Q1 2025 Pembina Pipeline Corp Earnings Call

Good morning, ladies and gentlemen, and welcome to the Pembina Pipeline Corporation Q1, 2025 results conference call. At this time all lines are in listen only mode. Following the presentation. We will conduct a question and answer session. If at any time. During this call you required immediate assistance. Please press star zero for the operator.

Operator: Good morning, ladies and gentlemen, and welcome to the Pembina Pipeline Corporation Q12025 results conference call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session.

Operator: If at any time during this call you require immediate assistance, please press star zero for the operator.

Operator: This call is being recorded on Friday, May 9, 2025.

This call is being recorded on Friday may nine 2025, I would now like to turn the conference over to Dan you can now VP capital markets. Please go ahead.

Dan Tucunel: I would now like to turn the conference over to Dan Tucunel, VP, Capital Markets. Please go ahead. Thank you, Joelle.

Speaker Change: Thank you Joelle good morning, everyone welcome.

Scott Burrows: Good morning, everyone. Welcome to Pembina's conference call and webcast to review highlights from the first quarter of 2025. On the call today, we have Scott Burrows, President and Chief Executive Officer, and Cameron Goldade, Senior Vice President and Chief Financial Officer, along with other members of Pembina's officer team. I would like to remind you that some of the comments made today may be forward-looking in nature and are based on Pembina's current expectations, estimates, judgments, and projections. Forward-looking statements, we may express or imply today, are subject to risks and uncertainties, which could cause actual results to differ materially from expectations.

Welcome to 10 minutes conference call and webcast to review highlights from the first quarter of 2025.

Speaker Change: On the call today, we have Scott Burrows, President and Chief Executive Officer and cameras.

Speaker Change: Vice President and Chief Financial Officer, along with other members of Permanence officer team.

Speaker Change: I would like to remind you that some of the comments made today maybe forward looking in nature and are based on <unk> current expectations estimates judgments and projections.

Speaker Change: Forward looking statements, we may express or imply today are subject to risks and uncertainties, which could cause actual results to differ materially from expectations.

Unknown Executive: Further, some of the information provided refers to non-GAP measures.

Speaker Change: Are there some of the information provided refers to non-GAAP measures.

Unknown Executive: To learn more about these forward-looking statements and non-GAAP measures, please see the company's management's discussion and analysis, dated May 8, 2025, for the period ended March 31, 2025, as well as the press release Pembina issued yesterday, which are all available online at pembina.com and on both CDAR Plus and EDGAR.

Speaker Change: To learn more about these forward looking statements and non-GAAP measures. Please see the company's management's discussion and analysis dated may eight 2025 for the period ended March 31, 2025, as well as the press release permanent issued yesterday, which are all available at Pembina com and on both SEDAR plus and that car I will.

Scott Burrows: I will now turn things over to Scott. Thanks, Dan. Yesterday, we reported our first quarter results, which were highlighted by quarterly adjusted EBITDA of $1.167 billion. This is a very strong start to the year and builds on the momentum from a record year in 2024, providing confidence in our full year outlook. As Cam will discuss in more detail, we are currently trending towards the midpoint of our 2025 adjusted EBITDA guidance range, $4.2 to $4.5 billion.

Scott Burrows: I'll turn things over to Scott.

Scott Burrows: Thanks, Dan yesterday, we reported our first quarter results, which were highlighted by quarterly adjusted EBITDA of 1.1 $67 billion. This is a very strong start to the year and builds on the momentum from a record year in 2020 for providing confidence in our full year outlook.

Scott Burrows: As Ken will discuss in more detail. We are currently trending towards the midpoint of our 2025 adjusted EBITDA guidance range for two to $4 $5 billion.

Scott Burrows: Given the growth across Pembina's low-risk, fee-based business and confidence in the outlook for 2025 and beyond, we were pleased to yesterday announce a $0.02 per share, or a 3% increase in the quarterly common share dividend, beginning with the dividend to be paid in June. We recognize the importance of our sustainable, reliable, and growing dividend to our shareholders, and we are proud of our long track record in this regard.

Scott Burrows: Given the growth across 10 minutes low risk fee based business and confidence in the outlook for 2025 and beyond we are pleased to yesterday announced a <unk> <unk> per share or 3% increase in our quarterly common share dividend beginning with the dividend to be paid in June we recognize the importance of our sustainable reliable and growing dividend to our shareholders.

Scott Burrows: And we are proud of our long track record in this regard.

Scott Burrows: On the commercial front, Pembina has entered into commercial agreements with the leading Montney producer, covering Pembina's full value chain, including transportation, fractionation, and marketing services. The agreements include significant new and extended long-term take or pay volume commitments on Pembina's Peace Pipeline, Pruskape system, and Northeast BC Pipeline. The new and extended fractionation agreements are expected to support higher utilization of Pembina's red water complex, including RFS-4, currently under construction, and the proposed RFS-3 deethanizer, if sanctioned. Additionally, the process to remarket Pembina's capacity on the Cedar LNG project to third parties continues to progress well. We have now shortlisted the preferred counterparties and entered definitive agreement negotiations.

Scott Burrows: On the commercial front <unk> has entered into commercial agreements with the leading montney producer covering 10 minutes full value chain, including transportation fractionation and marketing services. The agreements include significant new and extended long term take or pay volume commitments on permanent peace pipeline. Please pay system in northeast BC pipeline.

Scott Burrows: The new and extended fractionation agreements are expected to support higher utilization Temenos red water complex, including RFS for currently under construction and the proposed RFS III D S and either if sanctioned additionally, the process to remarket Penn minutes capacity on the Cedar LNG project third parties continues to progress well, we have now shortlisted that.

Scott Burrows: Third Counterparties and entered definitive agreement negotiations.

Scott Burrows: Pembina continues to advance several in-flight construction projects to capitalize on growing WCSB volumes, diversify end-market exposure, and serve our customers better. Pembina has built a strong competitive advantage by effectively delivering projects safely, on time, and on budget. Further, we believe that recent and current expansions have been and continue to be executed with superior capital efficiency compared to others in the industry.

Scott Burrows: Kevin It continues to advance several in flight construction projects to capitalize on growing WCS D volumes diversified end market exposure and serve our customers better stamina has built a strong competitive advantage by effectively delivering projects safely on time and on budget. Further we believe that recent and current expansions have been and continue to be executed.

Scott Burrows: With superior capital efficiency compared to others in the industry.

Scott Burrows: In addition, Pembina's progressing development of a more than $4 billion portfolio of potential projects that includes conventional pipeline expansions such as the Taylor to Gordondale project, an expansion of the Peace Pipeline system to add capacity to the market delivery pipelines from Fox Creek to Nemeo, and further expansions to support volume growth in Northeast BC, including new pipelines and terminal upgrades.

Scott Burrows: In addition, 10 minutes progressing development of more than $4 billion portfolio of potential projects that includes conventional pipeline expansions such as the Taylor Gordon Dale project and expansion of the peace pipeline system to add capacity to the market delivery pipelines from Fox Creek to the mail and further expansions to support volume growth in northeast D C, including new pipeline.

Scott Burrows: And terminal upgrades.

Scott Burrows: While reiterating their commitment to their Path to Zero project, Dow recently announced the delay in construction of the project to manage capital allocation in light of current market conditions and economic uncertainty. At this time, other than changing the in-service date of Dow's project, the announcement delay has no impact on Pembina's ethane supply agreement and the development of potential infrastructure to meet its commitments. To date, Pembina has not spent material capital to support the ethane supply agreement and will continue to progress these projects, but may now have more time available to execute them. Pembina is evaluating the various options available to meet its ethane supply commitment under the agreement with Dow, including the addition of a de-ethanization tower at RFS-3 within the Redwater complex.

Scott Burrows: Reiterating your commitment to their path to zero project, Dow recently announced the delay in construction of the project to manage capital allocation in light of current market conditions and economic uncertainty at this time other than changing the in service date of Dallas project. The announcement delay has no impact on 10 minutes ethane supply agreement and the development of potential infrastructure to meet its commitments.

Scott Burrows: To date haven't it has not spent material capital to support the ethane supply agreement. We will continue to progress. These projects, but may now have more time available to execute them time and is evaluating the various options available to meet its ethane supply commitment under the agreement without including the addition of a D. S. Nidation tower RFS III within the Red water complex.

Scott Burrows: Regarding Alliance Pipeline and ongoing Canadian Energy Regulator review process, Alliance is working collaboratively with its stakeholders and remains focused on delivering the highest standards of service that customers have come to expect. Based on discussions to date, Pembina expects lower future tolls on the Canadian portion of Alliance, reflecting a negotiated solution that continues to benefit both Pembina and the Alliance shippers through an equitable sharing of value and risk. We expect Pembina will continue to earn appropriate risk-adjusted returns, while shippers will continue to benefit from Alliance's firm capacity, high reliability, and cost-effective access to premium US natural gas.

Scott Burrows: Guarding alliance pipeline and ongoing Canadian energy regulator review process. Our life is working collaboratively with its stakeholders and remains focused on delivering the highest standards of service that customers have come to expect.

Speaker Change: Based on discussions to date, Pembina expects lower future tolls on the Canadian portion of alliance, reflecting a negotiated solution that continues to benefit both permanent and Eli shippers do an equitable sharing a value and risk. We expect M&A will continue to earn appropriate risk adjusted returns while shippers will continue to benefit from alliances firm capacity high reliability.

Speaker Change: And cost effective access to premium U S. Natural gas markets I will now turn things over to Kam to discuss in more detail the financial highlights for the first quarter.

Cameron Goldade: I will now turn things over to Cam to discuss in more detail the financial highlights for the first quarter. Thanks, Scott. As Scott noted, Pembina reported first quarter adjusted EBITDA of $1.167 billion. This represents a 12% increase over the same period in the prior year. In pipelines, factors impacting the quarter primarily included a higher contribution from Alliance due to increased ownership following the Alliance Oxable acquisition. favourable US foreign exchange rate, higher tolls, mainly related to contractual inflation adjustments Higher contracted volumes on the Nipissi Pipeline and the Peace Pipeline systems. higher contribution from Alliance due to higher demand on seasonal contracts and lower firm tolls on the Koshan Pipeline due to the contracting that occurred in July of 2024.

Kam: Thanks, Scott as Scott noted permanent reported first quarter adjusted EBITDA of 1.1 $67 billion. This represents a 12% increase over the same period in the prior year.

Kam: And pipelines factors impacting the quarter, primarily included a higher contribution from alliance due to increased ownership following the alliance on Sable acquisition.

Kam: Favorable U S foreign exchange rate.

Kam: Higher tools, mainly related to contractual inflation adjustments.

Kam: Higher contracted volumes on the Liberty pipeline and peace pipeline system.

Kam: Higher contribution from alliance due to higher higher demand on seasonal contracts.

Kam: And lower firm tolls on the Cochin pipeline due to the re contracting that occurred in July of 2020.

Cameron Goldade: In facilities, factors impacting the quarter included the inclusion of Oxable following the Alliance Oxable acquisition and higher contribution from PGI primarily related to the white cap and variant transactions, largely offset by lower interruptible volumes at Dawson due to third-party sales gas restrictions. In marketing and new ventures, first quarter results reflected the net impact of higher net revenue from contracts with customers due to increased ownership interest in AuxSable. Fire WCSB NGL margins and volumes. Lower realized gains on commodity-related derivatives. lower Auxable NGL margins and no similar gain to that recognized in the first quarter of 2024 from a change in the provision related to Pembina's financial assurances for Cedar LNG.

Kam: In facilities factors impacting the quarter included the inclusion of Ark stable. Following the alliance ox able acquisition and higher contribution from Pgi, primarily related to the white cap in various transactions largely offset by lower interruptible volumes at Dawson due to third party sales gas restrictions.

Kam: In marketing and new ventures first quarter results reflected the net impact of higher net revenue from contracts with customers due to increased ownership interest in all stable.

Kam: Tired ws WCS be NGL margins and volumes.

Kam: Lower realized gains on commodity related derivatives.

Kam: Lower ox able NGL margins than new.

Kam: No similar gain to that recognized in the first quarter of 2024 from a change in the provision related to permanent financial assurances for Cedar LNG.

Cameron Goldade: Finally, in the corporate segment, first quarter results were lower than the prior period due higher incentive costs driven by the change in Pembina's share price and relative performance to peers in the period compared to the first quarter of 2024. Earnings in the first quarter were $502 million. This represents a 15% increase over the same period in the prior year. In addition to the factors impacting adjusted EBITDA, the increase in earnings in the first quarter was primarily due to the net impact of higher depreciation and amortization expense, largely due to the Alliance Auxable acquisition, unrealized losses recognized by PGI on interest rate derivative financial instruments compared to gains in the first quarter of 2024.

Kam: Finally in the corporate segment first quarter results were lower than the prior period due higher incentive costs driven by the change in the share price and relative performance to peers in the period compared to the first quarter of 2024.

Kam: Earnings in the first quarter were $502 million. This represents a 15% increase over the same period in the prior year in.

Kam: In addition to the factors impacting adjusted EBITDA increase in earnings in the first quarter was primarily due to the net impact of higher depreciation and amortization expense largely due to the alliance are stable acquisition.

Kam: Realized losses recognized by Pgi on interest rate derivative financial interesting instruments compared to gains in the first quarter of 2024.

Kam: Okay.

Kam: Higher unrealized gains on commodity based derivative financial instruments recognized by Pgi.

Cameron Goldade: Higher unrealized gains on commodity-based derivative financial instruments recognized by PGI. Lower unrealized losses on renewable power purchase agreements and crude oil based derivatives. unrealized gains on NGL-based derivatives, unrealized losses on interest rate derivative financial instruments recognized by CDRL&G, Higher income tax expense, higher net finance costs, and lower interest income. Total volumes in the Pipelines and Facilities Divisions were 3.7 million barrels of oil equivalent per day in the first quarter. This represents an increase of 9% over the same period in the prior year, reflecting the net impact of the Alliance Ox-Stable acquisition, higher contracted volumes on the Nipissing Pipeline and the Peace Pipeline system, higher volumes at PGI related to the Whitecap and VARIN transactions, and lower interruptible volumes at Dawson due to third-party restrictions.

Lower unrealized losses on renewable power purchase agreements and crude oil based derivatives.

Kam: Unrealized gains on NGL based derivatives.

Kam: Unrealized losses on interest rate derivative financial instruments recognized by Cedar LNG.

Kam: Higher income tax expense, our net finance costs and lower interest income.

Kam: Total volumes in the pipelines and facilities divisions were $3 7 million barrels of oil equivalent per day in the first quarter. This represents an increase of 9% over the same period in the prior year, reflecting the net impact of the alliance are stable acquisition.

Kam: Your contracted volumes on the Nipissing pipeline in the peace pipeline system higher volumes at P. G I related to the white cap it very transactions and lower interruptible volumes of Dawson due to third party restrictions.

Cameron Goldade: Thanks to strong results in the first quarter of 2025, Pembina generated meaningful free cash flow in the quarter, which was allocated to strengthening the balance sheet. Turning to the full year, as Scott mentioned, we are confident in our outlook and currently trending towards the midpoint of our 2025 Adjusted EBITDA guidance range of $4.2 billion to $4.5 billion. Notably, the guidance range reflects the following full year and quarterly or seasonal assumptions. Pembina continues to see rising utilization on its conventional pipeline systems and at PGI that aligns with volume growth across the Western Canadian sedimentary basin. However, in 2025, Pembina's revenue volume growth within the conventional pipelines and gas processing assets is expected to be slightly lower than physical volume growth as certain customers expand into their contractual take or pay commitment.

Kam: Thanks to strong results in the first quarter of 2025 coming to generated meaningful free cash flow in the quarter, which was allocated to strengthening the balance sheet.

Kam: Turning to the full year as Scott mentioned, we are confident in our outlook and currently trending towards the midpoint of our 2025 adjusted EBITDA guidance range of $4 2 billion to $4 $5 billion.

Kam: Notably the guidance range reflects the following full year and quarterly or seasonal assumptions.

Kam: M&A continues to see rising utilization on his comment conventional pipeline systems and at Pgi that aligns with volume growth across the western Canadian sedimentary basin.

Kam: However, in 2025 10 minutes revenue volume growth within our conventional pipelines and gas processing assets is expected to be slightly lower than physical volume growth as certain customers expand into their contractual take or pay commitments.

Cameron Goldade: We expect a higher contribution from Alliance in the first and fourth quarters due to the ability to transport higher volumes during colder periods. Further, the current guidance assumes the existing Alliance toll is in effect for the full year. For the second quarter, our outlook assumes planned maintenance at Oxsable and Lyons, certain PGI facilities, and the Redwater Complex, as well as restrictions on third-party natural gas egress within the basin. We expect the third and fourth quarters will have higher integrity and geotechnical costs across the conventional pipeline assets. And we expect stronger first and fourth quarter results in the NGL marketing business due to typical seasonality.

Kam: We expect a higher contribution from alliance in the first and fourth quarters due to the ability to transport higher volumes during colder periods.

Kam: Further the current guidance assumes the existing alliance tool is in effect for the full year.

Kam: For the second quarter, our outlook assumes planned maintenance at our stable and alliance certain pgi facilities and the red water complex as well as restrictions on third party natural gas egress within the basin.

Kam: We expect the third and fourth quarters will have higher integrity and geotechnical costs across the conventional pipeline assets.

Kam: And we expect stronger first and fourth quarter results and the NGL marketing business due to typical seasonality. Additionally.

Kam: Additionally, while marketing results in the first quarter exceeded 10 minutes original guidance expectations.

Cameron Goldade: Additionally, while marketing results in the first quarter exceeded Pembina's original guidance expectations. This has been an offset. by the Outlook for the remainder of the year, which reflects lower commodity prices due to global economic uncertainty. As a result, Pembina's full-year adjusted EBITDA Outlook for the Marketing and New Ventures Division of $550 million remains unchanged. Pembina does not expect any material impact to its guidance from tariffs on U.S. energy imports. At March 31, 2025, based on the trailing 12 months, the ratio of proportionally consolidated debt to adjusted EBITDA was 3.4 claims, and we expect to exit 2025 at 3.4 to 3.7 times.

Kam: This has been offset.

Kam: The outlook for the remainder of the year, which reflects lower commodity prices due to global economic uncertainty as a result terminus full year adjusted EBITDA outlook for the marketing and new ventures division of $550 million remains unchanged.

Kam: Pembina does not expect any material impact to its guidance from tariffs on U S energy imports.

Kam: At March 31, 2025 based on the trailing 12 months the ratio of proportionally consolidated debt to adjusted EBITDA was three four times and we expect to exit 2025 at three four to three seven times, our leverage remains well below.

Cameron Goldade: Our leverage remains well below The low end of our targeted range, reflective of our strong balance sheet and supporting a strong BBB credit rating.

Scott Burrows: The low end of our targeted range reflective of our strong balance sheet and supporting a strong triple B credit rating I'll now turn things back to Scott.

Scott Burrows: I'll now turn things back to Scott. Thanks, Cam.

Scott Burrows: Thanks Cam in closing I want to remind you that pembina will hold its annual meeting of shareholders. Today at two P. M Mountain time four P. M. Eastern time, it will be a virtual only meeting conducted via live audio webcast participants are recommended to register for the virtual webcast at least 10 minutes before the presentation start time for further information.

Scott Burrows: In closing, I want to remind you that Pembina will hold its annual meeting of shareholders today at 2 p.m. Mountain Time, 4 p.m. Eastern Time. It will be a virtual only meeting conducted via live audio webcast. Participants are recommended to register for the virtual webcast at least 10 minutes before the presentation start time. For further information on the annual meeting, please visit the investors tab at www.pembina.com.

Scott Burrows: On the annual meeting please visit the investor's tab at Www dot payment of Dot com. Thank you for joining US. This morning. Please go ahead and open up the line for questions.

Operator: Thank you for joining us this morning.

Operator: Please go ahead and open up the line for questions. Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the one on your touch tone phone. You will hear a prompt that your hand has been raised.

Speaker Change: Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star followed by the one on your Touchtone phone you will hear promptly your hand has been raised should you wish to decline from the polling process. Please press star followed by the two.

Operator: Should you wish to decline from the polling process, please press star followed by the If you are using a speakerphone, please lift the hands before pressing.

Scott Burrows: If you are using a speaker phone please lift fan Stifel pressing any keys.

Jeremy Tonet: Your first question comes from Jeremy Tonet with J.P. Morgan. Your line is now open. Hi, good morning. Morning, Jeremy. Thanks for the color today.

Speaker Change: Your first question comes from Jeremy Tonet with J P. Morgan Your line is now open.

Jeremy Tonet: Hi, good morning.

Speaker Change: Good morning, Jeremy.

Speaker Change: Thanks for the color today, just wanted to kind of start off with maybe a bit more color on your producer customer conversations at this point and how you see I guess.

Scott Burrows: I just want to kind of start off with maybe a bit more color on your producer-customer conversations at this point, and how you see, I guess, drilling activity shaping up, and should WTI be going below 60, staying there for some period of time, and corresponding moves in condi prices, how you think that impacts Montany production, and your outlook here. You know, granted, Pembina has the material contractual protections, but just wondering any thoughts you could share.

Speaker Change: Rolling activity shaping up and should WT IV going below 60, staying there for some period of time and a corresponding moves in condi prices. How do you think that impacts montney production and your your outlook here you know granted Pembina has a material contractual protections.

Speaker Change: But just wondering any thoughts you could share there.

Speaker Change: Yeah, Jeremy it's Scott I'll start off and make some comments and Jarrett might chime in as well, but I would say to date, we haven't seen any material changes to drilling plans I would say we have seen in the last couple of days a couple producers start discussing about moving completions into into Q3 and.

Scott Burrows: Yeah, Jeremy, it's Scott. I'll start off and make some comments and Jaret might chime in as well. But I would say, to date, we haven't seen any material changes to drilling plans. I would say we have seen, you know, in the last couple days, a couple producers start discussing about moving completions into Q3 and Q4. So I would say we are starting to see some timing of completions. But overall reductions of CapEx to date, we really haven't seen that. Got it. Thank you for that.

Speaker Change: Q4, so I would say we are starting to see some some timing of completions, but but overall reductions of capex to date, we really we really havent havent seen that.

Speaker Change: Yeah.

Speaker Change: Got it thank you for that and then.

Unknown Executive: And then maybe shifting over to Alliance, if I could, and recognize that you're in a place where you can only say so much at this juncture, but is it fair to kind of characterize, I guess, the range of outcomes at this point is relatively minor within the grand scheme of Pembina as far as what unfolds in the Canadian process here. And do you see, I guess, on the U.S. side, similar things materializing or any other color would be helpful?

Speaker Change: Maybe shifting over to Oh lines, if I could and recognize that you're in a place where you can only say so much at this juncture, but is it fair to kind of carry.

Speaker Change: Characterize I guess the range of outcomes at this point is relatively minor.

Speaker Change: Within the Grand scheme of Pembina as far as what unfolds in the Canadian process here and do you see I guess on the U S side, similar things materializing or any other color would be helpful. Thanks.

Speaker Change: Good morning, Jeremy Jaret here and I. Appreciate you are mentioning that we are obviously limited in what we can say, but what I. What I can reassure you Jeremy is that our customers continue to reiterate they enjoyed a high reliability availability of the alliance asset they enjoy the high value end market delivering into the Chicago area.

Jaret Sprott: Morning, Jeremy, Jaret here. And yeah, I appreciate you mentioning that we we are obviously limited in what we can say. But what I what I can reassure you, Jeremy, is that our customers continue to reiterate, they enjoy the high reliability, availability of the Alliance asset. They enjoy the high value end market delivering into the Chicago area. And they they really value the risk sharing aspect. You know, obviously, Pembina takes a material amount of operating cost risk. We believe we're a good, safe, reliable operator. And they do a pretty appreciate that with respect to that asset that on the Canadian side, that's unlike any other of the major gas transmission pipelines in Canada.

Speaker Change: And they they really value the risk sharing aspect you know obviously permanent takes a material amount of operating cost risk. We believe we're a good safe reliable operator, and they do appreciate that with respect to that asset on the Canadian side. That's unlike any other of the major gas transmission pipelines in Canada.

Jaret Sprott: Additionally, we heard from our customers that they do not want us as part of the negotiated settlement to move to a cost of service model, like a true traditional cost of service model. So with all that said, You know, we continue to work with them expeditiously to, you know, get to a negotiated settlement that we can get into the Canadian Energy Regulator as quickly as possible, you know, that ultimately will will provide Pembina with that risk based return. And that's unfortunately, that's all we can really say right now due to the active aspect of those negotiations.

Speaker Change: Additionally, we heard from our customers that they do not want us.

Speaker Change: Part of the negotiated settlement to move to a cost of service model like a true traditional cost.

Speaker Change: Cost of service models, so with all that said.

Speaker Change: We continue to work with them expeditiously to Hum.

Speaker Change: Get to a negotiated settlement that we can get into the Canadian energy regulator as quickly as possible you know that ultimately will will provide pembina with that risk based return.

Speaker Change: And Thats. Unfortunately, that's all we can really say right now due to the active.

Speaker Change: Aspect of those negotiations.

Speaker Change: Got it and as far as the U S nothing to think.

Unknown Executive: Got it.

Unknown Executive: And as far as the U.S. and I, no. Thank you. You bet.

Speaker Change: Think about there at this point.

You bet and then on the U S. I, Jeremy So I believe its December one of this year, we'll be submitting its roughly its every five years, we have to submit our our information to the FERC and that's coming up I believe December December one of 2025.

Unknown Executive: And then on the US side, Jeremy, so I believe it's December 1 of this year, we'll be submitting, it's, it's roughly, it's every five years, we have to submit our, our information to the FERC. And that's coming up, I believe, December, December 1 of 2025.

Speaker Change: That's helpful. Thanks, and last one if I could just real quick 10 minute has done a great job getting the balance sheet, a very strong position.

Scott Burrows: Pembina has done a great job getting the balance sheet in a very strong position and just wondering if there's the opportunity to go from defense to offense, if different opportunities shake loose as far as potential smaller bolt-ons or what have you. Yeah, Jeremy, I would say that a couple of things. One is that, you know, you've certainly seen us do that over the course of time on a targeted basis. You know, obviously, you know, we very, I think, successfully leveraged the PGI relationship to add some really exciting opportunities there over the past year or so.

Speaker Change: And just wondering if there is the opportunity to go from defense to offense.

Speaker Change: Opportunities that shake loose as far as potential smaller bolt ons or what have you.

Jeremy Tonet: Yeah Jeremy.

Jeremy: I would say that a couple of things one is that.

Jeremy: You've certainly seen us do that over the course of uptime on a on a targeted basis.

Jeremy: Obviously, we're very I think successfully leveraged the pgi a relationship.

Jeremy: To add some really exciting opportunities there over the past year or so.

Jeremy Tonet: You know, would say that in terms of capital allocation, obviously, you know, we're, it's a pretty dynamic environment right now. And we're obviously monitoring things kind of in real time. But at the same time, you know, we always stand ready to make our business better as opportunities present, I would say that, you know, the prospect for big game hunting is not something we're focused on. But certainly, you know, the smaller value add opportunities, if they come about, you know, we're certainly going to be in a position to tax. Got it. That's helpful. I'll leave it there.

Jeremy: Would say that in terms of capital allocation, obviously, you know where it's a pretty dynamic environment right now and were obviously monitoring things kind of in real time, but at the same time, we always stand ready to to make our business better as opportunities present, I would say that you know that.

Jeremy: The prospect for for Big game hunting is not something we're focused on but certainly.

You know the smaller value add opportunities if they come about you know, we're certainly going to be in a position to attack them.

Speaker Change: Got it that's helpful I'll leave it there thanks.

Unknown Executive: Thanks.

Speaker Change: Your next question comes from Spiro <unk> with.

Spiro Dounis: Your next question comes from Spiro Dounis with. Your line is now open. Thanks, operator. Morning, team.

Speaker Change: Your line is now open.

Speaker Change: Thanks, operator, good morning team I wanted to start with the.

Jaret Sprott: I wanted to start with the DS tower and the Dow contract. Sounds like your plan right now is still to develop it at some point, maybe even without Dow announcing their facility, you know, timeline. Once again, I just want to confirm one, that's correct.

Speaker Change: Tower and the Dow contracts.

Speaker Change: It sounds like your plan right now is still to develop it at some point, maybe even without Dow announcing their facility timeline. Once again I just wanted to firm one that's correct.

Jaret Sprott: Two, just curious if there's a point in that agreement with Dow where they would need to pay for the supply regardless of that cracker being online. And then lastly, sorry for the multi-part question here, but in the interim, this does seem to free up some capital if you're not developing this tower imminently. So just curious how you're thinking about redeploying some of that capital.

Speaker Change: Just curious if there's a point in that agreement with Dow where they would need to pay for the supply regardless of that cracker being online and then lastly, sorry for the multipart multi part question here, but in the interim this does seem to free up some capital if you're not developing this tower imminently. So just curious how you're thinking about redeploying some of that capital.

Jaret Sprott: Good morning, Jaret here. Yeah, maybe I'll just take a step back. So we announced, it was probably May of 2024, actually, we announced the supply agreement with Dow. And I think we've been saying quarter over quarter, we've been evaluating, Pembina has the luxury of having multiple supply sources across its entire portfolio. And we've just been taking a prudent approach to evaluating what's the most cost effective approach to that supply. And we have been signaling that RFS three, which was a clone of RFS two, does make a lot of logical sense to build the DF side of that, that asset as part of our overall portfolio.

Jared: Good morning, Jared here.

Speaker Change: I'll just take a step back so we announced it was probably may of 2024, actually we announced a supply agreement with Dow.

Speaker Change: And I think we've been saying quarter over quarter, we've been evaluating pembina has the luxury of having multiple supply sources across its entire portfolio and we've just been taking a prudent approach to evaluating what's the most cost effective approach to to that supply.

Speaker Change: And we have been signaling that RFS, III, which was a clone of RFS two.

Speaker Change: It does make a lot of logical sense to build the D. F side of that that asset as part of our overall portfolio and we continue to believe that that that's still makes a lot of sense.

Jaret Sprott: And we continue to believe that that that still makes a lot of sense. There was minimal capital being spent on the portfolio of assets in the calendar year of 2025. So even with the most recent reprofiling or delay that Dow has mentioned, there isn't a material change to our overall capital in 2020, in 2025. And we still believe, you know, not knowing exactly when the new on stream date might be, be announced, we believe that it's kind of that it's just normal routine execution, doing the DF tower. Now, my team is probably cringing that I'm saying that, but it's not like a three or four year build for what we're doing.

Speaker Change: There was minimal capital being spent on the portfolio of assets in the calendar year of 2025.

Speaker Change: So even with the most recent re profiling or delay that Dow has mentioned there isn't a material change to our overall capital in 2020 in 2025, and we still believe not.

Speaker Change: Not knowing exactly when the new Onstream date might be.

Speaker Change: Announced we believe that it's kind of that it's just normal routine execution.

Speaker Change: Doing the D. F tower now my team is probably cringing that I'm, saying that but it's not like a three or four year build for.

Jaret Sprott: So we absolutely believe that when we do get a little bit more line of sight, we'll be able to act quickly and have that asset on to meet our supply portfolio commitment. Got it. That's a good color. Thanks for that.

Speaker Change: For what we're doing so we absolutely believe that when we do get a little bit more line of sight, we will be able to act quickly and have that asset on to to meet our supply portfolio commitments.

Speaker Change: Got it that's good color. Thanks for that second question going back to your lines quickly I don't think this was addressed in the prior question, but I know at one point you'd been talking about with these same customers discussion around expanding that pipeline.

Unknown Executive: Second question, going back to Alliance quickly. I don't think this was addressed in the prior question, but, you know, I know at one point you've been talking about with these same customers, discussion around expanding that pipeline. Just sort of curious where those stand right now, if we're looking at maybe a singular integrated solution here when you announced the resolution here and how you're thinking about the timing. I won't get into the specifics of the negotiation, but I can say that obviously demand for incremental gas egress is extremely strong. And we have a couple of opportunities.

Speaker Change: Just sort of curious where those stand right now if we're looking at maybe a singular integrated solution here when you announced the resolution here and how youre thinking about the timing.

Speaker Change: I won't get into the specifics of the negotiation, but I can say that obviously demand for incremental gas egress is extremely strong and we have a couple of opportunities. We you. Obviously alliance was built for a full path expansion all the way down into the into the Chicago market and there's also opportunities to do shorter haul.

Unknown Executive: Obviously, Alliance was built for a full path expansion all the way down into the Chicago market. And there's also opportunities to do shorter haul expansions with, you know, less compressor stations here on the Canadian side into the Alberta heartland. So we're just continue to evaluate those and we're kind of in the pre-feed engineering stages of that. but lots of demand for incremental liquids rich gas egress.

Speaker Change: <unk> with.

Speaker Change: Less compressor stations here on the Canadian side into.

Speaker Change: The Alberta Heartland. So we're just continue to evaluate those and kind of in the pre feed engineering stages of that.

Speaker Change: But lots of demand for incremental liquids rich gas egress.

Speaker Change: Understood No that's great to hear I'll leave it there for today, Thank you gentlemen.

Unknown Executive: Thank you all very much, that was great to hear.

Unknown Executive: I'll leave it there for today.

Unknown Executive: Thank you gentlemen.

Speaker Change: Thanks.

Speaker Change: Your next question comes from Theresa Chen with Barclays. Your line is now open.

Theresa Chen: Your next question comes from Theresa Chen with Barclays. Your line is now open. Morning. I wanted to go back to the comments about risk sharing within Alliance. To your comment about your customers appreciating that Pembina is taking the risk, does that mean the risk sharing or incremental risk shift from Pembina to customers is off the table? Or is that still a point of negotiation? And if so, if the risks were to move, what would that illustratively even look like?

Theresa Chen: Good morning.

Theresa Chen: Wanted to go back to the comments about risk sharing within alliance.

Theresa Chen: Your comment about your customers appreciating that <unk> taken.

Theresa Chen: Taking the risk.

Theresa Chen: Does that mean the risk sharing.

Theresa Chen: Risk shift.

Theresa Chen: The net to customers is off the table or is that still a point of negotiation.

Theresa Chen: So.

Theresa Chen: The Bristol move what would that illustrative play even look like.

Theresa Chen: I don't think I can get into too many of the details, but maybe I'll just provide some color that that unlike some of the other pipelines in Canada, we do take operating cost risk and the reason.

Jaret Sprott: I don't think I can get into too many of the details, but maybe I'll just provide some color that, that unlike some of the other pipelines in Canada, we do take operating cost risk. And the reason, you know, PEMIN at the time and the joint venture previously was open to that is that we do believe that we're extremely good at providing safe, reliable and cost effective operations. But with that said, as we're the back and forth goes with the customers, there could be changes to that overall risk sharing profile as different inputs into, into, you know, into the economic model change.

Theresa Chen: At the time and the joint venture previously was open to that is that we do believe that.

Theresa Chen: We're extremely good at providing safe reliable and cost effective operations.

Theresa Chen: But with that said as we are the back and forth goes with the customers there could be changes to that overall risk sharing profile as different inputs into it.

Theresa Chen: Until the economic model change, so it's pretty live and dynamic right now, but that's all I can say about that.

Jaret Sprott: So it's, it's pretty live and dynamic right now.

Unknown Executive: But, and that's all I can say about that. Okay, fair enough.

Speaker Change: Okay fair enough.

Cameron Goldade: And to the earlier caller about the bifurcation between volumes and revenue and EPDOC contribution due to the gap as customers ramp into the NVCs, when do you expect that to true up?

Theresa Chen: And you see the earlier color about on the.

Speaker Change: The bifurcation between volumes and Rev.

Speaker Change: Revenue and EBITDA contribution can keep a gap.

Speaker Change: Customers frankly to the NBC when do you expect that to true up.

Speaker Change: So when you say its cam here I would say that that's a pretty consistent that's.

Cameron Goldade: Theresa, it's Cam here. I would say that that's a pretty consistent, that's a pretty consistent phenomenon or pretty consistent experience that we've seen. And the reason being is that, you know, as you've seen from us and continues to be the case, we continue to sign up new contracts on a regular basis. So as we continue to sign up new contracts, and obviously, you know, the contracts are the leading indicator against the physical volumes, they typically come first, the volumes come second, we've continued to see that lag over time. I'm not sure that we will expect those to true up.

Speaker Change: Pretty consistent phenomenon or pretty consistent experience that we've seen and the reason being is that you know as.

Speaker Change: <unk> seen from US and continues to be the case, we continue to sign up new contracts on a regular basis.

Speaker Change: As we continue to sign up new contracts and obviously the contracts of the leading indicator against the physical volumes. They typically come first of all he has come. So I think we've continued to see that lag over time I'm not sure that we will expect those to true up I think we we continue to sign contracts as evidenced by this quarter and so we will.

Cameron Goldade: I think we, you know, we continue to sign contracts as evidenced by this quarter. And so we will continue to see a gap between, you know, those revenue and physical volumes as a result of that. And maybe I'll just add to that that you do have to delaminate the difference between so what we call our high vapor pressure products. So that's your C3 pluses and your C2 pluses versus your LVP, your low vapor pressure, so your crude and your condensate. It's it is customer dependent and it is commodity dependent. Obviously, Pembina has a suite of pipelines in our conventional system, C2 plus, C3 plus, condensate and crude.

Speaker Change: You need to see a gap between those revenue in physical volumes as a result of that.

Speaker Change: And maybe I'll just add to that.

Speaker Change: You.

Speaker Change: You do have to Delaminate the difference between what we call our high vapor pressure products. So that's you see three pluses and Youll see two buses versus your LDP are low vapor pressure.

Speaker Change: So your crude and condensate.

Speaker Change: It is customer dependent and it is commodity dependent obviously pembina has a suite of our pipelines in our conventional system Cte plus the three plus condensate and crude so there is different.

Cameron Goldade: So there is different dynamics happening. Some customers are over on certain aspects of their contracts, but overall, you will see that true up. But it's not it's not a blanket statement that all of our customers are below their firm or their take or pay and they're all drilling into it. It is dynamic between asset, commodity and customer and region.

Speaker Change: Different dynamics happening some customers are over on certain aspects of their contracts.

Speaker Change: But overall you will see that true up but it's not it's not a blanket statement that all of our customers are below their their firm or their take or pay and they're all drilling into it it is dynamic between asset commodity and customer and region.

Speaker Change: Okay.

Speaker Change: Thank you for that detail.

Unknown Executive: Thank you for that detailed answer.

Speaker Change: Your next question comes from Aaron Macneil with TD Cowen. Your line is now open.

Aaron MacNeil: Your next question comes from Aaron MacNeil with TD Cowen. The line is now open. Good morning, all. Thanks for taking my questions. could provide. The Disclosure is. Maybe just confirmation. Open-ended, anything. Nope, yep. Yeah, you bet. Appreciate the question.

Aaron MacNeil: Good morning, all thanks for taking my questions, obviously, great to see the Montney contract with the quarter. Just wondering if you could provide any more detail beyond what's in the release I can obviously I appreciate that the disclosure is intentionally vague, but we're fielding the obvious questions from investors on Mac.

Speaker Change: Magnitude of the contract volumetric lease duration.

Speaker Change: The level of contracting at both tailored Gordon Dale and RFS for and and maybe just confirmation that it is a BC montney customer given the contracting on specific pipeline thing.

Speaker Change: You noted so just <unk>.

Speaker Change: <unk> ended anything you'd be comfortable sharing.

Speaker Change: Just give me the opportunity.

Speaker Change: Yeah, you bet I appreciate the question. So it is one of our I can say it is one of our largest customers. It is the northeast BC customer and I think what I'd like to leave the group with US that this announcement I think it just provides confidence that.

Unknown Executive: So it is one of our, I can't say it is one of our largest customers. It is a Northeast BC customer.

Unknown Executive: And I think what I'd like to leave the group with is that this announcement, I think it just provides confidence that We recognize our customers do have a choice to flow on other service providers and they continually to choose us for a safe, reliable and cost effective options specifically around the conventional pipeline. And it's not only the safe, reliable operations and cost effective, it is that suite of different assets that I just referred to, the different pipelines connected to all of the fractionators in the Fort Saskatchewan area, connected to all the egress outlets, etc. So, you know, we do recognize they have choices and we do appreciate them choosing us to be their service provider.

Speaker Change: We recognized our customers do have a choice.

Speaker Change: To flow on other service providers and they continually to choose us for a safe reliable and cost effective options, specifically around the conventional pipeline and it's not only the safe reliable operations and cost effect of it is that suite of different assets that I just referred to the different pipelines connected to all of the fractionator is in and the <unk>.

Speaker Change: Fort Saskatchewan area connected to all of the egress outlets et cetera. So we do recognize they have choices and we do appreciate them choosing us to be their service provider.

Speaker Change: I will say that this is somewhat.

Unknown Executive: I will say that this is, I'll use the word material volume, you know, it's existing volumes across the enterprise. So, the pipelines, the fraction in our marketing business, but it is also new and it's, there's kind of twofold here is one is that it shows the resiliency and the requirement for high utilization across the base assets, but also reinforces the need necessity for new expansions, albeit the Taylor to Gordondale area, you know, move new pump stations within Alberta, etc. We've referenced a pump station expansions between Fox and the Mayo. These are all incrementally required as as customers reaffirm their base volumes and sign up with new revenue barrels throughout our system.

Speaker Change: I'll use the word material volume.

Speaker Change: Its existing volumes across the enterprise so the pipelines the fracs and in our marketing business, but it is also new and it's.

Speaker Change: There is kind of twofold here is one is that it shows the resiliency and the requirement for high utilization across the base assets, but also reinforces the need and necessity for new expansions.

Speaker Change: Be it the tailored of Gordon Dale area.

Speaker Change: New pump stations within Alberta et cetera.

Speaker Change: Referenced a pump station expansions between Fox and the Mayo. These are all Inc.

Speaker Change: Incrementally required us as customers reaffirmed their base volumes and sign up with new revenue barrels throughout our system.

Speaker Change: Erin I'll, just maybe add a couple of data points.

Cameron Goldade: Aaron, I'll just maybe add a couple of data points. You know, the renewal piece is obviously a, we've talked about it, it's a very meaningful piece of our piece contract structure, you know, it's not quite 10%, but it's pretty close. And obviously, the commitments beyond that flow through both the FRAC, as well as other pieces. And so, you know, when we talk about it being a fairly material contract, you know, that's the renewal piece, obviously, the new piece of it, it's obviously quite material, not quite to that magnitude, obviously, but, but very meaningful on its own.

The renewal piece is obviously.

Speaker Change: We've talked about it it's a very meaningful piece of our peace contract structure.

Speaker Change: It's not quite 10%, but it's pretty close.

Speaker Change: And obviously the commitments beyond that flow through both the frac.

Speaker Change: As well as other pieces and so.

Speaker Change: When we talk about it being a fair fairly material contract. That's the renewal piece, obviously, the new piece of it it's obviously quite material not quite to that magnitude obviously, but.

Speaker Change: But very meaningful in its own.

Speaker Change: Wow, Okay that was more than I expected to get thanks, thanks for that.

Unknown Executive: Wow, okay, that was more than I...

Unknown Executive: I'm really sorry to go back to Alliance, but you know, you did mention the risk sharing. Guess I bring that up because original CER complaint, essentially compared. You know, I, so the question...

Speaker Change: I'm really sorry to go back to alliance, but.

Speaker Change: You did mention the risk sharing earlier, and then youre not a cost of service pipeline I, just guess I bring that up because.

Speaker Change: The original CER complaint essentially compared alliance to rate regulated pipelines.

Speaker Change:

Speaker Change: So the question is.

Unknown Executive: How do you define an appropriate risk-adjusted return? Obviously, it's not a rate-regulated... The right way to think about it. You know, just a touch quickly on that. It's that's, that's one of the biggest challenges through this negotiation is exactly what you just you just touched on. Um, and you know, it, we are different than any other asset. And we're just working through that.

Speaker Change: How do you define an appropriate risk adjusted return and.

Speaker Change: Obviously, it's not a rate regulated return by it.

Speaker Change: He is the right way to think about it in the <unk>.

Speaker Change: Context of prevailing industry build multiples or is there anything you can share there.

Speaker Change: Maybe I'll just touch quickly on that it's that's that's.

Speaker Change: That's one of the biggest challenges for this negotiation is exactly what you just you just touched on.

Speaker Change: And you know it.

Speaker Change: We are different than any other asset and we're just working through that what does that.

Unknown Executive: What does that risk premium look like for Pembina? Aaron, the only thing I'd say is, I mean, obviously, you know, the filings are the filings are public, you can look at all the other pipelines, which are, you know, effectively, no risk utility type structure, and see that the ROEs there have climbed, you know, into the into the mid teens in some cases. And so that's a that's a no risk scenario. So if you sort of look at Alliance, obviously taking on the kind of risk that it does today, you know, we believe that it's appropriate to to earn a premium to that.

Speaker Change: The risk premium will look like.

Speaker Change: For Pembina.

Speaker Change: Yes.

Speaker Change: The tough one to answer.

Speaker Change: Yeah, Eric the only thing I'd say is I mean, obviously.

Speaker Change: The filings are the filings are public you can look at all the other pipelines which are effectively.

Speaker Change: No risk utility type structure and see that the ROE is there have climbed into the into the mid teens in some cases and so that's a that's a no risk scenarios. So if you sort of look at alliance, obviously, taking on the kind of risk that it does today.

Speaker Change: We believe that it's appropriate to earn a premium to that and perhaps that's what we're getting out with an appropriate risk adjusted pretty much probably as far as I can go there, but I would just make those data points clear.

Unknown Executive: And, and perhaps that's what we're getting at with an appropriate risk adjusted premium, probably as far as I can go there. But I just make those data points clear.

Unknown Executive: That's super helpful.

Speaker Change: That's super helpful. Thanks, everyone for the financials I will turn it back.

Your next question comes from <unk> Satish with Wells Fargo. Your line is now open.

Praneeth Satish: Your next question comes from Praneeth Satish with Wells Fargo. Your line is now open. Thanks. Good morning.

Satish: Thanks, Good morning, maybe let me get my Alliance question out of the way here.

Unknown Executive: Maybe let me get my Alliance question out of the way here. It just kind of, you know, recognizing you're limited in what you can say, but can you clarify, you know, the timeline for when the tolls would take effect as it relates to EBITDA? I know sometimes that the timing of the actual settlement, it can be different than when you accrue it in EBITDA. And then second, you know, without giving a specific number, are you able to confirm that any potential impact would be contained within the guidance range that you've provided within the midpoint to low end of the range?

Speaker Change: Kind of.

Speaker Change: <unk> you're limited in what you can say, but can you clarify the timeline for when the tools would take effect as it relates to EBITDA I know, sometimes that the timing of the actual settlement.

Speaker Change: It can be different than when you accrue it in EBITDA and then second.

Speaker Change: Yes.

Speaker Change: Without giving a specific number are you able to confirm that any potential impact would be.

Speaker Change: <unk> within the guidance range that you've provided within the midpoint to low end of the range.

Speaker Change: Yeah.

Unknown Executive: So on the timing piece, you know, I'd say that's still still part of the negotiation, so no update. And with that in mind, you know, we really can't comment on 2025 guidance and, and giving that clarity will just is another angle to try to figure out kind of where we're at in our negotiations. And it's just too confidential and sensitive. So we're just not going to answer that question. I apologize. As soon as we can say more, we will. Under SIF, that's fine.

Speaker Change: So on the timing piece.

Speaker Change: I'd say, that's still it's still part of the negotiation. So so no update and with that in mind, we really can't comment on 2025 guidance and giving that clarity will just is another angle to try to figure out kind of where we're at in our negotiations and it's just too confidential and sensitive. So we're just not going to answer that question I apologize.

Speaker Change: As soon as we can say more we will.

Speaker Change: Understood that's fine.

Christopher Scherman: And then switching gears, maybe if we could get an update on the Greenlight Data Center project, and I guess specifically what I wanted to know is any more color on, you know, whether the JV has entered the queue for gas turbines, because, you know, we're seeing the lead times elongate, the prices go up, have you, has the JV secured pricing on the turbines and their critical equipment costs, and just any broader update you can provide. Sure. It's Chris Sherman. Thanks for the question. You know, the project's progressing nicely. We're really focused on our interconnection applications at the minute, at the moment, and we haven't made any turbine long lead purchases, but we are actively engaged with equipment suppliers.

Speaker Change: And then switching gears, maybe if we could get an update on the Greenlight datacenter project and I guess, specifically what I wanted to know is any more color on.

Speaker Change: Whether the JV has entered the queue for gas turbines because.

Speaker Change: We are seeing.

Speaker Change: Lead times elongate the prices go up have you as the JV secured pricing on the turbines and other critical equipment cost and just any broader update you can provide.

Chris Scherman: Sure, It's Chris Scherman, Thanks for the question.

Chris Scherman: The projects are progressing nicely, we're really focused on our interconnection applications.

Chris Scherman: At the minute at the moment and we Havent, we havent made any turbine long lead.

Chris Scherman: Purchases, but we are actively engaged with with equipment suppliers, we're very alive to the cost and timing.

Christopher Scherman: We're very alive to the cost and timing dynamics that are unfolding out there, and we're going to be prudent with our order placement, and frankly, the timing still aligns with our expectations. So everything's going well and on track, both commercially and on the project side. Got it, thank you.

Chris Scherman: Dynamics that are unfolding out there and we're going to be prudent with our.

Chris Scherman: With our order placement and frankly, the timing still aligns with our expectations.

Chris Scherman: So everything's going well and on track both commercially and on the project side.

Chris Scherman: Got it thank you.

Speaker Change: Your next question comes from Rob Hope with Scotiabank. Your line is now open.

Rob Holt: Your next question comes from Rob Holt. OSHA Bank, your line is now open. Hello, everyone. First questions on the Yellowhead straddle. So Acto continues to pursue that project, even with the Dow delay. You know, how do you think about the potential to straddle that asset, you know, in the context of a Dow delay? Or, you know, could incremental athene and C3 Plus allow that project to stand on its I think from a timing perspective, Rob, you know, nothing really changes on on our end in terms of that project. That was always a late 2028-2029 project.

Rob Hope: Hello, everyone.

Rob Hope: First question's on the yellow had straddle. So <unk> continues to pursue that project even about the Dow delay how do you think about the potential to straddle that asset.

Rob Hope: In the context of a DAU delay or could incremental ethane and see three plus.

Rob Hope: Allow that project to stand on its own.

Rob Hope: I think from a timing perspective, Rob.

Rob Hope: Nothing really changes on on our end in terms of of that project that was always a late 2028 2029 project so without knowing the specifics around the extent of doubt delay I really can't comment on that but as of right now we're continuing to progress that pipeline just due to <unk>.

Rob Holt: So, you know, without knowing the specifics around the extent of DOW's delay, I really can't comment on that. But as of right now, we're continuing to progress that pipeline just due to, you know, when the in-service date was. So no change from that on our end.

Rob Hope: When the in service date was so no no change from that on our end.

Scott Burrows: Rob, I would just add that, obviously, you know, the announcement from Dow and the assessment on our part and everything that comes with that is kind of happening in real time here. You know, Dow is obviously a big customer of ours and a big partner. We were not spending material dollars on that in 2025, obviously, you know, it was all sort of early works. And so we're obviously going to get more information as the weeks and the next, you know, two, three months tick by here. And, you know, we'll obviously make judgments at that point.

Rob Hope: And Rob I would just add that obviously you know the.

Rob Hope: The announcement from Dow and the assessment on our part and everything that comes with that is it's kind of happening in REIT and real time here.

Speaker Change: That was obviously, a big customer of ours and a big partner.

Speaker Change: We were not spending material dollars on that in 2025, obviously it is all absorbed or early works and so we're obviously going to get more information as the weeks and the next two three months tick by here and.

Speaker Change: Obviously, you make judgments at that point, but just wanted to make clear that we werent spending material dollars on that in 2025, obviously, just some early works and engineering work.

Rob Holt: But just want to make clear that we weren't spending material dollars on that in 2025, obviously, just some early works and engineering But you did nail it, Rob. Oh, sorry, that there is a there is a creative C3 plus that can be extracted from the gas. You know, if this did go into service, and you know, the ethane component on the sales side was a little bit delayed. There is NOI associated with this, that would be a creative to the project. Alright, appreciate that.

Rob Hope: Well, you did and I'll, let Rob.

Rob Hope: Oh, sorry that there is there is accretive ctrip plus that can be extracted from the gas. If this did go into service in the ethane component on the sales side was a little bit delayed.

Rob Hope: There is NOI associated with that so that would be accretive to the project.

Rob Hope: Alright, I appreciate that and then maybe diving deeper into the Dow agreement. So it appears that.

Rob Holt: And then maybe, you know, diving deeper into the Dow agreement. So, you know, it appears that the commentary today is that it's a delay, not a cancel. But if the delay from Dow is substantial, do you have a sunset date or any recourse?

Rob Hope: Momentary to say is that it's a delay not a cancel.

Rob Hope: But if the delay from Dow is substantial do you have a sunset date or any recourse.

Scott Burrows: I appreciate the question, Rob, but you know, I think out of respect for our partner, you know, we're going to refrain from sort of getting into the nitty gritty of the agreement. I guess what I would say is that, you know, we feel very comfortable that we have capital protection for capital, which we would spend and, you know, outside of that, I don't think we want to sort of go much, much deeper than that. Understandable. Thank you.

Rob Hope: I appreciate the question Robert I think out of respect for our partner, we're going to refrain from sort of getting into the nitty gritty of the agreement I guess, what I would say is that we feel very comfortable that we have capital protection for capital of which we would spend in outside of that I don't think we.

Rob Hope: Wanted to sort of go much much deeper than that.

Speaker Change: Understandable. Thank you I'll hop back in the queue.

Unknown Executive: I'll have back.

Patrick Kenny: Your next question comes from Patrick Kenny with National Bank Financial Your line is now.

Patrick Kenny: Your next question comes from Patrick Kenny with National Bank Financial. Your line is now open. Hey, good morning, guys.

Rob Hope: Okay.

Patrick Kenny: Hey, good morning, guys.

Patrick Kenny: I'll try not to ask anything too commercially sensitive here, but Just on the strategy to diversify your NGL markets, I just wanted to get a better sense as to, you know, where you're at today relative to, say, where you want to land in terms of exposure to various markets. And I guess we had a bit more color on, you know, what kinds of opportunities you're looking at in order to access non-U.S. markets. both on a proprietary basis as well as, you know, utilizing third party infrastructure. That'd be great.

Rob Hope: I'll try not to ask anything too commercially sensitive here, but.

Speaker Change: Just on the strategy to diversify your NGL markets I, just wanted to get a better sense as to where you're at today relative to say, where you want to land in terms of exposure to various markets and I guess, if you had a bit more color on what kinds of opportunities Youre looking at.

Speaker Change: In order to access non U S markets.

Speaker Change: Both on a proprietary basis as well as.

Speaker Change: Utilizing third party infrastructure that'd be great.

Speaker Change: Sure.

Christopher Scherman: It's Chris Sherman. You know, I think we've been fairly clear about our aspirations around propane and some of the optimism and bull case we have for the West Coast of Canada. You know, I think the positions we have today, both through our own facilities and others are serving us well. We like that ratio as far as how it fits into our portfolio, but we've also talked about a desire to optimize Prince Rupert to increase some of the margins there. And honestly, if the price is right, we'll look at more off the West Coast for propane.

Speaker Change: It's Chris Sherman.

Speaker Change: I think we've been I think we've been fairly clear about our aspirations around propane and some of the optimism in Bull case, we have for the West coast of Canada.

Speaker Change: I think the positions we have today, both to our own facilities and others are serving us well.

Speaker Change: We like that that ratio as far as how it fits into our.

Speaker Change: Our portfolio, but we've also talked about our desire to optimize prince Rupert to increase some of the margins there and honestly if it's the price is right. We'll we'll look at more off the west coast for propane.

Christopher Scherman: As well, we're keenly watching butane. We're, you know, looking at a number of different projects to try to figure out where butane is going to fit best into North American market, other product markets as well as potentially off the coast. In the future, I can't get too much into that, but we're putting a lot of effort and time into all of those. Okay, that's great.

Speaker Change: As well, we're keenly watching butane were.

Speaker Change: Looking at a number of different projects to try to figure out where butane is going to fit best into North American market other.

Speaker Change: Markets as well as.

Speaker Change: Potentially off the coast in the future I can't get too much into that but we're putting a lot of effort and time into into all of those.

Speaker Change: Okay, that's great and then I guess.

Scott Burrows: And then I guess, just on the remarketing of the capacity at Cedar. Would you say your patience is is paying off here in terms of, you know, the geopolitical trends supporting higher demand? Perhaps Stronger Economics. for this capacity versus the first one and a half million tons.

Speaker Change: Just on the remarketing of the <unk>.

Speaker Change: Capacity at Cedar.

Speaker Change: Would you say your patience is paying off here in terms of.

Speaker Change: The geopolitical trends supporting higher demand and perhaps stronger economics.

Speaker Change: For this capacity versus the first one and a half million tons and.

Speaker Change: Just curious as well if you can comment on the level of interest in the potential expansion.

Scott Burrows: Just curious as well, if you can comment on the level of interest in the potential expansion at Cedar. Just wondering if, you know, counterparties are considering dovetailing an option for the expanded phase as well.

At Cedar I'm, just wondering if counterparties.

Speaker Change: Counterparties are considering dovetailing it an option for the expanded phase as well.

Scott Burrows: Yeah, Yeah, it's Scott here.

Scott Burrows: Yeah, it's Scott here. You know, I think it's more than just the geopolitical changes. I think it's also the fact that we continue to see growing gas out of Northeast BC that needs an egress solution. You know, we're continuing to see strong arms between Canadian gas and Asian gas prices. And so, you know, that that's, that's driving pretty significant interest in in the cedar capacity. So we're pleased with where that's going. Also, the fact that, you know, obviously, we're FID and we're a year into construction and a year closer in service date. So I think all of those factors are leading to, you know, decent interest in this in this project.

Speaker Change: It's more than just.

Speaker Change: The geopolitical changes I think it's also the fact that we continue to see growing gas out of northeast BC that needs <unk> solution.

Speaker Change: We're continuing to see strong arbs between Canadian gas and Asian gas prices.

Speaker Change: And so.

Speaker Change: That's a that's driving pretty significant interest and in the Cedar capacity. So we're pleased with where that's going also the fact that obviously, we're <unk> and we're a year into construction a year closer in service date. So I think all of those factors are meeting too.

Speaker Change: Recent interest in this in this project and we're pretty pleased with where we're going so I would say that patience has paid off I mean at this stage we are.

Scott Burrows: And we're pretty pleased with where we're going. So I would say the patience has has paid off. I mean, at this stage, we are, you know, working very hard to to turn the definitives into a final executable agreement, but they're big, complicated agreements. And as we've said, for the last several months that, you know, we'll we'll do the right deal for Pembina, not the fastest deal for Pembina. And we continue we'll continue to progress that. I would say as it relates to a potential cedar to certainly the gas demand is there. We saw that from our recontracting efforts.

Speaker Change: Working very hard to turn that in definitive into final executable agreement, but.

Speaker Change: They're big complicated agreements and as we've said for the last several months that we'll do the right deal for permanent not the fastest deal for Pembina and we continue we'll continue to progress that I would say as it relates to a potential cedar to certainly the gas demand is there we saw that from our re contracting efforts.

Scott Burrows: You know, we, you know, based on on, you know, early stages negotiations on on cedar capacity, we believe there is demand for a cedar too. But until we have line of sight to that gas on on coastal gas link or other solutions, that's kind of the gating item. And that's something that we continue to work on.

Speaker Change: We based on an early stages negotiations on Cedar capacity.

Speaker Change: We believe there is demand for our seed or two but until we have line of sight to that the gas on coastal gas link or other solutions, that's kind of the gating item and that's something that we continue to work on.

Speaker Change: Okay, that's great color.

Unknown Executive: Okay, that's great color. I appreciate it, guys. I'll leave it there.

Speaker Change: I appreciate it guys I'll leave it there.

Speaker Change: Your next question comes from Maurice Chow with RBC capital markets. Your line is now open.

Maurice Chow: Your next question comes from Maurice Chow with RBC Capital Markets. Your line is now open. Thank you and good morning, everyone.

Maurice Chow: Thank you and good morning, everyone. Just wanted to take a broader picture about the long term WCS outlook and hone in on that.

Maurice Chow: I just wanted to take a broader picture about the long term WCSB outlook and hone in on and the Taylor-Cucorindia MGL Pipeline Project. Clearly there is a competing third party project out there. Transcripts provided by Transcription Outsourcing, LLC.

Speaker Change: Taylor to quota, India NGL pipeline project, Jamie There is a competing third party project out there.

Maurice Chow: Obviously against your projects in the CCAR process. So.

Speaker Change: Just your thoughts.

Jaret Sprott: How do you think the CEO will resolve these sort of issues and take it one step further? Any reason why you think there wouldn't be sufficient contract funds for both projects to proceed in the coming Morning, Maurice.

Speaker Change: As to how you think this year will resolve these issues and taking one step further.

Any reason why you would think would it be sufficient contracted volumes for both projects to proceed in the coming quarters.

Speaker Change: Good morning.

Jaret Sprott: Jaret here. So, yeah, we recognize that there's currently two projects moving forward, and we're actually, you may be surprised to hear this, but I think I mentioned to you before, we're very supportive of both projects moving forward. Removing egress constraints for our Western Canadian sedimentary basin customers, upstream customers is critical. That's what midstreamers do. We've removed constraints so they can get to higher value markets. And overall, between LNG Canada phase one, Pembina's highly confident LNG Canada phase two happens for all the reasons Scott just mentioned, world scale resource and low commodities. You've got your cedar, you've got other projects in the works and or in construction.

Speaker Change: Jaret here. So yes, we recognize that there is there is currently two two projects moving forward and where actually you may be surprised to hear this but I think I mentioned it before we're very supportive of both projects moving forward.

Speaker Change: Moving egress constraints for our western Canadian.

Speaker Change: Sedimentary basin customers upstream customers is critical that's what mid streamers due we've removed constraints. So they can get to higher value markets and overall between LNG.

LNG, Canada Phase one Hamlin is highly confident LNG, Canada phase II happens for all the reasons Scott just mentioned.

Speaker Change: World scale resource and low commodities you.

Speaker Change: <unk> got your Cedar you got other projects in the works <unk> in construction, we believe that the overall NGL and condensate demand in Canada, we still import.

Jaret Sprott: We believe that the overall NGL and condensate demand in Canada, we still import, you know, 250,000 plus barrels a day as a nation, and the NGLs that are going to come with that incremental gas egress need to get to a market, need to get to a fractionator, need to get to a pet chem facility. So we're very bullish that both projects are required, and we'll continue to work with our customers and work with the regulator and the communities to satisfy the requirements to get ours across the finish line.

Speaker Change: 250000, plus barrels a day.

Speaker Change: Asian, and the Ngls that are going to come with that incremental gas egress need.

Speaker Change: We need to get to need to get to a market need to get to a fractionator need.

Speaker Change: We need to get to a pet chem facilities. So.

Speaker Change: We're very bullish that both projects are required and will continue to work with our customers and work with the regulator to start in the communities to satisfy the requirements to get ours across the finish line.

Speaker Change: Understood great.

Unknown Executive: Okay, just finish up with a cleanup question here.

Speaker Change: Just finish up with a cleanup question here.

Speaker Change: Kevin I think in your prepared remarks, you mentioned you expect to exit 2025 at three four to seven times.

Cameron Goldade: Kim, I think in your prepared remarks, you mentioned you expect to exit 2025 at 3.4, 3.7 times. I think that shifted a touch by about 0.1 from what you mentioned in the last conference call. Clearly still well below the low end of your target range, but just wondering what assumptions have changed, especially given that the guidance for IBID. and perhaps some co-spending with this year. A little bit of timing of spend, Maurice, and also just assumptions on timing of cash flow. It really sort of speaks to... Timing of cash flow in the calendar year versus subsequent year, that has to do with changes in non-cash working capital as well as the timing of our cash tax payments.

Speaker Change: The EBITDA in <unk>.

Speaker Change: Thats shifted a touch above one from what you mentioned in last conference call. So.

Speaker Change: Clearly still well below the low end of your target range, but just wondering what assumptions have changed especially given that the guidance for EBITDA.

Speaker Change: Perhaps some growth spending since you just pause there.

Speaker Change: Yeah, a little bit of timing of spend Maurice and also just assumptions on timing of cash flow.

Speaker Change: It really sort of speaks to <unk>.

Speaker Change: Timing of cash flow in the calendar year versus subsequent year that has to do with changes in.

Speaker Change: Noncash working capital as well as the timing of our cash tax payments. So it's really more timing than any sort of structural change.

Cameron Goldade: So it's really more so timing than any sort of structural change.

Speaker Change: I'm, sorry, and just to reconfirm the guidance that you have right now still assumes engine aligned towards that right.

Cameron Goldade: And just to reconfirm, the guidance that you have right now still assumes interim aligned tools, is that right? Correct. Perfect. Thank you.

Speaker Change: Correct.

Speaker Change: Perfect. Thank you.

Robert: Your next question comes from Robert <unk> with CIBC capital markets. Your line is now open.

Rob Catellier: Your next question comes from Robert Catellier with CIBC Capital Markets. Your line is now open. Hey, just a follow up on on the situation with Dow. I wonder if you have any sense on what they need to see to resume this project? Was it delayed because of a trade related issue? For example, maybe their products were less competitive because of tariffs? Or is it something about the economy or anything related to Canadian policy?

Speaker Change: Hey.

Speaker Change: Follow up on.

Speaker Change: On the situation with Dow I Wonder if.

Speaker Change: Do you have any sense on what they need to see the resume this project was delayed because of.

Speaker Change: A trade related issue for example.

Speaker Change: Maybe their products less competitive because of tariffs or is it something about the economy or anything related to Canadian policies.

Scott Burrows: And Rob it's Scott here.

Scott Burrows: Rob, it's Scott here. I that's a better question for Dow. I just out of respect for our partner. I can't comment on that. Okay, I understand that.

Speaker Change: That's a better question for Dow I just out of respect for our partner I can't comment on that.

Scott Burrows: Okay.

Scott Burrows: I understand that and then just moving onto just tariffs in general.

Christopher Scherman: And then just moving on to just tariffs in general. What is the tariff uncertainty done to activity levels for Watson Island and the export outlook in general? It's Chris. Well, you know, first of all, terrorists have driven lots of volatility, which we've all seen, and undoubtedly some shifting trade patterns. You know, I think in the short term, we've seen strong volumes off the West Coast, which is, you know, really in line with increased demand for frankly, Canadian propane as a result of some of the dynamics going on in the Gulf Coast and some of the, you know, curtailed supply from China.

Scott Burrows: What is the tariff uncertainty done to activity levels for Watson Island in the export outlook in general.

Chris Scherman: It's Chris.

Scott Burrows: Well.

Scott Burrows: First of all tariffs driven.

Scott Burrows: Lots of volatility, which.

Scott Burrows: Which we've all seen and undoubtedly some some trip shifting.

Scott Burrows: Trade patterns.

Scott Burrows: You know I think in the short term.

Scott Burrows: We've seen strong volumes are off the west coast, which is really in line with increased demand for frankly Canadian propane as a result of of some of the dynamics going on in the Gulf Coast and some of the.

Scott Burrows: Curtailed.

Scott Burrows: Supply from China, but I think in the long term.

Christopher Scherman: But I think in the long term, you know, it really, it really positions Watson and really positions the West Coast of Canada really, really well. We've got, you know, tremendous resource in Canada. We've got a really proven pathway to get product to the West Coast. And we've got supply security concerns for a good part of the world that's going to be looking for alternate sources in Canada is a great piece of that. And so we'll be looking to leverage that as much as possible.

Scott Burrows: And really it really positions Watson and it really positions the west coast of Canada, really really well we've got.

Scott Burrows: Tremendous resource in Western Canada, we've got a really proven.

Scott Burrows: Pathway to get product to the West coast.

Scott Burrows: And we've got supply security concerns for a good part of the world that's going to be.

Scott Burrows: <unk> be looking for alternate sources of Canada's a great a great piece of that and so we'll be looking to leverage that as much as possible.

Scott Burrows: Okay. Thanks, everyone.

Unknown Executive: Okay, thanks, everyone.

Speaker Change: Your next question comes from Sumatra Banner G with UBS. Your line is now open.

Sumantra Banerjee: Your next question comes from Sumantra Banerjee with UBS. Your line is now open. Hi, thank you for taking the question. Just to go back to capital allocation and leverage, it's great to see that you increased the dividend and also the leverage target range went down.

Speaker Change: Alright. Thank you for taking the question just to go back to capital allocation and leverage its great to see that you increased the dividend and also.

Speaker Change: On the leverage target range went down I, just wanted to get any high level thoughts on capital allocation priorities going forward.

Cameron Goldade: I just wanted to get any high level thoughts on capital allocation priorities going forward. Yeah, good morning. It's Cam. You know, as I, as I mentioned earlier, I think it's something we've clearly been watching in real time, as the markets evolved through the, you know, the greater macro volatility in the last, in the last couple months here, you know, clearly, in our guidance, we indicated a preference or, you know, sort of a base case disposition towards debt reduction in 2025, as we had free cash flow, which we expected to do to have and continue to expect that.

Cam: Yes, good morning, it's Cam.

Cam: As I mentioned earlier I think it's something we clearly Ben.

Cam: Watching in real time as the markets evolved through the.

Cam: The greater macro volatility in the last.

Cam: In the last couple of months here clearly.

Cam: In our guidance, we indicated a preference or it.

Cam: Sort of a base case disposition towards debt reduction.

Cam: 2025, as we have free cash flow, which we expect it to do to have and continue to expect that.

Cameron Goldade: I think as we've seen things ebb and flow throughout the course of the year, we've obviously taken that information in. And we obviously haven't changed that leading up to the Q1 print here. We were in blackout through April, so we wouldn't have been in a position to execute any shared value backs, even if that would have made sense at the time. And so we are sort of looking at all the signals here and are looking at things on the back of the first quarter release.

Cam: I think as as we've seen things ebb and flow throughout the course of the year. We've obviously.

Cam: Taking that information and we obviously havent changed that leading up to the Q1 printer. We were in blackout through April. So we wouldn't have been in a position to execute any any share buybacks, even if that would have made sense at the time.

Cam: So we are sort of looking at all the signals here and are looking at things on the back of the first quarter release and as we come out of blackout in and obviously are reconsidering, whether we shift some of that free cash flow towards share buybacks.

Cameron Goldade: And as we come out of blackout and obviously are reconsidering whether we shift some of that free cash flow towards share buybacks, you know, wouldn't put a pin in it at the moment, but certainly something with lots of active debate and will ultimately be market condition dependent. Got it. Thank you. That's very helpful.

Cam: I wouldn't put a pin in it at the moment, but certainly something with lots of active debate and.

Cam: We will ultimately be ultimately be market condition dependent.

Speaker Change: Got it. Thank you that's very helpful. And then just a more general one on <unk>.

Cameron Goldade: And then just a more general one on guidance. So you mentioned that you're tracking towards the midpoint currently. And of course, there's a lot of talk about volatility in the macro. But are there any projects or other factors that could push you more towards the top of the guide? You know, I would say that the biggest one would obviously be just in the near term is frankly, probably going to be where we see the commodity business. I mean, I think it's no secret that that is the biggest driver of variability in our business. Obviously, you know, we do have some interruptible volume exposure in our business, and certainly where, you know, there are dislocations on competing pipelines, or alternatively, egress constraints elsewhere.

Speaker Change: So you mentioned that you are tracking towards the midpoint currently and of course, there's a lot of.

Speaker Change: Talk about volatility in the macro.

Speaker Change: Are there any projects or other factors that could push you more towards the top end of the guidance.

Speaker Change: I would say that the biggest one would obviously be just.

Speaker Change:

Speaker Change: In the near term is frankly, probably going to be where we see the commodity business. I mean, I think it's no secret that that is the bigger driver biggest driver of variability in our business obviously.

Speaker Change: We do have some.

Speaker Change: Some interruptible volume exposure in our business and certainly were.

Speaker Change: There are there are dislocations on competing pipelines or alternatively, egress constraints elsewhere, and we stand to benefit from that that that's another driver of variability.

Cameron Goldade: And, you know, we stand to benefit from that, that's another driver of variability. You know, obviously, we do see, you know, we do see seasonality in our business, as we highlighted in the release, and certainly Q2 and Q3, you know, we do expect to be sequentially, you know, sequentially lower compared to Q1, which is normal. And that's a function of all the elements we saw. You know, the cost picture on that side is largely well understood, but really, it's the revenue opportunities that could come on top of that. So, you know, if I summarize that, would continue to say that market price variability will be the biggest single driver.

Speaker Change: Obviously, we do see.

Speaker Change: We do see.

Speaker Change: Seasonality in our business as as we highlighted in the release and certainly Q2 and Q3.

Speaker Change: We do expect to be sequentially.

Speaker Change: Sequentially lower compared to Q1, which is normal and that's a function of all the elements we saw.

Speaker Change: The cost picture on that side is is largely well understood, but really it's the revenue opportunities that could come on top of that so.

Speaker Change: If I if I <unk>.

Speaker Change: Summarize that would continue to say that.

Speaker Change: Market price variability will be the biggest single driver and then lastly.

Cameron Goldade: And then lastly, you know, sort of the interruptible volume situation as as egress, you know, on our own or on third party pipelines, you know, becomes available or constrained.

Speaker Change: Yes.

Speaker Change: Tropical volume situation is as egress.

Speaker Change: On our own or on third party pipelines.

Speaker Change: Becomes available or constraint.

Speaker Change: Yeah.

Speaker Change: Great. Thank you so much.

Unknown Executive: Great, thank you.

Speaker Change: Your next question comes from Ben Pham with BMO capital markets. Your line is now open.

Benjamin Pham: Your next question comes from Ben Pham with BMO Capital Markets. Your line is now open. Hi, thanks. Good morning. A couple questions on the marketing and the guidance you've maintained for the year. You've, you know, Q1, you've pretty much hit almost half of it so far. Can you share details on hedging on that segment and Also, just a trend around propane barrels. This is a trend over time from your vantage to move more barrels to the Canadian West Coast.

Speaker Change: Hi, Thanks, Good morning, a couple of questions on the marketing and the guidance.

Speaker Change: And for the year, if Q1, you've pretty much hit almost half half of it so far.

Speaker Change: Can you share details on hedging.

Speaker Change: On that segments and.

Speaker Change: Also just a trend around propane barrels. This is a trend over time from your vantage to move more barrels to the Canadian West coast, how how and if that could impact.

Christopher Scherman: How and if that could impact the long term outlook in the market, even the It's Chris. So on the hedging side, our FRAC spread businesses, you know, in and around 50% hedged here across the full year of 25. And so we've got a degree of protection from the volatility that Cam was mentioning on the FRAC spread side. And then as to how we're thinking about the market long-term, you know, we've been, I think, fairly consistent for a while that we think, you know, the long-term resilient markets for the Canadian, you know, wave of growth that's come and will continue to come is global.

Speaker Change: The long term outlook and marketing EBITDA.

Chris Scherman: Sure it's Chris.

Speaker Change: So on the.

Chris Scherman: On the hedging side, our frac spread businesses.

Chris Scherman: In and around 50% hedged here.

Chris Scherman: Across the full year of 'twenty.

Chris Scherman: <unk> 25, and so we've got a degree of protection from the volatility that Cam.

Chris Scherman: They can was mentioning on the on the Frac spread side.

Chris Scherman: And then as is.

Chris Scherman: To how we're thinking about.

Chris Scherman: The market long term.

Chris Scherman: We have been.

Chris Scherman: I think fairly consistent for a while that we think the long term resilient markets for the Canadian.

Chris Scherman: Wave of growth.

Chris Scherman: And it will continue to come.

Chris Scherman: Is is global.

Christopher Scherman: You know, US demand has been strong and there's lots of different, you know, narratives out there about how that might unfold over the next while. But I think in the long-term, the most resilient markets are gonna be global. And so, you know, we'll be striving to get as much growth as possible access to those markets. You know, we remain constructive on, you know, our portfolio and think we've got a nice balance at the moment between, you know, some North American markets and global markets. But as we look forward, we truly think the most resilient markets are gonna be global.

Chris Scherman: U S demand.

Chris Scherman: It has been strong and theres lots, there's lots of different narratives out there about how that might unfold over the next while but I think in the long term. The most resilient markets are going to be going to be global and so we.

Chris Scherman: We will be striving to get as much growth as possible access to those to those markets.

Chris Scherman: We remain constructive on.

Chris Scherman: Our portfolio and think we've got a nice balance at the moment between.

Chris Scherman: Some north American markets and global markets, but as we look forward, we truly think the most resilient markets youre going to be.

Chris Scherman: Going to be global.

Cameron Goldade: And I would just add to that, Ben, that, you know, in terms of the hedging, Chris mentioned that we're both 50% hedged. We are hedged at levels which are in excess of the current, you know, sort of outlook for the balance of the year, you know, to the tune of, you know, 10 to 15% above current levels.

Speaker Change: And I would just add to that Ben.

Speaker Change: A hedge and Chris mentioned, there were about 50% hedged we are hedged at levels, which are in excess of the current sort of outlook for the balance of the year.

Speaker Change: To the tune of.

Speaker Change: 10% to 15% above current levels.

Speaker Change: Okay got it.

Unknown Executive: Okay, got it.

Speaker Change: And.

Speaker Change: Just on the lines, but I'm not going to ask Paul I just wanted to go back when you when you underwrote that asset yet so synergy expectation just wondering where you are.

Cameron Goldade: did just on the lines, but I'm not gonna ask what the tolls I just wanted to go back when you when you underwrote that asset yet, the synergy expectation, just just want to work where you're where you're tracked to that. And then also just wasn't there something about the Auxable marketing? Business in terms of higher volumes in the late decade time frame, just where you're at with that. Yeah, hey, Ben, good, good call out. First thing I would say is that, you know, if you remember back to our announcement there, I would say that the lion's share of the synergies The material amount of them were actually coming from the El Sable business.

Speaker Change: Were you tracked to that and then also just wasn't there something about the sable.

Speaker Change: Marketing.

In terms of higher volumes in the late decade timeframe. This where you have that.

Speaker Change: Yeah, Hey, Ben good good call out first thing I would say is that.

Speaker Change: If you remember back to our announcement, there I would say thats the lions share of dis synergies.

Speaker Change: The material amount of them are actually coming from the <unk> business.

Cameron Goldade: there's a significant amount of commercial opportunities in the Auxable business. You know, some small opportunities on the cost side across both assets, but more so on the commercial side, and those are largely on the Auxable side. I would say that, you know, so far our perspective is, you know, we're tracking very well to our plans timing. I think we communicated at the time, you know, a range of 40 to 65 million, and that obviously had a ramp to it. You know, those come very quickly. Some of those take a little bit of time, and certainly for 2025, you know, we're tracking towards our intention there, which is probably at the lower end of the range as we expected, and continue to see the, you know, the integration opportunities, and we'll continue to look for more, but so far tracking according to plan.

Speaker Change: There is a significant amount of commercial opportunities in the <unk> business.

Speaker Change: Some small opportunities on the cost side across both assets, but more so on the commercial side and those are largely on the <unk> side.

Speaker Change: I would say that so far our perspective is we're tracking very well to our plans timing I think we communicated at the time a range of $40 million to $65 million.

Speaker Change: Obviously, you had a ramp to it you know some of those come very quickly some of those take a little bit of time and certainly for 2025, we're tracking towards.

Speaker Change: Our intention there which is probably at the lower end of the range is as we expected.

Speaker Change: And continue to see the integration opportunities.

Speaker Change: We'll continue to look for more but so far tracking.

Speaker Change: According to plan.

Speaker Change: Okay got it and just one last quick clean up and I don't think this applies to anything else in your asset base, but if anything.

Unknown Executive: Okay, got it.

Cameron Goldade: Just one last quick cleanup, and I don't think this applies to anything else in your asset base, but if anything, just think about that alliance. Any other assets through 2026? I guess that's your current guidance timeframe that's up for toll, challenges or reviews in Excel a bit? Those are the two assets, you know, obviously, the two assets here that are sort of federally regulated would have been Cochin and Alliance. And obviously, you know, we've dealt with both of those. So nothing else. Okay, got it.

Speaker Change: Alliance.

Speaker Change: And yet our assets through 2026, I guess that your current guidance timeframe that's.

Speaker Change: For toll challenges or radios and an excellent debt.

Speaker Change: Those are the two assets you know obviously the two assets here that are sort of federally regulated would be a bit of caution in alliance.

Speaker Change: We've dealt with both of those so.

Speaker Change: Nothing else okay.

Speaker Change: Got it thank you.

Unknown Executive: Thank you.

Speaker Change: Yeah.

Speaker Change: There are no further questions at this time I will now turn the call over to Scott for closing remarks.

Scott Burrows: There are no further questions at this time.

Operator: I will now turn the call over to Scott for closing remarks. All right, well, thank you, everybody, for joining us today. And we look forward to speaking this afternoon at our AGM. Thank you.

Scott Burrows: Alright, well. Thank you everybody for joining us today, and we look forward to speaking this afternoon at our AGM. Thank you.

Speaker Change: Ladies and gentlemen, this concludes your conference call for today, we thank you for participating and ask that you. Please disconnect your lines.

Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your line.

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: No.

Speaker Change: Yeah.