TRP.TO - Earnings call transcript Q3 2022

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Operator

Thank you for standing by. This is the conference operator. Welcome to the TC Energy’s Third Quarter 2022 Results Conference Call.

As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. now Vice turn President, would to conference I Wylie, Gavin Investor Instructions] like the to over [Operator Relations. Please go ahead.

Gavin Wylie

Yes, morning, everyone. to much and to very third you call. XXXX TC thank welcome Energy’s conference I’d you like quarter good

Poirier, today A other comments Executive with Officer; and me of will some our highlights. our of and our senior Chief Joining financial their accompany website available section. François President Officer, begin and with under Hunter, Joel Financial Chief slide the presentation on results François Investors the are will copy along members Joel leadership is team. operational today that remarks on

are we’ll Jaimie ask questions yourself questions limit a their the investment the you two take media, please member that remarks, Harding. of contact you community. We to Following if from and

remind begins, forward-looking include risks that today François like Before I’d that and our remarks to will you are important uncertainties. subject statements to

see Canadian TC please by the filed and information, Exchange Securities Regulators more U.S. Securities For Commission. reports the with Energy the

during to refer finance operating not we on entities. provide over Energy’s to various non-GAAP information measures measures François. similar and are certain it’s ability will contained that, turn it operations. of With by These I’ll to generate and presented the A reconciliation appendix additional to presentation, comparable liquidity, to of may used be TC non-GAAP the that to measures performance, its Finally, funds the GAAP in is measures presentation materials. other

François Poirier

services headwinds assets resilient. Energy’s of energy portfolio the high. Good remains morning, TC everyone. our for North And facing the market, economic broader despite Demand American remains

our availability, utilization, deliver across to continue and overall strong operational We system. performance

to outlook, now results our have our increased higher XXXX. XXXX we expected comparable X% which EBITDA Given approximately in than the strength of is be year-to-date,

fully expect being do sheet that Under to differentiate generation is as increasing target an deliver projects outlook, capital Energy quality to of sales. our XXXX, incremental will Our balance debt-to-EBITDA fully sanctioned rich But X.XX portfolio we to to long-term opportunity sustainable in high our The capacity. expect leader. expected by asset and through cash billion projects industry TC continues flow additional we program means growth. provide capital be growth of further $XX leading even funded current without industry sanction

there’s the sources So balance on a to our uses and capital need equity. external of without further reliance

the divestiture that migration. with XXXX, extend minority assets We excess proceeds from program of and/or discrete longer capital use will in a new to to The be our are interests. and through bring through fund de-leveraging forward expected term be potential executing will of rotation $X progress targets portfolio to sale billion objective projects XXXX,

impact a multitude determining of where simplicity beyond. along per forma credit consider sustainability will metrics, We goals structure, our on factors and valuation, rotate pro on and out capital, delivering share growth with corporate and trajectory in XXXX to of including to

to Now, as capital core is past want demonstrated underscore ability the that This following over you I acquisition Columbia. for we competency. successfully rotate decade the us, a of to know, our have

U.S. our quarter to gas our natural record Now focusing continue results, flows. on strong third deliver business

strategic year develop been pipeline. to alliance CFE XPress Gateway a gas of XX%. transformative projects the our that US$X.X its Louisiana market. for It’s Project. that also system Haynesville This billion including Bcf X.X supply to from service, will strategic into LNG approximately further business. with our sanctioned growing US$X.X feed market from provide first and In August, Chenier of billion Mexico will assets we’ve the the is rapidly Year-to-date, Access executed It placed jointly our We XX% increased a Grand we of very the the also to us. for header share Louisiana a have expanding Gillis LNG connect investment a kind basin over Southeast

certainty under to a that project already contracts over start are are strong of completing XX% placed line de remind remaining Villa secured give In Tula around into North I’ll the price the of and sections service the off cost with costs you third meaningful the progress the on We’re sight East the fixed Reyes greater making quarter, project. that and we schedule. to and us sections.

of Our serve strategy and reliable, supply Mexico. the North strength the CFE southeast are leveraging American growing gas competitive deliver alliance with central demonstrates natural to clean, our we how affordable and and to regions

of solid we’ve base Our reach up of system assets in to same with NGTL service. and system placing XX%, deliveries WCSB. into to extend by the and NGTL expand another System our in period Year-to-date, grown quarter continues Alberta X% XXXX investment $X.X the had the compared our System billion

project VNBR migrating November supply the demand markets. to connect will key sanctioned also We in that

As have Coastal pipeline cleared, this and kilometers the And XXX with part reclamation support project will been approximately non-emitting route well to now activities compression intensity project of of use GasLink for our been electric journey, emissions entire GHG XX% underway. complete. lower The has the system. backfilled decarbonization is

to Now in barrels monthly Keystone of day. an achieved XXX,XXX record safely average our September, liquids, per system

liquids will optimization, market cost and North through largest focus direct providing the our to business excellence, effective ahead, in continue market access refining operational Looking value on America. to maximizing

results comparable at role Strong exceptional Our of with energy peak greater availability combined power the pricing Power year-over-year a Alberta solutions play our Bruce and the EBITDA energy portfolio in to for in business increase in contributed segment. XX% quarter during a continues diversified to assets. infrastructure produced and

be solar the several and in progressing our also announced carbon area. that project the Energy, including renewable October, capabilities be TC fully delivered megawatt in Saddlebrook low progressed development We developed of the utility thereby which will project projects, Solar by to and XX first scale

X% that them progress returns of rate delivering our we XXXX. and EBITDA linchpins and year, through I’m pleased assets the significant progress priorities have the report existing our our to of this capital our terms on annual executing program Increasing In secured of across on made positive are compound growth all. successfully

place and have the service mentioned, Villa As resolved started and projects arbitrations and on revenue into generating Tula projects. I we on both them Reyes de

We service and year-to-date. into long-term contracted billion long of continued to increase assets and on Keystone, we $X.X haul volumes placed

interests program is Our common now year minority billion added sale to high sanctioned in balance also to non-core this sustainability our $X.X our our data commitments XXXX, We with GHG opportunities achieve portfolio limited a assets by XXXX. our rigor secured funding and we’ve billion and And order progress of by we and that the industry leading intend Scope rich In our just and of in GHG between the milestone commitments. for X a We accelerating as $XX published alone. XXXX ESG to quality obtaining an continue from reached and sheet growth our we reconciliation opportunity plan. to our We capital independent proceed need reporting targets de-leveraging reaffirmed XXXX, without over including reduction key our greater our intensity provides X sustainability, our emissions targets and XX ESG sustainability emissions planning XX% action a third-party on and report our key processes. assurance equity.

the any very making few for our a report to much, good on on review and now ESG objectives. pass Thank track you encourage Joel comments. out progress reach these We’re key the time to with questions. I’d indicators and remain deliver I’ll you to over and

Joel Hunter

our the continue portfolio. to highlighted, As François demonstrate our resilience of results

The prices cash XX% and to tailwind the both U.S. last by versus benefits in same $X.X long-term as day. provide or service Our base availability an portfolio execution we a continues at comparable gas of from months increase expansions has to also flow Canada August X XX% comparable average a In was contracts this utilization certainty and energy $XXX solutions above EBITDA year-over-year that XX% Power. year. hour big factor in economic of the earnings. driven to our supply with This up per Switching cycles. system period also the achieved that the NGTL and into megawatt strength rate NGTL’s A continue record various earnings. during increase assets year. power feet and in stability in September. Alberta, total XX% Strength cubic across per billion to by we our in availability of performance led The are through solid billion largely dollar Bruce the rate growing brought XXX peak EBITDA. of benefit over and is regulated underpinned our acted high for have in track as WCSB our XXX of a approximately with investment comparable assets

construction. Following XX approximately long-term AFDC The is debt you, our began has and to on maturity on capital the continue XX% costs, and to X.X%. we the will debt under to will continue manage of interest rising remind average Despite in fixed execute Gateway coupon strategic amount August, our actively CFE partnership Mexico an our and announced our with grow Project. We approximately we our of projects a as exposure exposure booking program I’ll Southeast we the rate average pretax weighted fixed of years, floating rates. manage AFDC

percentage high of significantly debt rising fixed rate, is us rates. our long-term interest insulates a which from However,

revising full comparable solid approximately now year XXXX. outlook the are results, expect X% XXXX. year-to-date With than for we the EBITDA comparable our higher We EBITDA higher be to

we rising are despite rich. strong inflation, remain and to We in results rates into outlook XXXX. this interest well in confident positioned are We opportunity deliver

is by take annual our at for to long-term rate underpinned expect reiterate, contracts. XXXX or I’ll comparable EBITDA to We our a growth compounded And X% outlook pay grow XXXX. EBITDA largely

asset a provides that level X.XXx certainty flows. without future leverage Further, high achieve provides of same the ratio around regulation cash reliance a timeframe on the service of of cost within to our ability Our our outlook the sales. debt-to-EBITDA

billion Our an X% to growth $XX unlevered capital fully program after tax our industry X%. secured approximately expected of IRR is leading sanctioned to underpinned by is deliver

growth that and sanctioned highlight to spend As between will a opportunities. years, the all supply. announced the spend François emissions projects our next material in XXXX on project that within couple extensive provide additional be NGTL will we mentioned, to connecting capital in in now occur most the capital America will while North of across XXXX. million continue Today, I significant intensity extends we’ll migrating that not system VNBR is with have service our XXXX. The project to expected the reduce $XXX footprint

our the sources Additionally, projects moderate incremental sanction the and the US$XXX our sustainable has our accretive program announcement XXXX. program is declared dividends had contribute Access the our provided declaration near-term at August, funding our on Gillis while fund updated July our Gillis To a reinstated hybrid current dividend maintaining reinvestment of quarter was in Being dividend Participation expected discounted The in-service flow expected we capital new Last beginning inclusion to drive to that projects. and of that on first prudently incremental VNBR a to following targets. our long-term with ending equity. Southeast XX, capacity, approximately funding to project expected uses de-leveraging in quarter, common XX. The June is cash and and discount, project, in leverage with Gateway will reinvested program impact reinvestment declared continue XX% growth we following growth million was EBITDA our X% and dividends opportunities through we in rich, the is while be of for million $XXX place Access sanction XXXX. opportunity debt

However, additional ensure on two reliance as Capital target strength our rotation François us years. the provides financial to capital and to mentioned, de-leveraging will up further the accelerate rotation we common ability use our to equity. with flexibility by without

capital before competency. rotated a this successfully have core is We

billion, Columbia grow Pipeline five cash $XX in through X% by our investment we Overall, series exiting end We a value. than ratio the our before an while XXXX, an six continue delivering now reached to has to continue turn now expect per of dividends remarks. the supported the prepared payout to share over of in From our following sustainable Q&A. solid and long-term to flow execution XXXX, allow debt-to-EBITDA successful strong times perspective, attractive us earnings noted, to in shareholder adhering exceeded yield by back X% my I’ll superior the times ratios. debt-to-EBITDA ratios. growth will less achieved assets totaling dividend François call targeted X% coverage to François our sales As over acquisition That’s

François Poirier

Joel. Thanks

couple a reiterate. to comments of Just

resilient will and produce Our results. and operating financial diversified continue portfolio is strong to

see to extend to continue opportunity tremendous we network. Second, and expand our ahead unparalleled

goes We along opportunity that And opportunity and financial that strength rich. third, and rich portfolio. are are flexibility with key priorities,

in plans order we targets forward capitalize the and So go accelerate including de-leveraging interests to assets opportunities. of are those minority on and funding non-core in our sale our

So we’re questions. ready operator, for

Operator

first question-and-answer Please now question from Rob Thank you. We’ll the go The begin Instructions] Hope ahead. from [Operator session. is Scotiabank.

Rob Hope

in most get does announced a program guess to DRIP morning, going through finally And Two this working on you’re could this that endeavor? timing asset Good recycling the the replacing of questions announced be dive that or sale asset we into expectation everyone. the this of target the is the at all? in today. is was I XXXX, XXXX MD&A the longer-term Can

François Poirier

those two Rob, it’s take questions. François. I’ll

who in all, into appreciate I of we’re listening the as more today First can call, know conversations specific details. to this desire may with people around be

be to going not just that providing We’re detail.

to this is divestitures DRIP XXXX, $X-plus the stated remarks. point, as However, that, off close timing expand is To and will announce of I beyond a perspective, to can the to from DRIP billion for contemplate remain program us turn to on within close We at and would in the billion in XXXX. plan asset earlier. and decide base opening there, an we in divestitures but extent, our you our tell the plan $X-plus it opportunity presents the

Rob Hope

with you by elaborate what a migration. than asset you up assets? this list imply sales Does help this? mentioned that. would intensity And the assets carbon could follow-up, you Can appreciate on as further program lower mean that the higher then be intensity portfolio carbon I maybe higher on

François Poirier

As we’re can Rob. having, help I great the I’ll not you. to go delve deal a criteria, into we’re if to said the however of on going that detail conversations back before,

fund First growth. is and our and to foremost, goal de-leveraging accelerate

take We extent are going and want public private we those. there to valuation advantage are between to consider to markets, the of arbitrages

corporate forward. is us. consider We to are important also on GHG going Simplicity impacts very emissions our going to of structure

what that much monetize all will So place. we takes those how of factor when issues and monetize, into we

Rob Hope

hop the queue. appreciate in Thank color. the I’ll back I right. you. All

François Poirier

Thank you.

Operator

is next from ahead. Please Kwan Robert Markets. go The question Capital from RBC

Robert Kwan

Good morning. Great.

as can you François, top and your importance And just of those the rank structure Just valuations to you per are aspects, What are by metrics be did that number most list per important metrics. mentioned perform you to wondering, order just portfolio related, priorities? – what I’m impacts, a migration, then you? and just sustainability. share are share you going

François Poirier

goal our our Robert, foremost, and to First de-leveraging. accelerate here is

credit one criteria. will remain the So metrics number

Secondly, rotate and come growth with low-to-mid our asset double project monetize capital multiple to We seven multiple, fund we’re want to digit digit at a creating forward. value shareholders. I have low-double this. EBITDA accretive time asset think into Joel a we to build alluded and to continue Any opportunity to an eight – that for an

are to to continue going that. we So do

our priority. of is our terms then first corporate the in – the portfolio is impacts our other and and And balance GHG de-leveraging So on extending migration our of priorities profile Sustaining we’ll growth emissions second priority. our simplicity maintaining structure.

Robert Kwan

comments the here you A level? to Or want that strategy, fully it. your range Does just at see where you an billion to year. in Got this be? it’s another of as you just have XXXX ongoing lot whether or that confined $X do get

François Poirier

dividends. flow multiple much opportunity asset all Any rich. constructing free an This shareholders. exceeds us, redeploy be at value in very is high remain going ongoing opportunity for set to and We to monetize after out our lower our a in of businesses opportunity creates cash multiple assets for frankly an have that see of strategy Robert. an our We we

to And and forward, are to pass XXXX, far over that so this beyond and strategy it XXXX consistent we but versus basis to deploy on Joel. not XXXX just going is want later, a in as a in get to we I’ll how going

Joel Hunter

a is what us. obviously key and preserves is de-leveraging And again Robert think strength does it flexibility. for I us Yes, priority financial for our

forward François capital As shareholder value. factor us us, is again, an rotation to add a is for core for this mentioned, and just competency important going having

that about to two we it approximately think As here. look our would be we goal accelerate our years, de-leveraging, by

can funding times, program X.XX track we on we before the achieve with stated as XXXX. by we’re our current So

if the And to we so by flexibility. that that financial that could years, here objective up add accelerate to preserve is two again and strength

Robert Kwan

you Thank great. That’s much. very

Operator

next Tonet The Please Jeremy is from ahead. from question go JPMorgan.

Jeremy Tonet

Hi, good morning.

François Poirier

morning. Good

Jeremy Tonet

sales. follow-up of Just line to I here, if to on asset regards with the could questions

but the of that guess I the part about projects. through you Scope full X here wondering talking about as and time, carbon sustainability just think GHG it same I talked emissions talking intensity, capture about you also and You at think being that X like about, criteria is

maybe find in manner? So future they side. Just you assets differentiate GHG there of any feel themselves, thoughts to it this and are that where they abate to kind on lend for difficult trying your

François Poirier

going on we’re that reduct on balance to reduction intensity We Jeremy, those set targets emissions all focus X Scope of since and criteria. emissions we Scope emission X basis. – our

that upon what of will basis we we magnitude. divest topic which factor into into order the what that’s of So

of initiative with our a more simply on on divestiture initiatives us to continue projects production our customers. a And progress timing. Carbon gives allow natural Grid, Alberta capacity through number to significant those proceed their carbon capture advancing program hydrogen We make to

have divestitures we to going to So are continue to us enable just accelerate growth. and environment opportunity an our rich

Jeremy Tonet

just Thanks Day up we here, is the past. this similar be heard pop going see the Analyst it. differences time or that to then to versus Got for might or looking we the any past wondering that. And years format in what if forward to maybe themes

Joel Hunter

Jeremy, it’s here. Joel

session meet ask We about actually to with after Day. you’ll going to have able are Investor value in to questions. the specific BU that those have that all, where something participating them various same Day entire walking really we’re format to management Investor previous The the largely excited be we year see in-person years. and Again, the XX various team through as business for you’ll of in on Day. this units be leaders First talk to we’re see. the year November to be will this will be a We’ll Investor that’s is breakout time their Toronto completed, opportunities think

be it’s this to again, XX November it year. and looking in-person again again forward to yes, on nice So

Jeremy Tonet

you See there. good. Thank Sounds you.

Operator

ahead. Securities. Ezergailis Linda question is go The from Please TD from next

Linda Ezergailis

expenditures completed recycling projects can selling this us optimize more balance versus of their some franchise are that maximum How to capital mature some do you of maybe peers tax Thank on your to the making? by context servicing belabor perhaps continued have assets? too you. much. your not process value capital factor considerations selling you Not decision swapping merits by And into how more But assets. avoiding give – through

to of financial sort just partnerships of selling the what be to partners might wondering table. else swaps bring consider also might beyond So or there a – something financial who to asset interest opportunity

nuance how might Just that as wondering how well. proceed influence you

François Poirier

Clearly, is of after part after-tax assets are we’re maximize Mature proceeds shareholders. question, tax on matter assets, three your value Linda. growth proceeds. focused our here for six-part versus That’s Thanks, to what here. we’re

As I mentioned, we’re very where experienced capital. divestitures in on to and decisions managing making rotate

addressing accelerating is us our prosecute Our de-leveraging the have. on and rich maximizing focus set we our and and on opportunity allowing growth to that

So we’re some mature. that include tell program funding is an some all. part have we’re just something would at with divestitures, include selling that that It sake I that that not really interested assets through asset expenditures in comfortable the that free may avoiding are flow in growth growth our you may given in them. assets some cash further of that’s way capital and for

to going We’re on maximizing value. focus

swapping terms assets, In of rich. opportunity we’re look,

and be a with a will to all risks hydrogen capture They – of will in mitigate Nikola the we’re partnering risk if at may be demand manage we class, carbon fully about carbon production. invest a sink have the skills don’t we not where at technical to located look that’s have that as industry-leading And hydrogen the equipment capabilities billion particular as we factoring We in on with looking see our conference partner has with this plans asset in entity competitive produced. asset I secured to in we’re infrastructure the swaps to do helps to and a low I may and Hyzon projects. We for $XX recently talked near partnerships, We third-party supplier into a that the the individual program. project. storage if storage, looking extent future. capital partner partner a

who risks will manner. the in by in more an be motivated us future of and less So finding source effective manage finding partners a the can of capital help more suite external by partnerships

Linda Ezergailis

maybe comment product just dynamic developments in a how talk to product evolving recognizing on operating, well. where relaxed for on a about if can the potentially rules you’re geopolitics you. Mexico export get exposure couple as geographic you the to Thank might environment or well? And on it’s Act policy in as that U.S. Jones as factor a potentially as some movements of you example years. of and domestically it specifically next follow-up, facilitate bands And very geopolitical relates maybe over Can number fronts

François Poirier

we Sure. Stan U.S. with the ask Mexico, we then Mexico, said I’ll policy Southeast about start Gateway In provide your Project, to thoughts we when as I’ll on and some environment. the question announced We to to scheduled in XXXX. of exposure for remain Gateway managing we level get our service, actually committed to Mexico put consolidated that’s until our consolidated won’t that into XX% portfolio. Southeast and

So optimal in make time time that thinking when Southeast us project. we on Gateway. to to terms And continue for that be strong through might the on find gives us progress partners of

of the months. Our nothing seen as them positivity as level the other the moved CFE a in to level to partner with a improve we’ve having whole course but addition standpoint with last relationship of from over a do few collaboration customer, the a them has

to you over on policy so Stan And environment. U.S. the

Stan Chapman

rely LNG continue with Stan. that product could needs. still their time on energy export We’ll winter ban, mature to up conceivable for in which is with bans for I increase it’s meet including actually for consumers prices the New that imports the respect as England U.S. like for a energy LNG who offer in thought one maybe ban watch they moment, LNG we’re places at such an exports example, just respect developments example, this to to evaluating potential to over results of elections, exports. Linda, or policy current the

there, with the example, for given that XX% So of for meaning higher out theory, supplies could U.S. England, XX% for supply be in exports in today about cargoes New them. LNG prices the less LNG competing individuals

monitor next weeks, we’ll as things over continue the months to develop. So this

Linda Ezergailis

Thank you.

François Poirier

Linda. Thanks,

Operator

from Fargo. Satish The is Praneeth question from next ahead. Please go Wells

Praneeth Satish

of in kind say higher, I’m but wondering about of rates times Thanks. projects, Good – historically the been X morning. creeping cost the new EBITDA this just if IRR heard raising I With it’s you’ve and interest thought you’re then rising you financing that on I and range, you recycle in range. the on could X% X% think CapEx to invest if call

So hurdle wondering corporate on – higher? if projects hasn’t I’m just rate the new is is moved

Joel Hunter

Praneeth, of go Yes. it’s going rates that Obviously rates higher do seeing and certainly we kind various cost We as higher, just equity interest assets have for rising the here. are invest Joel we’re with hurdle in. of to Board look rates across various the that hurdle business well. seeing lines, our

we low, adjust we a rates trying few of we a buffer were into you years again, our And when take so build of accordingly. capital. into about think a our consideration, economics, And ago, in exceed never bit to cost

is – factor. we certainly that as here, going new is about certainly projects a so forward And think

François Poirier

Praneeth. a that, we in the strong to nearer to extent, opportunity objectives we term, add sanction have I’ll the an And project to To see deleverage. when

you’re maintain sheet increase to and any to is make equity going larger that be We’re definition looking our leverage, hurdle my divestiture rate balance needing of your proportion higher mitigate a further that means you program to potential use strength. your address which in sure to because

Praneeth Satish

Bakken. an the And I what’s the just wanted I border in to Bison That want makes recovered comfortable that’s that’s securing in helping that are there I as lot expansion? lower BTU latest with of bill? being That’s northern check ultimately sense. solution and guess, switching ethane a limits, in long-term a they producers helpful. gears, and pipeline a or do there’s expansion on know then but

Stan Chapman

So is this Praneeth, Stan.

border very up down our example, Flaring We strong. border to gas part remain oil remain the closed non-binding for pipeline earlier and an critical unparalleled footprint our season for was fundamentals expansion, As U.S. across know, this quarter-over-quarter. support a that had of still a The the and is the need the ratios asset open strong northern you summer. northern is very on throughput

it little to our still date are agreements, and service get that taking to seen done, to remain border estimates done customers get while in of the early get we’ve and flows our X,XXX have to We moved. roughly longer northern system XXXX Bakken, project the a coming of our notwithstanding negotiating with it’s that definitive bit capital in heat in out on line to respect With that the BTU X,XXX rates higher range. to the factors

as no [indiscernible] long issues. they the system there an ethane X,XXX rates and below But together to we So that’s across Then the rejection go to higher are perhaps with get extent of issue. now, BTU have BTUs, back that back not stay To customers appear. our or to we’ll see start again. as right

Praneeth Satish

you. Thank it. Got

Operator

from Markets. The go next Please question CIBC Catellier is ahead. from Robert Capital

Robert Catellier

the changing year-to-date those with rising on stable and hearing not are rating if level right manage the of the levels? believe is airing the leverage. comfortable the are agencies interest to I’m target what right This from their policy. X.XX the guess, targeted I apply and your question inflationary results for proven industry the environment you. or in if growth your same you’ve Thank target your are or still preferences is leverage of you exclusively broader perhaps anything TRP you just dividend your And you that’s by rates, strong your how very assets as curious that’s has specifically, about implications, question but approach. light ultimately described side And notwithstanding they to could conservatism

Joel Hunter

here. So, Joel Rob, it’s

underpinned for. of long-term our view leverage of is at lot sheet that’s appropriate the here and this to the by sheet, for was enhances shareholder higher to with outlook. at go X consider times balance which you that to certainly we year rotation our if our our the us going will, regulated and But really this earnings on us, hand strong cost left with to under XX% X what start With cushion, differentiates target look and agency’s our our with for X that agencies. They being of our service. target part stability the of that the strategic all, still X% it X% balance to other deliver times because of the a When contracts have hand X.XX, balance is growth, important us the rating ratings or profile, BBB+ to We side peers of today First cash just positioning and which relative you along again, the X.XX left we portfolio And strength level today of that our supports that to really we X.X to at of side felt we is stable growth a the long-term the talked debt-to-EBITDA continue value us left the side the where last have our don’t support under provides times. you of assets asset about flow look need really forward. hand sheet. the our dividend with the to dividend we or respect a again, bit over medium for performance leverage, with

Robert Catellier

LNG would a through, Okay. cost has interest much supporting point, support how that question. including Thanks I maybe for maybe Joel, pass that answer. EBITDA get that onto before But of your

Joel Hunter

interest wants through the coupon costs, system would portfolio insulated add interest anything. about my is look at from with given I’ll the $X.X it’s roughly costs, Greg advantage mentioned rising charges, or look of flow remarks, interest the have took I start the When of to we years NGTL here years. the rates, When XX our for our financial in of XX% We last I of mainline. our in really in overall of pass rated, at through and over the interest of Canadian fixed prepared whether that if billion portfolio that XX are duration that, call the our XX% as of largely an duration our extending debt is average we rates. X.X% we low

when factor that debt a our also line customers. hit would at look despite bottom rate I to the flow fact that are to immune our again, that rate So rising you in rates are fixed look I at environment balance XX% in we XX% higher that again, when about would interest through rates profile, today, is of XX% again, largely the our fact interest from our we that maturity when

Robert Catellier

Project LNG. detail detail. And implications LNG one you. on the wondering if I the Coast supplying exactly in project. Gulf for question this strategic are helpful what Access in that’s U.S. discuss was Gillis the benefits in Stan just think here for Thank could more Yes, you

Stan Chapman

Can. sure. Yes,

investment provide our of Bcf/d to customers for the again, further infrastructure XXXX. view in of pipeline in an million capital about Gillis irreplaceable summer we Access a X.X and with it’s as the announcement excited today, enhance Project solutions what service capacity our and to $XXX We’re

the state could building is lower the within think to X has at of sanctioning project supplies to called header connect downstream actually You us a project that to and can Resources a Haynesville LNG of system With office. Gillis multiple. show this the Department of time over Essentially, with the going to or authority the X Natural expanded the Louisiana’s that the will timing, up markets authority serve end in-service within to the of respect that rests of times state approve build Louisiana that be point at a further state. are ultimately the industrial other

project state. key have or the to placed we’re and several need a months next gas Corps and Engineers, going secure increase over will as share Bcf and to environmental file and or part With this. were that still which such guess, in be and to permits that’s we market Bcf other to large agencies U.S. we’ll FERC state the service target while to from the I X into picture, summer a Army about to have service not And we With other allows certificate. us share more a is XXXX Gillis required U.S. of service placing XX% LNG in the XXXX. offer roughly XX% flowing I macro that what projects years, into respect Wildlife, entities Fish the market our So from over X would today, in various

to becomes to our theme security footprint, reliability across in state as we world a best important serve with and demand. continue loads, respect Louisiana energy a particularly energy rich to target opportunities class forward So see continued to environment in energy LNG particularly of expand the

Robert Catellier

results. on Okay. and the That’s very Thank congratulations you, everyone helpful.

Stan Chapman

Thanks, Robert.

Operator

The Lapides go question Michael Goldman from next is ahead. from Sachs. Please

Michael Lapides

two little for them of a unrelated. guys. question. taking Actually, my bit Hey, you Thank

update in one about with large the first a project you Department hydro ago The talked Ontario just is any while a involved. scale Defense of

but Just the the cost, on update on it capital of you’re impacting about in inflation And don’t then operating recovery the side, to there? curious any it? where seeing – is necessarily where you impact like, both the you on get think specifically question, second also where really and you, trying

François Poirier

part Corey, on take second OPS and of start the I’ll I’ll ask question. the to you then

Corey Hessen

Good morning, Michael.

for Storage move Pump three X,XXX facility Ontario. filing for submitted you Ontario mentioned, project pump the to into earlier gate this of a storage its stage megawatt ISO near as consideration Meaford, located, Our month

of built are I and project forward go of we and are variety the support very amongst And Ontario. for that that territory in set we XXXX. across of serve. a think opportunities we this decision on We awaiting reinforces it have ISO for our should feedback service steps And very have a that our local large constituents our QX confident that right

François Poirier

of the opportunity bullish be it’ll of we’re We is be significant there Ontario rich comes that Michael, And as resource over very course – going market capacity be generating on as environment of feel to And amount Pickering for need us. will the manufacturing. an The for service. decade next significant incremental out the Ontario.

rich target a us. is Ontario for environment So

Storage Ontario So we’re very Pump excited project. about the

question, the clearly, labor. look, an inflation On impact cost there’s the on of

those time. projects construction excess near-term balance at instance, support number the far capacity when have out market in it’s sustainable the obviously for – in construction over to of happening that of of the in levels activity will We Canada, look of the you

seen we’ve construct prudently are have construction. in out the I incurred through they costs in in costs market in extent So that labor rates more point But ability the those than on our we pressure on Canada. flow Canadian inflation market to will to regulatory for an the U.S. given the

employees. $XXX have only and X,XXX in about billion We assets

don’t standpoint, very So from run intensive a an – business. labor operating operation we

the So that impacting expect because operation do don’t free on course cash pressure or factor for inflation budget year in terms we the years. our and our side, meaningful flow seeing terms over of our cost average next of incremental into costs generation we above And are labor beyond. and the of inflation our of the year plans of funding in of next couple while

Michael Lapides

it. follow-up And the just funding. Got of one cost super That’s quick on helpful.

Investor trying out kind of about Day planning growth of do kind debt kind of cost Analyst you big Just Day term? higher of be the I’m what and do some you both sale, multi-year EBITDA think of about earnings longer will just you’re the x to how the doing? for or you’re asset the the growth, thinking on curious think EPS as impact and how about power projects finance

Joel Hunter

paper way XX Michael, EPS more interest we Yes. us thing commercial about the our rising use increase program impact Where as that have to insulates earlier, is duration portfolio average sensitivity wage in of and point do the our good years X.X%. that XX% related rates. to is mentioned debt a when of your is I from of average share. the – it the XX for for average exposure an here coupon we debt. is debt, that obviously really rate probably an with with our largely you basis that think see of floating It with $X.XX And would

a today. you debt overall, when around billion So consider $XX impact not of portfolio our huge that’s

And return stay period extended we assets rates may a an for regulated site going going forward have about think higher higher a so the with on forward, earn interest obviously if the as interest of ability some things on to high rates of time.

rates portfolio. rising our from point this at insulated largely in interest again, So,

Michael Lapides

Much Got guys. you, Thank it. appreciated.

Joel Hunter

Thank you.

Operator

Ben from ahead. is go question Pham BMO. from next Please The

Ben Pham

rest public maybe as anticipate Good the you [indiscernible] morning. between I’m couple and on this maybe back portfolio had asset you management, Columbia. forward share At couple today qualitative actually synergies questions you of post from just I a you anything last you, your first and wondering, and and that some did think annoying wondering of sales of phase had last of I’m where the on buyer Thanks. to the the bring all around ESG. a cycle, years And about sensitivity comments that terms pool private, versus next in can cycle

François Poirier

because to are returns. on is strong private assets Ben, highly their what’s that there many back contracted I markets which or regulated have stable would bid your themselves in the second and for employ lend remains a very those investors of well flows, that assets, leverage, question say to like infrastructure cash improve infrastructure to particularly

first you Could strong I’m so bid quite what perhaps of assets. you? going suite question whichever a board. help there’s synergies, you at, So if question our assets, getting way look our your across not I strong go, see for a risk around very On the a to consistent at sure were Ben. have want understand I we’re And bid, we can you that refine to we profile

Ben Pham

would’ve you different and more, and through second I some time. the last the potential on more perhaps that I cons – gone relationships number process maybe and you it’s pros first monetization buyers, assessment Yes. through in should and going was versus would’ve thinking of doing it’s time went maybe developed a with asset

François Poirier

I clarification. see. for that you Thank

And to is us. upon upon as dialogue us potential a be tool to incumbent maintain relationships our going this going prior in good buyers. it’s a incumbent forward. toolkit and think I with question, a to It’s steady

demand process. integrity. the with offer process, marketplace, to assets going you’re and this art of a competency underscore when in because running assets, manner, and deal strengthen with It’s a to And developed we that strong an buyers relationships imagine we company. those competitive as when have with we a and up again program that we We there’s labor a that divestiture can of with get a it’s means other deal core So relationships counterparties And we’re those I’ll potential to with and yet act very divesting leverage you here. we intensive prior we integrity. just fair

Ben Pham

to not you anything cows then that Okay. Great. potential But sacred I at if you assets discuss to not look the you’re to know would And sell my I block. follow-up, all? are going able share may. on

François Poirier

to for the transaction I will defer when question announce we response then. that

conversations and any adding I listening with whom from comments. in Thank think I’m are there many going people to you. here refrain in we’re

Ben Pham

you. no Okay, problem. Thank

Operator

ahead. Please question go Credit from The is next Kuske from Suisse. Andrew

Andrew Kuske

that guess, duration kind you anything Thanks. the with some people to give give seeking just be today with maybe Gillis basin But your Good more takeaway. for effect of any I if of for and mentioned the kind capacity, context question’s clear and project greater any greatly that you going you with could be clearly the tone can appreciated? Haynesville customers appetite would Bevin. on us from for morning. And on, specifics Stan

Stan Chapman

ahead is start supply there’s go stick on situated with for things Columbia then system an our and to about So our I Coast I’ll East because going is example. that the fund part turn the these to pipeline would to Stan. network. This or project gas And terminal. And maybe East uniquely Coast say Bevin. to build would over connectivity just lot LNG irreplaceable theme of East its a over I can days I’ll and of an And be again, Coast, given discussions LNG, a LNG

for the permitting with think building Coast, that the will a Gulf Coast. XX% most we you’ll Instead, And more likely of the that are any we on export come a that that East that will is somewhat in in U.S. about the example, it’s that of lot the terminal LNG exports XXXX. think all show, is be that forecast see given new U.S. why Louisiana unlikely. challenges However, built terminals

respect that cursory we couple I down the in theme to that and and more Again, Gulf to keeping security LNG Columbia exports are Coast. counterparties and energy demand U.S. for to of energy, the potential with this system would worldwide to the expand reliability consistent bring with of just at look initial to our theme, So with and with call, in what conversations maybe a the particular. Gulf from volumes

Bevin Wirzba

So Andrew, gas move I’ll this then with to liquids. is I’ll Bevin. start and

our to seeing tremendous in for Gas the of egress basin. market and customers with positioned we’re respect to operations, and the our increased access response ideally Montney, growth are and with So from Canada our desire assets out

as through the that situated Coast are they of to U.S. base from the Coast asset that deliver can ideally assets as so stands Canada gas Canada. down well and East Gulf into the into Our feed into markets, gas

customers tremendous the in we’ve and strong build long-term is extremely of this of systems health our interest the So out environment. in seen our

into receiving to very margins, of the the are Moving that highest in up liquids, ever driving we very market serve high similar Midwest story. supply our to down Gulf extreme, and seen. system basins the again, Coast are Northern Alberta, customers The markets in Keystone that our that utilization we’ve

So more situated. XXX,XXX day or month we’ve the reached to examples of in move to of the Gulf two those high barrels just of a assets throughput highlighting are Coast. record barrels reflect our where of production of Both record desire the – October, quality the just nature

years this been operational next the as us in that our extremely has serves as for Our come. customers past and well well year to performance strong

Andrew Kuske

pointed very try does you. if I you That’s targeted helpful. have, about to you how to sort the step but you and François the philosophically question the reduction better implications just ultimately stock And probably Joel. that your about think customers the as networks? can cost follow-up serve guess of capital asset expand Thank is or your think do back and my And then And of of potential ultimately, that? sales just

François Poirier

earn markets capital, of competitive the we as other of and lower your competitive reduces to jurisdictions we to our on our We the is Our and projects minimizing to billion we what add for to of cost capital. values our cost capital that cost can operate extent we additional more compete $XX us backlog. makes many to and it your in in customers. look invest of job capital But to service it shareholder maximize the between create for your cost spread of benefit the

I appreciate So that question, Andrew.

Andrew Kuske

Thank you. Okay.

Operator

ahead. Weekes next iA from Matthew is The Capital go Markets. question from Please

Matthew Weekes

taking question. for Thanks morning. Good my

side that amount support funding. of good you you’re in – that of the about think accelerating U.S. at how Act providing the seeing too, see wondering point? kind project Inflation looking projects for more a kind receiving and Do you needs carbon is and the recently and or portfolio see to just low and that really thinking macro at opportunities taken I’m where some good, Reduction in of that Canada business? of support hydrogen government of and to growth – in the it Just you of need opportunities. more side these be being do the Do this steps see more government you

François Poirier

Matthew. Thanks for that question,

sure is develop become portfolio been part that we’ve in competitive. make both and we the to happen. they carbon low to very Reduction our our about And some supply And these new in As carbon competitive. supply, as Act positive of Inflation of working very that’s areas. hard directionally we’ve forms forms cost capabilities talked diversify more of our cost and alternate are what perspective, needs for to my energy From lower Statement Fall making of Canada the Economic strategy

it criteria. affordable, For us to technology, to and a new a allocate capital reliable needs be being into and sustainable, key affordability

these advanced being those us having into a they allocate manner really So able a incentives to is capital new is of the have in cornerstone areas.

positive. So a much we very view that as

of of which our well hydro, both States as small supports includes it includes for little bit border, So in pumped the out. as carbon And in well development hydrogen the production that as qualifies a a United reactors, Canada. renewables capture extending It which low modular sides businesses. in business is benefits and carbon on are as our activities ways

But of our opportunity our that and the talked to XXXX’s going the that past. in clearly We low Canada as I’ve about incentives set businesses. the carbon accelerate have opportunity both I are and in a presented think U.S. that see set. been in more

Matthew Weekes

I’m Alberta Okay. if And timelines the you this point? the not, for disclosed if next was Carbon wondering, or it. Thank comments steps but just on this for that. any of at are Appreciate sure kind Grid on there not

Bevin Wirzba

Carbon into it’s we’ve with Matthew, We’ve partner of Alberta evaluate. – carbon Alberta evaluation further Yes. government agreement the Pembina our sequestration Bevin. Grid with entered to

of the of industrial for emissions. carbon that evaluate came this area areas storing of that largest the interest us north Saskatchewan so from of to safely of through Alberta, One Fort allows interest that process in the suitability agreement

to to hopefully store evaluate of to a and what to can of like create closely and some our project look access secure objective our the this XX So that the these to in forward competitive will hubs we’re that our going timeline and project And to ensure to capabilities it transport eventually, really with effectively the point take the with solution for years our commercial move work footprint to customers middle across going and we few right and of looking provide we’re province. for The number customers. time leverage constructs order as our million the carbon tons is open across a very right the up of province, of to sources development is, in effectively. take we’re is customers collective province this a

Matthew Weekes

turn appreciate it. Thank you. back. I’ll call I Okay. the Thanks.

Operator

from The Bank Financial. next ahead. Patrick National is question from Kenny Please go

Patrick Kenny

Yes. Good morning.

expansions on either to with on further as perhaps secured year. expansions producers you cadence further Just on through sanctioning the discussions next system, in update NGTL, the Any system? of close debottleneck completing future on activity help the maintenance the on or

Greg Grant

Absolutely Greg Business. It’s sure. the Yes, Patrick, question. appreciate Canadian the Gas Grant,

touched earlier. last seen As market for on over system. year, what a the Bevin significant the there’s demand couple seen in the we’ve the you’ve points and of

team a As XXXX in has sales has which September here north work quickly October, safely as of seen amount being And on we were bring assets they’re and the system. Valley the through significant can ground, to I our We think used. done Deep able the we’ve program. that great get to online through the added into capacity

we’re stop. Bcf this So X.X doesn’t about bringing on roughly That year.

interest on Bcf, October producers over day. at XX.XX in seen from side, customers have another hit Bcf of record We receipts per X significant factory you’ve upwards here the

world been culmination say So we’ve WCSB economic. what of asset. class you’re really continuing seeing very to on that the It’s

we’ve both as seeing leaving levels side We’re of province. demand demand, from the record on and of the ton support seen a producers the

quite our opportunities and growth, So and seeing supportive here both customers. us for great some for

Patrick Kenny

revised impacts there’s a then citing great a on Looks in follow-up market just inflationary the cost, release color. like And the quick new just current disclaimer That’s Thank CGL. capital maybe recently labor. regarding you. on conditions, Okay.

if to of would would additional wondering XXXX your that equity further drip? to upward budget pressure push and the that to look proceeds through somewhere Or if asset billion off of end some north sale that is up $X.X the there the overrun? cover shut on billion, $XX.X timeline contributions if use your you Just out being

Bevin Wirzba

I’ll I’ll pass to this Patrick, Yes. Bevin. off it Joel. is begin and then

of the most welded, in mitigation project headwinds it the project of sight XXX So, earlier construction. XXX that was XX% industry And my impact clear risks completed. how is as in complex of executed those to when and limit François mentioned is career. we to know various the the line projects stages backfilled certainly kilometers This we is and already we the getting approximately in one develop his of of in to of and to is plans continue risks. started have remarks, that looking back

provisions also to structure has Our commercial manage those some risks.

is to only So come. and for in. quality communities not this each to will safely high upstream, but decades that our with legacy on that environment a and laser we’re our the day delivering operating the downstream impact And we’re customers focused zero project serve

laser as out of that for of deliver and by we we’re inflationary XXXX are those earlier LNG Canada. and them to day we’re in. we managing customers, aware François And day, can project being our some ensuring just the of on we’re the pointed about, focused environment transparent about we’re So risks the end that

in some force. labor We’re that of experiencing our

Joel Hunter

We up increase to facility And from Joel $X.X with CGL the billion. Patrick, did credit here. $X.X it’s associated billion

project look place a we utilize to if be place. all nature. would TCPL have do than loan would the temporary But were the $XX.X have a do into we cost there funding be to be. that the from in to if agreement, need funding in billion, We subordinated have in in subordinate the higher which extent well we loan So the as do place

accelerated the off the around in change Your dividend for turn declared my we said XX DRIP, we with DRIP, with to see the that as of To time. the timing expect with no remarks next question as that I would here year. that the prepared June depending François we’ll on DRIP in quantum and gets then extent we the the proceeds, point capital at look of rotation, at the see mentioned our that that

a that off that if would than So sooner with we don’t extend to, depending level anything we of the CGL, look to around later, rotation. again need see bring here on capital DRIP the

Patrick Kenny

you much. Okay. very That’s great. Thank

Operator

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

Gavin Wylie

you Thank we you, talking morning. operator, much with Energy. for your in this Yes. appreciate to and thanks you. And again. all very look soon everyone course, TC We interest participating forward Thank of

Operator

This conference call. concludes today’s

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

TC Energy (TRP) 9 Nov 222022 Q3 Earnings call transcript