Q2 2026 TC Energy Corp Earnings Call

July 30, 2026

Speaker #1: Thank you for standing by. This is the conference operator. Welcome to the TC ENERGY second quarter 2026 results conference call. As a reminder, all participants are in a listen-only mode, and the conference call is being recorded.

Operator 2: Thank you for standing by. This is the conference operator. Welcome to the TC Energy Q2 2026 Results Conference Call. As a reminder, all participants are in a listen-only mode, and the conference call is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference, you may reach an operator by pressing star then zero. I would now like to turn the conference over to Mr. Gavin Wylie, Vice President, Investor Relations. Please go ahead.

Operator: Thank you for standing by. This is the conference operator. Welcome to the TC Energy Q2 2026 Results Conference Call. As a reminder, all participants are in a listen-only mode, and the conference call is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference, you may reach an operator by pressing star then zero. I would now like to turn the conference over to Mr. Gavin Wylie, Vice President, Investor Relations. Please go ahead.

Speaker #1: After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star, then 1 on your telephone keypad.

Speaker #1: Should you need assistance during the conference, you may reach an operator by pressing star then 0. I would now like to turn the conference over to Mr. Gavin Wylie, Vice President and Investor Relations.

Speaker #1: Please go ahead.

Speaker #2: Thank you. I'd like to welcome you to TC Energy's second quarter 2026 conference call. Joining me are Francois Poirier, President and Chief Executive Officer; Sean O'Donnell, Executive Vice President and Chief Financial Officer; along with other members of our senior leadership team.

Gavin Wylie: Thank you. I'd like to welcome you to TC Energy's second quarter 2026 conference call. Joining me are François Poirier, President and Chief Executive Officer, Sean O'Donnell, Executive Vice President and Chief Financial Officer, along with other members of our senior leadership team. François and Sean will begin today with some comments on our operational and financial highlights. A copy of the slide presentation is available on our website under the Investors section. Following the remarks, we'll take questions from the investment community. We ask that you please limit yourself to two questions, and if you're a member of the media, please contact our media team. Today's remarks will include forward-looking statements that are subject to important risks and uncertainties. For more information, please see the reports filed by TC Energy with Canadian securities regulators and with the U.S. Securities and Exchange Commission.

Speaker #2: Francois and Sean will begin. Today with some comments on our operational and financial highlights. A copy of the slide presentation is available on our website, under the Investors section.

Speaker #2: Following the remarks, we'll take questions from the investment community. We ask that you please limit yourself to two questions, and if you're a member of the media, please contact our media team.

Speaker #2: Today's remarks will include forward-looking statements that are subject to important risks and uncertainties. For more information, please see the reports filed by TC Energy with Canadian securities regulators and with the U.S.

Speaker #2: Securities Exchange Commission. Finally, we'll refer to certain non-GAAP measures that may not be comparable to similar measures presented by other entities. A reconciliation is contained in the appendix of this presentation.

Gavin Wylie: Finally, we'll refer to certain non-GAAP measures that may not be comparable to similar measures presented by other entities. A reconciliation is contained in the appendix of this presentation. With that, I'll now turn the call to François.

Speaker #2: With that, I'll now turn the call to Francois.

Speaker #3: Thanks, Gavin, and good morning, everyone. I'd like to begin today with an update on the strong momentum we've continued to see across our businesses.

François Poirier: Thanks, Gavin, and good morning, everyone. I'd like to begin today with an update on the strong momentum we continue to see across our businesses. We're capitalizing on the competitive advantages afforded by our incumbent footprint in some of the highest growth markets in North America and converting strong demand into high-return growth projects. Our consistent focus on safety and execution excellence is the foundation that delivers reliable service, it wins new business, and it ultimately drives higher financial performance that continues to create long-term shareholder value. Through H1 2026, we've made meaningful progress on our development pipeline. We placed approximately CAD 2 billion of assets into service, largely on time and on budget or better, and we expect to place approximately CAD 3.5 billion into service by the end of the year.

Speaker #3: We're capitalizing on the competitive advantages afforded by our incumbent footprint, and some of the highest-growth markets in North America, and converting strong demand into high-return growth projects.

Speaker #3: Our consistent focus on safety and execution excellence is the foundation that delivers reliable service; it wins new business; and it ultimately drives higher financial performance that continues to create long-term shareholder value.

Speaker #3: Through the first half of 2026, we've made meaningful progress on our development pipeline. We've placed approximately $2 billion of assets into service, largely on time and on budget or better, and we expect to place approximately $3.5 billion into service by the end of the year.

Speaker #3: Including approximately $700 million of new natural gas pipeline projects we announced this quarter, we've now sanctioned $3 billion of growth projects at a weighted average unlevered after-tax IRR of approximately 12%.

François Poirier: Including approximately CAD 700 million of new natural gas pipeline projects we announced this quarter, we've now sanctioned CAD 3 billion of growth projects at a weighted average unlevered after-tax IRR of approximately 12%. Our late-stage pending approval bucket now stands at approximately CAD 7 billion, up CAD 1 billion from last Q. This portfolio reflects multiple projects in advanced stages of commercial discussions with large anchor customers and now includes our Crossroads project, where we have executed precedent agreements subject to board approval with multiple anchor customers and are in advanced discussions with several other potential shippers. We continue to evaluate opportunities to expand the project's scope with additional shippers and expect to sanction the project in Q4 of this year.

Speaker #3: Our late-stage pending approval bucket now stands at approximately $7 billion, up $1 billion from last quarter. This portfolio reflects multiple projects in advanced stages of commercial discussions, with large anchor customers and now includes our Crossroads project, where we have executed precedent agreements, subject to board approval, with multiple anchor customers.

Speaker #3: And are in advanced discussions with several other potential shippers. We continue to evaluate opportunities to expand the project's scope with additional shippers and expect to sanction the project in the fourth quarter of this year.

Speaker #3: Looking further out, we have over $20 billion of additional projects in advanced stages of origination that align with our targeted 5 to 7 times build multiple range.

François Poirier: Looking further out, we have over CAD 20 billion of additional projects in advanced stages of origination that align with our targeted 5 to 7 times build multiple range, further supporting our long-term growth visibility. Collectively, this progress reinforces our ability to grow our capital investments while maintaining our disciplined approach to project execution, risk-adjusted returns, and balance sheet strength. Our expanding capital backlog is anchored by fundamental demand growth driven by the next wave of LNG, accelerating power and data center load, LDC reliability, and connectivity between low-cost supply and high-value markets, each aligning to a strategic pillar of our portfolio. Our latest outlook now points to an approximately 51 Bcf per day of incremental North American natural gas demand by 2035. That is a 40% increase over 2025 levels and represents an 11 Bcf per day increase from our original outlook.

Speaker #3: Further supporting our long-term growth visibility. Collectively, this progress reinforces our ability to grow our capital investments while maintaining our disciplined approach to project execution, risk-adjusted returns, and balance sheet strength.

Speaker #3: Our expanding capital backlog is anchored by fundamental demand growth, driven by the next wave of LNG, accelerating power and data center load, LDC reliability, and connectivity between low-cost supply and high-value markets.

Speaker #3: Each aligning to a strategic pillar of our portfolio. Our latest outlook now points to an approximately $51 BCF per day of incremental North American natural gas demand by 2035, and that's a 40% increase over 2025 levels, and represents an $11 BCF a day increase from our original outlook.

Speaker #3: Accelerating power demand accounts for more than half of this increase, and now represents approximately $16 BCF per day of incremental growth through 2035. Importantly, nearly 70% of this demand growth is concentrated in the U.S.

François Poirier: Accelerating power demand accounts for more than half of this increase and now represents approximately 16 Bcf per day of incremental growth through 2035. Importantly, nearly 70% of this demand growth is concentrated in the US Heartland, Alberta, and Mexico, regions where TC Energy has a strong incumbent position and significant existing infrastructure. Additionally, customers are increasingly prioritizing supply diversity and reliability. By 2035, more than 60% of North American natural gas production will originate from TC Energy-connected basins, primarily Appalachia and the WCSB. Why are we growing our backlog and capturing growth? In the majority of premium markets we serve, we are the incumbent, often the largest provider. That allows us to develop cost-competitive expansions, converting this strong fundamental backdrop into our growing capital backlog.

Speaker #3: heartland: Alberta and Mexico, regions where TC ENERGY has a strong incumbent position and significant existing infrastructure. Additionally, customers are increasingly prioritizing supply diversity and reliability.

Speaker #3: And by 2035, more than 60% of North American natural gas production will originate from TC ENERGY connected basins primarily Appalachia and the WCSB. So why are we growing our backlog and capturing growth?

Speaker #3: In the majority of premium markets we serve, we are the incumbent, often the largest provider, and that allows us to develop cost-competitive expansions converting this strong fundamental backdrop into our growing capital backlog.

Speaker #3: Our extensive footprint and our integrated storage capability and long-standing customer relationships allow us to develop innovative commercial solutions that meet evolving customer needs. Today's projects announcements are a clear example of these advantages in action, reflecting growing demand from natural gas-fired power generation and data center development.

François Poirier: Our extensive footprint and our integrated storage capability and long-standing customer relationships allow us to develop innovative commercial solutions that meet evolving customer needs. Today's project announcements are a clear example of these advantages in action, reflecting growing demand from natural gas-fired power generation and data center development. The 2 US projects on our Columbia system were sanctioned at a weighted average build multiple of approximately 5.8 times, demonstrating the quality of our opportunity set. In Canada, we continue to serve growing customer demand through our multi-year growth program with the latest expansion project on our NGTL system. Across our systems, we continue to see high quality, low risk, and highly executable opportunities with more to come. Fundamentals in Canada are strengthening. Customer demand continues to validate our strategy.

Speaker #3: The two U.S. projects on our Columbia system were sanctioned at a weighted average build multiple of approximately 5.8 times, demonstrating the quality of our opportunity set.

Speaker #3: And in Canada, we continue to serve growing customer demand through our multi-year growth program with the latest expansion project on our NGTL system. Across our systems, we continue to see high-quality, low-risk, and highly executable opportunities with more to come.

Speaker #3: Fundamentals in Canada are strengthening, and customer demand continues to validate our strategy. Our outlook calls for over $8 BCF per day of additional Canadian natural gas demand through 2035, driven by next-wave LNG, including coastal gas link phase two, industrial growth, and evolving power and data center load.

François Poirier: Our outlook calls for over 8 Bcf per day of additional Canadian natural gas demand through 2035, driven by next-wave LNG, including Coastal GasLink Phase 2, industrial growth, and evolving power and data center load. Our extensive natural gas franchise is uniquely positioned to capture this growth, with the NGTL system serving as the primary conduit connecting Western Canadian supply to expanding markets within Alberta and across North America. The market signals we are seeing today reinforce this view. Our recent 2029 Greater Edmonton area offering closed fully subscribed. Our 2030 to 2032 intra-Alberta offering saw record amounts of participation by data center developers. Given this strong customer interest, we are exploring opportunities to expand this offering to better meet customer demand. With additional receipt and export offerings currently in-market, we will look to convert visible demand into incremental projects across our Canadian assets.

Speaker #3: Our extensive natural gas franchise is uniquely positioned to capture this growth with the NGTL system serving as the primary conduit connecting Western Canadian supply to expanding markets within Alberta and across North America.

Speaker #3: The market signals we're seeing today reinforce this view. Our recent 2029 Greater Edmonton area offering closed fully subscribed and our 2030 to 2032 intra-Alberta offering saw record amounts of participation by data center developers.

Speaker #3: Given this strong customer interest, we are exploring opportunities to expand this offering to better meet customer demand. With additional receipt and export offerings currently in market, we will look to convert visible demand into incremental projects across our Canadian assets.

Speaker #3: Our focus is straightforward: understand customer demand, invest where the market is growing at competitive returns, and continue to deliver low-risk, repeatable performance. On to Bruce Power, we are seeing similar momentum in Ontario power markets, where power demand is expected to grow significantly over the coming decades.

François Poirier: Our focus is straightforward: understand customer demand, invest where the market is growing at competitive returns, and continue to deliver low-risk, repeatable performance. On to Bruce Power. We are seeing similar momentum in Ontario power markets, where power demand is expected to grow significantly over the coming decades. Against this backdrop, Bruce Power continued execution excellence is strengthening its ability to competitively serve this growing demand. As a testament to this, Bruce Power returned Unit 3 to service following its major component replacement more than seven months ahead of the ISO schedule and approximately 15% below the cost of Unit 6. The result was driven by a strong focus on innovation and a repeatable stage-build approach, capturing learnings from each refurbishment to improve productivity, reduce risk, and enhance execution certainty. Disciplined upfront planning and design maturity continue to improve cost, schedule, and execution certainty across the program.

Speaker #3: Against this backdrop, Bruce Power’s continued execution excellence is strengthening its ability to competitively serve this growing demand. As a testament to this, Bruce Power returned Unit 3 to service following its major component replacement more than seven months ahead of the ISO schedule, and approximately 15% below the cost of Unit 6.

Speaker #3: The result was driven by a strong focus on innovation and a repeatable stage-build approach, capturing learnings from each refurbishment to improve productivity, reduce risk, and enhance execution certainty.

Speaker #3: Disciplined upfront planning and design maturity continue to improve cost, schedule, and execution certainty across the program. New technologies and automation have already provided meaningful productivity gains including our unit four recently achieving the most efficient can-do defuel on record.

François Poirier: New technologies and automation have already provided meaningful productivity gains, including our Unit 4 recently achieving the most efficient CANDU defuel on record. The Bruce Power story continues to resonate strongly, I'd encourage anyone looking for a deeper dive to review the Bruce Power investor teach-in available on our website. With that, I'll turn it over to Sean to walk through the numbers.

Speaker #3: The Bruce Power story continues to resonate strongly, and I'd encourage anyone looking for a deeper dive to review the Bruce Power investor teaching available on our website.

Speaker #3: And with that, I'll turn it over to Sean to walk through the numbers.

Speaker #2: Thanks, Francois. Good morning, everybody. As we walk through the second quarter financial results, I'll also touch on how our strong asset performance continued project delivery excellence and commercial optimization are each contributing to the upper end of our 2026 EBITDA outlook range.

Sean O'Donnell: Thanks, François. Good morning, everybody. As we walk through the Q2 financial results, I'll also touch on how our strong asset performance, continued project delivery excellence, and commercial optimization are each contributing to the upper end of our 2026 EBITDA outlook range. Overall, TC delivered a 12% year-over-year growth in comparable EBITDA, marking another solid quarter of contributions by each of our business units. Our natural gas pipeline businesses performed extremely well, with daily average flows up 3% across our three-country network as compared to this same quarter last year, driven by strong customer utilization and high levels of operational availability. In Power and Energy Solutions, Bruce Power achieved 99% availability in an exceptionally strong quarter, following the return of Unit 3 in June from its major component replacement outage that François mentioned.

Speaker #2: Overall, TC delivered a 12% year-over-year growth in comparable EBITDA, marking another solid quarter of contributions by each of our business units. Our natural gas pipeline businesses performed extremely well, with daily average flows up 3% across our three-country network, as compared to this same quarter last year, driven by strong customer utilization and high levels of operational availability.

Speaker #2: In power and energy solutions, Bruce Power achieved 99% availability in an exceptionally strong quarter, following the return of unit three in June from its major component replacement outage that Francois mentioned.

Speaker #2: On the right-hand side, you'll see that each business increased its comparable EBITDA contribution compared to the same quarter last year. In Canada Gas, EBITDA A increased by $38 million, or 4%, primarily due to higher flow-through depreciation on the NGTL and Canadian mainline systems, along with higher incentive earnings on the NGTL system.

Sean O'Donnell: On the right-hand side, you'll see that each business increased its comparable EBITDA contribution compared to the same quarter last year. In Canada gas, EBITDA increased by CAD 38 million or 4%, primarily due to higher flow-through depreciation on the NGTL and Canadian Mainline systems, along with higher incentive earnings on the NGTL system. In the US, EBITDA increased by CAD 129 million or 12% due to additional contract sales and higher earnings from ANR and Columbia Gas. In our Mexico business, EBITDA increased by CAD 90 million or 28%, driven by higher earnings related to the 25 May in-service date of Southeast Gateway, as well as higher earnings from Certatejas. Finally, in Power and Energy Solutions, EBITDA increased by CAD 60 million or 20% due to higher contributions from Bruce Power, reflecting the early return of Unit 3, strong availability, and an annual price increase.

Speaker #2: In the U.S., EBITDA increased by $129 million, or 12%, due to additional contract sales and higher earnings from ANR and Columbia Gas. In our Mexico business, EBITDA increased by $90 million, or 28%, driven by higher earnings related to the May 25 in-service date of Southeast Gateway as well as higher earnings from Certaos.

Speaker #2: Finally, in power and energy solutions, EBITDA increased by $60 million, or 20%, due to higher contributions from Bruce Power reflecting the early return of unit three, strong availability, and an annual price increase.

Speaker #2: Overall, it was a great quarter, supported by high system availability and performance across our pipeline assets and a particularly strong contribution from Bruce Power.

Sean O'Donnell: Overall, it was a great quarter, supported by high system availability and performance across our pipeline assets and a particularly strong contribution from Bruce Power. Turning to our comparable EBITDA outlook, we're now targeting the upper end of our 2026 range of CAD 11.6 to 11.8 billion, reflecting the strong operational performance our teams have delivered year to date and our high degree of confidence in our execution plans for the balance of the year. Looking ahead to 2028, we continue to target comparable EBITDA of CAD 12.6 to 13.1 billion, representing an approximate 6% annualized midpoint growth from our 2025 results. On the right-hand side of the page, we've highlighted several of the key financial tailwinds that are contributing to both our 2026 and 2028 outlooks, including many of the same drivers that we've benefited from in 2025.

Speaker #2: Turning to our comparable EBITDA outlook, we are now targeting the upper end of our 2026 range of $11.6 to $11.8 billion, reflecting the strong operational performance our teams have delivered year to date, and our high degree of confidence in our execution plans for the balance of the year.

Speaker #2: Looking ahead to 2028, we continue to target comparable EBITDA of $12.6 to $13.1 billion, representing an approximate 6% annualized midpoint growth from our 2025 results.

Speaker #2: On the right-hand side of the page, we've highlighted several of the key financial tailwinds that are contributing to both our 2026 and 2028 outlooks, including many of the same drivers that we've benefited from in 2025.

Speaker #2: The key drivers include continued strong asset availability, expected rate case schedules, disciplined project execution, and continued commercial and technical innovation and optimizations across the portfolio.

Sean O'Donnell: The key drivers include continued strong asset availability, expected rate case schedules, disciplined project execution, and continued commercial and technical innovation and optimizations across the portfolio. As François highlighted, the depth of our project backlog continues to grow, which is extending the visibility of our development pipeline well beyond 2030. We've introduced a new feature to our net capital expenditure outlook this quarter. We'll walk through the key data points for you to understand where the project backlog stands. First, as François mentioned, we sanctioned approximately CAD 3 billion of growth projects year to date, including today's announcements. Second, we've grown our pending approval bucket in gray to approximately CAD 7 billion, up from CAD 6 billion last quarter.

Speaker #2: As Francois highlighted, the depth of our project backlog continues to grow, which is extending the visibility of our development pipeline well beyond 2030. We've introduced a new feature to our net capital expenditure outlook this quarter, so we'll walk through the key data points for you to understand where the project backlog stands.

Speaker #2: First, as Francois mentioned, we've sanctioned approximately $3 billion of growth projects year to date, including today's announcements. Second, we've grown our pending approval bucket in gray to approximately $7 billion, up from $6 billion last quarter.

Speaker #2: And finally, our 20-plus billion backlog of projects and origination we've added the gray hash bars to our annual capital outlook to provide greater visibility into potential timing of these projects, and a new pie chart to the right to highlight the demand drivers that are influencing the current composition of this segment of our project backlog.

Sean O'Donnell: Finally, our CAD 20-plus billion backlog of projects and origination, we've added the gray hash bars to our annual capital outlook to provide greater visibility into potential timing of these projects, and a new pie chart to the right to highlight the demand drivers that are influencing the current composition of this segment of our project backlog. It's worth highlighting on the pie chart that nearly two-thirds of our origination backlog is associated with power generation. That's consistent with our year-over-year increased natural gas demand outlook that François mentioned earlier on slide six. As a general statement on FID timing, I'd say that we're looking to advance opportunities as early as possible. We expect that the sustained growth in our investment pace to occur in 2029, 2030, and beyond. While some of the FID timelines on our origination pipeline will remain dynamic, our approach to underwriting will remain disciplined.

Speaker #2: It's worth highlighting on the pie chart that nearly two-thirds of our origination backlog is associated with power generation. That's consistent with our year-over-year increased natural gas demand outlook that Francois mentioned earlier on slide 6.

Speaker #2: As a general statement on FID timing, I'd say that we're looking to advance opportunities as early as possible, but expect that the sustained growth in our investment pace will occur in 2029, 2030, and beyond.

Speaker #2: While some of the FID timelines on our origination pipeline will remain dynamic, our approach to underwriting will remain disciplined. Any annual increase in our pacing of capital allocation will be underpinned by strong risk-adjusted returns, continued outstanding performance by our project delivery teams on cost and schedule, and our commitment to maintaining our balance sheet strength and our 4.75x leverage target.

Sean O'Donnell: Any annual increase in our pacing of capital allocation will be underpinned by strong risk-adjusted returns, continued outstanding performance by our project delivery teams on cost and schedule, and our commitment to maintaining our balance sheet strength and our 4.75x leverage target. Finally, we've released this year's report on sustainability. The report provides a comprehensive overview of our sustainability performance and progress in support of our strategic priorities. A few highlights I'd like to draw your attention to. TC has reduced methane emissions intensity by 24% since 2019, while increasing throughput by 20% and growing our comparable EBITDA in our natural gas business by 57% over the same timeframe. Our report provides details on the planned pathways to further advance our methane intensity target of a 40% to 55% reduction by 2035 from 2019 levels in a manner that supports asset competitiveness and strong financial performance.

Speaker #2: Finally, we've released this year's report on sustainability. The report provides a comprehensive overview of our sustainability performance and progress in support of our strategic priorities.

Speaker #2: A few highlights I'd like to draw your attention to. TC has reduced methane emissions intensity by 24% since 2019, while increasing throughput by 20% and growing our comparable EBITDA in our natural gas business by 57% over the same time frame.

Speaker #2: Our report provides details on the planned pathways to further advance our methane intensity target of a 40 to 55 percent reduction by 2035 from 2019 levels, in a manner that supports asset competitiveness and strong financial performance.

Speaker #2: And finally, to evidence the effectiveness of our early and deep engagement with Indigenous communities and their meaningful community and economic participation in our projects, I'm pleased to share that we've invested $5.4 billion with Indigenous and Native American businesses from 2021 through 2025.

Sean O'Donnell: Finally, to evidence the effectiveness of our early and deep engagement with Indigenous communities and their meaningful community and economic participation in our projects, I'm pleased to share that we've invested CAD 5.4 billion with Indigenous and Native American businesses from 2021 through 2025. I encourage you to visit the report on our website to learn more. With that, I'll pass the call back to François.

Speaker #2: I encourage you to visit the report on our website to learn more. With that, I'll pass the call back to Francois.

Speaker #1: Thanks, Sean. We continue to see the benefits of our disciplined strategy and clear set of strategic priorities. Across the business, we've delivered strong performance with second-quarter comparable EBITDA increasing 12% year over year and today we now expect to be at the upper end of our 2026 comparable EBITDA outlook range.

François Poirier: Thanks, Sean. We continue to see the benefits of our disciplined strategy and clear set of strategic priorities. Across the business, we've delivered strong performance with Q2 comparable EBITDA increasing 12% year-over-year, today we now expect to be at the upper end of our 2026 comparable EBITDA outlook range. Additionally, the quarter's achievements from the return of Bruce Power Unit 3 more than seven months ahead of schedule to the sanctioning of approximately CAD 3 billion of growth projects year to date further reinforces our confidence in the outlook for the business. I'd like to leave you with this. Our confidence is driven not only by the scale of the opportunities we see ahead, but by our ability to consistently execute.

Speaker #1: Additionally, the quarter's achievements from the return of Bruce Power unit three more than seven months ahead of schedule, to the sanctioning of approximately $3 billion of growth projects year to date, further reinforces our confidence in the outlook for the business.

Speaker #1: I'd like to leave you with this. Our confidence is driven not only by the scale of the opportunities we see ahead, but by our ability to consistently execute.

Speaker #1: Through safety, operational, and project execution excellence, we will continue to find innovative commercial solutions to meet evolving customer needs increase the return on our existing assets, secure new capital projects, and consistently deliver solid financial performance.

François Poirier: Through safety, operational, and project execution excellence, we will continue to find innovative commercial solutions to meet evolving customer needs, increase the return on our existing assets, secure new capital projects, and consistently deliver solid financial performance. Operator, we're now ready to take questions.

Speaker #1: Operator, we're now ready to take questions.

Speaker #3: Thank you. We will now begin the question and answer session. To join the question queue, you may press star then 1 on your telephone keypad.

Operator 2: Thank you. We will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. Please limit yourself to two questions, if you have additional questions, please re-enter the question queue. If you are using a speakerphone, please pick up the handset before pressing any keys. To withdraw your question, please press star then two. Our first question for today will come from Theresa Chen with Barclays. Please go ahead.

Operator: Thank you. We will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. Please limit yourself to two questions, if you have additional questions, please re-enter the question queue. If you are using a speakerphone, please pick up the handset before pressing any keys. To withdraw your question, please press star then two. Our first question for today will come from Theresa Chen with Barclays. Please go ahead.

Speaker #3: You will hear a tone acknowledging your request. Please limit yourself to two questions and if you have additional questions, please re-enter the question queue.

Speaker #3: If you are using a speakerphone, please pick up the handset before pressing any keys. And to withdraw your question, please press star then 2.

Speaker #3: And our first question for today will come from Theresa Chin with Barclays. Please go ahead.

Speaker #4: Good morning and thank you for taking my questions. Would you elaborate on what you're seeing in terms of demand from your customers in Alberta in particular?

Theresa Chen: Good morning, and thank you for taking my questions. Would you elaborate on what you are seeing in terms of demand from your customers in Alberta in particular, whether it be data center related or just looking at the numerous large-scale WCS crude egress projects that are currently under development, supporting robust outlook for oil sands production growth and incremental demand for natural gas as well, or from a demand pull perspective on LNG exports. How are these dynamics impacting your ability to negotiate creative tolling structures with Canadian producers, given already constrained gas takeaway capacity?

Speaker #4: Whether it be data center related or just looking at the numerous large-scale WCS crude egress projects that are currently under development, supporting robust outlook for oil sands production growth and incremental demand for natural gas as well.

Speaker #4: Or, from a demand-pull perspective on LNG exports, how are these dynamics impacting your ability to negotiate creative tolling structures with Canadian producers, given already constrained gas takeaway capacity?

Speaker #2: Theresa, it's Francois. I'll just say at a very high level, then I'll pass it on to Tina. It's a dynamic in Alberta is similar to the dynamic across our footprint.

François Poirier: Theresa, it is François. I will just say at a very high level. I will pass it on to Tina. A dynamic in Alberta is similar to the dynamic across our footprint. As you saw, we have increased our outlook to 51 Bcf a day of growth across the continent by 2035. A growing portion of that gas demand is coming from power generation. Lots of that opportunity is certainly in Alberta, but also in the US Heartland. Of course, we have strong incumbency in both those regions. Over to you, Tina.

Speaker #2: And as you saw, we've increased our outlook to 51 Bcf a day of growth across the continent by 2035. A growing portion of that gas demand is coming from power generation.

Speaker #2: And lots of that opportunity is certainly in Alberta, but also in the U.S. heartland, and, of course, we have strong incumbency in both those regions.

Speaker #2: So over to you, Tina.

Speaker #4: Yeah, thanks, Francois. Theresa, specific to your question about Canada, we are seeing growth across multiple sectors, Francois mentioned in his opening remarks about 8 to 10 BCF of the incremental demand.

François Poirier: Yeah. Thanks, François. Theresa, specific to your question about Canada, we are seeing.

Tina Faraca: Yeah. Thanks, François. Theresa, specific to your question about Canada, we are seeing.

Tina Faraca: Growth across multiple sectors. François mentioned in his opening remarks about 8 to 10 Bcf of incremental demand. For us to address that demand, we have approximately half a dozen service offerings in the market totaling about 1 Bcf per day of capacity, spanning both receipt and delivery sides of NGTL and covering intra-Alberta and export points. These offerings serve as a really helpful marker on the demand signal and directly inform our conversations on our next phase of growth for NGTL. Near-term demand targeted through the 2029 greater Edmonton area offering. We saw a very strong market uptake on that, and we have 2030 to 2032 phased expansion that is going to unlock over 1 Bcf of intrabasin and egress opportunities.

Speaker #4: For us to address that demand, we have approximately half a dozen service offerings in the market, totaling about 1 Bcf per day of capacity, spanning both the receipt and delivery sides of NGTL.

Speaker #4: And covering intra-Alberta and export points. So these offerings serve as a really helpful marker on the demand signal. And directly inform our conversations on our next phase of growth for NGTL.

Speaker #4: Near-term demand targeted through the 2029 greater Edmonton area offering we saw a very strong market uptake on that and we have 2030 to 2032 phased expansion that's going to unlock over 1 BCF of intra-basin and egress opportunities.

Speaker #4: So we're seeing strong interest in the offerings, with demand across both egress and intra-basin and we're using this market data to inform our discussions on the next phase of growth across Canada.

Tina Faraca: We're seeing strong interest in the offerings with demand across both egress and intrabasin, and we're using this market data to inform our discussions on the next phase of growth across Canada.

Speaker #4: Thank you. And maybe turning to the Heartland in the U.S., congratulations on the precedent agreements on Crossroads, and we look forward to FID in the fourth quarter.

Theresa Chen: Thank you. Maybe turning to the Heartland in the US, congratulations on the precedent agreements on Crossroads, and we look forward to FID in Q4. Would you be able to share any color at this point related to the ultimate size and perhaps relevant economics on the project and maybe subsequent expansion opportunities within the same corridor, given the outsized interest you're seeing currently?

Speaker #4: Would you be able to share any color at this point related to the ultimate size and perhaps relevant economics on the project and maybe subsequent expansion opportunities within the same corridor given the outsized interest you're seeing currently?

Speaker #4: Hi, Theresa. This is Tina again. We are as we mentioned, we are really pleased to have signed a precedent agreement with a large anchor customers for our crossroads expansion.

Tina Faraca: Hi, Theresa. This is Tina again. As we mentioned, we are really pleased to have signed a precedent agreement with large anchor customers for our Crossroads expansion. Expect to sanction that in Q4 of this year. We're seeing significant market activity taking place across the Midwest region, which is supportive of broader investment thesis for us. We're seeing about 5 to 6 Bcf of demand growth across the Midwest, representing about a 2 Bcf year-over-year growth expectation out through 2035. We're the largest operator across several Midwest states, including Ohio, Wisconsin, Michigan, Indiana, and our footprint provides really strong delivery presence into those key demand centers. From a competitive standpoint, incumbency and integration really matter in this market. With our Columbia and our Crossroads, Northern Border, Great Lakes systems together give us a highly advantaged footprint.

Speaker #4: Expect to sanction that in the fourth quarter of this year. We're seeing significant market activity taking place across the Midwest region, which is supportive of broader investment thesis for us.

Speaker #4: We're seeing about 5 to 6 BCF of demand growth across the Midwest representing about a 2 BCF year-over-year growth expectation out through 2035. We're the largest operator across several Midwest states, including Ohio, Wisconsin, Michigan, Indiana, and our footprint provides really strong delivery presence into those key demand centers.

Speaker #4: And from a competitive standpoint, incumbency and integration really matter in this market. So, with our Columbia and our Crossroads Northern Border, Great Lakes systems together give us a highly advantaged footprint.

Speaker #4: From the perspective of the crossroads expansion, we would put progress that through the next phase of discussions and sanctioning and that will fall within our 5 to 7 times build multiple.

Tina Faraca: From the perspective of the Crossroads expansion, we would progress that through the next phase of discussions and sanctioning, and that will fall within our five to seven times build multiple.

Speaker #4: Thank you very much for that detailed response.

Theresa Chen: Thank you very much for that detailed response.

Speaker #3: The next question will come from Praneeth Satish with Wells Fargo. Please go ahead.

Operator 2: The next question will come from Praneeth Satish with Wells Fargo. Please go ahead.

Operator: The next question will come from Praneeth Satish with Wells Fargo. Please go ahead.

Speaker #1: Good morning. Just on the backlog changes. So you increase the pending project backlog by about a billion dollars this quarter. And then the potential backlog by 5 billion.

Praneeth Satish: Good morning. Just on the backlog changes, you increased the pending project backlog by about CAD 1 billion this quarter, and then the potential backlog by CAD 5 billion. I guess, can we assume that the increase to the pending project backlog is basically the Crossroads project? Then the CAD 5 billion increase to the origination backlog, that's quite significant. Any more detail you can provide in terms of the type of projects being added? I think, Sean, you mentioned two-thirds is power gen, but any more clarity in terms of the split between US, NGTL, Bruce Power, and Mexico that you can share?

Speaker #1: I guess can we assume that the increase to the pending project backlog is basically the crossroads project? And then the 5 billion increase to the origination backlog, I mean, that's quite significant.

Speaker #1: Any more detail you can provide in terms of the type of projects being added? I think Sean, you mentioned two-thirds is power gen. But any more clarity in terms of the split between US, NGTL, Bruce Power, and Mexico that you can share?

Speaker #3: Yeah, Praneeth and Sean, I'll take that. Thank you for a good question. We've got a lot of growth capital showing up in a lot of slides.

Sean O'Donnell: Yeah, Praneeth, it's Sean. I'll take that. Thank you for a good question. We've got a lot of growth capital showing up in a lot of slides, let me break it down for you here a little bit. On your pending approval question, the way to think about that, on page seven, we show about CAD 700 million that's been sanctioned. CAD 700 million moved from pending into sanctioned, and then when you go back to 13, you've seen that our pending has moved up. Yes, that is round numbers, largely Crossroads. I would tell you, it's going to be slightly north of CAD 1 billion, but round numbers, you're exactly right. To the second part of your question on the potential project inventory, what we're calling origination in our new chart on page 13.

Speaker #3: Let me break it down for you a little bit. On your pending approval question, the way to think about that on page 7, we show about 700 million that's been sanctioned.

Speaker #3: So 700 million moved from pending into sanctioned. And then when you go back to 13, you've seen that our pending has moved up. And yes, that is round numbers largely crossroads.

Speaker #3: And I would tell you it's going to be slightly north of a billion, but round numbers are exactly right. To the second part of your question on the potential project inventory, what we're calling origination, in our new chart on page 13, yeah, look, we felt important to include actually on the slide this quarter because it is growing quite quickly.

Sean O'Donnell: Yeah, look, we felt it important to include actually on the slide this quarter because it is growing quite quickly. As you noted, CAD 20 billion this year on origination in years, as you can see on the hash bar chart, and then a large portion of that's falling outside of 2030 and beyond. The largely powers, we said two-thirds, and then geographically, the rule of thumb I would give you on that CAD 20 billion is about two-thirds of that is US within that customer segment bar charts. To François' comments earlier, we have quite a bit of activity across NGTL on both the producer and the demand side. About a third of that capital is right now penciled for the Canadian markets.

Speaker #3: As you noted, $20 billion this year on origination, and as you can see on the hash bar chart, a large portion of that's falling outside of 2030 and beyond.

Speaker #3: The largely powers we said two-thirds and then geographically the way the rule of thumb I would give you on that 20 billion is about two-thirds of that is US within that customer segment bar charts.

Speaker #3: And then the Francois's comments earlier, we have quite a bit of activity across NGTL and both the producer and the demand side. So about a third of that capital is right now penciled for the Canadian markets.

Speaker #1: Got it. That's very helpful. And then maybe switching gears, you've talked about using AI to optimize your pipeline network, which I think is actually one of the more compelling AI use cases that we've seen so far in midstream.

Praneeth Satish: Got it. That's very helpful. Maybe switching gears, you've talked about using AI to optimize your pipeline network, which I think is actually one of the more compelling AI use cases that we've seen so far in midstream. Can you give us an update, I guess, on that initiative at large and the results that you've seen so far? How much of the system is currently covered by the pilot that you're doing? What are the benefits that you're realizing today? How should we think about potentially scaling that pilot across the rest of your system? Can those gains be linearly applied and the timeframe to get there? Thanks.

Speaker #1: Can you give us an update, I guess, on that initiative at large and the results that you've seen so far? How much of the system is currently covered by the pilot that you're doing?

Speaker #1: What are the benefits that you're realizing today? And then, how should we think about potentially scaling that pilot across the rest of your system?

Speaker #1: Can those gains be applied kind of linearly, and what's the timeframe to get there? Thanks.

Speaker #2: Praneeth and Francois, I'll take that one. I appreciate the question. Something we're really excited about ourselves look, we have proof of concept initiatives going across the organization.

François Poirier: Bernie, it's François. I'll take that one. I appreciate the question. Something we're really excited about ourselves. Look, we have proof of concept initiatives going across the organization, I would say on fairly small segments of pipe, 100 km here, 100 km there type of thing. No, you cannot linearly extrapolate, because we picked some of the lowest hanging fruit areas where we thought there would be a greater potential. Maybe a little bit of color on how we're doing this. Our teams across the company compete for the capital to implement the AI solutions in their regions. They have to present business cases, they have to commit to outcomes, and then they get an allocation of capital. That's a good, strong, fundamental way with accountabilities to deliver outcomes to figure out what the potential is. We're really at the very front end of that process.

Speaker #2: I would say on a fairly small segments of pipe, 100 kilometers here, 100 kilometers there type of thing. No, you cannot linear extrapolate because we picked some of the lowest hanging fruit areas where we thought there would be a greater potential.

Speaker #2: Maybe a little bit of color on how we're doing this. Our teams across the company compete for the capital to implement the AI solutions in their regions.

Speaker #2: So they have to present business cases. They have to commit to outcomes. And then they get an allocation of capital. That's a good, strong fundamental way with accountabilities to deliver outcomes to figure out what the potential is.

Speaker #2: We're really at the very front end of that process. It takes time to have people sort of understand that's how we want to do things.

François Poirier: It takes time to have people sort of understand that's how we want to do things. We only have a near-term target for 2026 of CAD 100 million of AI-related incremental EBITDA. We're on track for achieving that this year, about halfway there with two quarters behind us. We expect to be able to articulate that potential in more detail, hopefully by our November timeframe, all the way out to, let's say, 2030. We need to let this process where the teams provide the business cases and compete for capital inform that for us. It's still a little bit early to provide that kind of detail. Stay tuned. Our intention when we do provide that detail is to do it with lots of supporting proof points and information.

Speaker #2: And so we only have a near-term target for 2026 of 100 million dollars of AI-related incremental EBITDA. And we're on track for achieving that this year, about halfway there with two quarters behind us.

Speaker #2: We expect to be able to articulate that potential in more detail, hopefully by our November timeframe—all the way out to, let's say, 2030.

Speaker #2: But we need to let this process where the teams provide the business cases and compete for capital inform that for us. So it's still a little bit early to provide that kind of detail.

Speaker #2: But stay tuned. Our intention when we do provide that detail is to do it with lots of supporting proof points and information.

Speaker #1: Very interesting. Thank you.

Praneeth Satish: Very interesting. Thank you.

Speaker #3: The next question will come from Aaron McNeil with TD Cowan. Please go ahead.

Operator 2: The next question will come from Aaron MacNeil with TD Cowen. Please go ahead.

Operator: The next question will come from Aaron MacNeil with TD Cowen. Please go ahead.

Speaker #5: Hey, morning all. Thanks for taking my questions. You've launched several NGTL in Alberta area open seasons ahead of establishing a long-term framework for future growth investments.

Aaron MacNeil: Hey, morning all. Thanks for taking my questions. You've launched several NGTL and Alberta area open seasons ahead of establishing a long-term framework for future growth investments. When customers are bidding in these projects today, are they effectively underwriting projects based on a tentative new regulatory and return construct? Or is the ultimate return framework for those investments still to be determined?

Speaker #5: When customers are bidding in these projects today, are they effectively underwriting projects based on a tentative new regulatory and return construct? Or is the ultimate return framework for those investments still to be determined?

Speaker #2: It's still to be determined. The open seasons Aaron, we're undertaking are to gauge at a much more detailed and granular fashion. The level of demand for service and broken down specifically into different regions and service areas.

François Poirier: It's still to be determined. The open seasons, Aaron, we're undertaking are to gauge at a much more detailed and granular fashion, the level of demand for service, and broken down specifically into different regions and service areas. As Tina mentioned, we're seeing more demand and we're actually looking to potentially upsize some of the intra Alberta offerings that we're undertaking. We are, in parallel with that, having discussions with our customers about an investment framework. It's still in the early stages of those discussions, but we hope to have some progress to report by the end of the year.

Speaker #2: As Tina mentioned, we're seeing more demand and we're actually looking to potentially upsize some of the intra Alberta offerings that we're undertaking. We are in parallel with that having discussions with our customers about an investment framework.

Speaker #2: And it's still in the early stages of those discussions, but we hope to have some progress to report by the end of the year.

Speaker #5: Okay, great. You touched on the free cash flow inflection at Bruce Power. In the update a few weeks ago, but based on your internal forecasting, what level of annual growth capital do you believe TC ENERGY could fund organically in 2029 and 2030 while sort of maintaining your targeted leverage metrics?

Aaron MacNeil: Okay, great. You touched on the free cash flow inflection at Bruce Power in the update a few weeks ago. Based on your internal forecasting, what level of annual growth capital do you believe TC Energy could fund organically in 2029 and 2030 while sort of maintaining your targeted leverage metrics? How should investors think about the funding plan if all those opportunities in your pipeline come to fruition?

Speaker #5: And how should investors think about the funding plan if all those opportunities in your pipeline come to fruition?

Speaker #3: Hey Aaron, it's Sean. I'll take that question. A good one. And thank you for pulling forward the Bruce teaching. That's an important hinge here to understand the growth capital and gas co.

Sean O'Donnell: Hey, Aaron, it's Sean. I'll take that question. A good one. Thank you for pulling forward the Bruce teach-in. That's an important hinge here to understand the growth capital in gas co. Let me describe the framework that we're using, a three-part framework. We can drill into it a little bit. Funding growth capital, three-part framework. First one is, look, the commitment to the 4.75 leverage or better, that's a firm commitment, right? Our organic deleveraging plan over the last couple and the next couple of years are going to set us up very well for that 2029, 2030 kind of ramp on growth capital that you're seeing. It brings us really to the timing of that funding need. Could be 2029, could be 2030. I think you're also getting a sense for what kind of the 30s are going to look like.

Speaker #3: I would let me describe the framework that we're using. A three-part framework. And we can drill into it a little bit. Funding growth capital, three-part framework.

Speaker #3: First one is, look, the commitment to the 4.75 leverage are better. That's a firm commitment, right? And our organic be leveraging plan over the last couple and the next couple of years are going to set us up very well for that 29, 30 kind of ramp on growth capital that you're seeing.

Speaker #3: And it brings us really to the timing of that funding need. Could be '29, could be '30, but I think you're also getting a sense for what kind of the '30s are going to look like.

Speaker #3: And let me now hinge back to that Bruce slide. The critical years for the Bruce MCR program are 2031 and 2032 when the final two units complete their MCR program.

Sean O'Donnell: Let me now hinge back to that Bruce slide. The critical years for the Bruce MCR program are 2031 and 2032, when the final two units complete their MCR program. What Bruce unlocks for us is another CAD 2 to 3 billion a year of growth capital. Right? That 2031, 2032 is an incredibly powerful addition from Bruce. We've got this two or three-year window, if between 2029 and call it 2030 or 2031, that we're really solving for to support Tina and Greg. The hierarchy of funding sources as we look at that three-year window, 2029 to 2031 before Bruce really kicks in is obviously it's just compounding the EBITDA gains that we're delivering quarter-over-quarter for you. That in parallel with driving the best projects into our sanction buckets. The best build multiples obviously create the best amount of cash flow.

Speaker #3: So and what Bruce unlocks for us is another two to three billion dollars a year of growth capital, right? So that 2031, 2032 is an incredibly powerful addition from Bruce.

Speaker #3: So we've got this two or three-year window. If between 2029 and call it 2030 or 2031 that we're really solving for to support Tina and Greg.

Speaker #3: And the hierarchy of funding sources as we look at that three-year window, 29 to 31 before Bruce really kicks in is obviously it's just compounding the EBITDA gains that we're delivering quarter over quarter.

Speaker #3: For you, that in parallel with driving the best projects into our sanctioned buckets, the best build multiples, obviously create the best amount of cash flow.

Speaker #3: And look, if we have such growth in that 29, 30, 31 window that there is a funding gap, we've got a couple of levers that we can pull.

Sean O'Donnell: Look, if we have such growth in that 2029, 2030, 2031 window that there is a funding gap, we've got a couple of levers that we can pull, right? Obviously from a, whether it be capital rotation or any other kind of capital market. We have two or three years to solve for how tall does that growth capital go? How many years before the Bruce cash flow kicks in? Ultimately, what is the lowest cost of capital the year before on a dollar per share basis? That's the framework. I think, like I said, over the next year or two, as we really see what 2029 and 2030 are going to look like, that's the amount of time we have to solve for that least cost, best dollar per share funding solution.

Speaker #3: Right? Obviously from whether it be capital rotation or any other kind of capital market. But what we have two or three years to solve for, how tall does that growth capital go?

Speaker #3: How many years before the Bruce cash flow kicks in? And then ultimately, what is the lowest cost of capital the year before on the dollar per share basis?

Speaker #3: That's the framework. And I think like I said, over the 29 and 30 are going to look like, that's the amount of time we have to solve for that least cost, best dollar per share funding solution.

Speaker #5: Okay, great. Thanks everyone. I'll turn it back.

Aaron MacNeil: Okay, great. Thanks, everyone. I'll turn it back.

Speaker #3: The next question will come from Jeremy Tonnet with JP Morgan. Please go ahead.

Operator 2: The next question will come from Jeremy Tonet with JPMorgan. Please go ahead.

Operator: The next question will come from Jeremy Tonet with JPMorgan. Please go ahead.

Speaker #6: Hi, good morning.

Jeremy Tonet: Hi, good morning.

Speaker #2: Morning.

François Poirier: Morning.

Speaker #6: Just wanted to come back to Canada Canadian growth opportunities if I could. It seems like there's a lot of opportunities as you outline here.

Jeremy Tonet: Just wanted to come back to Canada, Canadian growth opportunities, if I could. It seems like there's a lot of opportunities as you outline here, but just wondering if you could walk us through how it competes for capital. A lot of attractive opportunities in the US. The economics seem a bit better than what has been achieved in Canada historically. Just wondering, the scope, the potential for improvements on either ROE, equity way or otherwise, so that would attract your capital into Canada versus US as far as future growth projects are concerned.

Speaker #6: But just wondering if you could walk us through how it competes for capital. A lot of attractive opportunities in the US to economics seem a bit better than what has been achieved in Canada historically.

Speaker #6: And just wondering the scope of the potential for improvements on either ROE, equity layer, or otherwise. So that would attract your capital into Canada versus the US as far as future growth projects are concerned.

Speaker #2: Thanks, Jeremy. Look, we're in the middle of these conversations with our shippers. We're doing a lot of listening so I don't want to front run any discussions we're having with them.

François Poirier: Thanks, Jeremy. Look, we're in the middle of these conversations with our shippers. We're doing a lot of listening. I don't want to front run any discussions we're having with them. What I will say is that, it is a lower risk, supportive regulatory framework in Canada than we have in the US in terms of protections around capital, cost of debt, billing determinants, et cetera. We also know that if we want higher returns, we're going to have to earn it. We're working with our customers to talk through ways like, through ancillary services or any cost savings that we're able to materialize can be shared to create a win-win. What's important here is to keep our focus on delivering to our customers what they need, which is growth intrabasin and growth to export points.

Speaker #2: What I will say is that it is a lower risk supportive regulatory framework in Canada than we have in the US in terms of protections around capital cost of debt.

Speaker #2: Billing determinants, etc. And we also know that if we want a higher returns, we're going to have to earn it. So we're working with our customers to talk through ways like through ancillary services or any cost savings that we're able to materialize can be shared to create a win-win.

Speaker #2: What's important here is to keep our focus on delivering to our customers what they need, which is growth introbasin and growth to export points.

Speaker #2: And I do want and prefer to see some balance in our capital allocation from a geographic basis. It's not simply where does the highest IRR project discreetly come from.

François Poirier: I do want, and prefer to see some balance in our capital allocation from a geographic basis. It's not simply where does the highest IRR project discretely come from. You want some portfolio diversification for economic diversification from economies, from regulatory regimes, from policy environments. We do keep that balance in mind in addition to the specific return of specific projects. All those things go into the discussion, and we're doing a lot of listening right now.

Speaker #2: You want some portfolio diversification for economic diversification from economies from regulatory regimes from policy environments so we do keep that balance in mind in addition to the specific return of specific projects.

Speaker #2: So all those things go into the discussion and we're doing a lot of listening right now.

Speaker #6: Understood. Appreciate the thoughts and his continue on the lines of geographic diversification. I was wondering if we could go south two borders and any thoughts you could share with regards to the strategy in Mexico going forward as far as the amount of exposure you want to have in the country, growth opportunities there, and whether any type of Mexican monetization in the future still makes sense.

Jeremy Tonet: Understood. Appreciate the thoughts and to continue on the lines of geographic diversification. I was wondering if we could go south two borders and any thoughts you could share with regards to the strategy in Mexico going forward as far as the amount of exposure you want to have in the country, growth opportunities there, and whether any type of Mexican monetization in the future still makes sense.

Speaker #2: Hey, Jeremy, it's Sean. I'll take that one. Look, I think part of what we're seeing in the Mexico portfolio candidly, not dissimilar to what we're seeing in the US at this point, major trunk lines all built.

Sean O'Donnell: Hey, Jeremy, it's Sean. I'll take that one. Look, I think part of what we're seeing in the Mexico portfolio, candidly not dissimilar to what we're seeing in the US at this point. Major trunk lines all built. We're seeing CFE in the last two years bring more generation online than they arguably have in over a decade. There's 10 GW of gas-fired gen. I think five are commissioned already. One more pending this year, three GW on our system. As we've been talking about, that largely gas-fired power market is growing into the pipeline capacity that we have built for it, we and others. I think you just have that maturation cycle right now and gen growing into the pipe. You're certainly seeing capital market and other kind of investors and strategics entering the space. We like exactly what we have.

Speaker #2: We're seeing CFE in the last two years bring more generation online than they arguably have in over a decade. There's 10 gigawatts of gas fire gen.

Speaker #2: I think five are commissioned already. One more pending this year. Three gigawatts on our system. So as we've been talking about, that gas fire largely gas fire power market is growing into the pipeline capacity that we have built for it.

Speaker #2: We and others. So I think you just have that maturation cycle right now and gen growing into the pipe. But you're certainly seeing capital market and other kind of investors and strategics entering the space.

Speaker #2: So we like exactly what we have. We're not seeing any other materially large kind of investments being required anytime soon. But certainly kind of growing into the portfolio.

Sean O'Donnell: We're not seeing any other materially large kind of investments being required anytime soon, but certainly kind of growing into the portfolio. I'll leave it at that because it's operating exactly as designed and exactly as we've kind of included in guidance in our outlook.

Speaker #2: So I'll kind of leave it at that because it's operating exactly as designed and exactly as we've kind of included in guidance in our outlook.

Speaker #6: Understood. I'll leave it there. Thank you.

Jeremy Tonet: Understood. I'll leave it there. Thank you.

Speaker #3: The next question will come from Rob Hope with Scotiabank. Please go ahead.

Operator 2: The next question will come from Rob Hope with Scotiabank. Please go ahead.

Operator: The next question will come from Rob Hope with Scotiabank. Please go ahead.

Speaker #4: Good morning, everyone. So it's good to see another increase in the pending approval backlog as well as the increase in the origination that you noted in the prepared remarks.

Rob Hope: Morning, everyone. It's good to see another increase in the pending approval backlog as well as the increase in the origination that you noted in the prepared remarks. You also did comment that the timing of FIDs is dynamic. Can you speak to how these projects are marching towards FID decisions? Just given the fact that we are seeing a number of kind of changing dynamics out there in the market and potentially some upsize in these projects. How are these projects kind of working through the funnel, and is the target still of to have CAD 8 billion of projects sanctioned this year?

Speaker #4: You also did comment that the timing of FIDs is dynamic. Can you speak to how these projects are marching towards FID decisions? Just given the fact that we are seeing a number of kind of changing dynamics out there in the market and potentially some upsize in these projects.

Speaker #4: So how are these projects kind of working through the funnel and does the target still have $8 billion of projects sanctioned this year?

Speaker #2: Hey, Rob and Francois, I'll take that and I'll maybe take the back half of that question first. We typically sanction three to four billion dollars a year of new projects.

François Poirier: Hey, Rob, it's François. I'll take that and I'll maybe take the back half of that question first. We typically sanction CAD 3 to 4 billion a year of new projects. We're halfway through the year, and we're already at the bottom end of that range. When you throw in the potential and our expectation of sanctioning Crossroads in the Q4, which will be a sizable project on its own, plus some of the other irons we have in the fire in the US and in Canada, there's a very good chance that we're going to be in that CAD 6 to 8 billion of sanctioned capital for 2026, which would be a great outcome and achieve our stretch goals. With respect to the first part of your question. Oh, I'm sorry.

Speaker #2: And we're halfway through the year and we're already at the bottom end of that range. When you throw in the potential and our expectation of sanctioning crossroads in the fourth quarter, which will be a sizable project on its own, plus some of the other irons we have in the fire in the US and in Canada, there's a very good chance that we're going to be in that six to eight billion dollars of sanctioned capital for 2026.

Speaker #2: Which would be a great outcome. And achieve our stretch goals. With respect to the first part of your question, we oh, I'm sorry.

Speaker #6: Yeah, yeah, I'll take that first part. I think your question was related to what's required to get to sanctioning. And you think of the project of projects in origination.

Tina Faraca: Yeah. I'll take that first part. I think your question was related to what's required to get to sanctioning. You think of the project's origination. We talked already about Canada and some of the demand growth we're seeing there. In the US, we have under origination, as we talked about before, about CAD 14 billion of capital, 10 to 11 Bcf of capacity centered around power generation, data center demand, coal to gas conversions, et cetera. We go through a rigorous process to sanction our projects, detailed conversations with our customers, ensuring we drive the highest value for our shareholders. The Crossroads expansion is next up, I believe, for sanctioning. We did talk today about our Central Virginia Capacity project and our Clark project, which are important projects for us on our Columbia Gas and our Columbia Gulf systems.

Speaker #6: We talked already about Canada and some of the demand growth we're seeing there. In the US, we have under origination, as we talked about before, about 14 billion dollars of capital 10 to 11 BCF of capacity centered around power generation, data center demand, coal to gas conversions, etc.

Speaker #6: And we go through a rigorous process to sanction our projects. Detailed conversations with our customers. Ensuring we drive the highest value for our shareholders.

Speaker #6: The crossroads expansion is next up. I believe we're sanctioning. We did talk today about our central Virginia capacity project and our Clark project, which are important projects for us on our Columbia gas and our Columbia Gulf systems.

Speaker #6: We are looking forward to developing more of those across the next couple of quarters. And go through our process with discipline before we announce the projects.

Tina Faraca: We are looking forward to developing more of those across the next couple of quarters and go through our process with discipline before we announce the projects.

Speaker #2: Yeah, sorry about that, Rob. In answering the second part of the question, I lost the thread on the first part. So Tina helped me out there.

François Poirier: Yeah. Sorry about that, Rob. In answering the second part of the question, I lost the thread on the first part, so Tina helped me out there.

Speaker #4: Not a problem. And then just maybe as a follow-up, like we're seeing across the industry, everyone's growth expectations tilt higher. Can you maybe just provide kind of your views on supply chain contractor availability and just the status of the market?

Rob Hope: Not a problem. Just maybe as a follow-up, we are seeing across the industry, everyone's growth expectations tilt higher. Can you maybe just provide your views on supply chain contractor availability and just the status of the market? Could we be entering into a bit more of a constrained supply chain?

Speaker #4: Could we be entering into a bit more of a constrained supply chain?

Speaker #6: Sure. I'll take that. We are actively monitoring all of our supply chain resources be it actual equipment, contractor selection, human resources, internally and externally.

Tina Faraca: Sure. I'll take that. We are actively monitoring all of our supply chain resources, be it actual equipment, contractor selection, human resources internally and externally. We take a very strategic approach to the supply chain process. To date, for our pipeline projects, we have all of our pipeline equipment secured for everything that's been sanctioned to date. We are negotiating with many of our suppliers to ensure that all of our equipment is available in time for our projects to be in service based on the announcements that we've put out. We take a very proactive approach to our contractor market as well in developing strategic alliances that allow us to keep some of our very top-tier contractors working from project to project.

Speaker #6: We take a very strategic approach to the supply chain process. To date for our pipeline projects, we have all of our pipelines equipment secured for everything that's been sanctioned to date.

Speaker #6: We are negotiating with many of our suppliers to ensure that all of our equipment is available in time for our projects to be in service based on the announcements that we've put out.

Speaker #6: We take a very proactive approach to our contractor market as well in developing strategic alliances that allow us to keep some of our very top-tier contractors working from project to project.

Speaker #6: So we're very confident in our ability to execute our projects in light of the supply chain challenges. And we do not see any issues related to our in-service states and having supply chain situations that would impact those dates.

Tina Faraca: We are very confident in our ability to execute our projects in light of the supply chain challenges, and we do not see any issues related to our in-service dates and having supply chain situations that would impact those dates.

Speaker #4: Thank you.

Rob Hope: Thank you.

Speaker #3: The next question will come from John Mackey with Goldman Sachs. Please go ahead.

Operator 2: The next question will come from John Mackay with Goldman Sachs. Please go ahead.

Operator: The next question will come from John Mackay with Goldman Sachs. Please go ahead.

Speaker #5: Hey, team. Thank you for the time. Sean, you touched on this earlier, but I just want to focus on the strong 2Q results and the 26 guidance commentary.

John Mackay: Hey, team. Thank you for the time. Sean, you touched on this earlier, I just want to focus on the strong Q2 results and the 2026 guidance commentary. I know it's early, any tailwinds you can talk about when framing up the 2028 guide that you have out there?

Speaker #5: I know it's early, but any tailwinds you can talk about when framing up the 2028 guide that you have out there?

Speaker #2: Hey, John. Yeah. Thanks for the question. Look, the ingredients on the tailwinds are fundamentally the same, kind of year in and year out. It's a little bit hard to capture how much operating leverage we are getting.

François Poirier: Hey, John. Yeah. Thanks for the question. Look, the ingredients on the tailwinds are fundamentally the same year in and year out. It's a little bit hard to capture how much operating leverage we are getting out of every piece of equipment across 94,000 km of pipe and 650 bays of storage. When teams have availability that high and you've got the fundamental demand growth and a little bit of volatility in the market, this footprint is just, candidly, it delivers and over-delivers in different ways, in different years. That's what I would tell you is the biggest tailwind. The other element that we're starting to see is, we touched on commercial optimization and innovation. Look, we enjoy our 20-year take-or-pay contracts, what we're also seeing on the innovation front is customer demand and opportunities are shifting very rapidly.

Speaker #2: Out of every piece of equipment across 94,000 kilometers of pipe and 650 base storage when teams have availability, that high, and you've got the fundamental demand growth and a little bit of volatility in the market, this footprint is just candidly it delivers and over delivers in different ways in different years.

Speaker #2: So that's what I would tell you is the biggest tailwind. The other element that we're starting to see is we touched on commercial optimization and innovation.

Speaker #2: Look, we enjoy our 20-year take or pay contracts, but what we're also seeing kind of on the innovation front is customer demand and opportunities are shifting very rapidly.

Speaker #2: So when a customer sees a money-making opportunity, but they need to time shift or shape shift some of that 20-year take or pay static contract, we've got capacity to move.

François Poirier: When a customer sees a money-making opportunity, but they need to time shift or shape shift some of that 20-year take-or-pay static contract, we've got capacity to move. We can move capacity. We can move regions in support of customer value capture opportunities and take our fair share. You're seeing a little bit of that even in 2026, coupled with some weather in Q1. Those are really two big ones that are driving EBITDA. As we get to 2028, a couple of the other ones beyond the standard rate cases we talked about, that we've generally had a pretty good track record on the last few years. The big one is just the continued place projects. Sounds simple. On time, and at these five to seven build multiples, that's a very powerful lever, right?

Speaker #2: We can move capacity. We can move regions in support of customer value capture opportunities and kind of take our fair share. And you're seeing that a little bit of that in even in 2026, coupled with some weather in the first quarter.

Speaker #2: So those are really two big ones that are kind of driving EBITDA. And then as we get to 28, a couple of the other ones beyond the standard rate cases we talked about that we've generally had a pretty good track record on the last few years.

Speaker #2: The big one is just the continued place projects simple. Sounds simple. On time and at these 5 to 7 build multiples. They're at the very powerful lever, right?

Speaker #2: And obviously, how much EBITDA per dollar invested we're driving. And so far, so good, right, on our '26 campaign, which is going to start showing up in '28, and potentially driving to the higher end if Tina's teams continue to do what they do.

François Poirier: Obviously how much EBITDA per dollar invested we're driving, and so far so good on our 2026 campaign, which is going to start showing up in 2028, and potentially drive into the higher end if Tina's teams continue to do what they do.

Speaker #2: So that's kind of the that's the high level on top of what Francois described as some of the technology and AI innovation that certainly is showing green shoots as well for us.

Sean O'Donnell: That's the high level on top of what François described as some of the technology and AI innovation that certainly is showing green shoots as well for us.

Speaker #5: Understood. Thanks for that. So we spent a ton of time talking about Canada so far, but I want to ask one more. Now that you guys are seeing a, let's say, different type of customer coming in on the data center side, is there an opportunity for TC to invest outside of the NGTL regulatory framework?

John Mackay: Understood. Thanks for that. We've spent a ton of time talking about Canada so far, but I want to ask one more. Now that you guys are seeing, let's say, a different type of customer coming in on the data center side, is there an opportunity for TC to invest outside of the NGTL regulatory framework? I guess meaning specifically an ability to capture potentially higher return type projects.

Speaker #5: I guess meaning specifically an ability to kind of capture potentially higher return type projects.

Speaker #2: Thanks, John. I'll start with that and then I'll ask Greg to provide some commentary. Yes, the answer is yes. To the extent there's an opportunity to competitively meet a data center customer's needs through a short lateral that can be developed by our unregulated arm in a faster timeline at an attractive toll that helps them develop their project on the pace that they've dictated for their strategy.

François Poirier: Thanks, John. I'll start with that, and then I'll ask Greg to provide some commentary. Yes, the answer is yes. To the extent there's an opportunity to competitively meet a data center customer's needs through a short lateral that can be developed by our unregulated arm in a faster timeline at an attractive toll that helps them develop their project on the pace that they've dictated for their strategy. Those types of situations can present themselves. The other thing that's interesting is we're seeing with many of the regions in North America have bring your own power policies or large consumer rate classes to make sure that there's no inflationary impacts on other classes of customers. We're seeing a trend from data centers to longer PPAs and take-or-pay contracts for power that are starting to migrate to what I would call within the fairway of our risk preferences.

Speaker #2: Those types of situations can present themselves. The other thing that's interesting is we're seeing that many of the regions in North America have "bring your own power" policies, or large consumer rate classes, to make sure that there's no inflationary impacts on other classes of customers.

Speaker #2: We're seeing a trend from data centers to longer PPAs and take or pay contracts for power. That are starting to migrate to what I would call within the fairway of our risk preferences.

Speaker #2: So, I don't think you should expect us to necessarily sanction tens of billions of dollars of behind-the-meter power projects, but there is an opportunity for us, particularly in Alberta, and perhaps I'll ask Greg to provide a little bit more detail.

François Poirier: I don't think you should expect us to necessarily sanction tens of billions of CAD of behind-the-meter power projects. There is an opportunity for us, particularly in Alberta, and perhaps I'll ask Greg to provide a little bit more detail.

Speaker #4: Sure. Appreciate Francois. And I appreciate the question, John. In Alberta, just as a reminder, we have a very unique footprint. As we start looking at, we have the power, we've been in the market for over 30 years.

Greg Grant: Sure. Appreciate it, François. I appreciate the question, John. In Alberta, just as a reminder, we have a very unique footprint. As we start looking at, we have the power, we've been in the market for over 30 years. We have gas storage, we have unregulated gas, we have regulated gas. When you think of a couple of weeks ago at Stampede, haven't seen so many tech companies sponsoring the events. We saw the first large data center announcement. That's the benefit of our footprint. I think as we start to see more people coming, we have the lowest priced gas across North America. This will give us some of those opportunities to work across the verticals and figure out ways to François' point, how we're going to optimize the system and get our risk return levels where we compete with capital against the gas business.

Speaker #4: We have gas storage. We have unregulated gas. We have regulated gas. So, when you think of a couple of weeks ago at Stampede, I haven't seen so many tech companies sponsoring the event.

Speaker #4: And we saw the first large data center announcement. That's the benefit of our footprint. And I think as we start to see more people coming, we have the lowest-priced gas across North America.

Speaker #4: This will give us some of those opportunities to work across the verticals. And figure out ways to Francois's point, how we're going to optimize the system and get our risk return levels where we compete with capital against the gas business.

Speaker #5: Thanks for all that color. Appreciate it.

John Mackay: Thanks for all that color. Appreciate it.

Speaker #6: The next question will come from Maurice Choi with RBC. Please go ahead.

Operator 2: The next question will come from Maurice Choy with RBC. Please go ahead.

Operator: The next question will come from Maurice Choy with RBC. Please go ahead.

Speaker #7: Thanks. And good morning, everyone. I wonder if we could just take us back to the high level. Where you've laid out that power generation and supply access has led to this revised 51 BCF a day.

Maurice Choy: Thanks. Good morning, everyone. I wonder if you could just take us back to the high level, where you've laid out that power generation and supply access has led to this revised 51 Bcf per day. When you look back at your original 40 Bcf per day estimate about 2 years ago, what has surprised you the most? Would there have been any initiatives you felt you would have pursued that perhaps you could pursue right now?

Speaker #7: When you look back at your original 40 BCF a day estimate about two years ago, what has surprised you the most? And would there have been any initiatives you felt you would have pursued that perhaps you could pursue right now?

Speaker #8: Thanks for the question, Maurice. This is Tina. We have increased our demand forecast from last year to this year. I think it was 46 BCF last year, 51 BCF per day.

Tina Faraca: Thanks for the question, Maurice. This is Tina. We have increased our demand forecast from last year to this year. I think it was 46 Bcf last year, 51 Bcf per day this year over the next 10 years. That's primarily driven by LNG feed gas. We're seeing an increase there of about 28 Bcf per day. In power generation, 16 Bcf per day. In the industrial sector, 4 Bcf per day of increase. The upside to our last forecast is primarily driven by the power generation sector. We now expect North American gas-fired generation to rise from prior outlooks of 54 Bcf per day to 60 Bcf per day by 2035. There are a number of factors playing into that demand growth, including accelerated data center demand of about 15 Bcf, broader base electrification, and coal conversions.

Speaker #8: This year, over the next 10 years. And that's primarily driven by LNG feed gas. We're seeing an increase there of about 28 BCF per day.

Speaker #8: And power generation, 16 BCF per day in the industrial sector, 4 BCF per day of increase. The upside to our last forecast is primarily driven by the power generation sector.

Speaker #8: We now expect North American gas fire generation to rise from prior outlooks of 54 BCF per day to 60 BCF per day by 2035.

Speaker #8: And there are a number of factors playing into that demand growth, including accelerated data center demand of about 15 BCF, broader base electrification and coal conversions.

Speaker #8: And so a key element of that demand growth picture is that the demand is not uniform. What's important here is that demand favors the US heartland, western Canada, and Mexico, where we have incumbent positions of about 60% of the incremental demand growth is set to occur in states and provinces where we operate.

Tina Faraca: A key element of that demand growth picture is that the demand is not uniform. What's important here is that demand favors the US Heartland, Western Canada, and Mexico, where we have incumbent positions of about 60% of the incremental demand growth is set to occur in states and provinces where we operate. Similarly, on the supply side, by 2035, about 60% of gas supply is expected to come from TC-connected basins, notably a combined incremental 18 Bcf out of Appalachia and WCSB. All this directly translates into the depth of our origination activities and our backlog.

Speaker #8: And similarly on the supply side, by 2035, about 60% of gas supply is expected to come from TC connected basins, notably a combined incremental 18 BCF out of Appalachia and WCSB.

Speaker #8: So all this directly translates into the depth of our origination activities and our backlog.

Speaker #7: Hey, Maurice and Sean. I'll tack on to the front part of that question. Would we have done anything differently two years ago than today?

Sean O'Donnell: Hey, Maurice, it's Sean. I'll tack onto the front part of that question. Would we have done anything differently 2 years ago than today? The answer to that is no. When you just break up Tina's point about all that was LNG. Were we going to get into the LNG business seeing that growth? No. Were we going to serve the LNG business? Yes. I think power is sometimes the question. For us, and hopefully explain today when we show our CAD 20 billion backlog, when we're building it 5 to 7 times in a core business with teams that are the best in the business doing that has been and remains the best value creation opportunity that we think we offer shareholders. Kind of stay in the course and stay in focus.

Speaker #7: And the answer to that is no. When you just break up Tina's point about all that was LNG, were we going to get into the LNG business seeing that growth?

Speaker #7: No. Were we going to serve the LNG business? Yes. I think power is sometimes the question. And for us, and hopefully explained today when we show our $20 billion backlog, when we're building at 5 to 7 times in a core business with teams that are the best in the business doing that, that has been and remains the best value creation opportunity that we think we often offer shareholders.

Speaker #7: So, kind of stay the course and stay focused. Same strategies, same answers today as they would have been two years ago. So, hopefully that makes sense.

François Poirier: Same strategy, same answers today as they would have been 2 years ago. Hopefully that makes sense.

Speaker #7: That does make sense. Maybe I can finish off with the question on just the broad theme of data centers. Does obviously been a lot of headlines about stakeholder pushbacks on data centers in various parts of the US.

Maurice Choy: That does make sense. Maybe I can finish off with a question on just the broad theme of data centers. There's obviously been a lot of headlines about stakeholder pushbacks on data centers in various parts of the US. Just at a very high level, have you seen any impact on how your customers approach signing pipeline deals with you?

Speaker #7: Just at a very high level, have you seen any impact on how your customers approach signing pipeline deals with you?

Speaker #2: I'll take that one, Maurice. I think it's fair to say that as I mentioned before, with some of the policies from PUCs and governments in various jurisdictions around bring your own power or different rate categories to make sure there isn't cross-subsidization of rates, the market, the data center developers, the hyperscalers are learning as they go along.

François Poirier: I'll take that one, Maurice. I think it's fair to say that, as I mentioned before, with some of the policies from PUCs and governments in various jurisdictions around bring your own power or different rate categories to make sure there isn't cross-subsidization of rates. The market, the data center developers, the hyperscalers are learning as they go along. Obviously, energy provision is a very important gating item for them to implement their strategies. When we look at the US heartland, for example, approximately 15 states, there are only two or three that actually have explored putting a pause on data center development. In two of those states, those were rejected. In the third, it's under consideration, but doesn't seem to be carrying lots of momentum. I would say that data center issue you mentioned is region-specific.

Speaker #2: Obviously, energy provision is a very important gating item for them to implement their strategies. When we look at the US heartland, for example, approximately 15 states there are only two or three that actually have explored putting a pause on data center development.

Speaker #2: In two of those states, those were rejected. And in the third, it's under consideration but doesn't seem to be carrying lots of momentum. So I would say that data center issue you mentioned is a region-specific.

Speaker #2: And as we look at our footprint, we haven't seen it slow down the growth of our development pipeline. The comment earlier that was referred to about sanctioning projects is dynamic is because our customers, the utilities, have to themselves be dynamic to compete for load.

François Poirier: As we look at our footprint, we haven't seen it slow down the growth of our development pipeline. The comment earlier that was referred to about sanctioning projects is dynamic is because our customers, the utilities, have to themselves be dynamic to compete for load and make sure that they're being responsive to stakeholders' considerations and questions as they go through. Oftentimes, that might impact the timing of sanctioning as opposed to whether or not a project will be sanctioned. Lots in there to unpack, but I think for us, it really hasn't slowed down our view on our long-term growth prospects.

Speaker #2: And make sure that they're being responsive to stakeholders' considerations and questions as they go through. Oftentimes, that might impact the timing of sanctioning as opposed to whether or not a project will be sanctioned.

Speaker #2: So lots in there to unpack, but I think for us, it really hasn't slowed down our view on our long-term growth prospects.

Speaker #5: I think.

Speaker #7: Thanks for the insight. Thank you very much.

Maurice Choy: Thanks for the insight. Thank you very much.

Speaker #1: The next question will come from Robert Cotellier with CIBC. Please go ahead.

Operator 2: The next question will come from Robert Catellier with CIBC. Please go ahead.

Operator: The next question will come from Robert Catellier with CIBC. Please go ahead.

Speaker #4: Hey, good morning. It's been a constructive call. I just wanted to follow up on improved CBIT. I noticed in the press release you had that additional funding for the impact assessment in the pre-development work, which I think is not only appropriate, but necessary.

Robert Catellier: Hey, good morning. This has been a constructive call. I just wanted to follow up on Bruce C a bit. I noticed in the press release you had that additional funding for the impact assessment and the pre-development work, which I think is not only appropriate, but necessary. My question here is that enough to get you to FID? Maybe you can refresh us on timelines for the technology decision and the ultimate FID.

Speaker #4: My question here is, is that enough to get you to FID? And maybe you can refresh this on timelines for the technology decision and the ultimate FID.

Speaker #7: Sure. I'll take that directly, Robert. Greg, first, I actually wanted to give a shout-out while I have the mic. We had great performance of our teams, both at Bruce and our power team from an operational perspective.

Greg Grant: Sure. I'll take that directly, Robert. It's Greg. First, I actually wanted to give a shout-out while I have the mic. We had great performance of our teams, both at Bruce and our power team from an operational perspective. You would have seen the announcement that Unit 3 came on early to François's comments. I also wanted to add, because this will lead into the Bruce conversation, we continue to see Unit 6 post-refurbishment running at less than 1%, which is world-class and world-leading. This is the type of performance that really gives us comfort as we start to look at Bruce expansion and the value of our Bruce management team. The next tranche of funding of CAD 300 million is going to cover us effectively till we get closer to the end of the decade. You mentioned a couple of the pieces of work that we're doing.

Speaker #7: You would have seen the announcement that unit three came on early to Francois's comments. But I also wanted to add because this will lead into the Bruce conversation.

Speaker #7: We continue to see unit six post-refurbishment running at less than 1%, which is world-class and world-leading. So this is the type of performance that really gives us comfort as we start to look at Bruce's expansion and the value of our Bruce management team.

Speaker #7: The next tranche of funding of $300 million is going to cover us effectively till we get closer to the end of the decade. You mentioned a couple of the pieces of work that we're doing.

Speaker #7: This is pre-feed activities. This is technology selection. Early engineering and external engagement and consultation. We'll look to continue the technology selection piece of that.

Greg Grant: This is pre-FEED activities. This is technology selection, early engineering, and external engagement and consultation. We'll look to continue the technology selection piece of that, looking into next year, likely, before you start to see a selection on there. Overall, still very excited about the opportunity. This is the best nuclear site in Canada. We have the skilled labor and supply chain locked up. You know it's over 95% Canadian. Continue to really focus on bringing that project forward and across the line.

Speaker #7: Looking into next year, likely before you start to see a selection on there. But overall, still very excited about the opportunity. This is the best nuclear site in Canada.

Speaker #7: We have the skilled labor and supply chain locked up. You know it's over 95% Canadian. So continue to really focus on bringing that project forward and across the line.

Speaker #4: I think on unit six, I mean, 1% offline time, correct?

Robert Catellier: I think on Unit 6, you mean 1% offline time, correct?

Speaker #7: Sorry, I just missed that.

Greg Grant: Sorry, I just missed that, Rob.

Speaker #4: Yeah, I think you said it's operating at 1%. I think you mean that as the outage time. Yeah.

Robert Catellier: Yeah, I think you said it's operating at 1%. I think you mean that as the outage time.

Greg Grant: Yes. The forced outage rates.

Speaker #7: Yeah. 2003. 1%.

Robert Catellier: Yeah.

Greg Grant: Yes. 2003, 1%.

Speaker #4: Okay. I just wanted to go back. Sorry, I just wanted to go back to the question that Teresa started us off with about egress options in Canada.

Robert Catellier: Sorry, I just wanted to go back to the question that Theresa started us off with about egress options in Canada. I think it is safe to say policy is encouraging for oil sands production growth, although that has yet to fully materialize. My ask of you is, what do you think is possible? Should we, as a nation, be successful in growing oil sands production, and what that would mean for egress requirements for natural gas? Presumably, oil sands production is going to lead to more on, say, drilling and associated gas, and it seems like that could be a bottleneck in the whole flywheel. What do you think is going to be required longer term for egress coming out of Canada to accommodate the oil sands?

Speaker #4: I think it's safe to say policy is encouraging for oil sands production growth, although that is yet to fully materialize. My ask of you is, what do you think is possible?

Speaker #4: Should we as an HMB successful in growing oil sands production and what that would mean for egress requirements for natural gas? Presumably, oil sands production is going to lead to more condensate drilling and associated gas.

Speaker #4: And it seems like that could be a bottleneck in the whole flywheel. So what do you think is going to be required longer term for egress coming out of Canada to accommodate the oil sands?

Speaker #2: Robert, it's Francois. I'll take that. I wouldn't necessarily point to egress via LNG only as the source of absorbing associated gas. As we saw with the advent of data centers in the province, there's lots of in-country load growth potential.

François Poirier: Robert, it is François. I will take that. I wouldn't necessarily point to egress via LNG only as the source of absorbing associated gas. As we saw with the advent of data centers in the province, there is lots of in-country load growth potential. Of course we have, coming out of NGTL, we call our US pipes the catcher's mitt for that gas in the Pacific Northwest, through Northern Border into the Midwest and then into Ontario and points east. I would foresee us expanding all of our systems in all directions, and be able to accommodate the incremental associated gas to produce the condensate that is necessary for increased oil sands production. Case in point, our Canadian Mainline settlement was approved recently by the regulator. That will add about 350 million cubic feet a day of capacity for a CAD 200 million capital investment, which is extremely efficient.

Speaker #2: And of course, we have coming out of NGTL, we call our US pipes the catcher's mitt for that gas. And the Pacific Northwest through northern border into the Midwest and then into Ontario, and points east.

Speaker #2: So I would foresee us expanding all of our systems in all directions and be able to accommodate the incremental associated gas to produce the condensate that's necessary for increased oil sands production.

Speaker #2: Case in point, our mainline settlement was approved recently by the regulator. That will add about 350 and it could be feet a day of capacity for a 200 million dollar capital investment, which is extremely efficient.

Speaker #2: And that's just one proof point or example of how we're going to be able to move gas through the whole system to absorb incremental production.

François Poirier: That's just one proof point or example of how we're going to be able to move gas through the whole system to absorb incremental production. Of course, we would love to see more LNG export off the West Coast. We're encouraged with developments on LNG Canada Phase 2. From the sidelines, reading what's happening on the Cedar LNG project is also encouraging. I would hope to see more to come. A next wave of LNG export beyond those projects in the 2030s.

Speaker #2: Of course, we would love to see more LNG export off the West Coast. We're encouraged with developments on LNG Canada phase two. From the sidelines, reading what's happening on the sealisms project is also encouraging.

Speaker #2: And I would hope to see more to come next wave of LNG export beyond those projects in the 2030s.

Speaker #4: Yeah, I agree. I wasn't suggesting it was just LNG. I think it's going to have to be all of the above. Thanks.

Robert Catellier: Yeah, I agree. I wasn't suggesting it was just LNG. I think it's going to have to be all of the above. Thanks.

François Poirier: Yeah. You're welcome.

Speaker #2: You're welcome.

Speaker #1: The next question will come from Ben Pham with BMO. Please go ahead.

Operator 2: The next question will come from Ben Pham with BMO. Please go ahead.

Operator: The next question will come from Ben Pham with BMO. Please go ahead.

Speaker #5: Hey, thanks. Good morning. I wanted to go back to the $20 billion plus projects and origination. I'm wondering, how do you think that pie chart will evolve in the coming years in terms of the size of the opportunity and the mix of the demand drivers?

Ben Pham: Hey, thanks. Good morning. I wanted to go back to the CAD 20 billion-plus projects in origination. I'm wondering, how do you think that pie chart will evolve in the coming years in terms of the size of the opportunity and the mix of the demand drivers?

Speaker #6: Hey, Ben and Sean. I'll take that. In terms of what will that pie chart look like, right, as just quarter over quarter? We verbally were kind of seeing a $15 billion number just earlier this year.

Sean O'Donnell: Hey, Ben, it's Sean. I'll take that. In terms of what will that pie chart look like, right? Just quarter-over-quarter, we verbally were kind of seeing a CAD 15 billion number just earlier this year, and we felt compelled to show you now the CAD 20-plus, just given how much capital formation we're starting to see in the early 2030s. Look, we're hopeful, right, that that number still continues to grow. The fundamentals, particularly in Tina's business on the pipeline side, are certainly suggestive of this new normal of what we're seeing on a run rate. I'd say it's probably a little bit early to call what exactly that number is on a sustained basis or a plateaued basis, but I do think that the breakdown that we're showing you is certainly a power-dominated kind of portfolio in the post-2030s.

Speaker #6: And we felt compelled to show you now that the $20 plus just given how much capital formation we're starting to see in the early 2030s.

Speaker #6: Look, we're hopeful, right, that that number still continues to grow. The fundamentals, particularly in Tina's business on the pipeline side, are certainly suggestive of this new normal of what we're seeing on our run rate.

Speaker #6: I'd say it's probably a little bit early to kind of call what exactly that number is on a sustained basis or a plateaued basis, but I do think the breakdown that we're showing you is certainly a power dominated kind of portfolio in the post-2030.

Speaker #6: So give us another quarter or two, but we're going to attempt to kind of refine this for you as best we can as the dynamic element that we mentioned kind of firms up here over the next 6 to 12 months.

Sean O'Donnell: Give us another quarter or two, but we're going to attempt to refine this for you as best we can as the dynamic element that we mentioned kind of firms up here over the next 6 to 12 months.

Ben Pham: Great. Got it. Sean, you also mentioned looking at, for factoring the Bruce Power inflection, that bridge in the late decade, looking at sources of capital to bridge that. I'm curious maybe to ask then, are you able to rank order your sources of capital today, same with hybrids, partnerships, even common equity? Then to that point, how do you think about the balancing of pre-funding this rising CapEx versus waiting and assessing at a future point of time?

Speaker #5: Great. And got it. And Sean, you also mentioned the looking at per factor in the Bruce Power inflection that bridge and the late decade looking at sources of capital to bridge that.

Speaker #5: I'm curious—maybe to ask, then, are you able to rank order your sources of capital today? You mentioned hybrids, partnerships, even common equity. And then, to that point, how do you think about balancing the pre-funding of this rising CapEx versus waiting and assessing at a future point in time?

Speaker #6: Yeah, this is my favorite thing to work on, Ben. Supporting Tina and Greg with funding growth capital. Look, the hierarchy that we described look at the end of the day is ultimately we have a dollar per share cap that we measure absolutely everything against.

Sean O'Donnell: This is my favorite thing to work on, Ben. Supporting Tina and Greg with funding growth capital. The hierarchy that we described, at the end of the day, is ultimately we have a dollar per share count that we measure absolutely everything against. The benefit of what we're seeing in the market right now, set EBITDA aside, that's obviously our top priority in terms of the hierarchy. As you start to look at capital rotation or investment grades or hybrids or anything else, all of those capital markets are in. I'll throw private credit in there. They're incredibly constructive, right? We're at all-time tights on every market that we're in. Increasingly, you're seeing even private credit in the 5% to 6% range inside of our hybrids, certainly well inside of our common.

Speaker #6: And the benefit of what we're seeing kind of in the market right now—set EBITDA aside, that's obviously our top priority in terms of hierarchy—as you start to look at capital rotation, or investment grades, or hybrids, or anything else.

Speaker #6: All of those capital markets are and I'll throw private credit in there. They're incredibly constructive, right? We're at all-time heights on every market that we're in.

Speaker #6: And increasingly, you're seeing even private credit in the 5–6% kind of range inside of our hybrids. Certainly well inside of our common.

Speaker #6: So it's just a we have a lot of options and a lot of levers and a couple of years. To kind of figure that out.

Sean O'Donnell: It's just that we have a lot of options and a lot of levers and a couple of years to kind of figure that out. We're going to take our time and watch that CAD 20 billion pie chart develop and kind of a year ahead. Probably no rush, no forcing function to have us do anything sooner than absolutely necessary to support the growth capital, particularly 2029 and 2030. I think 2028 will really be the year where you start to see us put things in motion, depending on what 2029 and 2030 and then Bruce Power in 2031 look like. What that balancing capital solve might look like.

Speaker #6: So that's exactly why we're going to take our time and watch that $20 billion pie chart develop. And kind of a year ahead, there's probably no rush, no forcing function to have us do anything sooner.

Speaker #6: Then absolutely necessary to support the growth capital particularly 29 and 30. So I think 2028 will really be the year where you start to see us kind of put things in motion depending on what 29 and 30 and then Bruce in 31 look like, what that balancing capital solve might look like.

Speaker #5: Okay, got it. Thank you, Sean.

Ben Pham: Got it. Take care, Sean.

Speaker #6: You're welcome.

Sean O'Donnell: You're welcome.

Speaker #1: Ladies and gentlemen, this concludes the question-and-answer session. If there are any further questions, please contact Investor Relations at TC Energy. I would now like to turn the call over to Mr. Gavin Wylie for any closing remarks.

Operator 2: Ladies and gentlemen, this concludes the question and answer session. If there are any further questions, please contact investor relations at TC Energy. I would now like to turn the call over to Mr. Gavin Wylie for any closing remarks. Please go ahead.

Operator: Ladies and gentlemen, this concludes the question and answer session. If there are any further questions, please contact investor relations at TC Energy. I would now like to turn the call over to Mr. Gavin Wylie for any closing remarks. Please go ahead.

Speaker #1: Please go ahead.

Speaker #7: Yeah, operator, thank you very much. And thank you for everyone for participating this morning with your great questions. We may not have gone through all the questions, so please do reach out to the Investor Relations team.

Gavin Wylie: Yeah, operator. Thank you very much, and thank you for everyone for participating this morning with your great questions. We may not have gotten through all the questions, so please do reach out to the investor relations team. We are always happy to help. Again, thank you for your interest in TC Energy, and we look forward to our next update in early November. Thank you.

Speaker #7: We're always happy to help. Again, thank you for your interest in TC Energy, and we look forward to our next update in early November.

Speaker #7: Thank you.

Operator 2: This brings to a close today's conference call. You may disconnect your lines. Thank you for your participation, and have a pleasant day.

Operator: This brings to a close today's conference call. You may disconnect your lines. Thank you for your participation, and have a pleasant day.

Q2 2026 TC Energy Corp Earnings Call

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