Keyera Corp.

Good morning. My name is Joelle, and I will be your conference operator today. At this time, I would like to welcome everyone to Kiara's 2024 Third Quarter Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, please press star, followed by the two. Thank you. I would now like to turn the call over to Dan Cuthbertson, General Manager of Investor Relations. You may begin.

Thanks, and good morning. Joining me today will be Dean Setaguchi, President and CEO, Eileen Maricar, Senior Vice President and CFO, Jamie Urquhart, Senior Vice President and Chief Commercial Officer, and Jared Bestilny, Senior Vice President, Operations and Engineering. We'll begin with some prepared remarks from Dean and Eileen, after which we will open the call to questions. I'd like to remind listeners that some of the comments and answers we will be giving today relate to future events. These forward-looking statements are given as of today's date and reflect events or outcomes that management currently expects. In addition, we will refer to some non-GAAP financial measures. For additional information on non-GAAP measures and forward-looking statements, please refer to Kiera's public filings available on CDAR and our website. With that, I'll turn the call over to Dean.

Thanks, Dan, and good morning, everyone. We're pleased to deliver another solid quarter driven by strong performance from all three business segments. We remain well on track to reach the upper end of our six to 7% EBITDA growth target. In our gathering processing segment, we delivered 99 million in realized margin. This result was supported by near record quarterly throughput from our north region up 15% year over year. This included the partial impact of our turnaround at the Wapiti gas plant. Our liquids infrastructure segment delivered its second highest quarter ever, with $135 million in realized margin. Driving this performance was a continued ramp up of caps and growing demand for our fractionation, storage, and condensate businesses. Our marketing segment continued to perform well, generating $135 million in realized margin. The increase relative to last year was due to higher propane, condensate, and iso-octane sales volumes and margins. Our marketing segment is a distinct competitive advantage. Strong cash flow from this physical business has enabled us to consistently deliver above average after-tax corporate returns. This cash flow is then reinvested into long-life infrastructure projects. in turn driving growth and high-quality fee-for-service cash flow. We continue to advance capital-efficient growth opportunities. At KFS, we have ordered long-lead items for an 8,000-barrel-per-day debottleneck over Fract 2. We expect to officially sanction the project in the early part of 2025 to achieve an end-service date late in 2026. We continue to advance customer contracting and engineering on KFS Fract 3. This project would add about 47,000 barrels per day of additional capacity. Together, these two projects will increase our overall net fractionation capacity by about 60%, further strengthening our integrated value chain and our ability to service customers. We finished the quarter in a very strong financial position. This gives us tremendous flexibility to deploy capital in a manner that is most value-creative for shareholders. Today we announce that we'll be seeking approval for share buybacks. This will be used opportunistically and weighed carefully against other options for deploying capital. As we said before, based on the opportunities we see, our preference is to invest in continuing to grow our integrated platform in Western Canada. I'll now turn it over to Eileen, who will provide an overview of our financial performance for the quarter and speak to our guidance for 2024. Eileen?

Thanks, Dean. Net earnings were $185 million compared to $78 million for the same period last year. Adjusted EBITDA for the quarter was $322 million compared to $288 million for the same period last year. Distributable cash flow was $195 million, or $0.85 per share, compared to $186 million, or $0.81 per share, for the same period in 2023. These results were mostly driven by higher year-over-year contributions from all three business segments. We continue to maintain a strong financial position, exiting the quarter with net debt to adjusted EBITDA at 1.9 times. below our targeted range of 2.5 to 3 times. This positions us well to pursue opportunities that will continue to enhance shareholder value. Moving on to our guidance for 2024, we are reaffirming our marketing segment realized margin range at $450 million to $480 million. Growth capital for 2024 is expected to come in at the high end of the previously guided range of $80 million to $100 million. This includes capital for the frac expansions and additional tie-ins for new customer volumes at the Wapiti gas plant. Maintenance capital remains unchanged at between $120 million and $140 million. And lastly, cash taxes are to remain in the range of $90 to $100 million. I'll now turn it back over to Dean.

Thanks, Eileen. Basin volume growth is materializing. This is evidenced by our growing fee-for-service cash flow. We're also seeing strong future demand for our services, allowing us to move forward with capital efficient growth projects. This continued growth is supported by key developments, including TMX, LNG Canada, a growing petrochemical industry, and increasing LPG exports off the west coast of Canada. As an essential infrastructure service provider, Kiara will continue to play an important role in enabling basin growth. On behalf of Kiara's Board of Directors and management team, I want to thank our employees, customers, shareholders, Indigenous rights holders, and other stakeholders for the continued support. With that, I'll turn it back to the operator for Q&A.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the two. If you are using a speakerphone, please lift your hands up before pressing any keys. First question comes from Rob Hope with Scotiabank. Your line is now open.

Good morning, everyone. My first question is on KFS3. Can you give maybe a little bit of color on KFS3? you know, how contracting discussions are there. Previously, you did speak to the potential that this could be sanctioned early 2025. And then also, have you started to order any equipment related to this project as well?

Yeah, good morning, Rob, and thanks for the question. You know, fracked demand in Western Canada is extremely tight. And so, you know, right now our fractionator is very full. As we've been talking about, we certainly see a lot of growth in the basin with LNG Canada, certainly a lot of demand for condensate with growing volumes on TMX. And with that, we just see a lot more natural gas development. And out of that natural gas development, it's going to be weighted to liquids-rich areas, which is going to drive more fractionation demand. So the point I'm getting to is that we see a lot of demand, not only for existing frac, but for future frac capacity. that we continue to advance that project and sign contracts. But I'll turn it over to Jamie and let him add any other comments on top of that.

Yeah, thanks, Dean. And thanks for the question, Rob. I think the only thing that I can add from a factory perspective is that we've completed pre-feed. That was completed in the quarter. And we've proceeded immediately into feed. And as Dean alluded to, and I can just reaffirm that We're very pleased with the progress that we've made on commercial contracting, and as such, we're gaining more confidence that we'll be able to move ahead with both those projects in 2025.

And I might also add, Rob, what we feel good about is that we're basically cloning our frac tube in a lot of ways, so it makes just less unknowns with respect to engineering and construction. So we feel very comfortable the way that side of the project is advancing.

All right, good. And then maybe just turning over to the optimization, you know, it looks like you're moving forward with a number of small projects at Brezeau and Wapiti. You know, as you've progressed through 2024, have you seen, you know, the amount and magnitude of these smaller high return capital projects increase? And is that, you know, is that really the reason why the CapEx is moving up towards the upper end of the band?

Yeah, first of all, I mean, you know, as we grow, we have to be very disciplined about optimizing our portfolio so that we can focus our attention and our capital to, you know, projects that are strategic to our long-term vision. And, you know, so some of the smaller plants, they still require a lot of resources that a big plant would. So, you know, it's better in other people's hands. So we're pleased that we're able to, you know, I guess, consolidate and high grade our portfolio. But we do see a lot of great opportunities, both in our north portfolio and also in our south. I know, Jamie, you have anything else you want to add?

Yeah, the only thing I'd add to that is, as you keyed in on, Rob, is that we have specific hurdle rates that we need to meet for those smaller projects. And all of the projects that we're working on right now that are frankly driven by customer demand and increased utilization opportunities at our facilities, they all hit or exceed those hurdle rates.

Thank you.

Your next question comes from Maurice Chao with RBC Capital Markets. Your line is now open.

Thanks, and good morning, everyone. Maybe I could just stick with hurdle rates and also moving forward with the FRAC projects. You previously highlighted the importance of underpinning projects with long-term contracts where the take-or-pay volumes support a 10% to 15% pre-tax target ROC with upside after that from spot volumes, full-on contracts, or marketing activities. Would that still be the case for these two projects as well as any future projects that you do?

Good morning, Maurice, and thank you for the question. You know, first of all, yeah, that's generally true for our infrastructure projects and our FRAC projects would be no different. You know, we've been very, we issued an update at the beginning of the year in terms of the contracting that we did there on our FRAC, but our whole integrated system. And, you know, I'm pleased with just the forward progress we've made on additional contracting since then. You know, we feel pretty good about where we stand today and our path to sanctioning this project next year. You know, when we think about our whole system, we have an integrated system and right now the biggest bottleneck is at our frack. So it makes a lot of sense that we're focusing a lot of time and attention and there's a lot of demand for that part of our service. So again, everything continues to advance both on the D bottleneck and the frack three. And we think both projects will generate strong returns for us on an individual basis and on an integrated basis.

Understood. And if I could finish off with a question about volumes and your outlook for both GMP and LI. Obviously, on the GMP front, the north record volumes are near record volumes, but lower in the south. Thoughts on the volumes on this part of the business, given the low gas prices? And on the Allied side, anything outside of the frag volumes that you could comment on, on what you see in volumes?

Yeah, well, generally, I mean, you know, as I said before, I mean, we're very optimistic about the growth for natural gas in our basin. You know, we see out to the end of the decade, you know, getting to that five or six BCF a day of growth. which is very significant. And we think a lot of it's going to happen along the Montney Fairway where we have a very good footprint up there. But at the same time, I really believe that setting aside where natural gas is today and where it's been in the summertime, I think with all this additional demand, it's going to compress differentials. And we will see more drilling in our south. Keep in mind that our south portfolio, these are very mature assets that really are are almost fully depreciated. So, you know, we think that we can attract value down there and be very competitive with our service. So I think over time, over the next five or six years, we're going to see growth in both areas. But Jamie?

Yeah. So, you know, the only thing I'd add there is that, you know, we had previously announced in previous quarters that one of our customers had decided to shut in some gas behind the Brazzo River gas pump. That gas has been brought back. And so our expectation in Q4 is that we're going to see an uptick in utilization, primarily at the Brazzo River facility, a little bit at Nordic River as well. But the other point I'd like to make is that we still continue to be extremely encouraged by the development in the Duvernay around Ribby. And some significant land sales in the last couple of weeks, that point to some of the existing producers or new entrants, don't know because it was behind a broker, they similarly view and are very excited about the new Rene. And so we're starting to see some additional volumes behind our Rimby gas plant in particular, which is very well suited based on its ethane and C3 plus extraction capabilities. So that's an area in the south that we continue to be extremely excited about in the future.

Just as a quick follow-up, if you could just parse out this potential recovery in itself, are we talking about it in a matter of like, you know, a couple quarters, or is it more about waiting until the LNG Canada fully ramps up before we see recovery in itself?

Yeah, well, I guess it'll depend on how quickly gas prices bounce back, but also just the fundamentals of this is still relatively liquids-rich natural gas. And our facilities in the south, for the most part, have high liquids recoveries. So I think the worst is behind us with respect to any reduction in utilization we've seen in the south. And the utilization impact is not that significant, frankly.

I think to Jamie's point, I mean, we think it's pretty positive that the Duvernay is looking to be a pretty commercial development facility. And so it's still in the very early stages. And as that continues to get developed, I mean, it's going to be just another play behind our facilities that is more oil weighted. So just like the Montney. So I think you'll see, you know, less sensitivity to natural gas prices as the DuVernay gets developed. And just a reminder, I mean, our RIMBY gas plant is a turbo standard gas plants with $200 million a day of unutilized capacity. So that's just like a full train of capacity that we have available down there to provide that service. Thank you very much. Thank you.

Your next question comes from Spyro Dunas with Citi. Your line is now open.

Thanks, Operator. Morning, team. I wanted to start with the buyback really quickly, if we could. Dean, you've made it pretty clear that the preference on capital allocation is for growth, and certainly you've got several projects in the hopper here in front of you, but I imagine this isn't an either-or situation between those two choices, and there will be some opportunities to weave in buybacks opportunistically from here. So I just really want to get a better understanding of maybe some of the conditions you'll be looking forward to to lead you to execute on that buyback.

Good morning, Sparrow, and thanks for the question. Overall, I'll say what we're here to do is to add value for our shareholders. The great thing is that we're in an enviable position with our balance sheet, and so we have a lot of opportunities to do that. But we see a lot of growth potential with what we see from just the growth that's going to happen in the basin and the discussions we have with our customers. So, you know, we see some pretty good opportunities there, but I'll just turn it over to Eileen for her comments.

Thanks, Spiro, and thanks, Dean. Yeah, not too much to add to that. I mean, it's nice now that we have the tool available to us so that this is something that we will constantly be weighing against other capital allocation opportunities. And, you know, back to where Dean, you know, was talking about, we are in an enviable position. Our balance sheet strength is a competitive advantage. And when you Combine both the balance sheet with the growth we see in the basin, there's just so much opportunity to deliver high returns for shareholders. At the end of the day, our goal is unchanged. It's to allocate capital to that highest value option, whether that be organic, inorganic growth, and now we have the ability to do buybacks when they make sense.

Got it. Great. And then, Eileen, you just touched on my second question, which is around inorganic growth. We've seen some M&A activity over the last quarter with one of your peers. And so just curious, maybe just to get your updated thoughts on the M&A landscape for you and maybe some types of assets you'd have an appetite for right now.

Yeah. Thank you for the question, Sparrow. And, you know, with our integrated platform, we see opportunities across you know, that, that asset base where we can enhance it and create a more valuable service for our customers, more competitive service as well. So, you know, we, we can't talk specifically about anything that we, we may be interested in, but I can say that, um, you know, we think that there might be some opportunities that come forward, but we'll always be extremely disciplined too. We, we need to make sure we're creating value with anything we do and, um, The great thing, as Aline just said, is that we have the optionality with our strong balance sheet that if we see something we really like at the right price, we can transact on it and add value.

Great. I'll leave it there for today. Thanks, Dean. Thanks. Have a good day.

Your next question comes from Robert Atelier with CIBC Capital Markets. Your line is now open.

Well, that's a first. I just want to just ask you about Zone 4 in light of this strong frac outlook. Do you view the frac 3 or even the frac 2 deball neck contingent on Zone 4 moving forward or the opposite? Do you see Zone 4 contingent on the frac expansions?

Good morning, Rob, and that's a great question. Jamie's team has been very active and adding contracts for our frac service. So I would say independent, and that's obviously independent of Zone 4 because we haven't sanctioned it yet. So I'll let Jamie maybe speak to that. But overall, again, we really like just the momentum that we have in the basin with the growth that we see, the growth outlook we see, and including for Zone 4. And if Zone 4 happens, that would have

uh help feed more volumes to the frac as well but jamie do you want to add to that yeah i know not much to add frankly um you know like i mean i think as dean said as we view frac tree um certainly it's not contingent on zone four proceeding but we certainly see the frac as a differentiator in order to attract customers that that would be um on cash zones one through three or zones four as well okay that makes sense and then um

Just going back to the big picture, the macro outlook on volumes here, how does your view of the basin growth change if LNG Canada doesn't make an FID on phase two for a few years?

Yeah, that's a good question. I think that overall, if it's two years off, I mean, we just look at the longer term growth macro and if something's off by a year or two, I mean, does that really change anything in the big picture? I don't think so. I just look at the logic of utilizing our basins, our industry, filling the full capacity of Coastal GasLink. It just makes a lot of sense with all the advantages that we have to export LNG off the west coast of Canada. And again, this is This is some of the lowest carbon LNG that's going to ever hit the market on the waterborne market. So I think it's a very attractive source of energy. And the advantages are, obviously, there's less shipping time to get it across to Asia. So it just seems to be a tremendous amount of logic for us to be maxing out the capabilities of at least the coastal gasoline pipeline. And hopefully, there'll be more pipelines built beyond that.

Yeah, cheap, cost-competitive resource, quick time to market, low carbon. It seems like it should move forward. Then over to the NCIB. I understand the opportunistic nature of the plan and why that makes sense for you. I'm just curious about what the implications are for dividend growth. Now that you have these two tools available to you, not just dividend growth, but also the option to allocate towards share repurchases, can we still expect dividend growth to follow fee-for-service EBITDA growth pretty closely over time, or is every dividend decision or dividend growth decision going to be pretty strictly weighed against the NCIB?

Thanks, Rob, for the question. No, 100%. We are a dividend growth company. That is first and foremost true and fundamental to who we are. So nothing changes in terms of the dividend growing in line with growing our fee-for-service cash flow and underpinned by a low payout ratio. So absolutely nothing changes there. It's just that now we have the option for, again, weighing it between organic, inorganic, and buyback.

Okay, that's what I thought, and congratulations on the momentum, and I'll turn it back. Thanks, Rob.

Your next question comes from AJ O'Donnell with TPH. Your line is now open.

I was wondering if I could maybe just start on some volumes in the north. It seems like you're seeing some pretty strong growth there. I was just curious about operational leverage that you have to continue some volume growth there. I know maybe some of your plants are running closer to full, but could we expect any additional small projects for optimization there? Or do you have the ability to move volumes around between those four plants up there?

So thanks for the question, AJ. Yeah, we've seen some growth. Pipestone with our expansion that we executed late last year is pretty much fall. I think we've talked about this in the past. We've got some ability at Wapiti based on the fact that we do actually pull some volumes currently north of the Wapiti River up by Grand Prairie where we do see some potential in the future around how we might want to optimize producer activity and ultimately how we provide our service. But we did share with the market this quarter that we've put in some smaller capital, highly accretive opportunities to increase the utilization at Wapiti. And I can share with you this week, we've hit record volumes at the Wapiti gas plant. And then ultimately, as we think about Simonet, the gathering systems that we have into Simonet reach into the same areas that feed the Wapiti gasbond. So there's no physical interconnection that we have right now, similar to our southern assets, but certainly that's something that we've seen value in the past, that model in the south, and we certainly would look in the right opportunity to replicate that in the north. And then finally at Simonette, we have identified in 2020 for some opportunities to be able to unlock some opportunities at the Simonette gas plant that based on some activity by multiple producers down in that area, we expect that we'll probably have some meaningful, positive things to share with the market in 2025.

Great. Thanks for that. I got one more just on marketing. I know you guys left the marketing guidance unchanged at 450 to 480 for the year, which kind of implies somewhat of a step down for Q4 relative to last year and Q3. So I'm just wondering maybe if you could provide some additional color there and how you're thinking about the business heading into Q4 and maybe where some potential headwinds are coming from. Thank you.

Yeah, so I'm talking a lot on this call, but thanks again for the question, AJ, and really, frankly, great question. Expected it. So just as a reminder, step back, our marketing segment really utilizes our physical assets, our relationship across North America, coupled with a really strong focus on risk management, right? So that's the foundation of our marketing business. You know, a couple thoughts on our iso-octane business, which really makes up roughly half of our marketing business. You know, long-term fundamentals remain very strong. Gasoline demand has increased slightly year over year. But more importantly, demand for higher octane gasoline used in newer industrial internal combustion engines is growing. So, you know, that in the long term, we're very positive on the fundamentals of that part of our business. But in the short term, you know, we expect and we're seeing RBOB cracks in octane premiums to return to more historical levels versus the elevated pricing that we benefited from over the past couple of years. You know, and there's multiple reasons for that, but really it's about getting more balanced in North America around supply demand of the octane market. So, you know, and we expect that to happen as well, you know, going forward, still strong pricing, but not as strong as we would have seen over the last couple of years. So the final point I guess I'd make is we do remain very focused though on continuing growing our sales volumes into higher value markets. And those are higher price markets, that continue to grow due to some increasing compliance requirements, but also high value markets might be lower delivery costs as well. And we've been very successful in the last couple of years in growing our sales into those markets. But, you know, like I mean, all told, we remain confident in our 2024 guidance, but also achieving our long-term base guidance that we've provided previously.

Great. Thanks for all the detail.

Your next question comes from Ben Pham with BMO Capital Markets. Your line is now open.

Hi, good morning. A couple of follow-up questions on the two FRAC projects. What are you expecting in terms of level of contracts before you sanction? And are you expecting to achieve those levels before sanction, or are you willing to move forward as long as you get those contracts in by the end of 2026?

Good morning, Ben, and thank you for the question. What I'd say is that the demand for our FRAC services are very strong. We've been adding a lot of long-term contracts for that service. I just say that it's commercially sensitive, so we're not prepared to divulge where we are on contracting. But I would say that our expectation is that we'll be able to deliver a strong return for those investments should they be sanctioned next year.

Okay, got it, Tim. And can you remind us that those facilities and the land base you have beyond these two potential projects, is there more ability to debodom or expand potential for expansion at some future point or time?

That's a great question, Ben. It's Jared here. We do have capacity at the existing KFS facility to continue to build out. So if a Fract 4 happened, we'd certainly have the potential to do that. Beyond that, we do have a very large land base just east of the KFS facility where we have 1,300 acres of undeveloped land. In heavy industrial zoning, we have most of the salt rights, some excellent connectivity. So very well suited for continued growth in the region as well beyond what we could do at the existing KFS footprint.

Okay, got it. And maybe there's questions for Aline. And can you remind me, in terms of the self-funded messaging, what level of CapEx can you fund without needing to tap the external capital markets?

Yeah, I think the projects that we've talked about already, the Fract bottleneck, the Fract 3 expansion, and Zone 4, assuming that those are sanctioned, we can absolutely self-fund that very easily.

And just lastly, on the PREF hybrid side of things, is there any room to access that now, especially with some of the credit rating positive actions you're seeing?

Yeah. At this time, you know, given where our balance sheet is, there is no need for us to add more hybrids. We certainly have them in our structure, and they served a purpose. But at this point, we don't see a need to add any more.

Okay, got it. Thank you.

Ladies and gentlemen, as a reminder, should you have a question, please press star one. Your next question comes from Patrick Kenny with National Financial. Your line is now open.

Thank you. Good morning, everyone. I know I just hit the wire this morning, but just on this big divestiture by Paramount, including their Wapiti region, I guess I could dovetail this in with just a broader question around consolidation, but I wonder if you had any thoughts on new customers taking over as your anchor, counterparties for your processing agreements in the area, how this might change your outlook, if at all, for being able to accelerate throughput facilities, as well as on the commercial side, being able to lock down those downstream commitments on both CAPS and KFS.

Good morning, Pat, and thanks for the question. I was wondering if anyone asked about that. You know, first of all, we were not privy to any of this information, and so we read it this morning. And so, you know, what I can say is that we have a very good relationship with Oventiv as we, you know, we work with them very closely at our Pipestone facility, and they have most of the volumes flowing through that facility, and it's working out very well. Our overall objective is to provide the best service and add value for our customers, and certainly it would be no different for Oventov. I think what we see here is the potential, because we have three gas plants that are right embedded within their existing lands and the lands that they're acquiring, and that's with our Pipestone, Wapiti, and Simonet facilities. So with a footprint like that, I think that we'll have the potential to offer them a lot of optionality in terms of how they develop those lands over time. So again, we think that could be a value add as a service for Oventiv. So we'll work very closely with Brendan and his team, again, to make sure that this acquisition is a success for them. But at this point, we haven't had any discussions with them. At the same time, we've worked with Paramount in the region for a number of years now, and we'll certainly work very closely with Jim and his team as well to make sure the transition goes very smoothly.

Okay, thanks for that. And maybe as a related question to you, I know the turnarounds are largely flow-through, but just given the Stratton and Whoppity turnarounds took about a week longer than expected, I think you touched on it last call, but if you could just remind us if these delays were more supply chain related, maybe labor productivity issues, or just how you're thinking about resetting expectations for timing around your plan turnarounds into 2025 and beyond.

That's a great question, Pat. It's Jared here, and you're right. Both turnarounds took longer than expected, and we know that extended downtime has an impact on our customers. They count on us to be running when we say we will. In the case of Strachan, it was really around some found work, which is always a risk at a turnaround. We did find some additional repairs that required that. That was really the bulk of the extra time. At Wapiti, it was our first full turnaround there, and we completed a number of projects to increase reliability and utilization there. We had some found work as well, and also some challenges with some of the initial equipment preparation and productivity throughout that really led to that extension. I think a key part for us of our whole turnaround program is learning. All of our turnarounds get a comprehensive look back similar to what you might do on a capital project and really to understand what went well that we want to repeat and where can we improve.

Thanks for that, Jared. Maybe last one, just a quick follow-up for Jamie on your marketing comments there. I appreciate the color into Q4, but just wondering, think about coming out with the guidance for 2025 in early December, you gave a good rundown of how you're thinking about the iso-octane business. Could you just bolt on a few comments, whether or not you're seeing macro tailwinds or headwinds at this point for the propane business, as well as the crude and condensate as well, and whether or not some of the volume tailwinds that you're seeing across your asset base might also support an upward bias going forward relative to that long-term normalized rate?

Yeah, thanks for the question, Pat. So, spoke to isooctane. You know, as Dean alluded to, is that, you know, like, I mean, globally, we just see a pull from the Western Canadian Basin with respect to all our hydrocarbon, you know, molecules. And we have a fantastic, I would say, you know, best-in-class connectivity for C5 and C4. I think C3 has been a focus for us with respect to being able to ensure that our customers have access to the highest value market. And that doesn't mean just one market though, because the dynamics will change. There is, like any commodity cycle and any basis, there will be times where certain markets are higher value than others. And so our model has always been to have the ability to touch all markets. And we've worked really hard in 2024 to set ourselves up to be able to create that offering for our customers. And with that, we'll be able to touch more molecules, to your point, and ultimately be able to continue to make the historic margins off of those volumes that we touch.

Yeah, just maybe if I can expand on Jamie's comments, Pat, is, you know, again, when I look back at the macro, we see a lot of growth in the basin. And with our integrated system, you know, a lot of that is going to end up back at Fort Saskatchewan, a lot of those NGLs that we see that are going to get extracted from future growth. And so with our two additional frac projects, you know, we're going to end up with more spec products in Edmonton, Fort Saskatchewan. so we're a supply-based basin so most of that product incremental product is going to have to clear to a different market and we have the assets that can get that product to the highest value markets and so you know i think about our marketing business a lot of it it's really a logistics business and and we're just trying to find take that that product that's oversupplied in western canada and we're taking it to a higher value market so We're going to have opportunities, obviously, to generate a margin, a physical margin off of that. Generally, we make more money in a higher-priced environment than a lower-priced environment. But I'd say as crude has softened a little bit, the Canadian-US FX has widened. So there's an offset to that as well. So overall, I think the market isn't too bad, maybe not as high as what we've seen the last couple of years. But generally, you know, I think the conditions are relatively positive.

Okay, that's great. I appreciate all the color. I'll leave it there.

Thank you.

I don't know for the questions at this time. I'll turn the call over to Dan Cutperson for closing remarks.

Thanks all once again for joining us today. Please feel free to reach out to our investor relations team with any additional questions. Hope everyone has a great day.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.