Earnings conference call (announced in 6-K)

factors impacting adjusted EBITDA, the change in earnings in the second quarter was due to higher unrealized gains on NGL-based and crude oil-based derivatives and unrealized losses from the CEDAR LNG compared to unrealized gains in the second quarter of 2025. Adjusted earnings were $415 million, or a 10% increase over the same period in the prior year. Compared to the factors related to earnings, the change in adjusted earnings excludes the impact of the unrealized gains on NGL-based and crude oil-based derivatives and the unrealized losses in Cedar LNG. Total volumes in the pipelines and facilities divisions were 3.7 million barrels of oil equivalent per day in the second quarter. This represents an increase of three percent over the same period in the prior year higher second quarter pipelines volumes were driven primarily by higher volumes on the alliance pipeline primarily driven by stronger operational performance and higher contracted volumes on the nipity pipeline serving the clear water formation higher second quarter facilities volumes were driven primarily by the impact of rfs4 entering service in may and higher volumes from certain pgi assets primarily from the wapiti expansion and at the dawson assets yesterday pemina reaffirmed its 2026 adjusted ebitda guidance of 4.35 billion to 4.55 billion dollars and we are currently trending towards the midpoint of that range at the midpoint due to seasonal factors timing of spending and certain one-time items Pemina anticipates that the adjusted EBITDA contribution in the third quarter will be lower than the second quarter, with a strong seasonal contribution expected in the fourth It is worth noting that over the past five years, the third quarter has contributed between 23 and 27 percent of the full year adjusted EBITDA. Our current outlook for 2026 has the third quarter contributing at the low end of that a few specific factors that are expected to impact the second half of the year are worth noting first seasonality in the wcsb ngl frac spread business resulting in a lower contribution in the third quarter and a higher contribution in the fourth quarter on a quarterly basis for the remainder of the year pemina has hedged approximately 90 percent of its ngl frac spread exposure in the third quarter and 40% in the fourth quarter. As a reminder, for the period from 2025 to 2026, our U.S. and Canadian frack spread businesses combined are expected to account for approximately two-thirds of our marketing costs. Secondly, higher integrity and maintenance spend in the second half of the year compared to the first half of the year. Due to strong 2026 fixed results and operational efficiencies, we have chosen to fast-track a portion of normal course integrity work. I want to remind listeners that the third quarter is typically our highest quarter for operating expenses. In 2025, the third quarter accounted for 27% of the full-year operating expenses and this year is looking to follow a similar trend. Thirdly, lower contribution from Cochin pipeline in the second half of the year compared to the first half of the year is expected reflecting strong first half first half throughput as certain firm shippers advanced a greater portion of their annual taker pay commitments into the earlier part of the year as a result throughput above the remaining annual commitments for the second half of the year is expected to be highly correlated with condensate prices in 2025 Approximately 60% of the full-year adjusted EBITDA on COCHIN was generated in the first half and 2026 appears to be following a similar pattern. Fourthly, sequentially lower contribution in the third quarter and higher contribution in the fourth quarter on Alliance Pipeline due to seasonality and the ability to transport higher volumes during colder periods. and finally a higher contribution from pgi in the fourth quarter due to new assets entering service and non-recurring revenue recognition in aggregate the lower and upper ends of the 2026 guidance are framed primarily as a function of commodity prices and the resulting contribution from the marketing business interruptible volumes on key systems the u.s canadian dollar exchange rate and PEMINIS share price performance and its impact on incentive compensation costs. I'll now turn things back to Scott.

Thanks, Cam. In closing, I would offer once again that recent developments reflect tangible execution of our 3C strategy and highlight the breadth of opportunities available within PEMINIS integrated business. The accomplishments over the past quarter reflect a continued focus on disciplined capital allocation, long-term contracted cash flows and creating value for our shareholders. Operator, please go ahead and open up the line for questions.

We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset closer to your mouth when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Jeremy Tonnet with JPMorgan Securities, LLC. Jeremy, your line is open. Please go ahead.

Hi, good morning.

Morning.

There's a lot of talk in the industry with regards to incremental WCSV oil egress, you know, Pembina, one of the projects being proposed. But I was just wondering if you could help me think a bit about the picture as a whole and how it impacts Pembina as it relates to condensate. It seems if there's sizable egress that's going to come on, that means there's sizable condensate needs. And I was just wondering how that gets solved. Is coaching expandable in any sense? Is in-basin production going to really tick up? Is it going to be a combination? I mean, if it seems like in-basin is going to be part of the solution, that's a lot of volumes, a lot of growth to hit Pembina's system. Am I thinking about that the right way?

Yeah, Jeremy, I'll give you our high-level macro view, and I'll I'll let my colleagues pitch in as well. I mean, that's one of our key fundamental tenets from our April strategy session. We talk about the flywheel and we always start with, you know, oil sands growth. And, you know, there's ranges out there between, you know, 600,000 to 2 million barrels of incremental oil. So let's just pick a million barrels for ease. You know, if the West Coast oil pipeline goes ahead a million barrels a day, that's going to require somewhere in the neighborhood of 300,000 barrels a day of incremental condensate. You know, I think we have a firm view that the majority, vast majority of that condensate needs to come from the WCSV. And we know we have the resource here in the Motney and the Duvernay. And so, you know, just condensate alone has, you know, fairly significant running room, which is, you know, some of the reason we were getting ahead of some of our expansions in northeast dc de-bottlenecking the system uh in advance of what we anticipate to be strong condensate growth across the system now of course you don't drill for condensate alone you drill for natural gas that condensate comes along with so we are going to need to find incremental home for natural gas whether that's lng canada phase two you know potential uh pushing incremental throughput through cedar wood fiber etc as well as incremental uh data center demand and of course the oil sands are going to need incremental gas uh in order to grow their production from the oil from the oil sands as well and and then lastly of course there's associated c2 plus and c3 plus that comes along with that natural gas which should drive growth through pgi and and fractionation and export as well so just backing up a step you know it's that kind of general linking of all those projects and all that growth that really leads us to be you know extremely optimistic about the wcsbo to 2035. and i think jeremy it's cam here i would just pitch in you know you reference caution um i think on on top of what scott said i mean reminder that

when we acquired Koshin, that asset was running at about 85,000 to 90,000 barrels a day through some great operational work by our team in the field and in Calgary here. We've managed to increase the capacity of that system to about 120,000 barrels a day, and it's running very firmly, very strongly, and I think will continue to be in high demand, especially as oil sands volumes continue to grow in the coming years you know that said i think the opportunity uh for more imported condensate you know is also a potential solution and and clearly you know with our franchise we'd be looking at uh the best way to serve customers across the board got it that's a very helpful there and then um just wanted to go i guess uh towards a green light and i realize i'm getting well ahead of myself here but i'll try nonetheless we've seen in other areas where data

centers have uh developed there's been a tendency to cluster um where you know initial toeholds have led to bigger developments over time just wondering um you know now that this project is in motion you know thoughts about the potential for that you know way down the road hey jeremy it's it's chris um yeah i mean you know the fid um earlier this month really supported our thesis about gas to power as a business serving data centers in alberta you know we think it's a scalable project we think alberta remains one of the best jurisdictions to build in we've got a very supportive government continue to have a first mover advantage and our adjacent businesses expertise and then to what you're referencing like the customer demand and interest remains high including around the the concept of clustering we certainly you know saw that happening elsewhere and have a view view around the potential for that to happen uh in this area you know the team's the team's already hard at work developing the next uh the next stage of the project that includes acquiring some some incremental strategic lands uh proximate to our lands we had an opportunity to consolidate some contiguous plans right around our existing green light site and they're also progressing customer discussions and all that is really centered around you know some of what you're referencing both from the you know initial customer perspective the the probability or likelihood of the clustering but then also how these facilities tend to group across a variety of customers in strategic areas like the Heartland.

Got it. Thank you for that.

Your next question comes from the line of Teresa Chen with Barclays. Your line is open. Please go ahead.

Good morning. Following up on the green light side of things, with phase one underway, and as you have already consolidated the contiguous lens and in the process of commercializing phase two and maybe beyond would you expect the timeline for further phases to be a little quicker and anything to say on size and scope at this point yeah um it's chris it's chris again um i don't think we can get in into timing a lot you know i think there's a few things happening in the market that you can look to is you know for a little bit of guidance uh the asos phase two large load allocation um that's underway and the continuation of the bring your own power strategy is i think a bit

of a guide to to think about um to think about timing you know i think we've got a relatively proven model on how to progress these these projects we're really focused now on getting those front end strategic um you know sort of first mover um components uh in place and we're working with customers to de-risk them much like we did on phase one. So I can't really give a guide on exact timing, but I can sort of tell you we're moving quickly and with pace, but very much in a similar vein to how we've done it on the last go-round.

Understood. And on the diluent side of things, can you just lay out the economics of in-basin production versus importing incremental barrels of condensate, what do you think is the marginal relative cost to the customer at this point? And if you move forward with the next phase of expansion for Cochin beyond the 120,000 barrels per day, what kind of size or economics should we think about related to that?

Hi, Tracy, it's Cam here. I think what I'll first say is that, You know, we see the economics of the condensate barrel as being market driven, meaning that, you know, the price gets set based on the availability of the supply. And clearly, you know, as Scott said, the vast majority of that supply gets gets filled domestically today. And obviously, those economics in in the basin for domestic condensate production are some of the most competitive available in terms of your specific question around the marginal economics of bringing condensate up. I mean, I think, you know, it's a bit preliminary. You know, we're not at a stage yet where we can share something to that degree. I think what we recognize is that both the scale and the economics have to have to have commercial support from the customers. And I think with that, you know, we've made some positive first steps in terms of the MOU with the government. Pathways Group has secured some signals that, you know, there is a desire to grow. But the timeline of that ultimately remains subject to subject to their decisions and their capital allocation decisions. And so, as we always do, we look forward to working with customers closely to to provide a value added solution. But, you know, probably a bit preliminary to start sharing math at this point.

Thank you.

Your next question comes from the line of Spiro Duny with Citi. Your line is open. Please go ahead.

Thanks, operator. Wanted to revisit the 2030 growth outlook. I guess since you provided that update, you've now sanctioned another $3 billion of projects, which I believe underwrites about 6% of that 5% CAGR range. So first, I'm sort of thinking about that right. And as you think about that sort of remaining $2 billion bucket, still left the sanction, how do you think about the ability to grow that opportunity set beyond $2 billion but still be within that 2030 timeframe that could maybe even take you above that 7% high end?

Hey, Spiro, it's Cam here. Thanks for the question. And first of all, I think, you know, we would look at it similarly to you, meaning that, you know, we've crystallized or de-risked a material portion of what was in that growth outlook, you know, from 2026 through 2030. You know, as a reminder, that was somewhere between $1.50 to $2.15 of adjusted EBITDA, fee-based adjusted EBITDA per share growth between 2026 and 2030. And, you know, we've obviously de-risked a material portion of that. You know, what remains in that is a combination of some core volume growth within our business and some core capital investment opportunities. And I think the positive thing I would say about that is that, one, you know, much of that or effectively all of it is within our core franchise, our core business, and very much only gets better and more compelling with continued volume growth, which I think we have even more confidence around based on what we've seen more recently. And I think, you know, as we've said, you know, since April 7th, you know, probably the biggest near-term lever for us on that 5% to 7% within the timeframe is overall industry activity. And I guess I would couple that by saying and reminding everyone that, you know, the level of organic volume growth that was really embedded in our 5% to 7% was more historical looking.

You know, I think I've said before in the sort of 2% to 3% range for liquids.

And I think what we take positive signals from is some of the large customers in the basin and some of our large customers talking about multi-year volume growth in excess of that number through 2030. You know, some customers talking about volume growth up to the likes of 5% even. And so that would be obviously very capital efficient for us and very, very quick turnaround. around. So I think that's probably the biggest opportunity for us. And as Scott signaled in his prepared remarks, what we're really getting excited about, whether it's future phases of green light, whether it's the West Coast pipeline opportunity, is the ability to extend that growth that we've signaled through 2030 into the next decade. And I think based on some of those opportunities, based on the condensate opportunity that we talked about earlier, and the breadth and the integration of our value chain, which we truly believe is unmatched, we stand very well positioned to continue to grow at that rate into the next decade.

That's a helpful color, Cam. Thank you for that. Second, we'll be just going to the West Coast oil pipeline, actually. So, Scott, you had mentioned sort of taking a prudent approach here and wanted to dig into that a little bit further. Just curious how you're thinking about the need to sort of protect your capital and preserve your return if this project does go forward and maybe perhaps more broadly can you just talk about your overall decision to get involved here i think as has been highlighted on this call you really benefit from wcsb growth almost regardless of of the egress method uh so curious maybe what some of the rationale was here sure um you know i i think from from a pemina perspective i mean there's there was discussions you know over time of of our involvement in in tmx and so i think that the southern route and that, you know, idea of getting our Canadian depressed prices

higher through egress has always been a strategy and clearly is highlighted in our 3C strategy. So when I think about the strategy, this fits clearly in the connect bucket. You know, anything we can do in a basin, whether it's natural gas, LPGs, crude oil, to increase the production and the netback for our customers has that knock-on effect throughout the business. So just from a core strategic perspective, it fits directly in what we're talking about. I think we see an opportunity here, as we talked about previously, to be part of a consortium where we're able to lend our experience and and really complement and not replace the the project proponent and build and bring our skilled uh project execution discipline to it so we're pretty excited about our role and i would say that we approach this no different than how we approach many of our projects you know we we look at the risk return risk return trade-offs we have our you know long track record of financial guardrails um you know we're willing to put some money at risk, but it comes back to the risk reward. And when we stacked up all the key aspects of this project, we felt like it was something that we wanted to be involved in and are very excited about it, not just for Pemina, but what it can do for the basin as well.

Great. Appreciate it, Scott. I'll leave it there. Thanks, everyone.

Your next question comes from the line of Praneeth Satish with Wells Fargo. Your line is now open. Please go ahead.

Thanks. Good morning, everyone. Maybe just staying on green light here, I guess just broadly speaking, I know it's still early, but when you think about, you know, phase two, when you think about another potential site, should we expect the economics and commercial structure and risk profile broadly to look like phase one now that you've got that out there? is that kind of like the blueprint or the rough template for how you're pursuing some of these other projects or do you think they're all kind of you know a little bit different yeah it's it's it's chris here you know as i was saying earlier i think we really feel like we proved out our our sort of thesis on gas the power as a midstream business in in alberta and and part of that is

certainly the commercial construct and how we've thought about the the risk profile and the fit of the of the project with with how we think about our broader business uh and so you know it's still in motion certainly and still still underway but future phases uh you know we're targeting to structure them in a similar way uh to phase one they're going to be long term they're going to be you know fixed fee low risk uh arrangements that'll fit align with with pembina's business model. I think if you get out into expansions, you know, not necessarily everything always looks the same out into time, but we've been really effective across all of our businesses of keeping that risk profile and keeping that structure in line with our business model, and this will be no different.

Got it. That makes sense. And then maybe just switching gears. So there are a number of pipeline projects being proposed in the U.S. to serve, you know, growing low demand in the Midwest, and Alliance and Oxable kind of sit right in the middle of that demand corridor. So I'm just wondering if you see an opportunity to expand and extend, you know, south of Oxable and participate in some of that growth.

Good morning, Jared here. With respect to expanding downstream of the Terminus of Alliance, you know, past the Shanahan extraction facility i would say we're probably more focused in getting incremental gas egress unlocked out of western canada to so our customers can produce more condensate like scott talked about and cam talked about that entire flywheel needs to find egress for for all of those products as oil sands grows so i would say we're probably more inclined to look at getting more gas down into the midwest versus just extending the existing gas volume further down the value chain Got it.

Okay. Yeah, no, that's kind of what I was suggesting here to kind of bring some of that gas down and serve the demand load, but understood. Thank you.

Your next question comes from the line of Aaron McNeil with TD Cohen. Your line is now open. Please go ahead.

Hey, morning all. Thanks for taking my questions. Cam, you sort of touched on this a bit already, but I wanted to put a finer point on it. Can you remind us of the basin growth assumptions that underpin your sort of April business update guidance and how you might take a crack at sensitizing the guidance in the event that production growth exceeds your assumption? And maybe as a follow-on, are there projects that were not referenced in that update that would be required, like a new fractionator or incremental pipeline expansions?

Would they be required to sort of realize that higher production-driven growth rate sure yeah um so as so as i mentioned earlier you know the the volume growth that was embedded in our april 7th update in our 2026 to 2030 outlook was again in a bit of a historical sense and we've seen liquids volume growth over the past uh four to five years in that two to three percent range and that's effectively what we embedded in our outlook um i think as as i mentioned earlier, if you see that escalate beyond that, you know, our math is that there's a very direct relationship in terms of our growth and the basin growth stepping up. So, you know, kind of percentage point for percentage point, obviously, depending on timing and when that comes. But, you know, if you want to try and distill it to the highest level, you know, that's the way I would think about it. But in terms of the investment there, you know, I think that we have one of the values of our franchise is the breadth and the integration. And as you know, you know, we have de-bottlenecked various points of that franchise along the way. Certainly on the pipeline side, we have, we de-bottlenecked upstream of Fox Creek significantly over the past five years. We made the investment close to 10 years ago to create the corridor from Fox Creek Inn, and we continue to have space there. I will say if we see activity and we do start to see a million barrels or more of new crude egress come to fruition and the requirements for condensate and the associated NGLs that come along with that, I think it's no surprise that we will be looking for additional fractionation capacity in the basin. You know, there may be devolved investment depending on where that supply comes from. But, you know, we certainly do have some running room in the near term here and the ability to respond quickly and capital efficiently where there isn't.

Nope, makes sense. And that's a helpful rule of thumb. I can appreciate your committed to self-funding growth today. So maybe just a hypothetical for now, but what market conditions would have to occur to incentivize you to deviate from that? And, you know, what might the funding plan look like in that scenario?

Yeah, I'll remind everyone that, you know, our target leverage range or our leverage guardrail has been three and a half times to 4.25 times senior debt, proportionally consolidated senior debt to EBITDA for a very long time now. And clearly we've been well below that because, as you mentioned, we've been very much executing within free cash flow for the balance of the past five years. You know, I think we look at that and when you look at whether or not we would go, say, beyond four times, which we haven't done, but whether we would do that, you sort of have to look at the overall risk profile of the business and the opportunity, you know, where we've significantly mitigated all other risks in the business. You know, I think that gives you some confidence to be able to accept risk in other areas of the business. And so those are the conditions. And I think, you know, you need to see a very clear path to getting back towards the middle of your target range, which is where we prefer to operate. But I would say that clearly we are at a generational point in the industry at the moment and the type of investment opportunities that we're seeing, both in terms of ability, scale and returns are very compelling. And so we really need to take a long-term perspective as we look at these investment opportunities to generate the most value.

Okay, great. Thanks. I'll turn it back.

Your next question comes from the line of Maurice Choi with RBC Capital Markets. Your line is now open. Please go ahead.

Thank you, and good morning, everyone. So to start with the West Coast oil pipeline, I suspect it might be too early to talk about customer volumes in the coming years. But maybe you could give us a vision as to what needs to happen between now and FID, whether that be between the industry, the governments, before we do see the first customer volumes get contracted.

Sure, Maurice, it's Scott here. You know, I don't think about this too different than any other major project when it comes to FID. I mean, clearly, we'll need to have a regulatory approval with conditions under which we can construct. We need to have a competitive cost estimate. And then we'll need a certain level of volumes to underpin the investment. And so all of that's going to happen over the next, you know, call it 18 months as we advance the project. But I don't see it really any different than any other major project. So, you know, based on what we're seeing and hearing, we do think volumes are going to be there. So we're pretty optimistic.

And if I could finish off with a question about, or more broadly, about your growth platform. I think in your press release, you mentioned that Greenlight establishes an entirely new growth platform. And I think, Chris, you mentioned earlier that, you know, this Greenlight project obviously proves out your gas to power thesis. I think in the past, you've mentioned that you're not looking to grow an IPP within the company. And sure, there's future phases of Greenlight on the same site. But could you just talk to any plans to grow this platform beyond Greenlight?

Thanks for the question, Chris. Chris, again. So when we think about what was really attractive to us about this project and about this business, I mean, it really starts with the macro, right? Energy demand growth associated with data centers and AI and all the rest of it. And that demand being served by natural gas-fired power generations, pretty attractive for us. It catalyzes demand in our basin for natural gas. so that that that part all holds um then it's really about can we can we build it into the type of business you know that we really like uh and the midstream construct uh we really like and and the nature of green light fits that very well at this time merchant power does not fit into that or being an independent power producer does not um fit into that we think there's lots are running room on the model. We've proven out here with Greenlight and are not pointed down a path towards IPP or merchant power.

To be clear, but you're okay going down being a contracted IPP in Alberta?

We're contracted going down the path of, we're confident going down the path of deals that look similar to Greenlight in commercial structure and risk profile.

Thank you very much for that. Your next question comes from the line of Sam Burwell with Jeffries. Your line is now open. Please go ahead.

Of all the projects that you called out in the April business update that are still pre-FID, which would you say are the nearest and maybe the furthest away from sanctioning?

And I guess specifically on the Nipity pipeline, Clearwater's gotten a lot of momentum, but with a fairly concentrated crew of producers. so i'm just curious what the progress is on that one in particular yeah thanks thanks for the questions chris um you know obviously we've seen tremendous growth growth out of the clear water basin um the netbacks the netbacks are phenomenal um and in this price environment the growth has has certainly uh reflected that uh the result of which is it's filling our existing um pipe that's there that's been a tremendous success if you if you recall the uh recall the history on that we're We're working with producers today and still to chart a path forward that works for both of us and, you know, optimistic about the potential to expand that pipe in the not too distant future. But at this stage, it's in commercial negotiations.

Sam, it's Cam here. I'll just chip in on some of those other opportunities. You know, we've talked about the opportunity for butane value enhancement. You know, I think we saw length in the butane market in Western Canada for some time. And I think with, you know, what we're seeing as the opportunity in the future with greater crude egress and the flywheel effect of that, that is only growing from there. And so we continue to investigate a solution that involves butane value enhancement. Likewise, on some of the incremental pipe egress, particularly towards northeast BC. Again, I think we continue to work closely with customers around the timing of those needs. And as usual, people are very much into budgeting season here for the next year and the following years. And I think it's a really a when, if not if that occurs.

And outside of that, it really comes down to just unlocking just rateable core volume growth as we see through existing capacity. okay great um and i'll try to sneak another one in on the west coast pipeline so it seems like you guys have tremendous optionality and do have some protections on cost but you also stated in the april business update that the max build multiple you consider it be 10 times so i i would assume that holds for your potential participation in the west coast oil pipe but I'm just curious if that contemplates the option to add the extra 10% after project completion, or if your returns would be effectively met through just the initial 10%.

It's Cam here, Sam. You know, I think what I would say is, you know, when we talked on April 7th about our history in terms of capital deployment, you know, it was very much, historically speaking, and with our current development portfolio, you know, in that six to eight times range historically for greenfield type opportunities. And so, you know, when you look at our model, a desire to grow in that mid single digit range over the long term, you know, really, it sort of drives towards something that continues to need to be capital investment along those type of parameters with the right risk profile so again we're very focused on both the return and the risk profile of the investment opportunity and the west coast pipeline is no different you know it's a bit preliminary to sort of get into bright lines at this point because we we have a lot of work to do on all fronts there but suffice to say as Scott said and just to reinforce the capital allocation decision for that opportunity you know will be no different than it is for our other portfolio investments.

Okay, got it. Thank you, Ken.

Your next question comes from the line of Robert Cattellier with CIBC Capital Markets. Your line is now open. Please go ahead.

Hey, good morning, everyone. I just wanted to quickly go back to the NGL picture here. You continue to highlight the strong outlook for the basin and the strong NGL fundamentals. and, of course, you have that exposure through your export facility and some contractual export exposure elsewhere. When you look at the evolution of the basin and what's possible if well-stands production does grow, as you mentioned, it's going to require more fractionation. I'm just wondering about your views in terms of fractionation and extraction in the field closer to the West Coast export points compared to Redwater where you have so much scale and so many tools already.

Good morning, Rob. Jared here. I think you're probably referencing a recent announcement of some incremental barrels going west from northeast B.C. So maybe I'll just take a step back and talk about our fractionation complex. We absolutely believe the size and scale of the Edmonton area does provide the customers with a significant amount of redundancy, storage, rail egress. You have multiple rail providers to go to different markets depending on if pricing or swing. You can go to eastern Canada, you can go around the states, you can go to international, you can go into Mexico, et cetera. So we still believe the fundamental thesis is that NGLs coming into the Edmonton, Port Saskatchewan area does provide customers with a lot of advantages. And I will note that just the majority of the barrels that come into that region are kind of like Alberta based. With respect to, you know, some niche opportunities going directly to the coast, you know, it's fairly relatively small. I think it, you know, I think it works for certain customers in certain regions. um but overall it doesn't you know it was is it's kind of anticipated in our five to seven kegger that we put on out out on april the seventh um and and you have to realize that those customers are making a choice long term to dedicate uh those small barrels to uh to asia essentially so it'd be very hard for them to capture uh you know an eastern canada uh price spike for example but um overall we still think fort saskatchewan and edmonton is extremely competitive and scalable yeah okay great and then i just wanted to move on to uh cedar lng here it

just looks like the construction is going um you know incredibly well so at this point what do you see as the uh remaining risk factor to be able to hit um those first cargoes in 2028 yeah i think rob the big unknown i don't say this as a negative will just be the ultimate uh you know hookup and commissioning of of the ship you know i think everything as of right now uh the pipeline's done as we talked about the transmission line will be done early um uh our third-party compressor station is wrapping up construction bc hydro's on track the ship is tracking slightly early for arrival so when you stack all of it up really the the unknown and again not not because i'm worried

about it it's just will be the ultimate commissioning of the ship because everything that's in the our control or at third parties control right now is tracking very well okay thanks very much your next question comes from the line of sumantra banerjee with ubs your line is now open please go ahead hi good morning thank you so much for taking the question You mentioned that HEP would have...it was accompanied by amendments to an existing ethane supply agreement with Dow. So I was just curious about if you had any higher level of commentary on what you're seeing in terms of global ethane demand.

Oh, the question's around global ethane demand and the relationship to our existing arrangements. Is that right?

That's right.

Yeah. It's Chris. Happy to take that. I mean, obviously, we've seen a lot of growth in Western Canada on the ethane demand front with Dow's announcement. There remains length in the basin, for sure, and others have been out talking about the potential opportunity to get that to Asian markets in particular. And you can see why if you pay attention to some of the pricing or watch closely some of the pricing that you're seeing for ethane sold off the dock in the coast and landed in certain parts of Asia. It's a pretty compelling proposition. You know, we've spent time understanding and continue to spend time understanding the cost structure and all the rest of it associated with getting that product to Asia. I think we've got great partners in the basin and great partners in Western Canada in the, I think, crafting business that we've got tremendous relationships with, and we think there's even potential for more of that in the future, but certainly some of the global price dynamics are driving some different exploration by different participants.

Got it. That's very helpful. I'm also just curious if you're noticing anything on the storage front as well in terms of incremental opportunities?

On the storage front? You know, certainly depends which products. You know, crude storage, you know, in its back-renated state and at least a little bit of available capacity at the moment, has not seen a ton of opportunities associated with it, but there certainly are opportunities popping up there. We continue to take advantage of seasonal and different storage opportunities on the NGL side. We've got a pretty substantial position there and then no real insights to provide on gas storage.

Got it. That makes sense. Thank you so much.

Your next question comes from the line of Benjamin Pham with BMO. Your line is now open. Please go ahead.

Thanks. Good morning. I just want to go back to the Canadian West Coast pipeline opportunity. Can you flesh out, I know there's some timelines that have been noted before in the press, but I'm just curious about, as we look forward to the key milestones for this pipeline into FID, when your non-binding becomes binding, what that binding actually means, and then beyond that buying, what other key items to look for?

I'm happy to. This is Sarah. Right now, obviously, it's been a very busy month since we made the announcement in June. We're working very closely with our government partners on the key work streams, the first one being, or a primary one being, obviously, the definitive agreements and working to support a major project office on their project national interest assessment so the first milestone as we look forward is really targeting that October 1st designation under the Building Canada Act around that same time we are anticipating that definitive agreements will be finished and we will then move into proceeding with the CER or other regulatory applications that are required that's got referenced in order to get to an FID decision. So these are the sort of core pieces as we look forward. Obviously, there's a lot of compressed timelines and optimism as we look at this, but we will be pulling it together and targeting early commencement of operations next fall.

Got it. And maybe take a step back. I know you've already on oil pipes. You have storage in the mix. You had looked at Trans Mountain in the past, now decaying West Coast pipe. You mentioned that you're supporting oil pipes. It benefits your business broadly in the basin. Do you have appetite for anything beyond decaying West Coast pipe? Because there's also a number of other alternatives being proposed out there that maybe look for partners or investments.

No, not right now. This is West Coast oil pipelines, our focus.

Okay. Got it. And I mean, just one quick one. It's really been night and day of your cost of capital over the last year. And that's creating a lot of value for organic growth. Just given returns have been still quite attractive. How do you think of the M&A landscape today, especially in the U.S. side of things, are there assets you can shake out and maybe build a new footprint there to build on?

Hey, Ben, it's Kim. You know, I think it's probably pretty consistent with our comments in the past, which is, you know, one, we're always looking at how we can enhance the business strategically and what fits within the 3C strategy. obviously capture connect and catalyze underpins all of that um you know i i think our view continues to be as it's been you know for some time that uh the opportunity that we see in front of us at at the moment and for the the near term is really probably more so with respect to tuck in opportunities as they come and you know sort of have strong strategic fit with the rest of our business uh you know i think it it sort of speaks to the opportunity in front of us organically and and and what we have and as we said you know we have a very strong growth profile through the end of the decade and setting up to continue to have that into the next decade and so you know our our focus would be executing that executing that well pointing our company's resources towards doing a really strong execution job on those opportunities just like we have and uh you know sort of smaller tuck in opportunities where they present themselves and fit strategically okay got it thanks a lot your next and final question comes from the line of robert hope with scotiabank your line is now open please go ahead uh morning everyone uh maybe just going back to the potential

for incremental gas to power opportunities um you know acknowledge kind of your commentary on the commercial structure there but how should we think about the ownership structure if green line is expanded would that be with kinetacore or if you are looking for you know other opportunities could you be lead developer and uh 100 owner of those opportunities hey robert it's chris we're really happy with the kinetacore teams um as as the team that's uh that's leading us leading this for us we're also really happy with with the partnership we have and the partner we have uh in place we're seeing lots of alignment uh across the the partners and the execution team to

to really pursue what we're trying to to pursue in this space um so so with all that we think it really is in support of us having you know maintaining that first mover advantage it's really in support of us having all the the right expertise and capabilities and financial wherewithal to to keep investing um in this space and so yeah like i mean at this time that's our team that's our partnership um we like it and that's going to be the vehicle we're pursuing these investments in i appreciate that uh and then maybe going over the west coast pipeline so you know it is possible that uh the new west coast pipeline could operate as a kind of a common

carrier or a common system with the existing trans mountain uh system there including moving uh ships to uh in between the docks when you think about that you know could there be an opportunity or is there a way to kind of we'll call it normalize your ownership interest in not only the west coast pipeline but in the broader overall system robert i would say at this time and stage you should think about them as two completely independent projects with independent owners and independent development.

So, you know, in this five minutes, that's not being contemplated.

Thank you.

There are no further questions at this time. I will now turn the call back to Scott Burroughs for closing remarks.

Thank you. It was an announcement-filled quarter at Pemina, and our successes reflect very strong momentum within the Canadian energy industry. Our ability to capture opportunities, both as a first mover through Greenlight and a trusted project development partner as showcased by the West Coast Oil Pipeline Project continues to differentiate us among peers. We are seeing new developments across all commodities within the WCSB and Pemina's integrated value chain is uniquely positioned to capture this momentum. Our confidence in the growth outlook both to 2030 but also well into the next decade is continuing to strengthen. We hope you share our excitement as we continue to execute our strategy to capture, connect and catalyze in service of creating value for our shareholders. I'm incredibly proud of our amazing Pemina team and everything we have accomplished this quarter. Thanks for joining us today. Enjoy the rest of summer and we look forward to speaking to you again soon.

This concludes today's call. Thank you for attending. You may now disconnect.