TCP - Earnings call transcript Q1 2020

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Operator

Good morning, ladies and gentlemen, welcome to the TC PipeLines, LP 2020 First Quarter Results Conference Call.

I would now like to turn the meeting over to Ms. Rhonda Amundson. Please go ahead, Ms Amundson.

Rhonda Amundson

Thank you, Operator, and good morning, everyone. First Conference PipeLines TC to Quarter Call. XXXX Welcome President, our and VP joined Principal today General Brown; our by Morris. Watson; I'm and Nathan Manager, Officer, Chuck Financial our Janine

accompany note Presentations. their our Please at it Investors in where be TCPipeLinesLP.com slide heading section a presentation under website remarks is the available that and on found the can will Events and

key the first a today review begin a for review will on XXXX the commercial our will PipeLines' takeaways. Nathan provide will call Chuck with first and assets the growth quarter will of our Janine remarks wrap Nathan TC results. which some results and program, up Partnership's update close of and return quarter. our following financial a provide with

remarks, conference your the prepared the operator ask will questions. I coordinate to Following

to our Before this during future call statements begin, would we financial I future you performance. events that certain forward-looking, made remind will regarding and be conference like

the All and detail as forward-looking reflect views statements are future in assumptions with subsequent filings uncertainties These subject results various may and respect discussed Commission. currently events differ our risks, to information made our as XXXX assumptions as statements these statements. assumptions current incorrect, actual to the to beliefs, us. materialize, as underlying well are available and forward-looking prove in well as in one based or Securities materially and on our uncertainties XX-K, those by Exchange or or with our If risks of more if described the from

provide EBITDA period directly flow during period measure operating our of our generated measures and to the we the EBITDA of flow flows evaluate use the our a cash distribution cash Distributable to presentation. Please current are financial during adjusted cash non-GAAP EBITDA, that earnings cash income. capability. reconcile also adjusted approximate measures during net and note EBITDA cash and distributable

as and EBITDA, closely we a These we've measures our by in adjusted change GAAP later provide SEC in the financial a covered filings. to release call most definitional this results, to to this GAAP in press are will the related morning, supplement stated Chuck. provided made reconciliation be As our a measures and

Nathan. the I that will over turn to call With

Nathaniel Brown

Thanks everyone us joining today. you Rhonda. and thank Good morning for

Let to that are times with uncertain that COVID-XX you care who to living safe at their me on healthy in I'd around a are clearly the begin truly having and sincere also front we line of others. like by our of essential TC world. times. significant behalf saying we these your such On health other unprecedented service people the pandemic thanks PipeLines, being the impact and everyone and well personal families the during workers ensure safety to express risking are hope

Energy execute and sponsor and with COVID-XX which continue operate. assets our a business focused health the our of put and us March, continuity PipeLines to TC are and on When at across were our programs. early our Health in in World safety place We declared concert capital communities safely effectively employees, we Organization on operate the in our pandemic contractors TC very companies, plans to global in allowing our the

to of financial the our daily health, work is lives first vital results. and are are now energy do at physically this, so given are those energy us protocols. distancing provide To to role of of actions States. working be and that critical following infrastructure we considered country. while United hygiene essential to be quarter delivered to I'll the the across continues in many plays or remotely, must across the ensure important seamlessly These our that broadly our services businesses delivering many These us rigorous turn people

looking at and outlined our release As news in

with pipeline we're energy our our to long-term that's cash others results Slide X, contracted assets as With solid and XX% to assets, the perform continuing I'm from business. volume in pleased with throughput volatility many portfolio experienced take-or-pay prices to being coming insulated commodity expected. by of PipeLines great of flow a quarterly report associated approximately recent from TC degree the

Customer strong the the American demand impact on broader of for COVID-XX our North remains service economy. despite

of from assets, impact change income have during of factors, $XX and activities, period the We reinforces million which normal same Aside any date XXXX, in the our in quarter utilization less $XX million further the maintenance meaningful than adjustments XXXX. in the of planned generated critical slightly our the we seen the to in seasonal regulatory nature first of net infrastructure. not

we EBITDA was lower at and rate compared adjusted $XXX this in period. to year. same warmer a all $XXX million million decreases result were the negotiated the winter $XXX over generated of was with short EBITDA million respectively decreases million experienced and for the of together XXXX to first certain The related discretionary largely our quarter, sales pipelines on $XXX term

to coming into and seasonally million winter to weather flow upside quarter $XX colder limit revenue able we're XXXX marginal anticipated decreases XXXX XXXX. the in we in distributable cash last rate to winter The first generated the achieve We additional were essentially compared our warm compared in the the year.

largely with is Our capital expenditures. together DCF million. already maintenance was result $XXX integrity as higher The of the discussed revenues and decrease lower

flow, $X together capital be first on Higher We flows. in maintenance and $XX paid gas of unit through of B reflects million a our tolls. to our rate distributable out return Class units. on cash to natural enjoy costs, added during and environment positive to with million base higher costs a distributions quarter, drag future the these And although will holders

consistent stability unit economic uncertainty. the even which distribution strong common each long-term and for is to and our quarterly to holders, performance demand for services periods ability $X.XX by risk The a with energy our distribution basis XXXX of financial also in our essential for The business low our of and provides per take-or-pay quarter distributions contracts, unit, first model, in solid underpinned in its and maintain our stress which quarter XXXX. declared partnership is of

in Chuck a little the discuss call. detail will results financial more in the later

growth organic our our work continuing Tuscarora program, expansion. advance both to XPress on continue also and project We GTN

well and on timeline. to Our other construction a capacity PNGTS in Northeast. an pandemic projects the in changes COVID-XX other impact system practices health the response work are progressing restrictions put PNGTS pipeline provide government and will anticipate place authorities to for organic the have could We and incremental on in by

time. We of operations, generally and this is associated the will long-term - this impact be our certainly COVID-XX material believe to at but is uncertain impact effect not

projects discussed Both in the which and impact are compression XPress was previous project including We only Baja's continue our Iroquois low Compression Project portfolio, calls. develop across other to Enhancement North projects. by

discuss in commercial and these will or minute developments Janine a in detail other more two.

position, bank leverage financial our times approximately X.X our distribution at looking quarter, first approximately and ratio coverage also remained X.X at the times. our was very During strong

unit our performance I our our for have and we and with social safety, that we balance our holders, of financial priorities success proud returns ongoing critical want reliability depends to on stress responsibility. environmental generated us. safety and we're While know ability to profitability for are

Our to and all and track we of in safe general the committed protecting record has TC partner, that a environment we're reliable do. operations, XX-year Energy,

to serve. beyond. the carbon will further America our the critical achieving We gas gas in and contributors in of emission targets important systems footprint North communities be improve quality believe natural greenhouse assets Our life are of they to

VP General assets the for with on color Watson, turn and call developments, Janine now outlook. over together the our I'll and Manager additional market our to commercial our

Janine Watson

Thanks Nathan, and good morning, everyone.

quarter. Moving are past their Slide highly as steady in performance was this on X. evidenced TCPs to Assets infrastructure contracted critical

fluctuations noted, Nathan insulate pipeline associated with these As firm largely systems contract take-or-pay throughput. structures have markets in that or from volatility them

slowdown credit expectations prior utilization the during COVID-XX the those our or as or experience, months our and our weather assets the no to based any compared on maintenance we And see this nor activities years' tied noteworthy changes of encountered other contract changes assets meaningful material than there during that our Despite of QX are period, expirations spring expect no in due issues non-renewals. to when were economic activities. we to to saw in

down the X.X% largest its to its Mild Northwest recourse Turning rate experienced asset, step Pacific with to GTN X settlement implemented shippers. effective conditions weather in January in on the of make this case agreed not our in short-term have disruptions QX to many and the was other XXXX. of marketing as the opportunities that sales, team meant as systems did absence our XXXX neighboring spring major

TCP. long-term contracts, with TC Energy's a performer of take-or-pay be flows to the Kingsgate upstream, together solid portfolio to large down result for GTN's a incremental enabled projects GTN coming ongoing Nonetheless of as debottlenecking

of anticipate the we a half XXX,XXX will become about forward, of day GTN for XXXX. in transportation upstream additional to available dekatherms Looking second capacity

elevated maximum final Border's equity when As the parity increases months frame upstream capacity. the with last earnings team Border's QX discussed to were successfully for winter. operational as slightly systems current marketed Northern Northern same volume these bring in the capacity past year its in of will capacity time to compared up calls, GTN's

And, can which as but maximum Northern the points of in no supply Border. Williston content as level continue receives Safe developments, production long X many coming provision as of it and has points harbor excess Northern a BTU. to on the a levels is BTU level present tariff response it overall to onto a to Border of taken BTU blend only across system. gas system a being X,XXX able BTU Northern establish amendment - out higher the This to more Basin, into in a an content receive than this receipt with FERC X,XXX was safe in cap, of Btu natural BTU to level the hard many gas or Border increased above at a step level, Btu opposed resulted X,XXX higher the the recent for in XXX,XXX filed Bakken to receipt By heat Harbor XX,XXX May natural proposing the

And transportation our economical remain being Pipeline. designed include to continued Bakken, that and could Border's of through Bison proposed gas of takeaway potential changes the out system the ensure to flow project reversing and working downstream expansion an incremental natural project a towards capacity of direction markets. reliable The are committed we safe provide the Northern to to on

to compared Now events we of development the global cannot point, development but recent half beginning by may activities this be expecting the and we a X the this project XX at the the to service of on of in assessed this months project impact of slowdown the back fully our experience of date perhaps of into a at second year XXXX. push pace were potentially

par this to contracts of multiple with a via able total various of about over for to for XX months. day just successful April, average dekatherms marketing a capacity it season Great parties open on Lakes term continues recently And be a firm of hold an XXX,XXX current a market find XXXX. with equity earnings that we was performer significant Moving steady Great Lakes roughly with QX uncertainties, of on, light in

About half asset positive the of crisis. as commence have ongoing these arrangements to is value of of this our XXXX as dates COVID-XX November year, base, XXXX. We of some believe and though start challenging the current in a are set times the in during even this indicator

remainder not availability, operational results to this mild sales levels comparable safety make with many our at that to roughly quarter incremental and all of or our firm of And assets past finally, year. short-term meant last of quarter on the weather QX versus significant XXXX. of assets arose has Quarterly highly - transmission on system opportunities operated a though opportunity contracted all were no of issue. the incremental basis, These are each QX sales, high

it this introduced over illustrates what major largely we X, last to It chart February. in Slide and XXXX our is CapEx period. XXXX to our projects we outlook from quarter, unchanged presented now the for Turning

have slowdown TC to continuity our up make plans execute on place and our the program. pre-construction that of permitting, significant our continue our across material advance planned continue business PipeLines for We no our with date operator effectively To activities expenditures. we any operate platform to our changes capital growth construction footprint, in nor to to or allowing assets projects experienced capital

impacts pandemic whether long-term on capital it is to too determine have the program. any will However, our early

of productivity on We to based the represent but related a our continue subject levels. have their advanced TC the layers our still graph protocols stages COVID- share Baja monitor extra and approval, on ownership North Iroquois that the proportionate we on them safety projects. execute of estimated as further CapEx given are, bars on The projects have few of included to we development. of impact course, will PipeLines

on anticipated schedule currently effect, as X protocols proceed on Permit continue projects remains COVID-XX into project has both Phase PNGTS' as acquisition on work these safety also anticipated. continued to this the service and the projects X under Portland with contractor November of in XPress year. be QX. construction put having of to is in

year. PNGTS and anticipated PNGTS to with to XXXX permit in Westbrook upstream work service XPress Phases the be in to two to II planned this achieve be at XXXX. about dates proceed phases project for FERC the filed We enhancement XC capacity certain and completed July These with section of continue III of of November require of their

permit our course. acquisition be Tuscarora GTN per continue track progressing XPress, and are efforts as on and normal we Engineering to XPress project for

plan continue to We the of with from required. credit the PipeLines, this revolving together cash a to period during our self-fund asset with if from the levels at operations, capital combination contributions debt latter and through funded TC facility,

of to to in maintenance XXXX, quarters CapEx as portion expected activities to again this about small result our maintenance million our year proportionate continuity our response share self-funded. of planning $XXX a QX be subsequent of still planned a Though shifted in been COVID-XX, is have business in

this always, basis - be fixed rate recovered added respective through basis or time. to expected rate to contracts rates negotiated CapEx respective over pipeline system's As our is and and recourse

I quarter more in will Principal detail. call Chuck Financial our Morris, the to now our Officer, discuss over to first turn

William Morris

Janine, and Thanks, morning, everyone. good

that quarter $XX Slide now to review compared quarter million of X% opportunities weather XXXX. in together on per offered $X.XX the represents the reflective pipelines, scheduled year to attributable to unit income This $X.XX short-term to XXXX first interests I'll $XX warmer on reductions rate financial or fewer year-over-year quarter and results. benefit Net sales. or winter the partnership's controlling per unit first primarily was Moving of the of this in with million from a decrease certain X, our first

partially pipelines the noted. X% that at result million or by late into a service were of as came new revenues EBITDA lower, from decreases year, $XXX lower was from QX $XXX that I versus for PNGTS in in just contracts XXXX consolidated offset of These additional revenue million the previous our primarily XXXX. our

I'd also for were and reflective measure but we've this past, adjusted change like of a operations. our made to calculate we underlying we how highlight included significant, that the in EBITDA. In that items have not adjusted non-recurring

also EBITDA and to from those earnings Going investments. our add equity investments from generated cash forward, we equity would remove adjust received distributions

recast this to by our aligns have from believe measures We revised operating enhancement, the approximately $XXX first measure results conform peers ended more and closely new quarter provides March XX, for our X% similar XXXX We lower. XXXX was with the that performance. this our of presented non-GAAP to adjusted that a $XXX better EBITDA representation compared of quarter With our presentation. million to XXXX, million in

final quarterly a lower to surplus the QX of Iroquois from balance lower our payment together was been equity obligation. marked our making sheet the installment decrease investment revenues, from The in in distributions with with of Iroquois. on the result of that payments owners cash had the investment and date its its Iroquois, the associated XXXX

the first unit $XX paid of QX The in XXXX. holders in Partnership quarter, amount common that was million the of to distributions paid same

Class to XXXX, GTN in resulted paid reduction paid CapEx lower was reduced B $X generated. distributable at year-over-year million than The We flows units in million $X cash which that XXXX. higher from our also maintenance

of flows Nathan in earlier, quarter distributable were cash with is common XXXX quarters of lower quarter $X.XX in declared XXXX. we As quarter for first million and declared unit. XXXX, XXXX mentioned our million first in each in that And year-over-year. This the previous distribution per consistent $XX $XX

rate be to added expense costs, resulting the natural period reflect our future primary Partially together gas The attract first system these base on flows. in interest on debt $X utilization. return capital at earnings higher was and average environment cash of will factors same The million adjusted and a with of the these higher capital a through from higher costs XXXX. distributable XXXX compared decrease positive to and And will the attributable expenditures of flow, in a were drag million lower higher for the drivers lower and $XX in tolls. maintenance although maintenance offsetting balance quarter to our reduction integrity GTN EBITDA,

X.X% August GTN of a GTN, of discretionary of X reduction effective our This during January year that North on last primarily X million a by XX.X% of of effective for same from pipelines XXXX scheduled is on together lower result of and the by the to first the rate quarter year $XXX Tuscarora quarter with period. lower this sold X, of million. decrease than Turning revenues at were consolidated PNGTS and Slide XXXX, the $XX services Baja

maintenance These decreases of quarter were than on in revenues $X in service first million the earnings same a higher result XXXX. Equity in and of an that quarter into of from were projects X quarter administrative ended same were PNGTS' lower XXXX property the taxes partially expenses first million and of the allocated lower growth November Operating, and went offset on than in XXXX. during the by XXXX Bison decrease new quarter costs. as employee $X the PNGTS, overall

first March $X Depreciation of unchanged million and The debt year. $XX balance, was the expense the XXXX, XXXX or outstanding period of versus at XXXX. the million previous quarter from which XX, XXXX the compared in to same charges in quarter ongoing first in our lower reductions lower was XX% financial were

measures years. financial is on financial have our X, over that reflective Slide we healthy our to past on the the position Moving position taken proactive of two

is our structure sheet pipeline with infrastructure strong by high-quality balance capital a energy solid underpinned Our assets.

solid ratings, organically financial - provide we in outlook. condition financial portfolio upgrade our BBB the the And flat to including the as by us our one-notch grade future. look we BBB-minus last the from ratings investment flexibility grow year credit S&P Our reflect with and believe

of revenues portion counterparties. investment contracted long-term grade with A significant our

organic We'll on issues a to to our the without receivables on date. need access growth the of self-funding our markets. suite We projects have basis capital equity collection execute not experienced any

pandemic of reduced conditions stable on access volatility resulting Despite operations, cash flow from market in liquidity to periods $XXX facility. remains the and the Capital cash price been full have XXXX heightened position by impacted and liquidity. our credit significantly decline and COVID-XX Underpinned million in hand our by strong. oil this, our revolving

our expect with $XXX unsecured that loan of refinance used we million senior finance in XXXX, XXXX Tuscarora's due to of our self-funding XPress. ratio due resulting growth, build have of bank $XX approximately will with be balance, portion future notes average debt overall GTN together Consistent Additionally, reduced to funding in to million and order GTN's a XPress additional and model, in capacity we June organic times. Tuscarora X.X of for August a term leverage

we've As the previous ended on to the times common of noted area migrate $X.XX low to unit, ratio de-contracting quarterly leverage toll XXXX. of distribution expected high our a at the calls, resulting We Bison. to bank threes quarter to X.X the settlements March in previous earnings impact is four of and ratio distribution per for solid the XX, times coverage maintained due

Janine As XPress with Tuscarora and to the PNGTS' Xpress, growth explore growth use outlined we including on GTN our PXP organic both time Westbrook projects continue an proceeding and across Nathan Xpress ground earlier, continue in our to on system pipeline program, steel to on and And additional opportunities. execute advantage and we budget.

I'll on the That over the quarter concludes financial turn remarks to Nathan. now back my first call results.

Nathaniel Brown

Thanks Chuck.

now to refer XX. I'll Slide

risk good proving well, this their and As business assets quarter strong model. a to we the had continue our outset, very and out I year perform mentioned low at resilience

contracts flow to shippers. take infrastructure of gas -or-pay cash be critical long-term our continue forward, derived our underpinned pipeline by from will Going credit-worthy assets of natural portfolio

are take-or-pay approximately systems contracted basis. on long-term aggregate, a XX% In our

financial in believe manage prudently resulted sheet. have balance position actions a to strong continue and We our our

currently X.X self-fund each on metrics Our very as and is times bank our growth Tuscarora outlined projects. quarter a healthy These to us this coverage leverage is are our organic X.X our enabling times. distribution GTN, we healthy ratio of and PNGTS earlier

markets We distribution targeting ratio equity of times the to fund need three to current area we're term, our times. capital do Longer growth program. bank to four we reiterate ratio our and not coverage leverage to roughly our to access the high X.X in X.X that low maintain

model, self-funding execute and pay our program. with to build capacity for down growth, on organic debt order continued consistent to noted, in Chuck and our As levels we've delevering

with of energy on Our of the our essential remains optimization focus together asset services the portfolio. provision

growth And we'll time. continue organic over

approximately suite projects, North together our current $XXX are excited to and Baja growth development XPress pursuing million We our Iroquois very These our across of Tuscarora of with GTN, and projects PNGTS be opportunities. assets. include

maintain we We our continue support to long it common through believe position, fund levels Based forward on consistent period self us a to to of obligation available debt of fund unit. occur. - business should disruption, our to financial in ongoing quarterly conservatively prudent financial at distribution well known our business and manage today, positioned level going are capital and our we to our and all information $X.XX performance expect our currently deliver per our expenditures

turn the now to over call I'll Thanks. back Rhonda.

Rhonda Amundson

like now call the I'd Nathan. to up you, ahead. open Thank for go Operator, questions.

Operator

[Operator from from your JPMorgan. go The Jeremy open. question Instructions] Please line Tonet ahead, first is is

Jeremy Tonet

development I want couple a of here. question projects off on with start to a just

the Just at latest watching projects more hoping Iroquois Baja think of on this you timeline I what are waiting we a and specifically, milestones little both to and and should for guess for the details progressing approvals is any guys and how those exact point? get you other be more for bit

Nathaniel Brown

Yes, thanks for the question, Jeremy.

on Sempra their So Azul Costa FID with facility. still waiting to there, approvals starting final by subject on Baja,

Sempra's for as step if But them on making. looking any there, FID, So things through and their that quarter that's that communicate next within continue so. next of And going next changes, we're quarter the through. certainly they're get decision they one the number that really have course. develop But for that to there run for to things Certainly for on time frame, to a its in working things we'll pace that are or hopefully listening

that no hearings ExC and through the extraordinary ability permitting interveners seen. course regulatory going and the back due are there, course. process has its progressing there Everything extraordinary the Iroquois in so things interventions, through project from push too, to an Within up normal as for we've fairly on certainly regulators normal and course stage no that questions. And seems ask it's every

time a taking advisable is and certainly probably that this in jurisdiction. We're very at measured as approach

think I management very the getting on team way. Iroquois done the right focused at is that

on timeline no So real proceeding, either. that's that changes

we'll watching communicate any changes we're as So develop. that, they and

Jeremy Tonet

Northern I here And regards for minute could talking to that if a to I then, I with the just X,XXX Border want were to limit new there. that you about pivot think

Just right bit wondering, it in slowing Bakken with down here. like regards have situation seems dynamic it's a now then you production And a dynamic Canada. to kind of similar

So be kind And I of that that you would and changing kind right wondering how that two do progressing time? those that Just see a mix change see do Could or you you reject as extraction? because of here Williston dynamic that there. Thanks. shift streams would are just now, you where scenario it's to trying bit. at force there too guess over Gas understand a better where hot limit

Nathaniel Brown

only and talking gas and producers the marketers outlet can the down have. they to make that for for the Border use end sure the of on Northern interested been finger up about developing while it users find are pretty and It's pretty kind able that inputs all has certainly we've parties one limit the to this then the that talked to equation to one your is it. Really and volatile heat content situation - we that dynamic, put you the there. of of have a Well they been a actually that gas

we can but more possible the a page on a is make point get to everyone's make Yes, there Is operationally. should to mechanism and that to limit that signpost the sure gas there don't of of it's offsides rejected? you it's more a of be same tool - and we sure it be with some could introduced, So what milestone a do that.

as Canadian far of with blending blending and Western goes Bakken. gas the and As dynamics the

economical back volumes economical the volatile keep think we are the for optimize Northern coming I the a they pipe an where Border very products. depreciated It's the flowing to of needed, them. very, fundamentally, advantaged Canada the a net-backs with of represents for pointing whether commercial the pipe work their or will very out Western situation them it's are outlet find good that situation, for of said, As folks to and base, a out And to they're where Bakken. rate fundamentally users tools for

So the this. Northern position still like on Border's the whole, for

of, the definitely specifically As far where with as going definitely evolving going out can to but the that's like gas market term, change conditions, position. is how the to sourced long - be

Jeremy Tonet

But right full I still ins? is curtailments there as to there shut or flowing of keep now flaring the if still to pipe even captured mean full be it is right?

Nathaniel Brown

data not out up-to-the-minute of kind any they're have don't case, basin the in, which or in I but coming flow ordinary. of on up-to-the-week are Border from fluctuations it's and seasonal the flows anything

Operator

Taylor Pickering Matthew from Next question, Please & Holt Tudor Company. go ahead.

Your line is open.

Matthew Taylor

they that hotter own? down context from don't you if to it a arrangements then mind, follow-up tariff on those Just you paying need blending, a there pushing continue gas? for financial more customers Border. there this blend those to to new Jeremy's premium want on a make Northern Is for do to questions on are their impact And or

Nathaniel Brown

But ourselves, blending gas spec get. had users can we so we can of limited the don't what we any too. accept accept we're end our do to Yes, by

our So the we're the into trying transmission may workable interstate to specs value sure on feed different that or that gathering is folks the it's whether for system, across work here systems have, really us end-users. that our chain make everything to

normal this toward we're around blending we're definition is into that's direct comes that has spec, Border's And we what at a receive for lends And Northern on Manchee about streams for to than talking Western talk tariff but done do receipt the Canadian in that's than Northern in so really gas Bakken. of blending what is case, the that. upon drier less gas gas being the that the working what The course. sight about Border line of sort done. processing strictly more filing it's When itself our we

around worry starting So we're to has that the some gas heat had anyone everyone content to spec. to a definition never had that And onto just back get that to about. historically mechanisms issue the sure for - make add

is the blending a extent got there streams, So from around the that we've to additional in tariff. definition that little

And the So drier gas any relatively may Or growth coming of wetter out X,XXX that employing a be tool get really of pipeline more point. coming got you shift. regular transparent. of it the be we Western number. It's a day, and that dynamic I Canada, if we a is making we've way the still to But points, issue, Bakken given as the it look of it if an this as and at it blend day the from be that operational a issue more as greater gas big see on representative necessary, manage proportion out on we'll not don't of a kind operate there to in can that. with but it's able but

Matthew Taylor

if want a Is of there just flow definitional there excess change? is or in do you the discrimination this to X,XXX any tariff

Nathaniel Brown

not Definitely some discriminatory we discrimination. basis. us it's turn back, wouldn't as approach a look the to at but it It on ability the X,XXX gives if potentially

Matthew Taylor

is And just the tariff? the change clear, to there of no actual in be crystal dollar amount

Nathaniel Brown

have rate. doesn't impact any this No, on

Matthew Taylor

your non-investment is highlight all to exposure you see have like most might know XX% maybe at shift mentioned that counterparties just could downgrades? if base collection just curious any seen the grade recent collection customer And Have I'm And you of date. then about that mentioned risk, looks number to issues? and could that pipes partnership I grade. potentially the given issues profile you all counterparty seen your haven't on you investment It

Nathaniel Brown

us sure, Yes, into none the certainly downgrades space, has territory. across significant to grade been some get there non-investment

customers because of not same in thing ourselves, other investment it's fair we rated who to to say internally are got sitting call would that be of sort grade a - amount publicly The that space. hard that we've

So referenced the that category put the another in publicly-rated XX% number we've publicly you they is or XX% we that folks, would the rated. same so and were got if

to deal even puts counterparties commodity we persisting And XX% that environment. in seems price investment of us the the with. grade-ish current that range So be through that

relatively counterparties, don't apart side pinch have from are folks trading to moment. and exposure the large our say are to TC the Energy extent strong the the strong on directly have the the focus upon in large contracting support they're particular liquids reliant space pipes, that's affiliates house, customers we also that's gas the really are less have upstream prices and them. to large at that operations other, a feeling doing that of to The very we marketing and So well the and on

Operator

Lapides from question your Next Goldman ahead, Sachs. line from is Please Michael open. is go

Michael Lapides

when the you taking my Thank think have growth Nathan, on the I One question, positioned you first year. you good or is, shareholders? think the three. will start distribution be a company for congrats reinstate do for when to about do to actually one. That's and

kind are for any on ROPER The remind there update permits can Iroquois of approvals Border? the you is project? second us state or what needed then state is, Northern And or re-contracting third, on

Nathaniel Brown

Yes, Michael. thanks question, for the

fair coming what financial a potential expenditure can positive Obviously to now in amount First the line of the one come and on clear into of precisely going the distribution prior these right projects, of of And executed. get growth, focusing cash of once being really then going you've and sight these distribution growth to a in future. out we on project flow we've we full get there we're start is they're got on got things to out line we going what us. them going execution back sight of when the and into model picture estimation be, the is front is growth portfolio the when the have to

But sure we're near see the pass. healthy growth coming be as in we make keep it able even absorb to balance making taking our sure flexibility sheet on term potentially that, and a to more we execute we to to open, these projects very measured our keep approach

us. But So not a flow level into really really it's case of be more for thing, timing, phase and is focus these project a funded of execution time of with to this a comfort it's the frame growth, of the all get to then Once type our we an next phase. kind organic turn able internally we'll cash thing. of

to that we future. last question, your the Janine, do that through your to Iroquois stability a round shot to you holders to what distribute best I out that's think regulatory at out the be the project to think mind one? stuff on On that way Iroquois - be to And value and projects take in of the that's gone going able unit build build

Janine Watson

they I ordinary say seeing through different that its this the allows course. Iroquois need that or working obviously for window unusual is FERC now, have equipment their right to the regulatory process fully that and application are actually they are going going ahead FERC meet And long-lead-time determine three-year that we An types can appears process the equipment. feature to EA-stage. through a of go are at us to of to ordering in process of construction project that and the be to

important that handle regulatory of risk an that that's we're the some to in feature using think I territory. So

- each Once which we get get or they permit assuming compressor anticipate next need of in sites. permits the year, then FERC get their to of their they do at QX would we air

in as permit So well discharge various that's the and New well one permits. York level equivalent Connecticut, sundry as some state permits storm as as other DEC type from water

are closely we're Nathan of trying the all forward. of step and as those times, working course, we be we and how with seem very agencies, the there. well prudent progressing to geography because things But So be in mentioned, to

Michael Lapides

early last of it. of XXXX? Got the the kind the have re-contracting about customers question of the some right on for Northern Border And and FERC refusal then and

Nathaniel Brown

Yes.

it as continues dynamic that So has.

chock I great The very full has and for very, think been pipe strong. decade there now. is of value of Border the about fundamental the running has value Northern shown path a

increasing may And of seen gas three for coming gas the Bakken. the for change we've the for is over two, doesn't pipe out. of that the of of years here, a coming while months the supply that associated past off I Canadian Western slack period pressure think out what strength push underlying

to think to needs market, do still it's and path. on a that economic we find it production a very going So

Northern for it. Border's got what that's So going

got we down again positions because have contract its provision our and you there. portion we've at bid. drives large look have incumbent got it renew can these ROPER to like within that what tenure for Border's tariff, they a Northern a For on that that simply uncontested drive of That's large a looks long-term contracting if five-year simplified only going what out we've look at, see go what you

we've So come got up rebid, as positions. those strong for

Michael Lapides

that And ROPER, when on the they - when does or your is when the customers tariff? just also capacity maintain the exercising the same it and exercise

Nathaniel Brown

rate Well, the recourse contracts.

change, we rate recourse extent the to that. So go with they'll have

the are terms. on those done So same

Operator

concludes If this questions, future LP. I the at please question-and-answer turn call Rhonda are Relations session. there ladies you, gentlemen, Thank now and over the any TC PipeLines, Investor contact will Amundson. to

Rhonda Amundson

for staying your your and participation everyone appreciate TC for are your We hope you interest and PipeLines, bye you today. thank Great, sincerely we healthy, in families now.

Operator

conference Thank you at you. your lines time your for we disconnect Please participation. has now this ended. The thank and

TC Pipelines (TCP) 6 May 202020 Q1 Earnings call transcript