TC Energy Corporation

Thank you for standing by. This is the conference operator. Welcome to the TC Energy First Quarter 2026 Results Conference Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star, then 1 on your telephone keypad. Should you need assistance during the conference call, you may reach an operator by pressing star, then 0. I would now like to turn the conference over to Gavin Mairi, Vice President, Investor Relations. Please go ahead.

Thank you. I'd like to welcome you to TC Energy's first quarter 2026 conference call. Joining me are Francois Poirier, President and Chief Executive Officer, Sean O'Donnell, Executive Vice President, Chief Financial Officer, along with other members of our senior leadership team. Francois and Sean will begin today with some comments on our financial results and operational highlights. A copy of the slide presentation is available on our website under the Investors section. Following the remarks, we'll take questions from the investment community. We ask that you please limit yourself to two questions, and if you are a member of the media, please contact our media team. Today's remarks will include forward-looking statements that are subject to important risks and uncertainties. For more information, please see reports filed by TC Energy with Canadian Securities Regulators and with the U.S. Securities Exchange Commission. Finally, we'll refer to certain non-GAAP measures that may not be comparable to similar measures presented by other entities. A reconciliation is contained in the appendix of this presentation. With that, I'll now turn the call to Francois.

Thanks, Gavin, and good morning, everybody. We entered 2026 with strong momentum, delivering against a clear and consistent set of strategic priorities. First and foremost, we had our best safety performance in six years. We generated over $3 billion of comparable EBITDA, up 14% year over year, demonstrating strong, stable results amid ongoing market and geopolitical volatility. We reached settlement agreements with customers on our Canadian mainline, ANR, and Great Lakes assets, with outcomes largely in line with expectations further supporting our comparable EBITDA outlook. Today, I'm pleased to announce a strategic investment on our Columbia Gas System, the US $1.5 billion Appalachia Supply Project, which extends our reach into a high-demand corridor and creates a scalable platform for future growth. Customer demand continues to validate our strategy, with consecutive open seasons in Ohio and on our crossroads system seeing strong response, supporting incremental growth visibility. In Canada, we reached an important milestone with new commercial agreements for Coastal GasLink Phase 2 under a disciplined risk allocation framework, while execution of the Bruce Power MCR program remains firmly on track. These outcomes reinforce our confidence in delivering on our 2026 comparable EBITDA outlook, maintaining disciplined capital spending and preserving balance sheet strength as we continue to deliver solid growth, low risk, and repeatable performance. The U.S. heartland is one of the most strategically important regions in our portfolio and one where we have a clear competitive advantage. With over 27,000 miles of pipeline infrastructure, we operate more natural gas pipeline and storage in the region than any other company offering unmatched access to low-cost supply and key demand markets. Today, the Heartland represents approximately three-quarters of our U.S. deliveries, with natural gas demand expected to grow an additional 40 percent through 2035, driven by diversified demand from power generation, including data centers, LDCs, and LNG exports. Our ANR system sits at the core of our Heartland footprint and exemplifies the strength of our incumbent position in the US Midwest. Including our Heartland and Northwoods projects, we've announced nearly US $3 billion of investment on ANR over the last six years, adding more than 1.1 BCF per day of incremental capacity by leveraging existing rights-of-way and infrastructure. On our Columbia gas system, Natural gas demand across the footprint has increased by approximately 50%, and we expect an additional 4 BCF a day of incremental demand by 2035. We expect this momentum to continue to unlock additional accretive growth opportunities further reinforced by the strategic investment being made today in our Appalachia supply project. This project further extends our reach into this high-value, high-growth market. The U.S. $1.5 billion expansion project on our Columbia gas system is supported by a long-term, 20-year take-or-pay contract backed by an investment-grade utility and is expected to deliver solid risk-adjusted returns and a 7.3 times build multiple. The project will add 0.8 BCF per day of capacity to support new power generation development with an anticipated in-service date of 2030. But importantly, the project will be capable of up to 2 BCF a day of total capacity through future expansions, creating line of sight for capital-efficient growth projects relating to overall economic development, demand from data centers, and as broader electrification continues to scale. This strategic investment reinforces the strength of the Columbia gas system while positioning us for several potential follow-on accretive opportunities. Accelerating power-related load growth is driving customer demand across our footprint, and it's reflected in the results of our two most recent open seasons. As we noted in our fourth quarter earnings call, the Columbus, Ohio open season was approximately three times oversubscribed. This strong response reflects Ohio's projected natural gas demand growth of more than 30% over the next decade, the largest increase nationally outside of LNG exporting states. Growth is being driven by power generation, industrial expansion, and grid reliability needs, including significant incremental load from more than 40 new data centers, positioning Ohio as a top five U.S. data center market. Our crossroads open season received a similarly strong response, with bids exceeding two and a half times the capacity offering. What's important is not just the level of demand we're seeing, but how we're well positioned to capture it. We are intentionally strengthening connections across our systems, linking assets with access to premium low-cost supply, such as Columbia Gas, to systems serving high-quality, long duration demand such as ANR. In corridor expansion opportunities on established systems like crossroads allow us to respond quickly to customer needs, deploy capital efficiently and meaningfully reduce execution risk. Turning to Bruce Power, the MCR program continues to execute safely, reliably and with improving economics. we've seen successive MCR costs come down by applying lessons learned and using new tools like robotics for removal and installation activities. That execution excellence underpins the long-term visibility of cash flows from the asset. By 2030, distributions will begin to meaningfully exceed capital spend. And by 2032, Bruce is expected to generate approximately $1 billion of annual free cash flow, increasing to approximately $2 billion once the MCR program is complete in 2035. Strong execution reinforces confidence in the team's ability to deliver significant free cash flow growth from Bruce Power that creates further optionality, supporting growth across our entire portfolio as well as the potential expansion of Bruce C. And with that, I'll turn it over to Sean to walk through the numbers.

Thanks, Francois. Good morning, everybody. Turning to our first quarter performance, TC delivered 14% year-over-year growth in comparable EBITDA, marking a very strong start to 2026 from each of our four business units. Both our Canadian and U.S. natural gas pipeline businesses continued to perform exceptionally well, setting seven new all-time delivery records during the quarter. The results underscore the strength of our footprint and the value that our highly contracted in-corridor assets provide to our customers. In the power and energy solutions business, Bruce Power achieved 88% availability in the quarter, which is in line with our plan and which also includes the planned outage on Unit 8. For full year 26, we continue to expect Bruce's availability to be in the low 90% range, which is consistent with 2025. Our Alberta cogeneration fleet also delivered exceptional performance, achieving 99.5% availability. On the right-hand side of the page, we summarize our quarterly EBITDA performance. I would highlight that this was a record quarter, marking the first time that we generated more than $3 billion of comparable EBITDA from continuing operations in a single quarter. Growth was led by our Mexico and U.S. natural gas businesses who placed over $8 billion of new assets into service in 2025. Canadian natural gas pipelines benefited from higher flow through depreciation and NGTL incentive earnings, while power and energy solutions saw higher contributions from Bruce Power. These results reflect strong execution across each of our lines of business and reinforce the momentum that underpins our financial outlook for the portfolio this year. Looking ahead, we're reaffirming both our 2026 and 2028 comparable EBITDA outlook, which reflects our customers' steady demand for access to our assets under our unique long-term, low-risk, take-or-pay, and rate-regulated commercial constructs. For 2026, our comparable EBITDA outlook remains at $11.6 to $11.8 billion, which represents roughly a 7% actual to midpoint increase relative to an exceptional performance in 2025, and it represents an 8% actual to midpoint annualized increase relative to 2024. Looking out to 2028, we continue to target comparable EBITDA of $12.6 to $13.1 billion, implying a 6% actual to midpoint three-year annualized growth rate that is fully underpinned by sanctioned projects advancing towards in-service states. Moving to the right-hand side of the page, we summarize several additional factors that could influence our EBITDA outlook over time. While our EBITDA is highly contracted, we have ongoing revenue enhancement initiatives and cost and capital optimization programs across the organization that are in flight, each of which have the potential to drive incremental upside. We've added a project execution dashboard to provide a unique level of visibility on the key projects that are driving EBITDA growth over the next few years. Collectively, these projects account for the majority of our capital allocation and expected EBITDA growth. You'll note that we have a clear line of sight to our in-service dates and our build multiples. Similar to 2025, where we placed over $8 billion of projects into service on time and 15% below budget, The team is carrying that momentum into 2026, where our projects are tracking on schedule and on or under budget. We're providing a lot of detail on this slide, but you'll note that the majority of investment activity is concentrated in the U.S., where we are seeing commercial and regulatory tailwinds that are supporting a weighted average build multiple of 6.2 times. Notwithstanding the attractive positioning of the portfolio today, project execution continues to be a strong focus given how critical it is to our continued growth. Strong execution is a direct reflection of the discipline embedded in our low-risk project selection process and the strength of our cross-functional project delivery capabilities. It is this consistency in our team's execution excellence year in and year out that is foundational to our ability to deliver the financial outlook we provide It also reinforces the confidence we have in both our near-term forecasts and our longer-term growth trajectory. I'll wrap this slide up by underscoring that the visibility we are sharing on our next wave of projects continues to validate the quality, repeatability, and low-risk nature of our project backlog. It's that backlog and our team's ability to execute that underpin our EBITDA outlook and continued shareholder value proposition. I'd like to turn to our investment outlook with our updated capital allocation dashboard. This chart further demonstrates the depth, diversity, and continued growth of our project portfolio through the end of the decade. With today's announcement of the Appalachia Supply Project, we converted approximately $2.2 billion of investment capital from pending approval into sanctioned. Last quarter, we also added over $2 billion of new high-conviction, substantially de-risked projects to our pending approval bucket, which continues to support near-term project announcements. Beyond the project portfolio on this slide, we have about $15 billion of additional projects in origination that are competing for capital allocation this decade. To give you a sense for where some of this $15 billion backlog stands and our confidence in converting them to sanctioned capital over the next year or two, Francois mentioned that we recently conducted two open seasons in the US that were substantially oversubscribed that we're extremely excited about. Similarly, in Canada, we've launched the first in a series of expected new offerings on NGTL, while continuing to advance parallel discussions on a new growth investment framework with customers. I'll wrap this slide up with a few comments about how we're thinking about capital allocation going forward. Over the next couple of years, we will continue to look to optimize and bring forward capital to support up to $6 billion of annual net capital deployment. As we look out to the latter part of the decade and are considering the project backlog we discussed, it is this high-value, largely in-corridor opportunity set that will define our level of net investment. We remain committed to maintaining the balance sheet strength and our 4.75 times leverage target, and we will continue to execute projects with excellence. These guide rails are fundamental to our risk and capital allocation screening process, which supports the ability to exceed the $6 billion annual level, particularly as we near the conclusion of the Bruce MCR program post-2030, as Francois highlighted earlier. That is the scenario which is now in our planning window that sets us up very well for continued EBITDA growth towards 2030 and beyond. With that update, I'll pass the call back to Francois.

Thanks, Sean. We've got an exciting year ahead and our strategic priorities remain clear and firmly in place. We'll continue to maximize the value of our assets through safety and operational excellence while leveraging commercial and technological innovation. We will prioritize low risk, high return growth. More announcements are expected throughout this year. And thirdly, we will maintain our financial strength and agility to support long-term value creation. Operator, we're now ready to take questions.

Thank you. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. Please limit your questions to two, and if you should have additional questions, please re-enter the queue. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. The first question comes from Praneet Satish with Bells Fargo. Please go ahead. The first question comes from Aaron McNeil with TD Con. Please go ahead.

Hey, morning, all. Thanks for taking my questions. Appreciating the implication that the Appalachian Supply Project arguably has a bit of pre-spend for future growth. Can you give us a sense of what the economics of a fully loaded project at 2BCF might look like from a build multiple perspective, and then what needs to happen to get to 2BCF per day, and when do you think that could happen by?

Tina Baraka Good morning, Aaron. This is Tina Baraka. I'll kick off with a response to that question. We're really excited about announcing our Appalachian supply project this morning. for many reasons over and above the headlines that we talked about. When we make capital allocation decisions, we look many years ahead, and the scenarios around placing this line into service gives us a strong long-term growth trajectory. So the nature of these facilities in terms of pipeline extension and compressor modifications is an opportunity for us to leverage future opportunities in the region. The corridor that this project passes through is a high – growth power corridor for us. We see gas demand growing in that region of our footprint by about 4 BCF through 2035, so it's important for us to look to the future as we develop the scope for this project. As you look at the opportunity to increase the capacity of this project to up to 2 BCF, that can be accomplished with minor facility modifications. And so as you kind of contemplate what that might look like, that this will be a very economic expansion for us going forward.

Makes sense. Maybe just switching gears to Canada, the slide deck says you've launched an open season on NGTL. Can you give us a bit more details there and how a project like that would compete for capital versus sort of the other opportunities across the portfolio?

Sure. We did launch an open season on NGTL. We are seeing increased demand across the system. including incremental low growth in the greater Edmonton area, which is what's triggered the recent open season. We've also seen just a step up in general interest across NGTL that we're responding to as a result of the open seasons. Our goal is to aggregate that customer demand in the most efficient way to serve the market. We look at these investments from the lens of ensuring that they earn a competitive risk-adjusted return with the rest of the portfolio. So you'll recall our NGTL settlement, which runs through 2029, that enabled an investment framework through incentive shared mechanisms to support competitive returns on invested capital for our multi-year growth plan. And as we look ahead for the next expansions beyond multi-year growth plan, we're discussing with our customers an opportunity for a new investment framework which will continue to allow us to compete for capital in the market.

Got you. Thanks, everyone. I'll turn it back.

The next question comes from Jeremy Thomas with J.P. Morgan. Please go ahead.

Hi, good morning.

Morning.

Just wanted to start with Appalachian Supply again, the project here. I'm just curious, when you mark the two BCF of capital-efficient expansions. Is 2BCF a specific point as far as capacity-wise for the system that you see, or is it line-of-sight to customer interests? And when you talk about this being a platform for future growth, are you talking just moving to two, or are there other opportunities as well?

Yeah, we marked the 2BCF based on a very economic expansion through just compression or minor modifications. It could be expanded beyond that with a pipeline or extensions, but it's in such a great high growth corridor that not only can we serve growth along that corridor, we can extend that corridor to reach for additional opportunities.

Got it. That's helpful. Thank you. And then just wanted to turn to A&R real quick here. And as far as the settlement, and just wondering if you could share any thoughts in how that, I guess, compares to your guidance expectations. Is there room for upside here from this or anything else, I guess, across your system as you're looking as more settlements could come into place in the future?

The outcome of that settlement, in principle, is a positive result for ANR. We're pleased to have received unanimous agreement with our customers on all major issues. As reflected in the interim rates filing, we have settled with an increase over pre-filed rates. The outcome of that settlement is consistent with estimates. We typically look at sort of a conservative approach, but that doesn't mean that that's not what we're expecting related to an outcome with our customers. So this remains, again, a settlement principle and within our predictions.

Got it. That's helpful. We'll leave it there. Thank you.

The next question comes from Teresa Chen with Buckley. Please go ahead.

Good morning. Turning back to NGTL, given the clear need for incremental residue egress out of the area, Can you elaborate on the new investment framework in discussion? And how has the framework and precedence established by the Canadian Mainline Settlement informed your discussions with shippers on NGPL?

Theresa, it's Francois. I'll take this one. You know, the Mainline was, and, you know, those terms are now out in public. It was really a win-win in that we were able to commit to adding roughly 300 million cubic feet a day of capacity over a four-year period with a $200 million capital commitment, which obviously is a very efficient use of capital in exchange for being able to maintain the incentive programs that were established in the last settlement. This is effectively an extension of that original settlement. A win-win in terms of shippers being able to see expansion of capacity and we're able to have our Canadian projects compete for capital in our internal processes. That was the signal in addition to, in the very recent few months, significant increase in demand for service on our NGTL system. that urged us to enter into a dialogue with our customers on a new investment framework. So we're doing two things in parallel. With the open seasons, we are gauging interest in capacity in three or four parts of the province at the same time as we're discussing a new investment framework. It's early days in terms of that conversation, but suffice it to say that on a risk-adjusted basis, what we have put on the table we feel is a win-win and would compete for capital within our capital allocation framework.

Thank you. In the U.S., following the successful and highly oversubscribed Crossroads pipeline open season, what are the gating items to FID from here? Just taking a step back as the Midwest is increasingly becoming a focal point for data center build-out and is also experiencing the step-up in power demand growth more broadly, can you elaborate more on your view of the magnitude of opportunity size for your assets here and your relative competitive positioning?

Hi, Teresa. This is Tina. I'll start with Crossroads and then move maybe to the more broader discussion on the Midwest growth. As you have heard, our open season was very successful. We had interest that exceeded what we had advocated for by two and a half times. So our focus is now shifting to thoughtfully developing that demand in a means that will drive a capital-efficient expansion for our customers and to try to get the largest size project we can in the most efficient way possible. So we're in the process of working with all of our customers who participated in that open season to refine the commitments and scope. And there's, as I mentioned, certainly the potential to upsize based on current discussions, and we'll continue to target sanctioning that project in 2026 within our five to seven times build multiple range. In terms of the Midwest, we are seeing incredible opportunities across that corridor, specifically in the power demand sector. We see about five-plus BCF per day of incremental gas demand across the Midwest corridor over the next 10 years. And from a competitive standpoint, our incumbency there is really a critical opportunity for us with our Columbia, A&R, Crossroads, northern border and Great Lakes system give us a highly advantaged footprint in that region. We're the number one operator across several of those states. We have over 200 connections to electric and gas utilities in that Midwest corridor, specifically on A&R, so it really positions us well to capture that new demand. Additionally, we bring supply optionality that's becoming more and more important to our customers. We can access Appalachia, Gulf Coast, Mid-Continent, Bakken, and WCSB supply to bring that diversity to our customers. And then finally, our storage access is unparalleled in that region with over 532 BCF of storage opportunities for our customers. So all in all, we're really excited about our opportunity to compete for that growth in that corridor.

Thank you so much. The next question comes from Rob Hope with Scotiabank. Please go ahead.

Good morning, everyone. Can you speak to how your project development pipeline is progressing? So, you know, you sanctioned roughly $2 billion of projects this quarter, and even with that, it appears like the project development pipeline has increased to over $21 billion. So can you just maybe help us understand how, you know, what the book-to-bill ratio is looking like for you?

Yeah, Rob, it's Francois. I'll take this one. As we've said in the past, project development life cycles for pipelines is many years. It takes a good solid year to develop a project and then a couple of years typically to get your permits before you've got shovels in the ground. We have pretty good visibility on what's coming for us down to the specific projects. We have within a 50 basis point plus or minus range a very good sense of what the returns look like and therefore the EBITDA build multiples. And I can tell you that everything in that pipeline in aggregate, the full 21 billion is solidly within that five to seven times EBITDA build multiple and in that 12% in Libra to IRR after-tax range. consistent with what we've seen over the last couple of years. It's true that the backlog is building, and that's because even with the projects that we've been working on for many months, if not years, our utility customers are coming back to us and saying, you know, we want to upsize. As a project to supply electricity gains credibility, and is looking firmer and firmer, that is attracting additional load, either from electrification writ large or from additional data centers that want to benefit from the certainty of a project. It's true that we see the momentum continuing, and it's not surprising that our backlog has grown even from what we had a quarter ago, which was fairly robust.

I appreciate that. Maybe a bit of a broader and longer-term question. Canada is looking to develop an electricity and nuclear strategy. What would you look for in this strategy to help underpin future investment in Brucie, and when should we think that discussions could kick off?

I'll start with a very high level, then I'll ask Greg to provide some detail. We're the only investor-owned owner and operator of nuclear in Canada. Bruce Power is best in class. They are INPO one rated reactors, which means, you know, top decile operating efficiency and safety performance. You may have seen that we've entered into cooperation agreements with Alberta and Saskatchewan. And so we absolutely have ambitions over the next many decades, because these projects take quite a bit of time to develop, to invest and allocate capital to nuclear across the country. That, of course, will come after we prosecute Bruce and evaluate Bruce. So I'll turn that over to Greg. Sure, thanks.

Appreciate the question, Rob. To me, it's quite flattering and can feather in the cap for a great management team at Bruce. to be invited not only into some of the conversations around a federal strategy, but obviously with the recent announcements in Saskatchewan and Alberta. And obviously the experience and credibility that Bruce has built over the last couple of decades as a large-scale operator and seeing some of the critical work and delivery on the MCR program safely, on time, or under budget and ahead of schedule is really leading to them being you know, the team to call on as we think about the next nuclear build in Canada. Just to Francois' point, I just want to reiterate that, like, our immediate focus obviously is the safe delivery of the remaining MCR program and driving Bruce expansion as the next nuclear facility in Canada. We just believe given the existing footprint, infrastructure, the highly skilled labor that we have in place, and the strong local support, and you have an integrated Canadian supply chain. It just makes Bruce kind of that next project we'd like to see happen, but the longer-term prospects and optionality across Canada and having Bruce at the table is extremely important. Excellent.

Thank you. The next question comes from Praneet Satish with Wells Fargo. Please go ahead.

Good morning. Thanks. Sorry for the technical difficulties before. So you have $6 billion of late-stage projects now pending approval. I'm just wondering if you could talk conceptually about what's in the bucket there. I think last quarter you said that Crossroads and Columbia Gas are not in there. Sounds like that's still the case, but Bruce Power MCRs are included. So if Crossroads and Columbia Gas are not in that bucket, does that imply, just adding up the MCRs, does that imply you have another couple billion of undisclosed U.S. gas projects that are close to FID?

Hi, Praneeth. This is Tina. Yes, our backlog continues to grow. You're correct. Those projects were not included in the pending capital. We're advancing those this year based on our customer discussions and the increasing demand across our footprint. As we look towards the end of this year, we know we're continuing to see growth in our power generation sector, which allows us to bring more and more of these advanced projects into that queue. So we are continuing to find opportunities, particularly in the Midwest corridor of our system, where power generation growth continues to exceed our expectations, but importantly, our footprints allowing us to capture those opportunities.

Gotcha. And I guess in light of all these projects, as you think about longer-term capital planning, particularly 2029, 2030, when a lot of the CapEx for these projects that you're sanctioning is going to hit. Leverage should be lower. You're reaching that free cash flow inflection at Bruce. So given that backdrop, I guess maybe if we can revisit how much flexibility you have to increase CapEx, maybe pull forward some of the Bruce free cash flow. On our math, it seems like you could raise it by a couple billion, but just trying to understand the range of outcomes. Thanks.

I'll speak to capital allocation, and then I'll ask Sean to talk about funding and impacts on leverage. We'll remind you all that the first criteria is around maintaining project execution excellence. That is a non-negotiable. contemplate growing our net capital spend beyond six billion. We've satisfied ourselves, our board, that we have the capability to do that with, I think, a fairly detailed and rigorous amount of planning and preparation. Obviously, maintaining balance sheet strength is very important. Toward the latter end of the decade, we will allow the opportunity set within those guardrails to drive the size of our capital program rather than a self-imposed $6 billion net capital limit. We feel that we're in a generational point in time where the returns are quite attractive. We're investing at very attractive returns and build multiples, and we want to make sure that we capture that for the benefit of our shareholders. And over to you, Sean.

Yeah, I think pretty the only thing I would add that thank you for kind of calling out Bruce, right? It is in our planning window now. So as you see, this program will have worked for a decade to deliver the cash flow profile beginning in 2030. It's a ton of fun, you know, to think about what Bruce can help Gasco do in 2030 and beyond. And it's a fundamental game changer. And within the guide rails that Francois just talked about. So 2030 and beyond, our degrees of freedom and optionality subject to team discipline and capability and high returning projects is just a lot of fun.

Thank you.

Next question comes from Robert Catelli with CIBC. Please go ahead.

Hey, good morning. A couple things here on the NGL side. First, with the revised CGL framework, just walk through how that limits TC Energy's construction and cost exposure and what it means for some of the returns you might get if the project goes FID for CGL Phase II later in the decade.

Hi, Rob. This is Tina. I'll take that question. We entered into a new commercial agreement framework with LNG Canada and the partners. What will happen under that agreement is that LNG Canada is going to lead the project execution as the execution manager, and our team will provide technical advisory services. We're actively operationalizing that new execution model. In practice, what that means is that As the project execution lead, LNG Canada will manage some of the cost and schedule activities, and that puts limits on our capital commitments and overall liability for construction costs and schedule risks. So this is consistent with our strategic objectives to produce project execution at capital allocation risk within our tolerance.

And Robert, in your question on returns, As you know, we have an equity account for CGL. We own 35% of the equity. So we look at that project on a levered return basis. Only our equity cash calls are included in the capital table, given the project financing that is expected to be in place once we've got shovels in the ground. So on a levered basis, it is an extremely attractive returning project for TC, albeit a small project in the grand scheme of things.

Okay, understood. And then turning to the U.S., you know, obviously you have a pretty good market share there. Deliveries were up significantly year over year. But as you look to the next wave of U.S. LNG projects, what factors will determine whether you can continue to grow versus maintain your market share there. What type of spare capacity do you have versus likely requirement for new builds?

Rob, you may be familiar that over the last several years, we've progressed several energy export projects across our entire footprint. We've put in service about $16 billion Canadian a project to provide natural gas transportation capacity to LNG export terminals with a total of over seven DCF per day. So we've, over the last several years, really developed a very strong approach to serving this corridor. In the U.S., we have two projects – well, one project underway with our Gillis Access Extension project that will be going into service later this year. And in Canada, we have our Cedar Link project that's in execution as well. So we're continuing to develop solutions for the LNG export model. And as we look into the future, we have great connectivity, not only to the U.S. Gulf Coast, but to the west coast of Canada. So we're well positioned to capture additional opportunities through expansion of those facilities.

Thank you. Got it.

The next question comes from Siri Dunas with Citi. Please go ahead.

Thanks, operator. Good morning, team. I wanted to go back to the $15 billion backlog and maybe a bit of a follow-up to Puneet's question. So clearly that backlog is now 25% higher since the last update. It seems to imply things are accelerating here. So I guess in the context of elevating your CapEx cadence later on in the decade, just curious how much of that $15 billion could potentially result in pre-2030 spending?

Thanks. I'll go ahead and answer that question. So the $15 billion backlog is primarily in the US business for our pipeline facilities. As we look at the lifecycle of a project, it typically takes, as Francois mentioned, several years from origination into in-service. So typically, the largest spend on a project is the year that you're actually going into construction. So oftentimes, that spend is weighted towards the end of that cycle. And so that's kind of how we think of the spread of that capital. Most of our projects are now targeting anywhere from 29, 30, 31 types of in-service states.

Great. That's helpful. Thanks, Tina. And then a question just on the Canadian pipeline side, and you mentioned it there a little bit, but it sounds like that region is getting closer to competing for capital at a larger scale. And so I guess I'm curious, how much of the Canadian expansion is in that $15 billion backlog. It sounds like not much. And I guess maybe another way to ask it is, what's the opportunity set there? How much could be added if this framework starts to be scaled up higher?

So very little of the NGTL expansion is in the $15 billion backlog, as I said earlier. Spiro were early days in our conversations with our customers around a new investment framework, and it would be premature to put it in our backlog based on our criteria. It could be several billion dollars. We've seen since the MOU between Canada and Alberta was announced a significant uptick in interest in service. And that has been the catalyst for us kind of in between our typical, you know, annual demand assessments to come out with sort of an off-cycle service offering. So it's moved very quickly, and it could be quite meaningful subject to a new investment framework. Great. I'll leave it there. Thank you, team.

The next question comes from Maurice Choi with RBC Capital Market. Please go ahead.

Thank you and good morning, everyone. I just wanted to start with a big picture question. You mentioned earlier the non-negotiables on project execution, balance sheet strength, and competitive returns. From your perspective at the very top, and as you think about times beyond the next three years, what are the areas of your business that you're seeing as being perhaps an emerging limiter to the durability of your growth?

Maurice, it's Francois. I'll take that one. It's certainly not demand and it's not the return profile of the projects we're seeing. It's really human capital. As I said, we've gone through a very rigorous and detailed organizational readiness assessment in order to be able to execute on projects. We feel that we've developed processes and mechanisms to have a good couple of years of visibility around where the points of tightness might be in terms of our people, in terms of contractors, supply chain for steel and compressors, et cetera. So I would say that would be the one limit when you're looking into the 2030s. The other would be the permitting and policy environment. We're seeing some tailwinds there, both in Canada and the United States, with respect to a desire of governments to accelerate infrastructure spending for affordability and also energy security purposes. Our base case right now is that those constraints will not present themselves, but we have to plan for all scenarios. We have to be disciplined. And the last line of defense will always be our ability to safely and efficiently deliver our projects on time and on budget and with impeccable safety record.

Thanks. And maybe as a quick follow-up, is supply chain an area that you spend more time in, or is it the fact that you're quite large, you've got a conscious skill and ability to demand?

Maurice, we do have to pay close attention to the supply chain. It is a bit tighter in the United States than it is in Canada. That's one of the reasons why Canada seems like an attractive opportunity for us to deploy more capital. There's a bit more slack in capacity there. But we're taking different practices to manage supply chain risk. We're entering into strategic alliances and long-term agreements with OEMs. We're contemplating doing that with construction firms as well, just to make sure that we have not only the project backlog, but the certainty in our ability to execute. We do see the need for us to be a bit more strategic and do things a little differently than we have in the past. It's a very high-quality problem, as I would say.

Understood. And if I could just finish off with a quick follow-up to one of Tina's earlier responses on the Appalachia supply project. The initial phase is 7.3 times bill multiple, and you suggested that there should be better returns and economics for future phases. Is it fair to say that after all these phases are built, you'll probably be averaging down to within the five to seven times target range and potentially maybe even closer to the lower end of that range?

Thanks, Maurice. Yeah, given the fact that we can very efficiently expand that new infrastructure up to BCF per day, you could quickly see how we could move that down towards the end of that five to seven times range.

Great. Thank you very much.

The next question comes from Sam Burlow with Jeff Bees. Bees, go ahead.

Good morning, guys. I wanted to clarify whether the Appalachian Supply Project was only in the pending approval bucket for a quarter. I'm just curious if the PGM backstop procurement announcements have had just any bearing at all on sanctioning it. any more quickly or if this was more fully baked and that was a non-factor, but potentially PGM development might be a tailwind for future project origination or just converting backlog?

Yeah, I'll start with just the market drivers there. That was not a consideration as part of this sanctioning the project as well as the development of the opportunity set could be a tailwind certainly, but that wasn't the driver for the customer demand here.

Okay, understood. And then the $200 million that you flagged for Canadian mainline investment, just any comment on how that exactly increases egress capacity out of Western Canada? Is that mostly addressed Eastern Canada? I'm curious if there's anything we can read through in potentially sending more Canadian gas down into the U.S. on your pipeline systems downstream.

Yeah, thanks, Sam. The capital that we're looking at for our mainline expansion supports primarily capacity from Empress to Emerson. So that enables us to feed expansions downstream of Emerson on the northern Ontario line and into the eastern triangle. So that's where we're focused with that capital right now.

Okay, great. Thank you, Tina. Yeah.

The next question comes from Ben Pham with BMO. Please go ahead.

Hey, thanks. Good morning. I had a question on your three different buckets of the backlog. You got the $23 billion secured, the $6 billion and the $15 billion. I know you've talked about this in earlier remarks, but can you define maybe a bit more context and what a project needs to achieve to fit in the $6 billion? also the $15 billion plus in origination?

Yeah, hey, Bennett, Sean, I'll take that one just to echo a little bit of Francois' comments. You know, the what has to be true for a project to compete for capital, obviously it's got to be a high-returning, low-risk project, and predominantly in corridor is what you're seeing in everything on that slide. And then the human capital internally as well as supply chain control and visibility, right? Those are really the guide rails as we talk about. And as we get into that 2030 and beyond, as Tina was mentioning, the 4.75 remains true in all years and it gets even easier, you know, the post 2030 kind of time period for that or better to be our metric given the cash flow profile. So that's really a triangulation, right?

And in terms of you know, the difference between pending and in our advanced business development. You know, pending, you know, we may not have contractually committed the capital, but in our minds, we've committed the capital. So it's a very, very high bar to make it into the pending bucket. We haven't seen anything as of yet fall out of the pending bucket other than to become a sanctioned project. And there is deal flow and opportunity set of conversations that are not even in the advanced business development, the $15 billion that we put there. For projects to make it into that $15 billion number, we have to have had concrete conversations with customers where we have a good idea of what the capital commitment would be that it translates into a toll that's competitive. We may be in the process of bidding against our competitors. Certainly, there's no certainty if you're in that $15 billion number that it'll transpire. You would have had to win a bid, but still be working through some of the details to make it into the pending bucket. So there's even another bucket that's more in the preliminary stages that's you know, in addition to the 15 that's there. So the 15 has a fair amount of substance in it. Obviously with our Columbus, Ohio project and our Crossroads project, those are in that 15 billion and not yet in the pending, despite the fact that we have had very robust open seasons. There's a lot of work that needs to be done after you've had an open season, sorting through all the details of the contracts, making sure the credit provisions, The delivery points that customers are asking for, looking at reaffirming capital cost given you have a much better sense of what the actual demand is. So just a whole bunch of tailwinds in all three of those categories that give us a lot of confidence and our ability to extend our growth well into the next decade.

And it sounds like when you think about this fourth even bucket perspective, it sounds like you have a multi-year runway of constant replenishment than on the $6 billion and the $15 billion.

Very much so. As I said, it takes multiple years to develop and permit projects. We benefit from a very high degree of visibility many years into the future, so that is absolutely the case, Ben.

Okay, that's great. Just my follow-up on NGATL, the new investment framework, to clarify that. That doesn't require you to go back in the existing settlement and open it up. It's something that could be outside of that framework.

You're correct, Ben. That would be outside of the existing settlement. It would be specific to any new investments past the multi-year growth program.

Okay, got it. Thank you.

The next question comes from John McKay with Goldman Sachs. Please go ahead.

Hey, team. Thanks for the time. Maybe I'll do a quick one on the backlog, not to fall too far into semantics around pending approval versus origination, et cetera. But let me talk about that $15 billion. Is there a general timeframe for that? Francois, you mentioned kind of project cycling in, cycling out. Would you be able to put a kind of number of quarters or number of years around that $15 billion?

Hi, John, this is Tina. I'll talk maybe more about the timing for in-service, but these projects span various in-service dates anywhere from 2028 through 2031. So depending on where we're at in the discussions with the customers and the commitment for earlier in-service dates around that earlier 28, 29, 30 timeframe would require sanctioning in the next year or two. We look towards when those need to be sanctioned in order for us to start the development activities and move those into execution with our regulators. So hard to say, but we have a long runway of opportunities to sanction these projects over the next several quarters and several years.

All right, that's our quick second one for me. You and a couple of your peers were talking about a lot of Midwest gas demand growth. Can you spend a second on where you see the gas supply coming from those? And more specifically, are you having conversations with Appalachia producers that are looking to effectively boost overall basin egress, get Marcel's production higher than it's been and move, I guess, effectively, you know, incremental production to the west?

Thanks, John. It's really been interesting with our customer discussions where supply optionality in that region is becoming more and more important. That's why you're seeing projects like our Crossroads project becoming over two and a half times oversubscribed because customers are looking for optionality. In the Midwest, our supply opportunities give us access to Appalachia, Gulf Coast region, Mid-Continent, Bakken, and the WCSB. So we're really well positioned to provide that optionality that the customers want. A couple of our projects into Wisconsin over the last several years have brought in more WCSB supply. Some of the producers are interested in that opportunity, but it's really the demand component of that that's looking towards sanctioning projects here in the near term.

I know we're at the top of time. Maybe just a quick clarification on that. On ASP specifically, is that bringing incremental Marcellus egress, or is this just, I guess you could say, improving connectivity to existing Marcellus utica supply?

Given the large amount of supply that's required for that project, we are the number one transporter of Appalachian supply in the region. This project will allow for additional egress out of the basin.

Fantastic. Appreciate the time. Thank you.

Next question comes from Zach with TPH. Please go ahead.

Hi, all. Thanks for taking my question. Maybe going back to the last question a bit, I know you mentioned four BCF of demand around your assets, but then mentioned five BCF of demand in the Midwest. Do you guys have an internal... whole demand number for the Northeast. It seems like some of your peers as well as the producers keep increasing that to the 5 to 8 BCF range. I was just curious if you guys had an internal number on a total demand.

Zach, this is Tina. Thanks for the question. The numbers continue to exceed our expectations. Our new forecasts are coming out soon and looking at those recently, we are seeing the power generation component of that demand actually moving up into that 5 to 8 times our 5 to 8 BCF range in that Midwest corridor. Our facilities are primarily weighted towards the Midwest, where a lot of that growth is. So as I mentioned before, we're the number one operator across several Midwest states that allows us to advance that connectivity and serve that growing demand.

Gotcha. That makes sense. And then you mentioned diversity of supply. I'm curious if you're still seeing demand from the Gulf Coast, maybe down A&R or Columbia Gulf? Or are most of these projects now in the Northeast basically absorbing all the incremental supply? There might not be a need for a longer haul project just because there's enough projects in the Northeast?

There certainly are lots of projects out there right now, but it's As I mentioned before, the supply optionality has really been an important component of our discussions with our customers and our ability to access not only all the Appalachian supply and the mid-continent supply, but our connectivity to the Gulf Coast and Haynesville is an important differentiator for us as well. So we are seeing our customers look to all supply basins right now that we are connected to to provide them with supply optionality into the various regions that they're seeing their demand growth.

Gotcha. That makes sense. Appreciate the time.

The next question comes from Keith Stanley with Wolf Research. Please go ahead.

Hi. Good morning. On Crossroads, I wanted to follow up. Your competitor was also oversubscribed on their competing projects open season in that area, so it feels like demand is overwhelming. Going forward, would you say you're competing with them for securing this demand in that area with binding agreements, or do you see your project as mostly separate from them and a different set of customers you're negotiating with?

Thanks for that question, Keith. This is Tina. As I've mentioned before, our competitive position in that region is very strong, and we're well positioned to compete for and win our fair share of opportunities in that region. Our connectivity to over 200 electric and gas utility city gates in that corridor gives us, I think, a substantial competitive edge. However, where you're located and where you're connected is really important as well. That, again, goes to our interconnectivity with all the electric and gas utilities in the region. The oversubscription of our project and some of our peers' projects, I think, is just this increasing opportunity set for supply diversity across the region, but importantly, many of our customers are looking for some level of redundancy and perhaps even just some optionality. So, I think there's room for more expansion in this corridor, but I'm very confident we're going to win our fair share.

Thanks for that. Second question, for the gray bar projects awaiting finalization, would you say they're fairly diversified across the asset base, or are they very concentrated in this heartland area you've been pointing to with Columbia and A&R?

I think you could say, Keith, there's a fair degree of diversification in that ending approval bucket.

Got it. Thank you.

Thank you.

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

Well, thank you again for participating this morning, the great questions that we've been asked, and for your interest in TC Energy. If we didn't get to your question, as the operator mentioned, please do reach out to the Investor Relations team. We're always happy to help. With that, we'll close out and look forward to our next update in late July. Thank you very much.

This brings to a close today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.