll be selective in what we do to make sure that we're

The Optionality and we will be selective in what we do to make sure that we're doing the highest return most strategic projects to us as an organization.

Speaker 4: the highest return most strategic project to us as an organization as we move forward. Can you comment the fall of the...

As we move forward.

And can you comment.

<unk>.

This capital recycling and almost nothing.

Speaker 4: Huge, huge focus for you guys. I mean, if you've done it's an opportunistic one, this is that still an effective way.

Huge huge focus for you guys.

That's opportunistic.

Is that.

So an effective way to.

To fund projects.

Speaker 4: projects and if there's a year we're going to be exceeding that

Projects and if there is a year, where maybe exceeding that.

That's $6 billion, yes.

Speaker 9: Yeah, we've got a list we're always looking at Ben and you know, I think some

Yeah, We've got a we've got a list we're always looking at Ben.

Since 18, we've done $10 billion of that things like rocket not only provide a funding element, but perhaps first and foremost helped us to.

Speaker 9: Since 18, we've done $10 billion of that, brought things like Rocket, not only provide a funding element, but perhaps first and foremost help us to, you know, make sure we're that first choice partner for various stakeholders and in that regard, things like Rocket for Indigenous communities. So that's definitely always something on the list. And...

Make sure where that first choice partner for our various stakeholders and in that regard things like rocket four indigenous communities. So that's definitely always something on the list and have.

Speaker 9: You know, if someone else is going to value and ask it at a higher valuation that we look at, we think nothing about pulling that trigger. That's the benefit of being a very large

If someone else is going to value an asset at a higher.

Valuation that we.

Look at we think nothing about pulling that trigger that's the benefit of being a very large wide breadth wide portfolio entity, you've got multiple levers to pull on and youre not forced to pull on any one and so that's why we're focused on not only growing the earnings of the company and the distributable cash flow keeping the <unk>.

Speaker 9: wide breath, wide portfolio entity. You've got multiple levers to pull on, and you're not forced to pull on anyone. And so that's why we're focused on not only growing the earnings of the company and the distributive cash flow, keeping the balance sheet in that four and a half to five range in his patsys right below end.

Balance sheet in that four five to five range and as Pat says we're at the low end and also making sure that when we need to we can pull the trigger on divestitures.

Speaker 7: and also making sure that when we need to, we can pull the trigger on the best of choice.

That's great. Thank you.

Thank you.

Speaker 1: And we will take our final question from Brian Reynolds with UBS. Your line is open.

And we will take our final question from Brian Reynolds with UBS. Your line is open.

Yeah.

Hi, good morning, everyone.

Speaker 10: Hi, good morning, everyone. Maybe just quick follow up on some of the peer strategic announcements. There's a big focus on costs that help remain more competitive on toling and to bring some values to the bottom line. So curious if you could just talk about how average is looking at it's broader cost-based to remain competitive and perhaps the main line towing agreements that are in a way to remain competitive with peer pipe.

Maybe just a quick follow up on some of the peer strategic announcements Theres, a big focus on costs to help remain more competitive on tolling may bring some value to the bottom line. So I'm curious if you could just talk about how enbridge is looking up it's brought our cost base to remain competitive and perhaps of the mainline tolling agreement was done in a way to remain competitive peer pipes. Thanks.

Speaker 7: Yeah, that's definitely a constant focus here. You know, whether it's in the distribution business, even though, you know, that cost structure ends up flying through to ratepayers, we think there is, you cannot go wrong by being the lowest cost provider. And we sure are an arrogant to think that we're that on every single day, but definitely something that we're looking at right across the business. And I-

Yes, that's definitely a constant focus here.

It's in the distribution business, even though that cost structure ends up flowing through to rate payers. We think there is you cannot go wrong by being the lowest cost provider and we share an arrogant to think that we're that on every single day, but definitely something that we're looking at right across the business and I think.

Speaker 7: We're actually things like the mainline tool, actually incentive to make sure that we do that, so that we are in a most competitive position from a cost and service offering perspective, GTM as well. And

We're actually things like the mainline toll actually incentive to make sure that we do that so that we are in a most competitive position from a cost and service offering perspective, <unk> as well and as we.

Speaker 7: We get these assets and we tuck them in and integrate them. They may be coming from a PE or smaller player that has less ability to get those synergistic benefits. It's not a huge element, but you think of our four or five percent.

We get these assets and we tuck them in and integrate them. They may be coming from <unk> or smaller player that has less ability to get those synergistic benefits, it's not a huge element, but when you think of our.

Four 5% growth focus we often put that chart out that shows.

Speaker 7: focus. We have to put that chart out that shows, you know, the first one percent of that growth comes from optimizing our costs and volumes and rate structures and regulatory side of things. So it's a big element for us when we constantly need to

The first 1% of that growth comes from optimizing our costs and volumes and rate structures and regulatory side of things. So it is a big element for us and we constantly need to.

Speaker 7: Look at it and make sure that we're ready for the next 75 years to be quite honest.

Look at it and make sure that we're ready for the next 75 years to be quite honest.

Speaker 7: Next year's the company's 75th anniversary is Endbridge. And so making sure that we're even better position for the next 75 is very much focused to company rate.

Next year is the companys 75th anniversary as Enbridge and so they can share that we're even better positioned for the next 75 is very much a focus the company right now.

Speaker 7: Greg, you guys offered a double click on a couple of examples within the cost, P&L. Enbridge has a mature supply chain function. We've had one for many years, we across all our businesses. I think that's been helpful on quality and price.

Greg maybe I'll just offer a double click on a couple of examples within the cost P&L.

Enbridge has a mature supply chain functions had one for many years.

Across all of our businesses I think that's that's been helpful on quality and price.

Speaker 7: Power costs, right? Get our power used down through optimizing flows, and modernizing pumps through to some.

Power costs right.

Get our power use down through optimizing flows.

Modernizing pumps through through some rate base growth.

Speaker 7: Working with we talked about earlier electric utilities find that that right tension around affordability reliability

And working with we talked about earlier electric utilities find that right.

<unk>.

Around the affordability reliability and upgrading the grid.

Speaker 7: agree to the grid. We've got a mature, a major projects organization, right? That allows us, again, to optimize quality and price of our capital program. So just a couple of examples there.

We've got a mature a major projects organization right.

It allows us again to optimize quality and prices of our capital program. So.

Just a couple of examples there Brian one.

On the details around.

Speaker 7: maintaining and improving our cost structure across all four business.

Maintaining and improving our cost structure across all all four businesses I think it's important not just to focus we focus on cost a lot, but also the revenue side, which is helpful. Not only for our shareholder bottom line loss of our customers to optimize the amount of volume colon can get through the liquids line the availability of the gas system, especially at peak periods and Cynthia.

Speaker 18: I think it's important not just to focus, we focus on cost a lot, but also the revenue side, which is helpful not only for our shareholders or bottom line, but also our customers to optimize the amount of volume and calling can get through the liquid's line, availability of the gas system, especially at peak periods and Cynthia's business, availability of our wind assets to make sure that they're up and running when the wind and solar is blowing. So we focus on both the cost and the revenue optimization side as an enterprise on a daily basis.

Availability of our wind assets to make sure that they are up and running when the wind and solar is blowing. So we focus on both the cost and the revenue optimization side. There is an enterprise on a daily basis.

Great I appreciate all that color.

Speaker 10: Great, appreciate all that, all back color. And then that's my follow up just yesterday evening. We saw updated commentary around CMX blind, through on August , just kind of curious. You could just update us with your view of whether this is included in your current guide into expectations. And then, you know, just an update of you on timeline and when you're expecting all of these migrate from rail back onto your system.

Then as my follow up just yesterday evening, we saw updated commentary around CMI flying through on August just kind of curious if you could just update us with your view of whether this is included in your current guidance and expectations.

Just an updated view on timeline of when you expect volumes to migrate from rail back onto your system.

Speaker 7: Yeah, that's all built into our forecast. We've been respecting TMX's public disclosures all the way along. If it is delayed, that's probably a little upside to our plan. In 23, maybe 20.

Yes, that's all built into our forecasts we've been respecting.

<unk> public disclosures all the way along if it is delayed.

That's probably a little upside to R. R.

Our plan in 'twenty, three and maybe 24.

Okay.

Okay.

Speaker 1: And ladies and gentlemen, this concludes the question and answer session. I will now turn the call over to Rebecca Morley for final remarks.

And ladies and gentlemen. This concludes the question and answer session I will now turn the call over to Rebecca Morley for final remark.

Okay.

Speaker 2: Great, thank you and we appreciate your ongoing interest in Enbridge. As always, our Investor Relations team is available following the call for any additional questions that you may have. Once again, thank you and have a great day.

Great. Thank you and we appreciate your ongoing interest in Enbridge as always our Investor Relations team is available following the call for any additional questions that you may have once again, thank you and have a great day.

Speaker 1: Thank you ladies and gentlemen. We appreciate your participation. This concludes today's conference and you may now disconnect. Thank you for the opportunity consumer.

Thank you ladies and gentlemen, we appreciate your participation. This concludes today's conference and you may now disconnect.

Yeah.

[music] today's conference and you may now disconnect.