AltaGas Ltd.

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the AltaGas first quarter 2024 financial results conference call. My name is Sylvie and I will be your conference operator for today's call. All lines have been placed on mute to prevent any background noise. If you have any difficulties hearing the conference, please press star then zero for operator assistance at any time. After the speaker's remarks, there will be a question and answer session. As a reminder, this conference call is being broadcast live on the internet and recorded. I would now like to turn the conference call over to Adam McKnight, Director, Investor Relations. Please go ahead, Mr. McKnight.

Thanks, and good morning, everyone. Thank you for joining us today for AltaGas' first quarter 2024 financial results conference call. Speaking on the call this morning will be Vern Yu, President and Chief Executive Officer, and James Harbalus, Executive Vice President and Chief Financial Officer. We're also joined here this morning by Randy Toon, Executive Vice President and President of our midstream business, Blue Jenkins, Executive Vice President and President of our utilities business, and John Morrison, Senior Vice President, Corporate Development and Investor Relations. We'll proceed on the basis that everyone is taking the opportunity to review the press release and our first quarter results. This call is webcast and we encourage those of you listening on the phone lines to follow along with the supporting slides that can be found on our website. As always, today's prepared remarks will be followed by an analyst question and answer period. As for the structure of the call, we'll start with Vern Yu providing a few of the first quarter highlights. Then he'll discuss the macro outlook for the business, and provide an update on our reef project. This will be followed by James Harbilis discussing our 2024 priorities and our first quarter operating performance in more detail. Then he'll provide an update on MVP and close with our 2024 outlook and guidance. And then we'll leave plenty of time at the end for Q&A. Before we begin, I'll remind everyone that we will refer to forward-looking information on today's call. This information is subject to certain risks and uncertainties as outlined in the forward-looking information disclosure on slide two. And with that, I'll now turn the call over to Vern Yu.

Thanks, Adam. Good morning, everyone. It's great to be here today to discuss our strong first quarter results. I'll talk about the highlights from the quarter, then touch on the macroeconomic outlook, and provide an update on our reef project before turning it over to James. Let's start on slide four. Our diversified platform continues to deliver strong results as we execute on our strategic plan. This quarter, we delivered normalized EPS of $1.14 and normalized EBITDA of $660 million, an increase of 15% and 13% year-over-year, respectively. We saw results in line with our expectations for our utilities business and stronger-than-expected performance in midstream. which included record first quarter global export volumes and contributions from the newly acquired Pipestone assets. We exported over 115,000 barrels a day of propane and butane to demand markets in Asia, with 12 ships departing from Ripit and seven from Ferndale. Ripit had a record quarter with 77,000 barrels a day of exports due to great operating performance by the team and growing Western Canadian LPG supply. We completed a very successful NGL recontracting season on April 1st, where we'll have 56% of our 2024 export volumes under tolling agreements. This is ahead of our near-term targets and part of our strategy to grow the take or pay or cost of service portion of our business to about 90% of our total EBITDA. We also commissioned our third VLGC time charter, and extended the term of a previous time charter agreement. In the utilities, our number one priority is to safely and reliably deliver affordable energy to our customers. In the quarter, we invested $179 million into our network to make it safer and more reliable while lowering our emissions. On April 1, we filed an application in Michigan to extend SEMCO's modernization programs by an incremental $114 million, which will extend the program out to 2027. This will be used to improve the safety and reliability of our system while reducing long-term operating costs and lowering emissions. Although weather was warmer than usual in Michigan and DC, financial performance was in line with our expectations. due to a better than expected rate case decision in DC, strong retail performance, and continued cost management. Enhanced efficiency will continue to be a focus for the balance of 2024. Turning to slide five, we remain very positive on the fundamentals for natural gas, NGLs, and the outlook for both of our businesses. Natural gas is affordable, reliable, and the fastest growing form of energy in the United States. Moving from coal to natural gas has been the largest driver in reducing emissions globally over the last decade. And the average natural gas-powered home in the U.S. uses 42% less energy and produces 20% less CO2 than an electric-powered home. Last week, we saw the U.S. federal government take further steps to crack down on emissions from coal-fired power generation. These new rules will force the shutdown of many of the U.S.' 's coal power plants, further increasing the need for natural gas. All of this demonstrates why natural gas is critical across our jurisdictions. Slide 6 highlights why we believe we are in a unique inflection point and highlights the importance of natural gas and the longevity of our utilities. A big part of this is rising energy demand for AI and data centers within WGL's service area. Coal plant retirements and data center growth are expected to boost U.S. natural gas demand by 5 to 10 BCF per day by 2030. Turning to Canadian midstream on slide 7, the outlook is equally robust. Gas development activity in Canada is healthy, as producers look beyond current near-term headwinds and are focused on LNG Canada coming online. Gas drilling is at a three-year high. In total, Canadian gas production is set to rise 40% through 2030, and Canadian NGL production is expected to increase by more than 35% over the same period. With limited growth in domestic demand, all of this product needs to be exported globally. Let's move to slide eight. I'm pleased to provide an update on our reef project, where we continue to move towards reaching an FID by the end of Q2. Reef is planned to be developed and constructed in phases. This approach allows for the most capital efficient builder of the project and matches export supply with reef's export capacity. The first phase of the project will include the LPG export facility. which shall have an initial export capacity of 55,000 barrels per day, 600,000 barrels of LPG storage, rail offloading and logistics infrastructure, and the new jetty, which is shown in blue on the slide. The first phase of reef will only use 10% of the dock's capacity. Subsequent phases are shown in yellow and orange on the diagrams. and will provide long-term expansion opportunities for years to come. Slide 9 shows the location of Reef relative to Ripit and the surrounding area. Just like Ripit, Reef has geographic and logistical advantages, and these are highlighted on slide 10. It will benefit from Prince Rupert's deepwater ice-free harbour and its proximity to Asian markets. and the dock will have multi-vessel loading capabilities. At startup, Reef will have 10 dual-sided rail offloading slots and 25 kilometers of rail track, which will eliminate rail congestion and provide enhanced storage options if there are logistical disruptions. As seen on slide 11, progress on Reef continues to be on track with 85% of the site preparation now complete. On slide 12, we update the key gating items to reach FID. Front-end engineering and design is more than 95% complete, and we are ready to commence earthworks and in-water piling, as well as award other major work streams. Reef benefits from being on a single site, having all of its key regulatory approvals in hand, and from our previous experience in building rip-its. We plan to minimize on-site work to reduce capital cost risk, with 90% of the equipment, packaging, and pipes being prefabricated off-site, limiting our exposure. And we expect to have more than 60% of the project's costs fixed before we move into construction of each workstream. On the commercial side, we now have 56% of our global export volumes under tolling agreement, with a diversified mix of over 30 customers, including producers, aggregators, and downstream off-takers. Demand for REAP's initial capacity has been very strong. We are now in negotiations with multiple counterparties for more than 100% of REAP's phase one capacity. Based on the contracts in hand and the status of our negotiations, commercials no longer considered a gating item to a positive FID. We're proud of AltaGas' performance in the first quarter, and we're very excited about the road ahead. With that, I'm going to turn it over to James to get into the details on the quarter, review our 2024 priorities, and provide an outlook for the balance of the year.