AltaGas Ltd.

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Altagast Second Quarter 2025 Financial Results Conference Call. My name is Jenny, and I will be your 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 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 Aaron Swanson, Vice President, Investor Relations. Please go ahead, Mr. Swanson.

Good morning. Thank you for joining Health Against's second quarter 2025 results conference call. This call is being webcast, and we encourage following along with the supporting slides that can be found on our website. Speakers this morning will be Vern Yu, President and Chief Executive Officer, and James Harbalus, Executive Vice President and Chief Financial Officer. We are also joined by Randy June, President of Midstream, Lou Jenkins, President of Utilities, and John Morrison, Senior Vice President of Corporate Development and Investor Relations. 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 of the presentation. As usual, prepared remarks will be followed by a question and answer session. I'll now turn the call over to Vern. Thanks, Erin.

Good morning, and thanks for joining us today. It's great to be here this morning to discuss our strong Q2 results. We're pleased with our Q2 performance, where we continue to execute on our strategic priorities, and our strong Q2 results put us in good shape to meet our 2025 guidance. Let's start with our strategic priorities. We've continued to maximize return on our assets by increasing midstream throughput and reducing operating costs in our utility sector. We've actively de-risked our portfolio through long-term tolling agreements, and we're pursuing weather normalization in D.C. Our balance sheet is stronger with trailing leverage now below our target. And we're executing our growth plans with investments in modernization programs and system expansions at our utilities. And we've made strong progress on the construction of Pipestone 2 and Reef. Through it all, we've maintained disciplined capital allocation to drive shareholder value. I'm going to start with some highlights from the quarter, provide an update on our major projects, talk about optimization and expansion opportunities at Reef, and review the macroeconomic tailwinds that are driving growth in both of our businesses. I'll then turn it over to James. He'll review Q2 in more detail. give you an update on 2025 guidance and our longer-term financial outlook. Let's start on slide four. We delivered normalized EBITDA 342 million in the second quarter, 16% higher than Q2 2024. Normalized EPS was 27 cents, nearly double the 14 cents per share we recorded in 2024. Customer demand for open access export terminals continues to be robust, and this has led to new agreements with KIRA, BASF, and Pembina. We have now firmly exceeded our global exports tolling target of 100,000 barrels per day for the 2027 NGL year. Given the commercial support that we've seen for our global exports platforms, We're looking to advance some de-bottlenecking opportunities at our reef, which I will discuss in more detail shortly. We filed a new rate case in Virginia yesterday, seeking a $65 million increase in base rates. That will be effective in early 2026. We also continue to advance the DC rate case and our DC ARP extension. We're expecting resolution of both of these items by the end of 2025. Within midstream, we delivered record second-quarter global export volumes, almost 128,000 barrels per day of LPGs to Asia. Midstream throughput also grew by 6% year-over-year across the balance of our midstream facilities, led by our multi-assets. Utilities also performed well in the quarter, driven by modernization investments, improved asset optimization, and colder weather in Michigan. We're excited about the long-term outlook for our utilities, which continue to deliver the most reliable and cost-effective energy for space heating in our jurisdictions. The delivered cost of electricity is almost four times that of natural gas. And we're operating in a period of growing energy insecurity, particularly in the PJM market, where concerns about power capacity shortfalls are rising. In response, we're making significant investments to connect new customers and modernize our network to enhance long-term safety, reliability, and energy security. This includes securing regulatory approval for projects like the Kibana Connector Pipeline and advancing infrastructure to serve emerging opportunities, such as data centers, where we are progressing projects across Maryland, Michigan, and Virginia. We will also continue to advocate on behalf of our customers against public policies that undermine reliability, affordability, and customer choice. The local economies in Maryland, Virginia, D.C., and Michigan can't grow without affordable and reliable energy, and it's our job to provide it to our customers. Let's turn to our midstream growth projects starting on slide five with reef. Construction on reef continues to be on time and on budget. Approximately 70% of the project's costs are now incurred or committed. with 60% of the total capital cost under fixed-price EPC contracts. The earthworks phase is complete, and concrete foundations are now being poured for the LPG bullets and accumulators. Off-site fabrication in Asia is also progressing according to our execution plan. Propane and butane bullets are over 90% complete, and the three LPG accumulators are over 85% complete. Major equipment will arrive on site in Q4 this year. Progress on the jetty continues to recover from weather delays seen in the winter construction season. Overall, the jetty is around 40% complete, with almost 60% of the permanent piles driven into the seabed. Construction efficiency has ramped up as we've now entered our first summer construction window. On the ground, we've moved to the construction of the rail loop, the on-site roads, and the utilities corridor. Commercially, we continue to see strong demand for our open-access terminals, which gives us conviction to advance reef optimization and expansion initiatives. Slide 6 outlines the optimization and expansion opportunities we're currently evaluating beyond Phase 1. Optimization 1 has the potential to add up to 20,000 barrels per day of propane export capacity. We have sufficient commercial support to advance Optimization 1, and we are working through the final stages of detailed engineering and cost estimates. Our goal would be to complete Optimization 1 within 12 months of Reese's in-service day. Optimization 2 is a larger project with the potential to add up to 60,000 barrels per day. Timing of this project will be dependent on market demand and availability of LPG supply. But we will be positioned to deliver the project by the end of the decade, further expanding global markets for Canadian LPGs. Beyond these optimization projects, we will also progress work for future expansion phases, where we are evaluating the potential for further LPG expansions, including the potential to add other products like ethane. The global waterborne trade for ethane has grown considerably over the last decade, and we've received strong interest from Asian buyers looking to diversify their long-term feedstock sources. To unlock the ethane opportunity, we need to solve a few technical hurdles and ensure ethane exports can comfortably coexist with strong petrochemical demand in Western Canada. We're also making excellent progress on Pipestone 2, which is shown on page slide 7. We're on track to be in service by late 2025. Facility construction and assembly is the only major remaining workstream, and we're now over 85% complete. The project is fully contracted under long-term take-or-pay agreements, and all the project work has either been completed or is under fixed-price EPC contracts. Let's move to slide eight. Our midstream business is well-positioned to match increasing Asian LPG demand with the increased Canadian LPG supply. Led by petrochemical demand in China, Asian LPG demand is expected to grow by more than 30% by 2030. Asian propane demand for PDH facilities, which has been growing at 15% per year since 2020, is expected to grow by another 300,000 barrels per day through the end of 2026. Canadian supply continues to be driven by the development of the Montney. The Montney is very liquids rich, and we're seeing improved liquid yields from the play. Slide nine highlights why we've made considerable infrastructure investments in the Montney over the past decade. More than half of our GMP and fractionation assets are positioned in this region to serve growing demand for gas processing, liquids handling, fractionation, and global exports connectivity. Turning to the macroeconomic outlook for utilities, which is found on slide 10, we continue to see rising demand for all forms of energy across the U.S., with natural gas being critical to meet long-term energy needs. U.S. natural gas demand is increasing with coal-fired power plant retirements, increased industrial activity, and data centers. The constructive outlook for natural gas reinforces our continued investment in modernization projects, where we've invested more than $2 billion since 2018. This has driven an 8% annual rate-based CAGR since 2019, and we expect that to continue for years to come. Our modernization runway remains extensive. More than 30% of our system is made up of vulnerable pipes, which we will replace over time to enhance safety and reliability of our network. These investments will allow us to continue to deliver the most affordable and reliable energy for our customers. The expected increase in energy demand coming from AI and data centers is set to accelerate natural gas demand through 2030. This is particularly prevalent in PGM. We're seeing a significant increase in the gas-fired power generation interconnection queue. Currently, 16 gigawatts of power interconnections are backlogged, nearly double the amount from last year. Lastly, I want to reiterate our 2025 strategic priorities, which we show on slide 11. We'll continue to maximize the value from our existing assets, actively look to reduce our commercial risks, continue to drive down long-term financial leverage, advance our strong organic growth projects, and remain disciplined allocators of capital. I'm very excited about AlphaGas's future and the value we can unlock through the execution of our strategic priorities. And with that, I'll turn it over to James.