PBA - Earnings call transcript Q2 2022 | Pembina Pipeline Corporation

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Operator

Good day, ladies and gentlemen, and welcome to the Pembina Pipeline Corporation 2022 Second Quarter Results Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Cameron Goldade, Pembina Interim Chief Financial Officer. Please go ahead.

Cameron Goldade

Thank you, Keith, and good morning, everyone. call of to XXXX. conference the highlights Pembina's quarter second to and review webcast from Welcome

Vice Operating On Burrows, President, Officer; Executive Senior and President call External and and the today, Legal Senior Chief Officer; we Affairs and Stu Jaret and Senior Taylor, Janet Loduca, Officer; have Chief Scott President Vice Chief Sustainability Sprott, and the Vice are projections. forward-looking remind you to I would President, Marketing like current be Pembina's and on may New some based Ventures comments of expectations, and in and today nature Corporate Development Officer. judgments made that estimates,

X, Analysis, at measures. express over and Management's imply some XX, as will things as learn to uncertainties, Further, to forward-looking well dated & these ended which may now opening make company's we EDGAR. period Scott statements non-GAAP more risks actual materially available remarks. Discussion to release differ yesterday, are June August of both and the Forward-looking some for turn SEDAR please about could results To XXXX, and cause see issued and or on are the non-GAAP press statements today XXXX the I information expectations. the subject measures, provided to Pembina from pembina.com which to refers online

Scott Burrows

Thanks, Cam.

As adjusted quarter. second detailed another EBITDA delivered was with with record our for a release strong of which quarter yesterday, Pembina a $XXX million,

Pembina's NGL crude systems, a across our and see typically volumes marketing higher from the business, sequential quarter lower marketing we contribution the margins a from benefited in strong NGL While Pembina's growth business. from contribution results of many in oil continued second

Alberta earlier to segregation full The customer this peace service system cogen cogeneration Cedar Empress facility operating the of product growth. the ongoing, under low million across transformative outlook year. expected. the to bringing and and projects, Phase our deliver to X and projects. will for continue adjusted year-to-date alongside a year, of our the expansions growth Grid cogeneration Empress progress June, annual developments, that detail contribute facility quarter including of heat forward advance the QX results emission also budget creating enhance date rest Throughout GHG to into accommodate X offering partners, capacity reductions on which will we benefits, second Phase previously in to exciting and ahead guidance with we LNG, Cam the a and service significant advanced this is at utilization the egress through quarter, we have proposed power to additional than of $XXX Phase of both pipeline service and to of a expansion. in X of our billion EBITDA expansion look continued billion. Likewise, by expansion the later strong portfolio reduce generated. We've waste positive These in-service notably extraction by for continue $X.XXX the And NGL As bringing raised $X.XXX we to overall and piece XXXX future are our the the schedule into one construction and reactivating multitude project X year, to Pembina's Carbon and costs moment,

to same planning progressed Alberta commercial Cedar stakeholders. surface have to both supply Nation, Alberta, front work fronts, commercialization discussions, discussions Carbon and customers subsurface at time, On Haisla new engagement Through while streams of work international markets Pembina sources. natural TC interest ongoing considerable project and underway. and our get with First WCSB observed the design we the gas engineering and the end Grid, continued diversifying and with are to Government Energy LNG, On and the on including with several engineering

projects, there other major strong another financial first positive -- to quarter. during the developments In addition were and quarter on several our quarter progress second continued

include interest KKR, we to been with the is These First, pipeline, venture joint have of to transaction of of a all XX% received working approvals in is respect satisfy the the are with we in close, the Competition August. when agreement which was the and our in and expected regulatory remaining intentions which sale transaction KAPS the with the efforts announced part Bureau. consistent conditions

significant and now the being the developed. with long-term B.C. fractionation terminated. executed is to producer Second, These agreements terminalling commitment Pembina another has take-or-pay acreage agreements Northeast Montney on a and the allow B.C. multi-phase services call leading that future basis Montney firm the of Northeast transportation referenced volumes third from include development previously for

Montney Our chain, service egress agreement remainder announced future for transportation Phillips unnamed with provides Conoco and with and Tourmaline, producers previously from leading customer with value including access X area of key their the together agreements integrated this of with certainty services. and development Canada to marketing Pembina's another the fractionation

with a and positive very our infrastructure benefit. As B.C. service to for we we saying poised has for development Pembina integrated Northeast outlook a have feel existing offering, and been while,

volumes capital-efficient future a announced utilization Midstream, As we future. of secure into as these as expect significant assets agreements, expansion existing recently we portion Northeast a as B.C. projects will the have long-term well in under Montney. through to well collectively the fractionation of transportation, our support with result marketing commitments ownership as forecasted Capturing the our rights that incremental growth these and improved of in Veresen

expansion capacity storage, Pembina rail per up As a a customer of significant demand fractionation infrastructure and existing incremental meet evaluating to allows holdings plus existing flexibility specific Redwater capacity connectivity. Significant pipeline barrels complex an engineering the commitments fractionation to recently cost-effective to rightsize industry-leading Pembina manner. land Complex. day propane provides a as The XX,XXX Redwater the ownership well and announced example, and Pembina's incremental derisked, incremental to cavern currently at is the capital-efficient due and timely of as contiguous for in

very of progress well. the contracting Alliance to Third, Pipeline continues

years resulted million cubic offered open of Alliance day of largest commencing the per with weighted X XX XXXX, long-term incremental seasons volume a XXXX. in to in of open XXX The market. quarter November second the firm service average approximately the feet During seasons term of

costs The other Recent current Alliance we XXXX. continues the service. ESG X resulted to credit being Pembina our priorities. into advance a revolving next seasons of for through intensity highlights commitment and its relative facility established contains strategy open Pembina's seasons And finance financing contracted strategy. gas were Pembina's with reduce further reduction finally, in execution adjustments gas its Establishing have strategy. performance pricing and November $X facility July, Pembina's to for and borrowing to on this increased a ESG emissions over business year sustainability-linked ESG facility, our greenhouse target. aligning short-term that based billion XX% performance integrate ongoing efforts In ESG open The

Additionally, purchase power XXX system. of We its And in ESG Capstone of agreements for transition Infrastructure inclusion purchase cost we of and and as power carbon to support lower a subsidiary development agreement, and lower a Corporation. and The power strategy, Capstone with to consumes. commitment a benefits PPA price entered workplace. energy the securing energy renewable to associated Pembina efficient megawatts owned the Pembina's infrastructure, portion also Pembina support the demonstrate wholly energy the emissions competitive continues equity, Pembina fixing renewable to tool further diversity energy renewable view attributes renewable to an a into with of by

the broad towards roles goal, and Senior President level executive expanding is past board. both year, well on the Vice and tremendous Over enabling initiatives its to its Vice progress the made deliver organization. of including and retain are a has and Pembina on to President representation at Pembina company and also leadership The EDI the safe a pool targets broader positioned all diverse workplace and talent and inclusive attract and levels create

and into detail year second forward and over quarter. to the in back am to I continued the financial Cam I tailwinds, for half now beyond. this momentum pass highlights discuss industry to more the strength Given looking will the call of

Cameron Goldade

Thanks, Scott.

and Scott due the Mitsue to As Relative in Pembina benefited results margins or contribution million and marketing and administrative were higher Ruby contributions These year. the offset the lower pipeline quarter on Alliance. XXXX, year. the and period $XXX quarterly EBITDA representing lower Sable of commodity-related increase and second to XX, $XX as quarter year, same over higher due primarily stronger driven partially period costs, share a systems of or same well earnings X% from Pembina's volumes inflation price reported oil a Peace Pipeline prior by on crude to the higher the higher of contracts, costs million, tolls factors due recorded on Pipeline incentive Ruby, by from sales, performance. representing due relative $XXX due Aux filing the bankruptcy in from and a as higher March to increase to combination on of for Pembina to higher period positive general million, expiration system in higher million results NGL on noted, Nipisi the XX% relative second a last to contracted the adjusted volumes losses protection $XXX prior long-term derivatives, realized same largely

EBITDA, the on and expense unrealized impacted the and other by a to addition In impairments lower higher quarter earnings factors commodity-related impacting gain in derivatives. adjusted second positively were

Complex. XXXX. volumes income in to systems pipeline compared as Nipisi prior barrels on was increased by with partially costs the decrease Second and oil Gathering Valley lower that finance Cochin impacted bankruptcy to was Total A Ruby contracted to period in million the offset second Pipeline entering the due A lower X% by the Ethane volumes due These the Saturn largely the volumes on the by volumes factors facilities quarter filing and and and to worth at to Alberta complex higher protection, Mitsue outages. volumes as due Pipeline were third-party protection system on on quarter Pipeline, per losses contract of contracted result in compared earnings at decrease day X.XX It tax of were in would approximately volumes Mitsu gains year. Drayton maintenance, foreign the contract the to the higher down pipeline expense the pipeline of exchange quarter over X% of partially driven last by in noting is same system, period impact negatively bankruptcy expirations, quarter net volumes higher X% excluding approximately of as pipeline Nipisi for of a equivalent combined prior largely second due higher Ruby well volumes Cutbank lower systems offset volumes have were Vantage expirations X% scheduled pipeline year. volume the and Peace Pipeline. second a

revised to from used generated noted, guidance capital marketing, Alliance stronger and Services $X.X now to EBITDA Relative reflects to transaction. primarily range shares billion, later operating the adjusted the X.X cash results million, the year-to-date excess the fund has to to nearly the Pembina Pembina higher XXXX a year, the strengthening common the common month. activities with XXXX company's NewCo billion previous share guidance, the As subject been remains assets at the to reduce on the committed and the in $X.XXX Pembina XXXX, raised dividend based million. for pipelines cost Since of late which certain as the contribution results approximately total Cochin of repurchases thereby the $X.XXX outlook used billion. common NewCo of payments flow remainder for debt, million repurchase metrics. strong shares Pembina up Scott to has of to well transaction of and anticipated program outlook closing the closing as and $XXX repurchased Year-to-date, $XXX leverage has the from and Gas this has the business

year, used Scott position flow and debt remarks. cash closing to the I'll excess in for turn reduce Additional future. the if be back to any, now expected to the things company for is

Scott Burrows

Cam. Thanks,

results I With the the twice. to at prospects. stronger-than-expected able been performance, our As year, of we've pleased reflect am I raise our guidance with midpoint and

this Canadian expect We entity. a Western of our X transaction gas to highly through combination close complementary and premier, month competitive NewCo processing create the platforms

meaningful and and customers, balance to both positioning our And and the Grid. Pembina's within the our future value the opportunities Overall, Western on Pembina's number the and Sedimentary remain and we across materializing volume ahead WCSB a outlook observe Western volume the in of year. of towards sheet projects, outlook including multibillion-dollar petrochemical share are chain, morning steady targets the facilities commodities for the of projects. the the pipeline Carbon joining West support. being by advance development and medium-term repurchases progress Mountain Pembina them Canada's last Thank and strength LNG on informed Coast, of additional growth price our and position to formations, to Alberta and well strategy Please Montney the contracting unaltered us potential commitments questions. and debt, we executing growth of as up the strengthening potential paid all LNG is for Duvernay, growth We've customer continue allocated go We underappreciated. supported and continued quality our WCSB remains for of sector. you growth key in Cedar broadly, line for systems is and for a common us such capital the prospective set on Trans your Alberta's factors, the in this expansion future diversification ESG growth open view, being Pembina's Canadian success making portfolio future. in the and Basin is continues positive for financial sound including More within by

Operator

[Operator JP Tonet We'll our from take question Morgan. first with Instructions] Jeremy

Jeremy Tonet

running the is a of in second and math, -- the of first little it was half. the I I repeated year half bit saw Scott, EBITDA

guys I guide the You -- over there. new your might think end top you of go

was flow? second Or be that the predicated was that And I cash should versus there other the the so how cash much on, just of year fee-based are wondering guidance flow headwinds commodity we about? I thinking raise, guess, in half of with

Scott Burrows

our you a year. if QX. have recall, marketing this strong typically, the very QX We quarters obviously again, X largest been Jeremy, and QX business, historically had

view which set rapid does If guidance a in then as obviously strong. of the year, kind in inform benefited forward QX whereas of you it But backwardated, quite range. propanes last the remain at also, we and from appreciation the to our pricing this year helps QX prices, remains look adding on this year curve, inventory and continue QX of

lot was on the as our carrying inventory into a means curve year, is and we which winter, based see. less you cost last inventory go there's than potentially our the it of So just higher margin

get I marketing drive in outlook see seasonality the a by year is or So QX would for of of we the half marketing the of continuing that even annualize through suggest always increases being year. when do there system. probably helps across some people half point nervous that that said, which back offset All because volume lower the business, we the

Cameron Goldade

their everyone second the is that to add QX half that integrity it's Jerry, are and it's Typically, our most Cam. that, well. worth I'll just QX reminding when active of the year. as early teams

so QX typically costs see And we some higher profiling through and early QX.

to So the seasonality some that does of contribute as well.

Jeremy Tonet

on you kind was the the Maybe balanced? the balance just see Or I point. need provide it. up think you basin I right how you there you on if exports? this Got now. at propane more are things picking Is thoughts heading propane guess, Or point wondering a just for of things could curious, there, where do in updated see

Stu Taylor

it's Jeremy, online. facilities propane market coming Stu. -- The IPL the is

We're us of then propane But more about opportunity balance. in volumes. good mention -- think additional growth. and looking we now, relatively increasing right excited capacity, seeing pipeline fractionation incremental build the on as the there's volumes at market are export we balanced is looking the systems to additional is but of market are pretty We at the volumes

Jeremy Tonet

factors? million, balance balance But here. as mentioned I a excess think guess, Got capacity it. you be you capital higher price? you share interest of buyback specifically to about deploying allocation. more know relates how portion do up or how as $XXX cash to And Or just timing I about impacting the function you costs, would sheet there, with buybacks talked of those it

Cameron Goldade

around think at think, Jeremy. popped But sheet the the strong, And this obviously, have at benefits gone. markets debt income I capacity economic look mean, is repaying just they've mean the I I time. comment we of I here. up balance our Yes. fixed obviously, where

-- years term we'll take In the date. obviously, be And program view in position, to the couple that our in a at debt. does terms next so shape free continues be that here, over interim sense of as strong a of short with pulling some flow the repaying cash to that later growth make the being on it certainly

transaction NewCo balance year, the do that half the and to obviously, the coming $XXX We're that would of year. be as do feel opportunistic that the of look of this $XXX on the share to obviously as $XXX reliant we for but using half in Obviously, think track back buybacks, to from million of I second proceeds the I to we the hit characterize for that that strong the million. year. As commitment through on million was first very the from pulp being going

Jeremy Tonet

Got it.

Just CFO right seems you on time could the It if say. wondering well just provide curious there's performed functions process, us being just Scott, real very the any what you but quick updates now, last one. CFO line? there like can

Scott Burrows

Yes. Thanks you, inning would for we to an with we ninth the that look has market us to process. are and next update I which would of the job, in, agree say in I or and question, thorough a campus Jeremy. full call so. doing month process, I'll run allowed excellent would the it, that the

Operator

from We'll take question Ezergailis Securities. TD our next with Linda

Linda Ezergailis

market to about do question ratio or updated Just you dividend policy being build would about for follow-up thoughts provide that, capital how annual on increase closes. it on I projects growth it payout transactions? think view related again, accretive increases investments? be, balancing future big or retaining how opportunistic matched? you with Would do you after and be an But the beyond buybacks, to some transaction your that, is as philosophies? and a NewCo anticipating can mean, share the the to Jeremy's And

Scott Burrows

Yes, Linda.

be the of as increasing closing dividend NewCo the transaction. we off So will we the stated, publicly

that an next on couple of update the expect weeks. in So

to cash growth. of we form really, dividend our per to growth look I flow tie forward, a As want share

So them resume typically expect of greenfield we second increases. time. dividend pandemic. I normal normal large at back to opportunities then we've stand would at and uncertainty in major XXXX of or XXXX, around acquisitions Obviously, always we in the the do just look terms And course looked course closing with to service. closing paused dividend of were as into getting we now, increase coming right over dividend think we to aspire But increases. annual those a

our as far the we're neighborhood to is As XX%. XX% concerned, payout in ratio somewhere of

we're about think pay capital back good comes pretty into really either retaining. that I debt, and down shares growth that to amount back us of feel we buy some So positions the ability visible. or And being as more of

Linda Ezergailis

update. other position environment you've you you a give That's you frac And just prior then any on a a looking the expect And FID timing of to that? magnitude the if at, can could when what us inflationary we're your and you're in of larger guess, potential estimate the do on and us versus be make in commitments helpful of had? projects. some I differ maybe looking that help might to attributes contractual frac at with this how decision some cost of agreements

Jaret Sprott

Jaret. respect overall fractionation dedicated is Obviously, we've land the the extremely the to we complex services, with full. recent fractionation announcements and with through as marketing it's and transport and is Edmonton Linda, everyone have large in I aware, stated some think before that swaths Pembina as to of

for to a meet our in demand lead So need time customer that. we order will X-year about

incremental frac lease in working. as said And outside boundary storage, do et rail, Scott focusing we on the front-end cetera. feverishly are utilities we incremental connectivity, So need really there, such prelude what his spec storage, as we're

So just through really that. working

that. looking into work line still some be like exactly decision quarter. fourth have by to And have what subsequently, expect to sight of make that here we But We to a do. do after then would we looks

bit with now. But weeks, respect the else, So it's little have prices seen inflation, that the last, significant have to said, right we And over everyone a XX early down come obviously, like think, substantially. with I steel inflation.

-- projects large time when actually in is So favor sanctioning waiting a your right bit now. little

make that and and trigger So the we we appropriate continue just watch the to time. at reevaluate sure pull

Linda Ezergailis

with bigger picture that the just That's opportunities a never always corporate to helpful follow-up, maybe at context. -- as capacity look broader, Pembina's constrained opportunistic. are And itself

update that excites an on have? that interest? additional opportunities of seeing Any organically maybe what on you're with you're Just the be in that what you right terms you seeing all and you of what front and balance now thoughts M&A on would how

Scott Burrows

close I to priority Yes, short-term is existing NewCo think acquisition, Linda, really here transaction. our the

on all when Bureau. of the obviously, expect terms next pre-close begins able to frankly, commercial we that asset We of that a And the being work been lift restrictions in the that's getting out see quite to haven't with after do base weeks. there's heavy couple close once And we the that gets just integration. due real closed, Competition opportunities to under in

focused So asset. I pretty think we're on that

disposition well. underway as We also have the KAPS

picture So what's our will focuses in on focused we we're at in look now. us. the M&A. those are right return But current opportunistic to some at point, Bigger environment, front of

Operator

our question take Rob Hope We'll Bank. with next Scotia from

Rob Hope

circle an B.C., the backstop a Maybe X versus I the about there, does such to wanted Northeast volumes you that support firm secondly, get how are you frac. are back investment? on further how thinking XX,XXX understand, in far of dedication area And dedications barrel to and area day to agreements clarify to the frac? the maybe

Scott Burrows

those all, down take path. the Rob, way agreements first of -- a decent us Yes, it's

the of consideration. we're of got new those, the the also to contracts the timing underneath with frac You timing remember that, underlying balancing those, that have coming we that of into renewals contracts

But So bit it fracs the assuming existing us stay with way dynamic, a taken say. long would full a production, I there. it's has

and, those arrangements. get arrangements turn sanctioned. have track are our record we solely customers, plans take-or-pay they dedications, and When it at profiles once they take-or-pay those while confidence land relates assets. going And have visibility careful are look not the have that we the do to agreements are of we developments say high be I obviously, land with drilling the to what of with confidential. into into a ergo, producer on because dedications they're to production get projects in But Secondly, the place, we as degree I

Rob Hope

But follow-up, just through, Cedar And side? a a the permitting capital of Good on months spent are have last commercial And as color. we there. those then in update that Right. can have as you it, provide an agreements? where You terms X of we bit call on LNG, the how changed project? as well little

Stu Taylor

been Stu. project arrangements filing Yes, at work Cedar continuing process, the our board. we've the it's all the all the our across pricing been progressing documents Rob, reaching the the We've with basis time We're the to of EPC progressing with while contractual commercial our same regulatory and working regulatory EPC, contracts. out on our conversations. consultation communities,

And have Cedar conversations Nation the being commercially. Haisla that a pipeline major gas We are progressing through stranded not LNG unique see to Haisla quite LNG as access a in and acceptance the success. get activity a to pricing markets substantial LNG secured The been It some project. surprising, that in as considerable a is interest TC brings stranded the value constructed There people cheaply. -- Nation and the is -- diversification an the see frenzy opportunity can that today, Canada by and Asian by there project. -- is of has to

good. at and trying world So progressing. conversations are those lightning very along an possible. quickly as as speed in progress the But We're LNG conversations are to moving

Operator

Catellier Robert next take with Markets. Capital question from CIBC We'll our

Robert Catellier

just Catellier. couple on of wanted on things a up the to first discussion. Rob I follow frac just

X things there. So

there capacity spec any it's take for heard whether storage. spec. to -- I be you might appetite your the mention question on what curious Just

the with And given reality environment is your respect of the there. about curious potential on opportunity there appetite just we're to cost any or So side to risk inflation, with the customers there? in

Jaret Sprott

is meant to on sharing risk the the the sum, so Pembina. from lump Jaret. frac [indiscernible] customers, on Yes, respect on build actually people for sorry. that take away taking to with on like products, the seen When end back premium so the we've -- I'll side do taking Rob, first question. I storage, potential -- cost spec that and And appetite an said the maybe what with the storage. I it's product spec of then there,

types So that traditionally, But have we we the manage of seen these for appetite that. assets. on

definitely in The equipment hasn't So lines significantly have a just we're as line And to have the a months, cost few very, in. we been of seen that obviously, rapid maybe evaluating previously QX as mitigation we time stated, is very also looking strategy contract seeing we're sight increase saw to delivery at. something would better anything as We're time in But quickly. period. and that I come incremental as of over quick to of expect we the in next a 'XX. significant

Robert Catellier

the And are doing to how to if how exposure anything you're to hedge might in that 'XX? And just and Chicago-AECO much curious contracted example, separately, For line make Sable. of Aux you differential? in pipeline I'm Okay. capacity on to moving liberty have then the -- disclose XX% 'XX at line much how on Aux Sable up is that being managed?

Scott Burrows

I Sorry, understood Alliance. it? just sure Could clarify question you not I'm the on Rob,

Robert Catellier

level -- Alliance? Is have they Sable being on to as just know Yes. got contracting I'm anything Aux level that how represents currently, the much curious done it's on to extent to exposure of high and And the differential? I'm to do contractedness. curious hedge there a of

Jaret Sprott

Jaret. Rob, it’s

So currently, here, actable gas goes does that all the zero. customers taking Talking new capacity. have some into That to capacity. that will upstream essentially be

Scott Burrows

AECO-Chicago Very exposure, we to But minimal of the at at hedging level, differential Pembina are level. [indiscernible] a extent the the the our portion long-term not exposure. short-term

Robert Catellier

Great. Got it.

NewCo that's for then is the at reducing and And so for last question emissions curious once vision what closed. opportunity I'm is, the me

power are there more or road? renewable further example, even opportunities, down CCUS For the

Jaret Sprott

that, take can Rob. I

So I'll break it into X buckets.

So Veresen Midstream primarily is hydroelectric power.

owned opportunity nature of wholly the to a so Pembina's power due business. but there, little the those of opportunity that's assets, So limited bit powering

CCUS XX% the from flaring, consumption. to it's our heat consumption We are have a et to burners gas it asset to won't of gas be emissions our emissions reducing of going future cetera, emissions more and and focusing power lot there focused, because of natural on et more mediums. -- be compression, opportunities cetera,

more consumption be essentially cogens makes reduction, Energy on it those some levers. our areas the would same you focusing is natural But will in move we gas. the that natural So Empress focusing have real into where previously. gas one the certain be looking and really consumption around of at biggest Redwater in like Canada assets And the of potentially That on Transfer sense, at. ones, Rob, really as we're efficiency focus big that

Operator

take Kuske, Andrew Suisse. from We'll Credit next our question

Andrew Kuske

Maybe a picture question. big

dynamics and to you Redwater longer-term platform LNG look You touched When your longer in on happening maybe look upon scale B.C. your some an front a do of smaller have side? there's end. some term, a footprint, but you the on basis stuff like inherently the and the opportunity across see

Jaret Sprott

looked and shelved previously, that due connectivity. opportunity. lot the inability the essentially by sense. market It the same in that have is if frac the right to it's quality for train connectivity capacity. guess We economic that B.C., economically But Coast, And of that of a Andrew. to due amount get a does in capital the reason but the infrastructure barrels make rail getting out a of Northeast unit example, unit it's and bring make there West for does rail is you to actually to We've not But nothing just sense train the it Edmonton of rail into out itself, with to the real had just feasible. I at impossible A impossible. the there, more

we much all pretty opportunity. shelved So that

Andrew Kuske

of think opportunities just But about areas most of have which the of for sort distinct the When risk just are your clearly, upon and on how capture, you And profiles about I X elements that. those and mean maybe and building to management of then X sort buckets you storage, buckets? just you Carbon return asset then base. think the X and those the Alberta CCUS you Appreciate transport compounding Grid. appealing? Great. Okay. the do economic

Stu Taylor

progress a of the capability I ongoing now, for we as Right we that's at mentioned. those as corporation, looking capture continue are emissions. own own work the our to capture our Jaret aspect, -- of assessment And mean, there's assets.

for -- Grid, emissions emissions. then it Carbon gathering it a the sequestration from With that. Alberta transportation hub is It of a essentially, is and those is and

We capabilities. the very and gather upgrade product, as we transport we along that see product. Pembina's we and that move So of something product lines

the like in think worked where the progress sitting Alberta with and we we're it's continuing right government, we're our Grid, to with that line asset those the We capabilities. opportunities. So Carbon Alberta with we've

looking pipeline our that, far returns. at the of return As as normal we're

conversations have make on bring to to go-forward customers. cost take a our We price does continuing it We're is what what engineering carbon sense. estimates where and continue forward of with the is to potential that's basis going and

say, days Pembina's So conversations line normal -- now. we're are still us those I nothing would It's ongoing. course different, in businesses. right for early there's but from and I think

Operator

We'll our Matthew IA from question Weekes with Markets. take next Capital

Matthew Weekes

then that contracts with you at where are incremental and how volumes idea just to really at this the signed of capacity. in you an deploying to expand of utilization room sort terms capital without of much more you commitments I'm able too if have provide you've Northeast at point? And your to looking much account those volume Just wondering looking producers in footprint, think you to B.C. just are asset

Jaret Sprott

system, into service. Phase us X obviously, Peace the been different that sanctioned. now, X to with Phase being to in incremental pipes speak service X give as executed NGL is us allowed some repurpose service we has condensate Phase coming and Right

once with we all into system, a have that, on that B.C. the where out to is that all recall going Edmonton. goes average So Northeast essentially the way from across you have built that I'm system

system. kilometers that So all said, And we're around moves X long. hundreds condensate. that and CX+, different products, CX+, XX% across With of it currently, crude utilized

future room have Edmonton accommodate the products significant across market. X to do we volumes So into running those

Operator

We'll with question from take Capital Kwan Markets. Robert RBC next our

Robert Kwan

at had you some it had you talk some just haven't customers, Is If wondering cautious the around types that that guess, that to? norm capital I'm statements amenable given though, have, just may your I generally around can protection. infrastructure? impact and the just as you that as just go higher future inflation a projects. typically, you maybe commentary level, I hasn't start you consider forward, been cost for would of and your Is they're something with something

Scott Burrows

I'll about the business. impacts let Yes. the picture maybe Cam the I'll projects, on Rob, start on big and base talk

thing the I over A we're steel think, volatile to projects of And seeing out, increases half seeing lot move right the engineering now. say first as to of Jaret the that down probably seen the the all it capital year. pointed is We've inflation place. we're apt I'd out. is X push The risk some firms, come more as pointed off of dramatically. that we're Jared to

FEED doing other as lump at. arrangement, sum we're looking as and Cedar a we're of that or on the some at projects example, well work the the For securing there, we're looking of turnkey under majority that

-- business, as of scale some So things the to so pushing to the larger think than I'd engineering we're relates risk as say relates say pipe that comfortable. projects, looking we're customers to pretty to but there, it it like firms at more I off

business. do core very that's think well. I our it We

think to Cam, that want talk And the about an continue base I to warehouse so that's business? where Pembina you do will area risk.

Cameron Goldade

Yes.

business, inflation comment, of the the those But to commodity whether are -- our or from earlier On projects up more is And Rob, inflation. that's you differentiate sometimes of a bit I And points, ask most the function X. a say is. whether it's capital business amount a seeing second I catch steel inflation where the that just goes the on have Jaret's the to And on fair think on would side base then the it's piece and more more What it's side. couple a seen between hard mean, on we of side obviously, out and the there recently. can systemic else would certainly pandemic coming generally. be labor to insulation really we've we of have structured yourself I as everyone is of that

also this and commercially, moderated been of for has more change In But past it's that And it obviously much account. that's side, the significantly. recently. protected a obviously, year. moderated couple on months, clearly, the quite is power big Although Pembina's of

has you business from as results, see the quite there we've ourselves can structured to inflation, been the significantly. while insulate So

Robert Kwan

the I to allocation, back and said I capital here think tie it if you earlier. And something clear about cautious on of statements more great. just That's kind just want be to

instead it that temporarily more on permanently. or the sounds While to warehousing whether the scaling that's capital Is of basically committed in optionality this you're a leverage, seeing sheet, you're higher, balance the buyback at that buyback, like reducing fair? lot point,

Cameron Goldade

to a And that's at been where of Rob. flipped you I it has it's along fair that point goes points -- I throughout comment, balancing think favor I look mean, the that ends ultimately, various the kind at of if to spectrum think way. both far, year so

that in most going and it the to term in to the we market value attention debt obviously future. strength positioning to for based see obviously the value the pay opportunities stands decision make close we're short do the But on continue considerable retiring creates us. So ourselves some have as and in today, the

Robert Kwan

there? just an where you need are getting you secure of contracts want extending in I all IV, extending for amenable Is customers update what's earlier terms you to a term the to with there of term? for as III? to Scott, and to through questions. can what couple but Are mentioned, I On If from you finish RFS contract importantly, follow-ups you what's need obviously,

Jaret Sprott

seeing volumes very activity Robert, frac capacity and Obviously, customers are active the becoming growing very that -- Jaret. in star. high been current across Customers spare extensions we've is pricing our is are complex. extremely executing

that. in doing So yes, successful been we have

Robert Kwan

And to like IV? of is where say when success, you need looking what the you at start capacity percentage

Jaret Sprott

we I of follow-up. don't a the that have could my off have top head, Robert, but

Robert Kwan

inflated of to that a quarter other to, volumes in rates kind as or of bids for Alliance, the would basis? may does that that much how volumes due strong forward, interruptible have seeing you be. that factoring of subject to and But of this about kind any those as whatever and well, results And any from the great. came would new been been just That's we're have very contracts EBITDA. Okay. look compare then proportionate this quarter, How the

Scott Burrows

Yes.

I dynamics Alliance. think on going few there's different a on,

with interruptible, was, strong -- space clearly, being we've has short-term on quite the less that where we that been pipeline, the So bids as interruptible spread done That volume. strong. space have saw on recontracted do the there's we as said, we've but

next we the have last U.S. in modest acquired if stepped down gas that due just think due line recourse reoccurring. we just in also we I typically lastly, And will second at historically, line where from to we quarter pack relatively seasonality, pricing. highlighted unlikely year. that been there have price pack also was to look that's But to is rates year QX that that have sales. then you And that an to the be would uplift today, where have

negative. some on some Alliance, So there's noise of bunch positive, a

Robert Kwan

put And it just so of of a let like bit me way. is kind -- a this there

and about year do first seen the your into citing into the year you and of you As we've the half? to certain largely already that due think is for aspects possibly in XXXX? Or expect guidance continue Alliance, second the end to what half

Scott Burrows

utilization. we continue see I think the that aspects will be to high-high

we any efforts contracting seeing Going strength through the weren't differential of we on half we're lead basically to And there. the into year, the back fully monthly a that daily, pipeline. now should the stronger in year, continued kind of whereas are which utilized, of full short-term

Operator

time, Burrows to this remarks. additional to gentlemen, today's back the like I'd or and Scott session. At any turn for this concludes Ladies question-and-answer conference closing

Scott Burrows

few a remarks. closing Just

your thank to today for wanted time Just and questions. everyone their

the what as of about the half half excited equally really back through we first we’ve the in We’re excited the are move of year. achieved and year

and and So I hope summer everyone safe we’ll soon. chat has healthy a

Operator

gentlemen, and participation. We concludes today's Ladies this conference. appreciate your

You may disconnect. now

Pembina Pipeline (PBA) 5 Aug 222022 Q2 Earnings call transcript