Pembina Pipeline Corp. Ordinary Shares (Canada)

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.

Thank you, Keith, and good morning, everyone. Welcome to Pembina's conference call and webcast to review highlights from the second quarter of 2022. On the call today, we have Scott Burrows, President and Chief Executive Officer of Jared Sprote, Senior Vice President and Chief Operating Officer. Janet LaDuca, Senior Vice President, External Affairs and Chief Legal and Sustainability Officer. And Stu Taylor, Senior Vice President, Marketing and New Ventures and Corporate Development Officer. I would like to remind you that some of the comments made today may be forward-looking in nature and are based on PEMNA's current expectations, estimates, judgments, and projections. forward-looking statements we may express or imply today are subject to risks and uncertainties which could cause actual results to differ materially from expectations. Further, some of the information provided refers to non-GAAP measures. To learn more about these forward-looking statements and non-GAAP measures, please see the company's management's discussion and analysis dated August 4, 2022, for the period ended June 30, 2022, as well as the press release Pemina issued yesterday, which are available online at Pemina.com. on both Cedar and Edgar. I will now turn things over to Scott to make some opening remarks.

Thanks, Cam. As detailed with our release yesterday, Pemina delivered another strong quarter with adjusted EBITDA of $849 million, which was a record for a second quarter. While we typically see a sequential lower contribution in the second quarter from Pemina's NGL marketing business, our results benefited from continued growth in volumes across many of Pemina's systems, higher NGL margins, and a strong contribution from the crude oil marketing business. As Cam will detail in a moment, with strong year-to-date results and a positive outlook for the rest of the year, we have raised our 2022 adjusted EBITDA guidance to $3.575 to $3.675 billion. Throughout the second quarter, we continue to progress our portfolio of growth projects, notably by bringing Phase 7 Peace Pipeline expansion into service in June, ahead of schedule, and $150 million under budget, by reactivating to Phase 8 expansion. Likewise, construction on the Phase 9 expansion is ongoing, and we continue to look forward to bringing that project into service later this year. These expansions deliver a multitude of benefits, including full product segregation across the P system and creating additional egress capacity to enhance Pemina's customer service offering and accommodate future growth. We've also advanced the in-service date for our Empress cogeneration facility to Q3 of this year, one quarter earlier than previously expected. The cogen will reduce overall operating costs and contribute to annual GHG reductions at the Empress NGL extraction facility through the utilization of cogeneration waste heat and the low emission power generated. And alongside our partners, we continue to advance two significant proposed developments, the Alberta Carbon Grid and Cedar LNG, both of which are exciting and transformative projects. On the Alberta carbon grid, Pemina and TC Energy progressed work on several fronts, including continued discussions with the government of Alberta, surface and subsurface engineering, and planning and engagement with customers and stakeholders. On Cedar LNG, our project with the Haisla First Nation, front-end engineering design and commercialization work streams are both underway. Through ongoing commercial discussions, we observed considerable interest to get WCSB natural gas to international markets, while at the same time diversifying to new supply sources. In addition to another strong financial quarter and continued progress on our major projects, there were several other positive developments during the first quarter. Second quarter. First, all regulatory approvals have been received in respect of the joint venture transaction with KKR, and we are working to satisfy the remaining conditions to close, which is expected in August. These efforts include the sale of a 50% interest in the caps pipeline, which is consistent with our intentions when we announced the transaction and was part of the agreement with the Competition Bureau. Second, Pemina has now executed the previously referenced long-term agreements with a third leading Northeast BC Montney producer, being Tourmaline. These agreements include the commitment of significant volumes from another multi-phase Northeast BC Montney development and allow Tourmaline to call for future firm transportation and fractionation services on a take-or-pay basis if the acreage is developed. Our agreement with Tourmaline, together with the previously announced service agreements with ConocoPhillips Canada and another unnamed customer, provide three leading Montney producers with certainty of transportation egress from this key area for their future development and access to the remainder of Pemina's integrated value chain, including fractionation and marketing services. As we have been saying for a while, Pemina has a very positive outlook for Northeast BC development, and with existing infrastructure and our integrated service offering, we feel poised to benefit. As a result of long-term commitments under these agreements that we have announced recently, as well as through our ownership in Barrison Midstream, we expect to secure the transportation, fractionation, and marketing rights significant portion of forecasted future growth in the northeast BC Montney. Capturing these incremental volumes will collectively support improved utilization of our existing assets as well as capital efficient expansion projects into the future. As a specific example, Pemina is currently engineering and evaluating up to an incremental 55,000 barrels per day of propylene pus fractionation capacity at the Pemina's Redwater Complex. The Redwater Complex allows for a capital efficient expansion due to existing cavern storage ownership of significant contiguous land holdings, and industry-leading rail and pipeline connectivity. Significant existing infrastructure provides Pemina the flexibility to right-size the incremental fractionation capacity to meet recently announced customer commitments, as well as incremental demand in a de-risked, timely, and cost-effective manner. Third, the contracting of Alliance Pipeline continues to progress very well. During the second quarter of 2022, Alliance offered three open seasons to the market. The largest of the open seasons resulted in approximately 270 million cubic feet per day of incremental long-term firm service with a volume-weighted average term of 15 years, commencing in November 2022. The other two open seasons were for short-term service. Recent open seasons have resulted in Alliance being contracted over 90% for the current and next gas year through November 2023. And finally, Pemina continues to advance execution of its ESG strategy. In July, we established a $1 billion sustainability-linked revolving credit facility, aligning Pemina's finance strategy with its ESG priorities. The facility contains pricing adjustments that reduce or increase borrowing costs based on Pemina's performance relative to a greenhouse gas emissions intensity reduction performance target. Establishing this facility further highlights Pemina's ESG commitment and ongoing efforts to integrate ESG into our business and financing strategy. Additionally, we entered into a power purchase agreement, 105 megawatts of renewable energy and associated renewable attributes with a wholly owned subsidiary of Capstone Infrastructure Corporation. We view power purchase agreements as an efficient tool to support development of renewable energy infrastructure, lower emissions, and support the transition to a lower carbon energy system. The PPA with Capstone also benefits Pemina by securing cost-competitive renewable energy and fixing the price for a portion of the power Pemina consumes. And further to Pemina's ESG strategy, Pemina continues to demonstrate its commitment to equity, diversity, and inclusion in the workplace. Over the past year, Pemina has made tremendous progress toward its goal, including expanding representation in executive leadership roles, both at the vice president and senior vice president levels, and also on the board. The company is well positioned to deliver on its targets and broader EDI initiatives, enabling Pemina to create a safe and inclusive workplace and attract and retain a broad and diverse talent pool at all levels of the organization. Given industry tailwinds, I am looking forward to continued strength and momentum into the back half of this year and beyond. I will now pass the call over to Cam to discuss in more detail the financial highlights for the second quarter.