TRP - Earnings call transcript Q2 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Thank you for standing by. This is the conference operator. Welcome to the TC Energy Second Quarter 2022 Results Conference Call. [Operator Instructions] And the conference is being recorded. [Operator Instructions] I would now like to turn the conference over to Gavin Wylie, Vice President, Investor Relations. ahead. go Please

Gavin Wylie

much, welcome very Conference morning, I'd everyone. Yes. to and TC to you Quarter Energy's like Thanks good XXXX Call. Second

Chief begin Chief call, Poirier, senior other management the have the and Executive company some our and Officer; Joel comments Francois will On accompany on our members of our Investor Joel with Officer, Financial we that of Hunter, team. along will today with their President the and is copy section Presentations. website financial results Relations in developments. and Events under slide A certain on François remarks other available presentation

limit Following In to take order a equal X we'll their everyone provide questions you with an remarks, we from yourself community. to participate, opportunity questions. the investment to few that ask

a are of Harding uncertainties. important you that please contact are call. like include you will subject that today media, member forward-looking to Jaimie I'd the statements to our remind this after and If risks remarks

these please Securities Exchange information the and U.S. the more TC see with Canadian securities and with by filed on Commission. Energy For reports regulator the risks uncertainties,

EBITDA other during comparable operations. to we may refer comparable comparable earnings, generated to funds Finally, be comparable certain comparable measures earnings measures. this are These common non-GAAP share, measures and such from per certain presentation, as and considered

liquidity the These performance, result, that, I'll a operating With used are measures to to to call entities. its measures they TC finance over Francois. provide generate other Energy's funds As may information operations. by not similar be ability to turn presented its additional on to comparable and

François Poirier

events, Energy's and volatility joining good thanks value and proposition and important and ongoing during we Gavin, quarter. progress made for you, constant, this us today. Thank everyone, remains Despite market TC global morning,

on partnerships of assets, We this services. focus America's the continued course, relationships business and increasing the demand our reflects of and long-life from essential and high-quality, and for model, deliver our our and value results of safety operational long-term our utility-like to strength financial our excellence, operating strong North

LP In the has agreements addition, we're all of GasLink with milestone significant the with Coastal completion execution to outstanding revised that disputes, us a the achieved timely and Canada project. safe settles LNG pleased to announce and allows continue that of

GasLink discussing be revised well importance dividend Joel provide funding And of given on everyone's of moving highlights growth, EBITDA ability start quarter. then before plan our to mind, as the why our Now as revised ‘XX a detail to annual I'll agreements and will few X%, growth our our more Coastal compound rate achieve the debt-to-EBITDA in around by the to X% from will to X% remain ‘XX we target confident deliver our X.XX. operational

the regulatory start COVID, requirements, over So from a by stakeholder project. XX-year weather inflation, We've life CGL and saying I'll the lot impacts of seen past that additional other increases, scope and changed has events. extraordinary

assets. hasn't Western the commitment our our our globally what for system to competitive Basin. with with delivering is a long-term solution changed strategy is basin CGL and Canadian So Sedimentary competitive aligning and of The value NGTL fundamentals LNG the

that revised LNG our with and agreements advancement project partnership. long-term a for establish one further Our Canada framework better strengthens

specifically, LNG the Our project expedited X risk. capital and and us recovery sanctioned. revised we've process, risk, it agreements and mitigate our Phase resolution work to and when will provide funding reduced if project dispute execution with allow on a is Canada More CGL

we loan our increase sheet our can on a facility with and by $XX.X specific of down the uncertainty enable our over to resolving $X.X estimate project step And This settlement equity an incorporates that in will over anticipated subordinated balance billion. credit level On now together project billion. costs time. new contribution,

by viable, that to Now and end the project XXXX economically Coastal of service. the commercial commissioning and in as to service and see reaffirm GasLink by followed mechanical continue we want we I anticipate

most project change Coastal gas foundation to path X TC world. agreements CGL markets, the natural and The solid create path to and providing sanctioned, first success not responsibly gas forward climate LNG is for global of important development project potential these be nation-building for and project TC global in reach is only competitive the a economic Canada, of will that clearer Phase this Energy Canadian could for numerous additional if tangible for for creates produced returns. of enhance goals egress that natural benefits contributes some GasLink and LNG direct social stakeholders. the a Energy's a the Finally, and and when for this

than the at resolution in and X,XXX our and to awarded the now execution XX% of which safe communities Importantly, $X.X allows contracting More approximately billion employed peak and complete. opportunities been employment indigenous to us timely be and people continue has this local project, up summer. will is to construction

indigenous with Canada's Moving one to is of project made of ways we reflects This commitment projects. resource reconciliation. communities forward, the we this continue also largest advance to one in partner the

million We XX% emissions by have historic X and XX the coal-fired interest million Nations year reduce option agreements equity signed project along route, the to Canada, the by project per displacing agreements could groups global power. representing together greenhouse indigenous of tonnes to LNG nations. with of all to First those with XX XX have XX gas And sell a

slide, section Now reliable and transport of This and accomplished. execution clearly is materials project. can for can specifically aligns considering CGL has and on project the Canada, tonnes This XX its crane pipe this affordable, a of top. of the The with American the mountain first North being rising and transported to demand long This global team engineered action. was X.X-kilometer for classification, of of proud kind our see innovation in slope you energy. cable the this work I'm specialized the low-cost is for

a economies in strong opportunities day forecast demand day LNG supply. This in role. decade, Asia. America footprint largely will Europe, grow growth demand forecasted by a Bcf an which XX% XX role creating to a align with concerns on from XXXX. heightened of the global Bcf critical LNG this with energy energy the Energy's significant securing global and is North from demand playing underpinned increase along is XX anticipated and reorientation over This of end to depending European strategy. at, energy LNG demand is Asian asset day by of mix is a increasing unparalleled look approximately by next Now the or security Bcf Combined you with XX that growing wave our TC play in to

of a to This exports Coast, over LNG from number X/X XX% world's shows by forecast the is LNG by XX XX market over With a LNG. world-class day is increase facilities XXXX. on U.S. the the North of Bcf coming growing over the years. largest updated expected and American export of Our the represents global a Bcf day to now exporter Gulf

of and this safely about connecting volumes win U.S. XX% share exports are our reliably fair for we Now LNG growing well market. and of compete are the and destined to for positioned

targeted volumes We is be the the XPress Chenier end delivering LNG by service a is projects end continue portfolio of will in-service underway of 'XX. our Louisiana Grand advance to year. of partial by already with at in-service XPress Construction January. into steady this Alberta and in XPress fully on went cadence.

of summer Additionally, XXXX, late Lateral $X East of represent FID an this customer is over and capital on XPress for we TC new of investment Energy in billion. Xpress follow the and expect in-service per to these capacity X.X Combined, North spring Baja later date slated to projects Bcf XXXX. online with the come a in day

Now Canada is support ideally growth. situated LNG future also to

X prolific and of to the gas As CGL natural Coast, discussed, and CGL supply West most exports off will is sanctioned. low-cost the when to over will day sources with a of facilitate Bcf When North the Phase X LNG if day potential Bcf America. approximately a connect in X one expand X of complete, Phase

natural with future. throughout tremendous LNG the kilometers pipelines we of of to is continue And the footprint existing continent, TC So asset today unparalleled North America's opportunities. core Energy, and XX,XXX to see success gas

Flows had operating phenomenal Now I out increasing U.S. to averaged our the the day, quarter. -- gas across energy. second our assets natural pipelines job compared high X% want by of quarter life entire over remains in our of Utilization a our a to up did operating they second for platform. diversified to teams underpinned system energy our XX They across high-quality infrastructure shout Bcf XX.X portfolio demand on XXXX.

on barrels related safely service. management ongoing April demonstrate Our reliable schedule our be North and $XX the program, a ability season Power, NGTL in compared system the in augmented we megawatt to ahead deliver Bcf day. last infrastructure system, Keystone execution averaging our were completed had work to XX.X a we of Pipeline This again, as total approximately to role X% in essential deliveries a adjustments. day plays received other Once to XX% our power contracted system At with by component contracts hour continuing XXX,XXX Planned same continues nearly this replacement into open price further exceptional. the year, outages about of increase Bruce XXXX And results access. market period the placed major highlights asset the up is reached to America.

and and increasing Now reliably. our constant. Executing culture we returns look in top overall the on that assets commitment also our the our XXXX It with a my program and on embedded business our as Safety very that are is is and pleased we it key progress. of our is at is capital conduct priorities. I'm value, existing secured safely priorities, our all

of will a XXX Keystone, net-zero As utilizations become pipelines first also industrial wind solutions for Power demand volumes just aggregating. and in business, corridor we've is link. of provide will the market required This increase supply ago, that then also approximately U.S. long-haul America. energy renewable megawatts of and renewable very the we're on I total that respectively. increasing contracts to electricity one for to finalized the now working mentioned Solutions Keystone portion solar It energy of Energy XXX we're and successful we've in been megawatts, liquids of XXX North energy, a to In minute megawatts on and our

evaluate to our additional and continue the XXXX. received finalize process through in RFI expect We contracts to proposals

of we’ve are growth Now placed $X.X opportunities year. assets billion sanctioning of billion goal high-quality, low-risk $X year-to-date, of service and towards working into each our

our the also financial Compact, ensure capital And joined identify solutions. world's We'll maintain and initiative As in and more funding the our energy corporate strength Energy and flexibility. prudently Joel year, the continue This we're sustainability TC will detail, innovative to ESG Forum. UN progressing viable we discuss largest TNFD commitments. our we are Global programs to

on comments problem sustainably you results. Thank value. off our very second to do and record We energy it solvers. And our while track I'll total commitment much. to so a safely long building hand shareholder superior on of Joel for are our few quarter is delivering now

Joel Hunter

Good morning, everyone, and Francois. thanks,

Comparable be the on on positions the $X.X arbitrage June contributions further bringing offset Francois active in million as or gas $XXX same the were was Sur $X.X within the team de second earnings to to quarter able segments comparable costs. from marketing while contracts achieved XXXX, Overall, are $X.X discussed the outlined same By to gas the XXXX, worth as and quarter funds EBITDA lower gain approximately locked were to U.S. second due to Keystone billion. increased higher billion EBITDA to contract from income subsequent part spreads decreased our by XXXX stronger billion for service in dollar-denominated the Texas. our to realized continue $X.X second strong year-over-year, share in by mentioned, period the ended is energy. effective second $X.X with second common which Liquids Pipelines at in in deliver It $XXX assets second items or Liquids we Natural or XXXX primarily of operations XXXX. with due second an Power the EBITDA in partially a compared for in quarter, XXXX income positive driven the U.S. of we results partially EBITDA offset billion respectively, million the corresponding months higher gas share in Alberta to $X expect were a are XX, associated as capture from while of April and primarily our loan, quarter slide offset XX, to and growing Pipelines the to repayment XXXX gains open volumes price entered recognized. quarter XXXX. $X fourth Storage interest XXXX, quarter in outage safely is quarter half into up favorable operating of dollar have second natural per System was reduce billion second EBITDA into of $X demand from volumes comparable common we on the for billion Natural X% lower due in from resulting Pipeline XXXX. the result the to quarter of meeting As by Mexico due per operating sales overall to the loan our report in Power a Net also storage planned shareholders. same by in Power, compared issuance X per that higher impacted Certain XXXX. placed results expense the specific share Gas Bruce net future peso-denominated generated to improved and forward days. X, Comparable management compared quarter, and Storage long-haul lower greater and purchases margins 'XX. and was common into storage XXXX. or XX% $X $X.XX period opportunities was per noting, for our share compared reliably segment the $X.XX for in comparable volumes season to billion, and shares the increased of period Marketlink partially comparable contracted contracted March

to of rate XXXX. of translational X.XX the dollar-denominated in X dollars Comparable businesses in with U.S. note U.S. a of junior and XX% streams debt naturally important subordinated compared has And and exposure It hedged Interest reminder, residual long-term our rate stronger rates and used our increased second occurred the XX interest expense fluctuations revenue net net amounts results to years. our that on For in X.XX U.S. part years. borrowings. foreign maturities, rate and and average other of is all on as dollar-denominated the with managed due actively dollar on exposure maturity levels to interest to term short-term note income. second increased due to in losses dollar-denominated issuances, in a higher quarter primarily quarter U.S. an to income, of average rolling XXXX below fixed the U.S. to our a income approximately an realized a exchange manage are derivatives of long-term on at dollar-denominated exchange EBITDA, primarily decreased debt is of basis to up Canadian

of program of We deliver progress $XX continue unlevered our into our capital year $X approximately our and service with to industry-leading to of remains in allocation average projects each adhere billion year. a secured program capital have our placed expected range. sanctioned to to strategic X%, targeted projects This $X.X weighted this is line after-tax targeted billion X% threshold. IRR billion Further, which must

return accretion priority. preferences, proposition. We per will a not requirements and with will be made value share our meet compromise risk and Projects as our must decisions

opportunity-rich. remain we Now

growing and our XXXX on focuses solutions. business, energy advancing modernizing only of and reducing at not offering growth our reiterate on We low-carbon EBITDA comparable projects aimed emissions outlook XXXX program X%. for capital Our but through also

or underpinned Importantly, take-or-pay our long-term by largely EBITDA cost service of outlook is contracts regulation.

cash visibility continues to per us share this at grow Now to our annum. dividend to by future flows X% position per X%

to turning our Now funding program.

anticipated and subject GasLink have LNG the funded over resulting we XX% earn Canada XXXX LP the in our will estimates of Capital announce we costs This you change of with made resolve cost incurred increased costs reached be contribution will revised for a cost partners, XXXX the amended new a Any will Coastal agreements of determination. agreements certain with revised address recoverable Coastal included final interest-bearing repaid Canada GasLink Outstanding agreement GasLink project. In original definitive partners, pleased will billion, our are return between contributions the the LP. of equity make and heard, As and which of a and subordinated be LP disputes outstanding and that in ownership. have Coastal no accordance and be incorporate in of installments initially agreements project with to to $XX.X LNG to amounts the all XXXX and from revised agreements binding in of execution our billion. will on Coastal cost with GasLink Coastal Energy recognition equity TC be contribution GasLink the commitment in and and us, project following cost August an commencing project including GasLink $X.X paid to through additional capital. in-service loan will LP Coastal estimate by

Francois' reiterate to remarks. want I Now

solid forward the project GasLink Energy's of foundation and continue TC path and enhance potential agreements a that see sanctioned viable Phase if development We to when create X and economically Coastal the could as for returns. clear

billion the Importantly, of reduce total facilities risk agreements financing the existing a our $X.X project billion. a credit project by supporting reached level expansion $X.X to of

the under billion is subordinated GasLink the with agreement installment capacity facilities under commitment associated LP contribution. down $X.X project over our Coastal as current equity increased TC be level will make time the and stepped from Our between we loan Energy payments and credit

Now of a our capital including $X.X equity increased uses terms as graphic $X.X of billion. we contribution system for The approximately in these XXXX of to sources approximately XXXX, and the result in associated billion XXXX invest spending, updated and GasLink illustrates Coastal expect with revisions. our of costs NGTL now funds forecasted through

to the $XX of of billion. including requirements $XX expenditures, X and column, in reflecting capital the dividends maintenance approximately over capital total starting be our Now are projected left years billion billion $XX

the leaves This additional of our expected billion from $X on residual have cash dividends targets, intended XXX the internally commercial plan, in the reinvestment we to is a depicted plan, USD common at with on a we reinstated issuance continue fund of XXXX. asset combination we March. fund and of while recoveries. service. commencing our activated plan column XL Keystone proceeds that be in to and right leverage project The hybrid billion The mechanism $XX X X% dividend historical hybrids, sales dividend into highlights declared dividend column incremental capital approximately to issued commitments based from for prudently reinvestment flow of funding treasury maintaining debt, through short-term bring XX, reinvestment expect be discount under second July million participation as shares and quarters that a will our generated paper, far anticipate need projects the we To

the we tools maintain our So in summary, share while financial will always utilize per delivering funding optimal most and to strength value. flexibility

$XX comfortable the higher EBITDA year-to-date reaffirm modestly XXXX comparable X.XX. performance of be growth We strong is generally to outlook ability share program we capital have Given incremental XXXX base that of And of of us our through with XXXX expected X%. to and visibility per reiterate with EBITDA our business, comparable last earnings industry-leading target comparable meet leverage our billion to be year. we strong to our our growth leaves deliver to consistent

we our before remarks, us. turn I over to to my the prepared sustainable combine allow execution to opportunity-rich continue grow Q&A. potential capitalize model, the in to we flow value. environment asset the in deliver growth will and share Gavin per organizational That's you enduring business When call long-term earnings back now and Overall, Lastly, unparalleled and X% end shareholder will to of differentiated the by us superior to on dividends X% with solid cash expect for are footprint on coverage our capabilities, our strong ratios.

Gavin Wylie

Thanks, Yes. Joel.

from Thank we questions. coordinator over I the just yourself reminder we that investment X before limit turn questions you. ask a conference it just the So for community, to to

Operator

Ezergailis Our of comes Securities. question TD Instructions] [Operator Linda first from

Linda Ezergailis

context the just I'm wondering more some us costs. updated you around could Coastal if GasLink give

level locked And how estimates? Or maybe cost cost, for prospective have any some the you much in of For actually of confidence have can you provide provided your sort in? you contingency? additional sort

Bevin Wirzba

this Yes. Linda, Bevin. is

mechanical completely has of contracting site. We've been the need sections and solved we materials already completion, on been -- are completed. X All terms of led. mentioned, and project the that are X we've and in finished all out as our strategies completed So project to XX% already the complete some have tendered the of

of the the meet for that we completion estimate of we is $XX.X confidence estimate moving confidence the high. that date as in we a high see conclusion. contingency we'll building have remaining mechanical potential the So our have billion what of But new forward end Inclusive XXXX. by risks our that in is to up

we right we in So with amount a settlement tremendous place sit customers our LNG with that now, with have Canada. of a given and partners confidence

end to on commitments and the XXXX billion And completion. mechanical of so of our deliver well we're positioned $XX.X

Linda Ezergailis

X? Can as sort provide Phase the ensure a your follow-on, LNG of in with kind be of And -- a for what cost reconstruction from FID of are et you minimizing active just that? you timing presumably labor And about and savings in mind would some camps, cetera, discussions any around dismantlement from initiative. Canada optimal to context

Bevin Wirzba

Yes.

of So X Canada the scope be. that scale and feasibility, active X. The with what linear facilities. around a will It is work we're in very development. to than and looks establish the project appropriate Phase project different not It's compression Phase doing discussions front-end the LNG

benefit. that And our changes to risk so the profile

prepared of tremendous do be investment now. in today. In that to terms amount one to customers, decision, that timing, when final that but evaluation accomplished, our needs to it's of and are a we're bring in LNG control the are of they work a that There's where determining work supporting Canada them important is right FID

decision high that confidence a going in have we into FID. So

Linda Ezergailis

And spend just for plan. your question, more my second for broadly capital

going up funding or have that? to you of identified extent the potentially plan. date discretion some all some pressures your inflationary appropriate You've sort or $XX in that around that Is any might embedded deferred Or contingencies? cost projects billion we in up with see to in

Joel Hunter

Linda, it's Joel here.

capital that to are to. So you with the date referred spend up we

did NGTL recall for we cost back revise the in might QX, our estimates system expansion You projects.

pressure Power. at the on obviously, MCR is The time program what We're cost So not budget. our you on pressure capital that's where within expansion well seeing really any It's seeing going by Bruce and We're of Unit here. portfolio. we're United the inflationary of investment We've the we're Mountain coming very in Alberta, most it's on got forward from CGL encouraged seeing, know. along NGTL. X with, States now, as going market huge the on. but the really obviously, There's Trans a project the

expect we our changes material reflective see going cost is any you most to and to our don't So what estimates current estimates. of forward see

Operator

next Our comes from BMO. question of Ben Pham

Ben Pham

go to think gray-shaded in around your that in wanted more I area? to And curious this asset really category ranks I'm with when back that same funding debt assets to environment specifically And is program. you're shaded on anything overall at the time? gray looking you logical is sales, how sell stands that there do appealing out? that reduce to it

Joel Hunter

So and we our we're always our the fund optimal trying how Ben, program capital at Joel it, capital to look it's here. that look for When really we and judicious obviously, want with structure cost per We our flow maximize we're share. very and Obviously, leverage per count. meets maximizing share share value our our shareholder targets. to really cash earnings minimizes capital,

discrete of So hybrids when equity. do equity venture to do look is And maximize then which And the capital if debt. through financing, an balance we is needed, and use internal utilization sheet of sale external at then partnering, in really obviously, XX% what structure. dividend of reinvestment box to plan assets joint that our equity, strategy. and see non-core look extent all-of-above permits, to our we you it the we We the our gray

monetize. that -- the of cost we capital assets do here what is in at, kind what that's we're our is funding our non-core again, look number trying shareholder to for that stack but of lowest have achieve portfolio But program. to value, alternative look the the maximize of we could So capital we a what

Ben Pham

then when thinking GasLink well at And on the you on you you least think impact DRIP funding putting your that pipeline for turning updated year? in you're some about this NGTL. when Mexican about a Okay. obviously, developments of you're Are plan, Coastal as

Joel Hunter

the to start regard Ben, here with I'll DRIP.

we at in to DRIP with Coastal the on really is connection and core is financial that we our NGTL time. we're be X% to our As to higher strength sheet. rate a flexibility, discount XX% just this fund the in And based therefore, point in here spending along is balance and outlined, us appropriate common program financial the seeing for GasLink. about for achieve Obviously, equity turning deemed strong capital point quarters, DRIP billion trying prudent we're to historical tenant We of with participation at X that $X.XX on determined a at have this what is time. preserve on

Ben Pham

Okay.

So no on then? comment Mexico

Joel Hunter

I comment to it Mexico. have turn will I on maybe that no had I Stan.

Stan Chapman

is both respect tell Stan. definitive some Yes. potential the the Ben, can project, progress around this much. we're I this and done in settlement you to agreements We've CFE, made negotiations the meaningful very but with the with not just yet.

for over As we've XX Mexico in been you years. know,

that with give us alliance I very negotiations. the that And very, out still close much have committed bit more little time our CFE. a the to we just are strategic ask you We to

Joel Hunter

have what's with So box a at as mentioned, disposal as a if Ben, last in number I we we again. that in that, about here comment plan ahead now here our funding move one to I levers would just offer our you project of that that think in right Mexico, gray I were mentioned,

We our targets. and ultimately value find try that are count our meets maximize and of shareholder very lowest cost really to we'll share judicious around capital the leverage

ahead of goes with all with obviously, So an it a above strategy, program, Mexico. our is anything not capital current but if bit only

Operator

of Markets. from RBC Robert Kwan question comes next Capital Our

Robert Kwan

current is codified with kind low if And expansion, returns, agreement? improve GasLink here how the I in return on the originally begin X you new to your relative a returns there's think the start can the anticipated agreement as to Phase framework which liquefaction and to think you're of part and on if and Or about cost about Coastal then has can are I were with? the returns potential returns. back much you Like, If CGL? being talk just as expansion, there no sitting returns? further not, pretty of -- you low base the And are lower mechanism just the

Bevin Wirzba

So Bevin. Robert, is this

X initial support in achieve our to the X puts ensure Phase coming But support Phase that as total clearly chooses to development objectives. competitiveness we project the to And to to its if So project move the best settlement follow priority primarily, position return LNGC forward. subsequently the the FID. ongoing indicated, would didn't and a was

Phase our X, would our that between the shareholders. linked not confident with our Phase profile a settlement are are settlement as project discussions exist in which and returns But Phase we're of for terms The Canada is in as LNG that well X. Our our delivers confidential. advanced strong X well return

Robert Kwan

Okay.

you So back get originally does Phase where you to anticipated? X

Bevin Wirzba

Phase brings the brings the project. X entire – back return scenario X, us X same a into for competitive of Phase the and very combination -- has Phase

Robert Kwan

I If on just specifically funding and finish the Okay. DRIP. then here can

share judicious You've with being talked about your count.

best say, And you so turn for very while can to year, on have as funding you or the add you're the source to a current DRIP other you or monetizations? on similar decision the about the see it DRIP just to the conditions on funding if if asset the leave current turn does Mexico the able to that of calculus portfolio? things market like persist, versus, DRIP the most tool -- talk projects optimal stated or And equities you'll the you being now mean

Joel Hunter

it's here. Joel Robert, Yes,

DRIP is to ability little is with X and of that profile. over DRIP we What the XXXX experiencing really was on to that increases the discount we the all, DRIP talking on saw kind of really shaped it look cheaper of X% saw at X% additional relative we're like discount equity, this for on And discrete on elevated based to have X% quarterly. a being is we what the nicely much with time. a Coastal, at looking us. our period forecast. would metrics we're for with internal obviously, quarters capital When all-in we say, our really where We're equity. spend bit than And tight turn that important we really you versus discrete see turning here NGTL a of, First that an off it's

get a we're XXXX really that basis again, And see again, we non-core of that maximize expansion reiterate where and getting I and and here, capital, we're and comfortable looking really we as our cost-effective well down monetize. of again, really just want program, to to again, forms to, capital with. obviously, This can leverage capital further manage spend of is forward we value our profile. with our move a assets on very to other we'll maybe look again, shaped shareholder to But there our we at against leverage. As way that so evaluate quick

Operator

comes of Robert Our next from Catellier Markets. CIBC Capital question

Robert Catellier

the wondered First could I to changes of I was Coastal more industry, finalized. any easy. -- congratulations you both that have not and could for know the on GasLink if the getting mitigate that priority revised been all, agreement to deal a you speak risk.

you think opening that comments. the I mentioned in

So what your us mitigate forward? about specific changes can that going risk you tell

Bevin Wirzba

forward. a settlement. matters good are -- We thanks Rob, for and getting of it resolve Accelerated partners the how good well. to clarity partners with really was in the us we the customers, I high not transparency, our maintain outcome. clarity going the reached as but gives our provides Well, path us, also mitigation the equity indigenous the we discussion ensuring a long project, dispute final The of only and on mechanisms, confidence transparency alignment to and that forward and key which components acknowledgment of question, that proper our appreciate through we them delivery

of the transparency alignment, in and project alignment LNG are deal customer, between mitigations with changes and more a strong we ourselves just the forward in the Canada. our in or So just how going challenges increased process

François Poirier

absence of carrying and our And capital future. then sizable the settlement, on a been -- would substantial settlement many amount for balance it's we credit a a have that fairly be not to add, of Francois, us sheet what the amount capital. carry the could in to would I facility upsize Robert, have into the of Achieving allows years ultimately

Robert Catellier

bit listed, has U.S. of largest we're more some of is the in through Or the already enhancing question leveraging the just become that exporter year. industry Can not that your And future? about just continue to have color the there little a you in addressing Is on simply Okay. available might asset to but LNG the pointed you a the first projects the half projects you've you way provide of as ways network going be that participate? M&A it transmission or to benefit acquisitions? existing what could from the other some out, you

Stan Chapman

and at Robert, that. I past given assets, breadth find growth. they more to a asset or on -- originating the to products, gas have by basis the about the given unparalleled around is is And year of right of Bcf from these growth of size is is in Stan. that and natural billion what of XX driven perspective, this supplies. the be of Europe should events forefront day geopolitical really statements relied So this look we I is a can new and our it start what the right about LNG the now, tell needs at my footprint Russian $X historically organic displace it you And

increment of that the predominantly X/X about I of expect us U.S., about Coast. transport about not And the U.S. maintain, U.S., forward. market share Bcf of comes out from going at if the an least Gulf Assuming to we the XX that's the LNG of in grow from Today, XX% that

to due aware an well these Bcf but opportunities So sensitive our other the offerings with get opportunity you to X country Louisiana, range. details can't Gulf and leverage But which in that that is over respect really into demand, for day to years, X system the various Not the the Baja a X are now competitive our suffice only counterparties nature. think Coast to in having of actively somewhere growth like Azul. can of in with advantage, in set it the next of LNG also our parts that's in say market X and North opportunities footprint. engaged and LNG to us we're I Costa

Operator

Tonet Our next question from JPMorgan. of comes Jeremy

Jeremy Tonet

could look to more, if I want here. at little bit a Just Mexico

you the just reach to with you completion relates completion 'XX line it move you VdRdelay, full Mexico As there. do to have in VdR? on wondering time forward the what on project before that early another line Would of the said you sight

François Poirier

I'll I Mexico with I've I'll so about and in some deep have Villa Stan XX And what de publicly we're start. conversations on supplement specifically been Jeremy, of time, as been these to questions we've for And course, said in ask past, seeing Reyes. years. for him in the

any disagreements a the it's incremental contractual simultaneous CFE. any or very critical to allocating capital do with feel ahead and We remaining of positive relationship with perspective into country, From constructive capital have the we resolve incremental decisions. the

So it. to that Stan, way would And we the be over about would think you.

Stan Chapman

project. service the lateral the we've you Yes, for -- Jeremy, put for the intensely north say, already this we some on issues early would And the probably Southern focusing now, we're in XXXX. right which can the is into de or service, I both Reyes should know, segment if get segment, for resolved, sometime some Stan. ready ready We're service as be Villa and hetos -- of

Jeremy Tonet

Got early billion or that it. this year. should timing large in a rise next how incremental coming if over issuance we portfolio in or the XXXX project is that fashion? rotation should about the there if later That's a year, of CapEx equity helpful. back, pushes And $X just approved year And later, think Mexico CapEx pipeline

Joel Hunter

Jeremy, here. it's Joel So

you've the around so to As our try I our to capital optimal particular, cost capital. per investment, that mentioned thinking share per and we're that maximize earlier, very when and when do that being cash judicious billion evaluate share we Again, capital flow count our of over we in $X earnings we like about find indicated, anything minimizes really threshold share. that

extent a will, the is we capacity, will an So that. that strategy. use capital can as Again, mentioned, that any with to extent use hybrid we that, really all-of-above the it we to project comes

assets. look equity. be equity of external We DRIP will need and if sale with internal And the to partnering, with discrete equity then

it's to We determination as to again, we're investment in it cost here best an make capital. path all-of-the-above So that the at strategy. decision when time as that point the relates forward to making what's our

Operator

Matt Tudor, Our & next of Co. question Pickering, comes Holt from Taylor

Matt Taylor

or cost of bit of in reduced XXXX, more profile you the you the is trying renewable rising you're about carbon be term? as or Keystone getting through costs a of some your using a to longer-dated In carbon. that sense including of longer projects? those plans offset storage. triangulating emissions are I'm increases Or pump not in as I need currently how the X% you other targeted of to A of over place? get disclosed the there's that Obviously, factoring whether rising time, plan EBITDA just What whether at government, how are it, using you're offsets guess if power carbon, on I one. to growth targets costs those what to to it's wanted emissions it's emission have of a reduce reduction your

François Poirier

for Thanks the question, Matt.

factoring cost absolutely are are outlook. and growth mitigations, incorporated in those offsets We of or our EBITDA

reduce of going our company. our strategy, a own way And embedded a a pass going find actually is we rich. matter in to forward emissions is for have and mitigate be continue others, that to through our As fact, because for be in catalyst their going driver it's be to customers future helping reducing emissions, we to of the for growth need reductions our is in the growth dynamic is jurisdictions, opportunity we why Look, a costs. to to ability Emission which various account. those

of are into All they the into and estimate growth factored we that extent to passed are visible those the been provided law.

Matt Taylor

more, one then And Excellent. may. I if

viewing heard market. opportunity are just steam, several LNG, speak floating some general up Mexico. level you're in that sense Just picking times on more how you that Mexico. LNG We've we've can a about seen But of just high you're potential projects

helping backbone of we've some stack obviously, term? heard things time and comment time to the those value? power a do longer there. gas industrial about in been infrastructure see of You've be opportunities long some of Or good there terms you over previously those this opportunities transition Would with the any about some to crystallize

François Poirier

government start some seeing. level a what support policy are I provide I'll to gas see that terms some Stan the at in and of I'll transmission, as and high ask color then of things we around very for

country. lower developments over different social they and is CFE's learning ambitions the is last address Mexico few to disparity gas years the of and regions indicate the transmission supporter realized government and CFE in of costs enabler and between power the to think an I that economic and

natural partnership country essential the they socioeconomic increasing see Over is gas short, Stan. an with policy. to you, private as in tool country, powerful access So in and for Gas around the to the Transmission a operationalize sector to very tool

Stan Chapman

back XX going of this U.S. goes Yes. we strong in along footprint this imports Matt, X about and over gas to the strong currently from perspective, the XX% next demand, again, to to context demand Bcf my Stan. years. from increase are the the that's in our is deliver Mexican Bcf of From today, Mexico, asset transported with

around Mexico, backbone system different Mexico, So pipeline point across focus there's that have power with is government particularly we time, us materialize. One, in West could De right the could extensively tells you focus LNG, things. greater at continues Sur particularly for Mexico, out to into me relatively industrial to building short opportunity that a the the up efforts our the to least be expand on advancing. lastly, which be at Texas term, and going closing which the capacity load to need Coast then of opportunity the negotiations. couple part CFE of now, be an brought Mexican with the But on go transition our loads for for the And tied some going out our of We're to as those done opportunity perhaps project efficiently growth compression. in on is central potential the

Operator

Our Brian from next of UBS. question Reynolds comes

Brian Reynolds

on follow-up a questions. the capital as curious of Just allocation some

the to over thinking how near one you the the of is about the support term? suspension growth dividend give over levers as potential sheet comment balance of management a term long a If could about

François Poirier

That not take the in is I'll one, that Brian. simple. and Plain cards.

range support to leverage earnings cash and lowering share as per X-year that the the that to in X% X% in well range, level We our growth window. and EBITDA are as have to dividend underlying X.XX X% per -- our share confident that ability a flow in growth to grow growth at

our Maintain delivering So those as discipline, we're capital various as maintain our and able interests. deleveraging all of growing a stable to to of shareholders. priority return well balance our

to growth of given dividend are plans the that no before richness there's us. So opportunities the moderate

Brian Reynolds

CGL follow-up, into Great. some color lever talked the assets Nations a it around the see those what another in probably that And project like Phase during their join time X? First interest about at to expansion they'd look Coastal assume of equity sales additional this to provide given on resolution like. non-core And earlier. ultimately from GasLink, to Or asset the Curious is returns as you just what increased as if participating fair could then interest? before you is in

Joel Hunter

not need Joel of a But here. call we smaller that over as there Brian, but that nature, monetize specifically what footprint, But be. to anything we're what that call going not time assets, are We're our it's far across management goes. if that So assets that this to look at point looking we're looking portfolio as maybe to we at out look tell out in is could number going non-core we're at. we time, can you when are

Bevin Wirzba

And is this Bevin.

settlement, by participation affected XX% Nations, at project the not First their of as agreements the the their in the the and On remains are terms option per original deal.

does a no there for indigenous and So path the agreements, changes for option provide forward are clarity the settlement but them.

Operator

Our of Fargo. next Satish question Wells Praneeth comes from

Praneeth Satish

and the starting pump juggling to funding you the try on guess, of is kind to the projects help the future is FID, Mexico asset incremental funding at I basically still higher. funding, sales thought return like corporate -- not I higher some of looking to fact CapEx and be X% So pipeline, current your fund to to than guess among any at a high you're hydro, your others. but return match that seek projects level, do higher there cost a and larger of cost that you're my backlog, creep on X% question DRIP might

François Poirier

of options we're have lots Because we rich, before us. opportunity

capital the we as company returning that highest One to bring high-grade critical the a of opportunity and capabilities to the discipline is projects.

question, You That relationship didn't is to. important. going mention risk I'm return in risk very but your

capital at our cash as you free capital sales the unchanged, are low-risk long-term run billion our that's looking to a preferences fund flow, X% look with to to we're in of $X beyond that ability -- a either managing cost stack. have maximize management is capital, forward to between or end cost cost must at a is after-tax highest historic deliver and regulation underpinned our to our the extent spread To or and Our that in return profile of the capital to marginal bring marginal incremental for of reasonable with spread that risk the And unlevered the projects of affordable by a X% cost proposition the value contracts of that we're mind rate make And that which IRR. job is that risk confident that those. is return changing to that be But not include asset calculus at which our may there equity, conservative decision. us. case, profile allocation earned between again, earned and always and risk top and capital

Praneeth Satish

And just to switch -- sorry, want did continue? you

François Poirier

No.

Praneeth Satish

Okay.

gears. switching Just

an update there's project the Bakken. Bison if curious the Just potential in on

launched you open I season. an think

that's been there's weather-related how some I curious in progressing. disruptions the Just know Bakken.

to not I'm anything. that's impact So if sure

Stan Chapman

we're push season opportunity another And with go forward look and We very those take agreements a the did projects for precedent that coming And to second the open These open nonbinding you back with here. negotiations again, for to it Stan. environment closed and we pleased that Yes. to that were and in growth this our to May. weeks We results in this footprint going into sharing year suffice This supply are best-in-class of is to that turn have of half us. opportunity-rich have season. more just say months.

Operator

comes of iA Capital question next Weekes Matthew Markets. from Our

Matthew Weekes

update quickly bit? season the and outlook about forward ask wanted that little for talked a you open here? any volumes might if Marketlink there quarter sort And just on looking of increase be the to you I had to last going what

Bevin Wirzba

in This both in you. Neches for the We getting completing successful quarter, certainly ran thank X Matthew, contracts also open place. were lateral, Port is in past Marketlink, our Bevin. that, but seasons

headwinds both -- to now some asset will is long-term we're rolling off contract from right that currently mid- is short on the facing reestablish have return profiles, headwind and our kind market to cognizant of and short- strategy situation going to in the the outlook of at the to the at Our Marketlink that's But as been was the long-term contracts of tailwinds. perform volatility least Marketlink a to in term.

refinery which open couples so in link of which that And the North enhancing with with project, is into largest coming is the season under Neches Motiva budget schedule Port in ahead and refinery, with America. deliveries

So our strategy. our key points providing been of customers increased a component has to delivery

So were of seasons those open very successful. both

Operator

Our next Rob Hope question follow-up a Scotiabank. at is from

Rob Hope

circle Mexican project. to on the want Just back

it move finance So about to as CapEx is similar backlog take make full will the look have a what risk-adjusted how when at think attractive -- lessen adding de if a returns, to but to upside Sur you we'll relative you project easier Texas. to there, at which what's classify you forward, the the do partner some happening relatively

François Poirier

XX%-ish the and cetera. appropriate an Thanks for Mexico EBITDA it's the want of the our contribution in prudent for from in how think to of Rob, management views Mexico much consolidated it's is It we just question. portfolio Francois. context medium-term we sharing on company. consolidated as target to near- et the diversification, portfolio, And EBITDA

we us in that. we'll prosecute the of helps that extent a value the of attractive a to premium a the franchise make earn return, to to and potential valuable, certainly, opportunities for see more extent So portion the bringing entire partner certainly consider

answer short for the selling and within is road something a be so prudent portfolio again, is minority more it's, but we the diversification. And proper down that the context potential management open to, of would interest

Rob Hope

'XX, if see the we into you Or any renewable call capital just from that. balance we the on look in we of help see some we'll 'XX tightness projects then state willing less in just And by take towards the possible? invest of to money flex sheet. right. year? could deferred as a the to All plan I at XXXX, Could the appreciate capital end this, it, some

François Poirier

I you years We've to somewhat think takes well to X X regulatory lead time opportunity capital sanction sometimes ordered or to us can there's approvals contractors. as equipment. permits. from made a and receiving imagine, it We've project for we commitments limited long defer the

bit And challenging. a deferring so spend can be

doing around project We value a if rotating deliver see partners value, near-term can be projects. capital. more long-term that capital be in likely be rather creative view to that shareholders. Our we for creative would accretive bringing deferring our to than can you is us to is around able And

Operator

further Ladies and ahead, this questions, any Investor TC contact at Relations question-and-answer concludes François Energy. over I the go gentlemen, If session. Poirier. the are call Poirier. will Please there now please turn Mr. to back

François Poirier

Thank to Appreciate everybody, key everyone's you very attention want much. for I our deleveraging today. company. capital priorities and remind and risk our profile time our discipline, discipline around just

rich. to a for is are transition catalyst growth. Energy continue We to opportunity going be

that a our incumbency forward. very asset to flow high-quality franchises bring have that us opportunities. we will is healthy going to through of Our footprint unparalleled And continue bring

will very of strength. we regardless to attention for of the well So and growth, and sheet prosper your balance and positioned transition, risk pace direction much today. -- maintaining always Thanks we're energy balance

Operator

call. conference today's concludes This

pleasant your Thank for you You day. a have may disconnect participating, and lines.

TC Energy (TRP) 28 Jul 222022 Q2 Earnings call transcript