Pembina Pipeline Corporation (PPL) Earnings Call Transcript & Summary

Good morning, everyone. I'd like to welcome you to Pembina's 2024 Investor Day. My name is Dan Tucunel. I'm Vice President of Capital Markets at Pembina. And I'm pleased to host you here and for us to host you here in Toronto as well as online via webcast. There are a few housekeeping items that I'd like to note first. [Operator Instructions]. We would also like to remind you today that we will make comments that may be forward-looking in nature and are based on Pembina's current expectations, estimates, judgments and projections. Forward-looking statements we may express or imply today are subject to risks and uncertainties, which could cause actual results to differ materially from expectations. Some of the information provided refers to non-GAAP measures. To learn more, please see our quarterly and annual disclosure materials available online at pembina.com and both on SEDAR and EDGAR. A copy of this presentation is available at pembina.com. Before we kick things off, I would like to take a moment to acknowledge our hosts today. Pembina takes pride in our indigenous partnerships and our support of the communities, where we live and work. We acknowledge that today, we are located on the traditional territories of the Anishnabeg, Chippewa, Haudenosaunee, the Wendat and the Mississaugas of the credit. Pembina also acknowledges our traditional hosts, and we thank them for their graciousness and welcoming us to carry out work on their lands. We recognize and respect the spirit and intent of the United Nations declaration on the rights of indigenous peoples and that all people, including industry and government must play a role in advancing truth and reconciliation. We acknowledge the original inhabitants of this place who have hunted, fished, gathered and taken care of these lands, while respecting their sovereignty, right to self-determination, sacred spiritual connection with the land and water. The indigenous peoples have inhabited these lands and waters, since time in Memorial, and we are thankful to be here as a guest. I would like now to introduce Pembina's team, and I'm pleased to inform you that the entirety of our senior officer team is here with us today. But before I introduce them, I'd like to acknowledge Mr. Henry Sykes, who is our Chairman of the Board and is present with us today. Pembina's officer team is led by Scott Burrows, President and Chief Executive Officer; and includes Eva Bishop, Senior Vice President and Corporate Services Officer; Cameron Goldade, Senior Vice President and Chief Financial Officer; Janet Loduca, Senior Vice President, External Affairs and Chief Legal and Sustainability Officer; Chris Scherman, Senior Vice President, Marketing and Strategy Officer; Jaret Sprott, Senior Vice President and Chief Operating Officer; and Stuart Taylor, Senior Vice President and Corporate Development Officer. Further, I would like to thank the entire Pembina team, who has worked tirelessly to make today possible. I know that they were here very late last night. So thank you very much. We have a full agenda today, and you will hear from our executive team about the successes we have achieved, since our last Investor Day as well as our positioning for the future. There will be a short break in the middle. And we will close with a Q&A session. If all goes according to plan, we aim to close by about 11:30 Eastern in any case before none. And now I would like to welcome Scott Burrows, our President and Chief Executive Officer.

Thanks to everyone, who is here with us today in the room and to those on the phone. We're happy to be here today to share in greater detail our thoughts on the industry, our business and our path forward from here. We're proud of what we've built. We're excited and optimistic for the future. We truly believe it is an exciting time in the Canadian energy industry and that Pembina is at the heart of that industry. Today, you will hear from various members of our executive team. I will start with an overview of Pembina's business in our industry. You will hear from us why we believe Pembina occupies a unique and valuable place at the center of the Canadian industry. Chris will cover Pembina's strategy and how we position ourselves for long-term success. Jaret will provide an overview of Pembina's Pipelines and Facilities divisions highlighting, in particular, the ongoing developments in the WCSB, including 3 transformational catalysts and how Pembina is uniquely positioned to benefit on a wave of growth. Chris will provide an overview of our marketing business, which helps augment our core business. Stu will cover new ventures, including our proposed Cedar LNG project and Cam will wrap things up with an update on our financial outlook and how we intend to execute our strategy with the same discipline that has made us so successful to date. But first, it has been 5 years since we have done an Investor Day, and a lot has changed and yet a lot hasn't. So we thought it was worthwhile to step back and recognize how Pembina and the industry have transformed over the past 5 years and recap some of the many achievements. I'm going to start with a couple of stats on how we've grown the business to set the stage. We've seen our conventional volume, which we generally see as a proxy for basin growth, have grown on whole over 17%. We've placed $2.4 billion of projects into service and have an additional $1.2 billion of projects underway with another $4 billion under development. We've executed 3 major transactions including the acquisition of Kinder Morgan Canada, the creation of Pembina Gas Services and the recent acquisition and additional interest of Alliance and Aux Sable all done accretively and positions us to continue to capture incremental growth. The result of our major project execution and strategic M&A has been that Pembina has continued to expand its footprint and add to the Pembina store, we've gotten better, not just bigger. We've added 20,000 barrels per day of new LPG export capacity off the West Coast with our propane sold into Asia. We continue to expand our Peace pipeline adding 460,000 barrels per day of upstream debottlenecking at pinch points across the system and creating full segregation across all 4 products. We've expanded our gas processing capacity by roughly 1 Bcf per day, including increasing our exposure to Northeast BC, and we've added 17 million barrels of storage. Finally, the recent Alliance and Aux Sable acquisition, we grew our natural gas export to the Midwest by 850 million cubic feet a day, and our fractionation capacity by 84,000 barrels a day. That growing footprint has allowed Pembina to deliver strong financial performance, including roughly 50% increase in EBITDA and a 30% increase in EBITDA per share. We've also delivered for our shareholders, including $7.2 billion of dividends and total shareholder return of 70% from 2019 to today. And the midstream industry has changed along with us. It's showing an evolving maturity, where balance sheet discipline is in focus with a preference for lower leverage and investors want to see self-funded free cash flow positive business models. There's a heightened focus on dividend protection and payout ratio preservation and an increased focus and scrutiny on financial guardrail strength and return of capital. While we feel like Pembina was an early adopter of the financial discipline we see across the sector, these changes still influence how Pembina thinks about strategy, new projects, funding in the balance sheet and capital allocation. Since 2019, we have lowered our debt to EBITDA from 4x to 3.4x to 3.6x. We've gone from free cash flow negative to free cash flow positive, and we've grown the dividend all while having a modest reduction in our payout ratio and returning over $9 billion to our shareholders. The E&P industry has changed as well over the last 5 years and grown stronger, more disciplined capital allocation means more predictable and stable growth and therefore, infrastructure needs. Reduced leverage and credit quality has improved as well across the sector. We have seen a wave of consolidation meant by smaller players by larger ones and more capable and better to execute growth. We've seen M&A lead directly to accelerated drilling and higher volumes from the acquirers. A key focus over the past year has been to strengthen and deepen our relationship with customers with a renewed focus on customer communication and service, which has led to strong recontracting efforts. The new infrastructure and new infrastructure is creating new export opportunities, alleviating what to date has been the biggest constraint on growth in the Canadian energy industry. And while the current gas market is challenged, well economics continue to be driven by high-margin liquid plays with quick payouts. We believe we have the right assets in the right areas to serve our customers, which Jaret's going to talk about in a little while. And since 2019, we have progressed our ESG strategy as well. On the E, decarbonization strategies rose to the forefront. We set our own target for GHG intensity reduction and the broader transition to a lower carbon economy has impacted how Pembina thinks about its long-term strategy. We have made progress with a 7% reduction in our intensity metrics. This is something that Chris is going to talk about a little bit more in detail a little later on. On the S, we rolled out multiple targets to enhance equity diversity and inclusion across the organization and at the Board level. We are meeting or exceeding most of our targets with still some work to do with our general workforce. We also have strong indigenous relationships, highlighted by our close partnership with the Haisla at Cedar LNG. And on the G, in addition to Canada's overall strength in corporate governance, Pembina continues to be recognized with strong third-party ESG ratings. Switching now to the macro, which we spend a lot of time thinking about. And while 2020 to 2021 showed a decline in global energy demand for obvious reasons, the overall trend has been positive and 1 of growth. That growth in all products, natural gas natural gas liquids and oil is expected to moderate slightly, but we believe in and many forecasts show continued growth through 2030. Third-party experts show global natural gas demand to grow by 34 bcf a day natural gas liquids by 9 million barrels per day and crude by 11 million barrels per day. The same growth we have seen and expect to see globally, we have also seen in North America as well. In particular, growing global demand and North American exports have driven growth across the WCSB. Since 2010, Canadian production has grown 20% in natural gas. Natural gas liquids are up approximately 45%. Crude has increased by 70% and condensate by over 100%. This growth is forecasted to continue to grow through the end of the decade, and we have confidence in these forecasts given the developments we will discuss shortly, the discussions with our customers and recent industry activity. You'll hear a lot today about the changes in the Canadian energy industry and how Pembina is poised to benefit from the resulting growth. Important to put the Canadian energy industry in context of the global energy industry Canada is not an island. What we are doing in Canada is a direct result of growing global demand. While the dynamics of global energy may be in flux, especially in light of efforts to reduce emissions associated with our energy. It is undeniable that global energy demand is rising, and that includes growing demand for oil and gas. While North American's oil and gas demand may have flattened, it is not declining yet. And Asian demand, along with demand elsewhere continues to rise. Amidst that backdrop, Canada has an important role to play. We are a reliable and responsible producer. We have large and cost-competitive resource base that is world-class in every aspect. And we are geographically advantaged with the best access to the U.S. and close proximity and a shipping advantage compared to other alternatives to supply growing Asian markets. We believe we have -- as we have for some time, that the time is now for Canadian energy. As I just mentioned, growing global demand for energy and petrochemicals is driving infrastructure opportunities in Western Canada that should unlock further growth in the WCSB. Later, Jaret will dive deep into each 1 of these, but the 4 catalysts we see transforming Canadian Energy over the next few years include the Trans Mountain pipeline expansion with 590,000 barrels per day, which supports oil sands growth and therefore, condensate demand for diluent. West Coast LNG with 2.8 Bcf a day of natural gas demand from LNG Phase 1, Cedar and wood fiber, and we know beyond that, there's the potential for another 2.1 Bcf a day for LNG Phase II and other proposed projects. And of course, with incremental LNG comes a significant amount of natural gas liquids that comes along with that gas production. We see LPG exports increasing with various projects on the horizon, which could add incremental demand pull and the petrochemical build-out continues in Alberta. We have the Dow path to 0 cracker, we'll drive new ethane demand plus associated propane plus production and recent third-party PDH PP developments drove 20,000 barrels per day of incremental propane demand. And Pembina is poised to benefit from this growth, given our extensive footprint, including a leading network of export, import and gathering pipeline systems with total capacity of 3 million barrels per day. Our conventional system transports crude oil, condensate, C2+ and C3+ our transmission systems, import condensate and ethane and exports natural gas and our oil sands gatherers and stores, heavy oil and synthetic oil. In addition to our pipeline network, Pembina has extensive gas processing, fractionation and storage facilities. Pembina gas infrastructure, the largest third-party gas processor in Western Canada, combined with our Pembina straddles processes over 6.3 Bcf per day of gas. Our Redwater fractionation complex is the largest fractionation complex in Canada and continues to grow. Aux Sable is a valuable extraction of fractionation in the Midwest market. And our Prince Rupert Terminal is our LPG export facility that allows us to gain higher value for our propane out of that terminal. Our significant asset footprint is not only made up of a diversity of assets across the Montney, Deep Basin and Duvernay, but it also positions us across all 6 commodities today. Natural gas business includes gathering and processing as well as export to higher-value U.S. markets and through our proposed Cedar LNG project, we hope to add global natural gas exports to this service offering as well. On natural gas liquids, our ethane business supplies resilient, Alberta polyethylene plants with a diversified feedstock. And our propane and butane business connects and oversupply WCSB to higher price North America and Asia markets. Our condensate business supplies resilient oil sands demand in a market with favorable pricing dynamics through advantaged assets. And our crude business connects long-life reserves to cost competitive value chains that insulate the WCSB production from demand destruction as long as Canadian policy remains competitive with the U.S. Pembina really is at the center of the energy industry in Canada. And we believe our service offering is unique. Our integrated value chain provides a full suite of midstream and transportation services across all commodity, which means Pembina is best positioned to benefit from the growth we are seeing and expect to continue to see in the WCSB. This means you don't have to pick a commodity. Pembina should benefit in any case, given our exposure across all commodities. We are the only Canadian midstream company that can say that, and it's something that we are quite proud of. And so what does it all mean? In our view, Pembina offers an unmatched business model and a unique blend of the attributes that make us a core energy holdings for any portfolio. We have a full value chain across all commodities. As I just touched on, we believe Pembina's service offering is unmatched across all 6 commodities. We have visible growth Pembina's assets and contracts position us to benefit from the transformational catalysts in the WCSB you're going to hear about today. We have financial discipline. We expect to grow our fee-based adjusted EBITDA per share by 4% to 6% on a compound annual growth rate, all within our financial guardrails. We have a predictable cash flow stream predominantly backstopped by long-term contracts underpinning fee-based take-or-pay cash flows with some commodity exposed upside. We have a long track record of project execution and delivering projects on time and on budget, and we believe that we're positioned for the future, building off of our 7-year history and exploring low-cost optionality for new energy extensions. So with that, I'm pleased to turn it over to Chris, who's going to talk a little bit about our strategy going forward.

All right. As Dan mentioned, my name is Chris Scherman, I'm Senior Vice President of Marketing and Strategy, at Pembina. I'm excited this morning to have the opportunity to talk a little bit about our strategy. We went public with our strategy a little over a year ago, I think early 2023, late 2022. But we haven't really had the opportunity to expand on that strategy. And so the objective today is to hopefully talk a little bit about what our strategy is how we develop that strategy, how we continue to evolve that strategy and maybe shed some light on some of the things you can expect from us as a result of that strategy. Undoubtedly, we'll based on conversations last night and this morning, we'll fall short of some expectations that we share the exact capital and exactly how this is going to play out for the next 10 years. But hopefully, at least get an indication of where we might go and how we might do it. So a few minutes ago, Scott showed a forecast of global energy demand through 2030. And as we look out to the next 6 years, I think we've got a relatively high degree of confidence in how that market might play out, at least for business planning purposes. But we really are committed to developing -- operating, developing, growing a business going to be successful until 2030, thrive to 2030, but also beyond. And when we think about beyond 2030, it really starts to become a big question as to how markets are going to unfold post 2030. And you can see on the screen, there's a wide array of prognosticators and organizations and entities that will provide a perspective and there is a wide array of perspectives out there. And frankly, we have no idea how it's going to play out. So what does that mean? Well, really, what that means is when you're doing planning, when you're doing strategy work you've got a challenge in front of you. You can't really determine how things are going to unfold post 2030. And so we decided to address that challenge of long-term planning back in 2022 by beginning to do something we call others call it as well, strategy based or sorry, scenario-based strategy planning. And that scenario-based approach to strategy planning and strategy development. It's not a new concept. It's been implemented by others, and I think very successfully. And for us, we see it as a powerful tool to address the type of challenges facing our business and our industry going forward. So in traditional strategy planning, you designed around a single scenario. If things play out as expected, it can be very successful. If you haven't got it right, if you don't have the precision or the understanding of the future you might need, it's not likely to be very successful. So given that level of uncertainty for the industry we're in for our business specifically, we decided to take a more robust approach to strategy planning, and we use scenarios analysis to support our strategy development. The objective of that strategy work is really to attempt to be successful across a broad array of outcomes. So our scenario work and our strategy development is specific to our business. as we began the strategy work and we continue the strategy work. One of the priorities is to, in a very deep way, understand our customers and the markets we serve. As well, it's trying to get grounded in 2 key variables that are going to impact the long-term success of our business, the pace and decarbonization and the resilience of the markets we serve. So for each scenario, we really assess the challenges and potential options that exist for our business in the future. And the objective in the work is to enhance our planning process and hopefully improve our capital allocation for the long term. So given the level -- or sorry, pardon me. So we talked about how we develop strategy. And then I think in order to understand our strategy and to shed a little white on the decisions we're making under that strategy, I thought it was worth taking a couple of minutes to talk about a few of the factors and themes influencing our strategy. So Scott touched on a few of them. The first is that the global demand for oil and gas is growing, and we believe will be enduring. We see a divergence in global energy markets going forward. As the world continues to evolve the energy mix. However, we see drivers for global demand for oil and gas to continue. Population, economic growth, reduced energy poverty, digitalization seems to come up a lot these days. But at the end of the day, we believe oil and gas will be enduring because it's a very efficient source of energy, it's affordable and transportable and it's very difficult to replace quickly. That brings us to the second theme, which is that the energy transition is driving a shift in the global energy mix. So we strongly believe oil and gas is going to endure. We strongly believe the businesses we have today are going to continue to be successful, but that energy mix is changing. And so with that change, the challenge for us becomes how quickly and in what form does that change take. Policy, innovation, investment pace, I'll determine the pace or I'll determine how that unfolds. But at the end of the day, we're really trying to solve 2 problems. The first, providing the world with available and affordable energy so that it can thrive and the second, reducing global energy emissions -- or pardon me, global emissions. That brings to the third theme. Scott touched on it, and it's pervasive through everything you're going to see today. And that is that Canada is positioned to support growing global energy demand for both conventional oil and gas and we believe, for new energies as well. And so the WCSB is growing. There's some catalysts. We talked about -- Scott touched on. It was going to be expanded on further. But there's catalysts in the basin that really represent a key moment for our business and a key moment for Canada to participate in long-term growing energy markets around the world. Finally, Pembina's differentiated is uniquely advantaged. You're going to hear it from me, and I think it's going to be a theme as well that goes through today. We have a business that we love, and we think we're very well positioned to exploit WCSB growth today. We think we're very well positioned to access global markets going forward. And we think we have a role to play and a promising future, when we talk about decarbonization and an evolving energy mix. So a lot of the stuff I just touched on and when we think about scenario planning, and we think about these themes, it really is about an uncertain future. And I think that's something we pay a lot of attention to. But at the end of the day, I wanted to highlight the most important part of our strategy that we understand very well and isn't uncertain is that of our existing business. We've got great existing assets. We've got tremendous strengths and our strategy at its core is really an extension of that proven performance. Our strategy is not about pivoting, and I'm going to try to talk about that today. I'm going to try to highlight that. It's not about revisiting our core business. It's truly about leveraging the strengths and successes we have within our business today. And so we have a track record of success. And over the last 7 years, I think we've had a really exceptional track record, and that wasn't built by accident. That was built on the back of tremendous assets that was built in partnership with great customers. exceptional project execution and continued financial discipline. And those same advantages are what we're going to continue to apply in our approach going forward. So what is our strategy? And how will it create value? So the products we process and transport today are instrumental thriving global population, and we take great pride in playing that role. And so you can see, first of all, with our purpose. You've heard it before for us, and you're going to continue to hear it from us because it really underpins the entirety of our strategy. Our purpose is to deliver extraordinary energy solutions so the world can thrive. We've captured our strategy in 4 key priorities, moving from left-to-right to drive strong returns from our core business ensuring our success beyond 2030, which is what I just talked about, maximizing the value of our products and our customers' products and benefiting all of our stakeholders along the way. As I take a little bit of a double click on each of those, strategic priorities. We start with to be resilient. We will sustain, decarbonize and enhance our business. I said it already, I'll continue to say it, we love our core business. Our core business remains a very important part of our strategy, and this strategic priority is really about improving and bolstering the resilience of that core business. We're focused on making it better and we're focused on making it more profitable. So when I think about sustain, what does that mean? It means continuous improvement. It means efficiency gains. It means cost savings as well. It means aggressively pursuing incremental margin from within our business. We really believe there is remaining intrinsic untapped value in our business, our core business today, and we're aggressively going after that. Third, it's about ensuring the stability and predictability of our cash flows through contracts. That's recontracting that's contract extensions, that's new contracts. And then finally, it's about continuing to deliver projects safely, on time and on budget. Moving on to decarbonize here, we're talking about decarbonizing our core business. This will ultimately improve the cost competitiveness of our business as well as differentiate our products and our services. And we're trying to enhance our business. We see a tremendous runway that Jaret is going to spend a great deal of time on today. We see a tremendous runway for growth within our conventional businesses and within our core business. And we've tried to highlight some of the recent accomplishments. I won't talk about every one, but Alliance Aux Sable transaction, RFS 4, 7% reduction in GHG intensity already. We're making progress against this strategic priority. Next, our second priority is to thrive. This is really about investing in the energy transition to improve the basins where we operate. To us, this represents an opportunity to expand our portfolio. It could include businesses that are associated with low carbon commodities, low-carbon infrastructure and carbon transport and storage. I want to highlight within this strategic priority. There's a tremendous opportunity to support our existing customers to leverage off of our existing customer relationships, especially when we think about carbon transport and sequestration, for example, where we can increase the resilience of our customers' businesses, thus increasing the resilience of our business and potentially create a new business line along the way, and I think that's pretty exciting. What you can expect is that our investments in energy transition will focus on opportunities, where we have a right to win. Stu is going to talk more about this later. But at the end of the day, we're willing to be patient as we develop this component of our business. and we're really focused on developing relatively cheap opportunities and cheap options to participate as these markets develop. With patients, we see a path to profitably participating in energy transition. If we have the right to win, we don't see the need to make sacrifices when it comes to returns or expectations. So a few of the recent accomplishments in this space, Alberta Carbon Grid is making great success. Our low carbon complex, which is really about enabling the energy transition, similarly making great success. Our third strategic priority to meet global demand. This is about maximizing the value and resilience of our products and our customers' products for the long term. As Canadians, we're very familiar with the implications of isolated energy markets. And as we look further out into the future, we see a divergence between North American and global oil and gas markets. And that dynamic requires us to position ourselves so that our business can keep growing and continue to be resilient for the long term. We have line of sight to demand for conventional oil and gas in Asia, for example, as well as other growing global markets, and we strive to increase that connection to those markets thesis is relatively simple here. Accessing Global Markets increases our resilience and extends the value and durability of our business. In addition to global markets, we're seeking opportunities to transform our products to serve higher value and more resilient markets within Canada. It's not new for us. This isn't a new piece of our strategy. We've been at this a long time. We've got our Prince Rupert Terminal. We've been focused on getting product off the West Coast, for some time. And obviously, Stu is going to spend some time talking about LNG and Cedar LNG, which I think is a shining example of this strategic priority. Our fourth and final strategic priority is to set ourselves apart. This is about recognizing that a highly engaged workforce, the ability to attract key talent, supporting thriving communities highly profitable customers and shareholders that receive industry-leading returns are all critical to our success. We've been a shareholder-focused organization for some time, and we recognize the value in that approach. We believe that differentiating ourselves across all groups is an important part of our success. It has been to date, and it will continue to be going forward. What does that mean? A differentiated experience for each of our stakeholders can mean, among other things, we meaningfully contribute to the quality of life and happiness of our Pembina family. We have the capabilities we need to get the things done, we aspire to do. We have mutually beneficial relationships with the communities where we operate. We have profitable customers who choose us and want our services, and we have shareholders that receive stable industry-leading returns. We've got a plethora of recent accomplishments in this area that we're very proud of. When we think about total shareholder return, we've got a really strong performance. When we think about community investment, improved employee engagement, we're making headway and continue to have success on this strategic priority. So if we get that all right, what does it look like? Well, I think in 2030, when we look back, if we've done things right, if we've done what we expected to do, we will have grown and strengthened our core business. We will have improved the basin where we operate, both through margin improvement, increased profitability for ourselves and our customers. We will successfully executed a significant capital program on time and on budget. In addition, we will have decarbonized our business and achieved our 30x30 targets, and we will build an enduring portfolio that connects our molecules to growing resilient markets. In addition, we will have entered businesses with low carbon commodities that support growth and longevity for our portfolio. And we will have demonstrated top quartile safety performance, exceeded employee experiences -- experienced benchmarks and create long-term partnerships with indigenous peoples and communities. Overall, we will have undergone significant growth, become more profitable and significantly increase the resilience of our business for the long term. With that, I'm going to turn it over to Jaret to talk about our core business.

Good morning, everyone. Pleased to be here. My name is Jaret Sprott, Chief Operating Officer here at Pembina. So Chris talked a little bit about our journey to 2030, what are we going to look like as an organization. obviously, our core business is still going to play a huge role into what we look like in 2030. But I'm going to talk a little bit about what do we really need to focus on, on a day-to-day basis to ensure that we're able to do some of the things like enter into new energies, focus on expanding our footprint on the West Coast. And it really comes down to -- I'm going to talk about the left-hand side, the resilient portfolio and the differentiated stakeholder experience. If you take a look over on to the right-hand side, you will not have an enduring resilient, sustained core business, if you don't have a safe workforce, right? So ensuring that we have a highly diversified talented safe workforce every day is core to our business. We need to ensure that we have best-in-class customer service. It's not lost on us that essentially, we're an infrastructure company, but we are in the customer service business. Every day, our customers rely on us to move their products from wellhead into various markets across North America and in the future, more into international markets, and they rely on us for safe, reliable operations every day. Also, we need to ensure that we have enduring indigenous and community partnerships. We recognize that our business is going to be in someone's backyard, and we want to make sure that those communities are welcoming us to be a part of their community and play a role in their backyard, So if you can set yourself apart and you can actually provide a differentiated stakeholder experience, we truly believe that allows you to transition over to the left-hand side and be extremely focused on driving value, like Chris talked about, in your core business. We obviously want to focus every day on having a highly utilized cost-effective business for our customers. We want to be a continued leader in project execution, which I'm going to talk about a little bit more. We have a tremendous track record on project execution over the last 20 years, and that gives us an extreme amount of confidence going forward to enter into new businesses, but also continue to deliver on the promises we've made to our current customers, leveraging our footprint and reputation for sustained growth. We've seen a tremendous amount of growth with the egress constraints that we've had for the past, I'll call it, 7 to 10 years. I'm going to talk a lot about some of the major key milestone transitional things that are going to happen in our basin, which not only are we going to play a role in, but we're also going to benefit substantially in our core business. And then obviously, our commitment to our decarbonization of our core business for our customers and the communities in which we operate. So we truly believe that if we can get these 2 outside pillars key strategic priorities, if we can nail these that will allow us to focus inward and start to expand into new energies, focus our time in exports. Organizations that are having challenges with safety challenge with project execution, that takes your eye off the ball and that ultimately will not allow you to meet the 2 strategic priorities in the middle. So speaking about safety, obviously, it's foundational. Before I get into this slide, I did want to just touch on, you've probably all seen in the news currently, we're experiencing wildfires again. in the month of May in the areas and communities in which we operate. I can let you all know that right now, none of our assets are in proximity to any of the current wildfires. But as of last year, none of our assets really last year were in proximity to the wildfires. It was the concern with respect to egress getting our employees out of the assets. that's when you had to shut assets down. So right now, we're continuously monitoring and things are changing on the fly, but I can assure you right now that everything is in good shape. And we are significantly more prepared in 2024 than we were in 2023. So moving on to one of our foundational items with respect to safety. Having a highly engaged, diversified and safe workforce will be foundational to the organization to be able to move on. We have a continuous improvement approach to our safety learnings, very focused on occupational, those are the injuries that you would have process safety, that's maintaining high integrity within respect to your assets. And we're very focused on psychological safety. The ability for people to speak up and stop work when they see things that just aren't right or take a pause as we move forward to make sure that everyone goes home safely. In 2023, we had some great improvements, 35% reduction to our SIF rate. So that's your serious injury and fatality rate. We're proud of that. But we recognize that we need to continue to improve in this area. And we obviously have some 2024 focus areas around process safety, continuing to advance our operational excellence management system and really working with our contractors, our partners. We recognize we would not be in business without our contractors, building some of the infrastructure we need, supporting us in various roles across Western Canada and the United States, and we also want them to be going home every night to their friends and family. So this will be something we talk a lot about internally and something that I'm fairly passionate about, we are passionate about, and we're going to start talking about it a little bit more because we believe you have to be excellent in this space to carry on for the rest of -- of the rest of this presentation. Now so focused on safety, but we're also focused on reliability. I said previously, our customers, they rely on us every day, and we're in the customer service business. What you have here on this slide is our gas processing business, essentially PGI, our pipeline business and our fractionation hub Redwater, and it just shows kind of the averages of availability by quarter. And you can see that availability, meaning we're available to obviously take our customers, process our customers' products, et cetera. And you can see across the board, we have extremely high reliability. And that's not out of luck. Pembina spends roughly CAD 150 million to CAD 175 million annually, inspecting pipelines doing integrity work at our facilities, doing process safety improvements, et cetera, so we can enhance the reliability for our customers. Last year alone, we inspected 5,300 kilometers, internally inspected 5,300 kilometers of pipeline, so that's internal inspections. And then that will help us understand where we're going to have challenges, where do we need to do a dig, et cetera. So extremely proud of the work that, that group does. And we believe that between our operations staff, our maintenance staff and our integrity and smart technical folks, that's what's driving these extremely high reliabilities that our customers seek, when you have an integrated value chain. Obviously, a couple of the dips there. It's not lost on us in Q1 of last year. We had the northern outage. We learned from that. We shared those learnings with our industry peers. And go forward, we'll be a better pipeline organization for that. And then in Q2, you can see a couple of dips. Obviously, it was the wildfires last year. We had to shut some assets down due to egress constraints that I mentioned. And then on the fractionation side, in Q2, we had a successful 15-day RFS 2 turnaround that was on time and on budget. That's just the routine 5-year turnaround, and that's a little bit of the dip there. But all in all, we're very happy with our availability performance and we hear the same feedback from our customers. Moving into the decarb space. So I'll take your attention over to the circles up on the right on the top there. Roughly 70% of all of our emissions are Scope 1, and they come from essentially 80% of that is the consumption of natural gas, right? That's just operating our assets, running compressors, heaters, et cetera. So we're very focused. That's obviously step 1, very focused on reducing the consumption of natural gas. There's a couple of things that obviously benefits your input cost your lower cost structure, not only for Pembina-wholly owned assets but also for our customers, where we flow through the cost structure to our customers. And then on the Scope 2 side, essentially all of our scope 2 emissions are using electricity, at various sites. And so just really focused on power optimization, et cetera, to not only reduce, and it's essentially to reduce the amount of power we consume, which directly affects the scope 2 emissions, but once again, reduces the cost structure, not for Pembina wholly-owned assets and for our customers. We've had some great successes to date. In 2023, we reduced our overall emissions intensity by 3%, 7% year-to-date -- or sorry, inception-to-date since we started from our 2019 baseline. So obviously, we have some work to do going into 2030, but we have a focused team now that is dedicated to understanding the cost abatement curve of all of our assets and we're going to be rolling that out to our board here in Q3 and then hopefully sharing a lot of that with you all in the future. So very excited and focused on our decarbonization priority. I'm kind of going along a theme here, when you have a really safe organization and you're highly reliable, that allows you to obviously to really focus your attention on areas that require it. And obviously, our project execution, project execution in Western Canada can be challenging. There's a lot of different types of terrain, there's a lot of different types of weather, forest fires, et cetera, but we're extremely proud of the project execution that we've had over the past while. And you know what it really comes down to a few things. There's no actual secret science for this, but having dedicated collaborative teams, who set out to achieve a unified outcome. We believe that we have some of the most talented people in industry. We obviously have a very vast knowledge of the area we've been operating in Western Canada that you saw the video at the start for 70 years. So we know the terrain. People know how to drill under massive rivers and stuff like that. So extremely talented team. And I believe what sets us apart is we have great partnerships with our contractors. The smart people who are drilling under rivers and providing services that Pembina doesn't have the expertise that's absolutely key. And then also our supply chain group that we don't talk a lot about, but we believe we've transformed our supply chain team into a strategic advantage, right? And having great project execution hopefully gives you all the confidence when we're announcing new types of projects that will continue on that focus and diligence. That leads into what have we got going on right now. Someone asked me last night, what are you up to these days, Jaret? Well, quite a bit. So kind of busy. We've got some pretty major projects that are supporting that continued growth. Happy to say the Phase VIII pipeline. I think when we went to print, I told the team, let's put commissioning underway. As of 2 days ago at 4:00, all of the pipelines were back in service, taking our customers' products. So pretty proud of that. I think that project is -- we reduced the capital spend on that project twice. And I think we underplayed the significance of what we were doing in Phase VIII we swapped a lot of products into different sized pipelines. We changed directions of products. We know from Gordondale, Alberta, if you have a map in front of you, all the way into the Edmonton market Fort Saskatchewan, we have segregated C2 plus and C3 plus pipelines for our customers. No one else can provide that service to our customers. So pretty proud of Phase VIII pipeline. We obviously have a pump station up in Northeast BC happening. That's going to add about 40,000 barrels a day of incremental capacity for the -- I think we've talked publicly about 3 large producers that are dedicated to Pembina's infrastructure. So making sure that gets on the customers are pretty keen for that to come on. RFS IV, it's early, but with all of the dedications we have at Pembina and seeing some of this wave of growth coming, knowing that Dow is going to get sanctioned and LNG Canada is going to come on, et cetera, getting out in front of that and making sure that RFS IV is up and running when we need it for our customers. That was pretty critical. And then I'll just go down to Alliance and Aux Sable. We closed that deal on April 1. April 2, we had 161 new employees in our office at Pembina from Enbridge. So integration is becoming a core strength, acquisitions and integrations of Pembina's -- we're getting -- we obviously have some hiccups here and there, but the feedback from the employees is that this is just one of the best experiences they've gone through. So we're really excited about driving that first wave of synergies out of the Aux Sable and Alliance, acquisition and then really focusing on providing incremental services for our customers. Gas egress is one of the largest constraints. Alliance is a gas egress pipeline, and Pembina is in the business of owning and operating assets and growing them. So we're excited to hopefully 1 day start telling you about some of the ideas we have in that space. Obviously, North America, we have some of the best resource plays in which are obviously very close proximity to some of the largest growing demand markets in the world. On the left-hand side, you have gas resource plays. It's a payback period, and then you have the oil plays on the right. Pembina's infrastructure basically overlays the top 14 gas plays, right? And these plays aren't all the same. They're not all dry gas. They're not all uber liquids-rich, our customers, obviously, throughout the Duvernay and the Montney and the Deep Basin. They have various different types of resources they can go after depending on commodity prices when gas was really, really strong. In '23 we saw a lot of customers shifting to the higher rate gas wells. You still get extremely positive NGL yields with that. So that's obviously really good for PGI. We have paid on a processing Mcf and then we move more gas that comes out, the more NGLs that come with it. And then the customers can go deep into right now condensate it's very strong. So they're going into that lower rate gas, but high condensate. Overall, Pembina's infrastructure being able to process natural gas, move all the different types of NGLs move your condensate, maybe you find oil, we can also move that. So it's an unparalleled integrated value chain that can basically accommodate all of our customers' needs in all of these plays. If you look over on the oil side, obviously, not in as many of those. But the top 2, it's the same resource. It's the Clearwater. And having your asset like the Nipisi pipeline, which we shut down, I think, in 2021, reactivating that. That's obviously going extremely well. We continue to see volumes grow on that asset and just continually excited to get that thing fully ramped up, hopefully, here in the near future. So where does that leave us, right? So here's the map of our infrastructure. And you can see our infrastructure basically overlays all of those gas and oil plays that you just saw on the previous slide. We've been operating in this area for about 70 years. I think it's going to be our 70th year birthday. And we're committed to providing our customers with that committed cost-effective, safe, reliable service every day, while maintaining our social license to operate in the communities here in Western Canada and into the United States. Scott talked about it, Chris talked about it. We've grown tremendously just even in like the last 7 years with the constraints that we've had, not only in Western Canada, but into the U.S. Midwest, and we're really looking forward to the next 5, 7 years out to 2030, as Chris identified, because of some key things that are happening in our industry, these are milestone game changers, and I'm going to talk a little bit about that and how we're going to benefit. So they're listed there. You can see Trans Mountain obviously, how will Pembina benefit at high level. Trans Mountain will hopefully drive incremental bitumen and heavy oil production. That production typically takes condensate for blend. We're one of the largest -- we are the largest condensate domestic mover transporter. In Canada, and we have a lot of space on our Peace pipeline and our ability to grow that system, add pump stations like our Northeast BC pump station, we can do those very accretively, and so as condensate demand grows, we would be there to catch the volume. Cochin Pipeline, there's 2 import pipelines that come into Canada, Cochin is one of them that we own. And just the high utilization demand for that asset will continue to be maintained. West Coast LNG obviously, with more gas egress, the customers aren't just drilling for straight up dry gas with that gas volume of 2.5 Bcf, 2.8 in Lots of NGLs will come, lots of condensate will come with that production. That's only going to be a benefit for PGI, the pipeline business, the frac, et cetera. LPG exports, we play a small role in that today. But we have the largest portfolio of propane proprietary and customer-based propane in Western Canada. So we will benefit from incremental propane egress and then obviously, the Dow path to zero cracker. Today, we move the majority of ethane in the province, we're a very large producer of ethane, and we're a very large supplier of ethane. So I'll get a little bit into the benefits to Pembina and some of the projects there. So Trans Mountain, I think, May 1 was declared in service. We could see -- with that 590,000 barrels of incremental egress oil egress, we see around 120,000 barrels of incremental condensate are required to fill to backfill the oil increase. Our Peace pipeline going out to the West, our reach goes all the way up into Birch, which is way up there in Northeast B.C. That's the only condensate pipeline that goes that far up. We have the 3 publicly communicated dedications up in Northeast BC. And then our entire infrastructure through once you get into Alberta on the P system, we have a lot of optionality to move condensate for our customers. We move a lot of barrels today, which obviously drives down the OpEx associated with that asset. I talked earlier about our high reliability, I believe that we have some of the best integrity and maintenance people. So we're in a really good position to capture a lot of those barrels and bring them into the Edmonton market for our customers. And then obviously, the Cochin Pipeline, when we acquired that, I think that pipeline averaged around 90,000 barrels a day through the exact same people that I've talked about, the good work that they did, increasing the throughput of that asset. We've got that up to about 110,000 barrels a day that asset go forward. So this will just -- with TMX happening, that will just maintain that high utilization in Cochin for a really long time. So really excited with that asset coming into service. West Coast LNG. So between Woodfibre, Pembina and obviously, the big chunk is LNG Canada coming on here in the next few quarters. There's a lot of layers here, but essentially, gas egress is really good for Pembina, right? Why that is, it is because I mentioned before, primarily all of the resource between the Montney, the Deep Basin and the Duvernay, it's extremely liquids rich. Right? So when the customers do drill for their gas to fill this incremental egress, a lot of NGLs come and a lot of condensate come with that. This will be extremely beneficial for PGI. PGI, we have through our partnership with Cutbank Ridge partnership with Ovintiv and Mitsubishi. We have roughly 1.1 bcf of gas processing just outside of Dawson Creek directly connected into Coastal GasLink. Mitsubishi is obviously an owner in LNG Canada. So we just see really high demand for our PGI assets. And then obviously, like I said, the NGLs that are going to come with that. It could be anywhere from 100,000 to 200,000 barrels of incremental NGLs that are coming. And our footprint, I stated earlier, with the completion of Phase 8. We have dedicated C2+ and C3+ pipelines all the way in from Gordondale, Alberta, and then we do have pipelines that go all the way into Northeast BC. So as the customers continue to fill that gas egress and white space that traditionally was full for gas that traditionally went down in the United States. And those customers in Alberta continue to fill that white space. There's going to be a lot of liquids coming at Pembina, and we believe that our infrastructure where it lies today is extremely valuable and ready to capture a lot of those liquids. I also just wanted to mention that here shortly in the next couple of months, we'll be finishing one of our last pipelines. And all the PGI gas plants will be fully connected to the Peace System. So it didn't take us that long to -- it took us a while to create PGI and then it took us less time to make sure that all the gas lines were connected to Peace. So pretty excited about that. LPG exports. So obviously, we have an existing asset today. There's another peer that has a really strong position in this space. But overall, I mentioned earlier, Pembina has a very large portfolio of proprietary propane. We extract a lot of liquids out of natural gas today at various assets, and Chris' team make sure that they get to premium markets. And then we also sell on behalf of our customers, a lot of their propane. So overall, more egress on the West Coast, getting it to the largest demand market in Asia will be a good thing, not only for Pembina, but for our customers. You may recall that Redwater fractionation facility, it is the only fractionation facility. It's the only facility period that has unit train capability to move unit trains of propane to the West Coast. So that's a direct shot on CN right from Fort Saskatchewan right to Prince Rupert. So as that -- that obviously gives us scale and a cost competitive advantage to get our customers' products out to the West Coast. And then finally, the Dow Path2Zero Ethylene Cracker. So a long time coming in behind the scenes to announce our 50,000 barrel a day supply. So back up a little bit. Today, there's 2 acquirers of ethane in the province of Alberta. We feed through the AEGS pipeline system. We feed 100% of that ethane to those customers today. And we also produce a tremendous amount of ethane. We supply a lot of ethane into that market through some of our deep field-based deep cuts and then our Empress extraction facility and our Younger facility up in Northeast B.C. Some of the benefits here, obviously, with Dow, they're going to grow the overall demand in the province by about 40% to about 100,000 barrels, and we're going to be roughly 50% of that on the supply side. So what that means is that your ethane barrel, it needs to come out of, obviously, with the gas production, you produce the ethane barrel. But you can't just produce the ethane barrel in isolation. With that comes a lot of C3+, so more propane, more butanes, more condensates, and Pembina obviously plays a tremendous role in moving those and Chris' team selling those. So super excited about that. But then also the incremental 50,000 barrels depending on where that comes from. We're obviously well suited to move that and transport that on behalf of other customers into Dow's incremental Cracker. So this has been a long time coming. This is an extremely positive project, not only for Alberta and Pembina but for Canada, Dow choosing to build this here. So super excited and lots of opportunity, which I'm going to talk about a little bit. So some of the opportunities that we've identified, I'm not going to get into details, but we think there's about $300 million to $500 million of net capital we're going to need to deploy to obviously, enhance the infrastructure for third-party barrels that we'll be moving, but also enhance the infrastructure for our own 50,000 barrels of incremental supply. That will be through potentially incremental deep cuts, field-based deep cuts through PGI. That could be enhancements to some of our extraction facilities around Empress RFS-3, that is a C3+ frac today, but it's an identical replicate to RFS-2. So all we need to do there is just put the de-ethanizer infrastructure in at RFS-3 to get that basically to a C2+ 72,000 barrel a day frac. So lots of optionality for Pembina. So we're just evaluating what is the most cost-effective route to come up with our 50,000 barrels a day of supply. And hopefully, we'll be sharing more information on that here in the next maybe 1 year, 1.5 years. So what does that all mean? We've got great people. We've got great assets. We're committed to being safe and reliable for our customers. Our footprint is unparalleled here in Western Canada. We've been growing even in the face of egress constraints here in Western Canada. We've grown our footprint into the United States. We believe that we're very well suited to be able to grow as these kind of very large catalysts come on. And not to mention that those charts that show the gas place and oil place. This is a world-class resource that we have underneath our assets and Chris talked about it, but we believe that our core business, if we do this right, if we create a differentiated stakeholder experience, we're very focused and diligent on making our core business as resilient as possible. We will maintain that and grow that well past 2030, but that will allow us to really focus in on more Cedar type things, more export type things and getting into new energies. So with that said, because I could talk about this for hours and hours and hours. With that said, I'm going to hand it over to Chris Scherman to talk a little bit about our Marketing business.

All right. I'll be relatively brief, and then we can head for a break. So first, I'll just talk for a minute about where our marketing business is, what it actually does and then hopefully, a little bit about why we think it adds value to Pembina. And so the marketing business is really an extension of our Pembina store. And so marketing leverage is our integrated asset base and our value chain, both in pipeline facilities and terminals to access various commodities and really extract incremental extrinsic value from our assets. It's important as well to recognize that our Marketing business does deal with proprietary volumes, does support our business, but it also has a big role supporting the Pembina store and supporting our customers in marketing -- in marketing their products. So what do typical activities consist of in our business, buying and selling commodities take advantage of price location and time spreads really traditional arbitrage there. Utilizing our significant above and below ground storage assets, to capture value for both short and long-term price volatility. And then marketing and distributing NGL products, both in the WCSB as well as more broadly. And we're one of the largest NGL marketers in Canada. And we certainly bring that scale and capability to bear in the market. So why is that important? And what value does that add for Pembina? So we truly do believe that marketing enhances the value of Pembina's business. We can drive incremental returns from utilizing the assets and from layering a prudent amount of commodity exposure on top of our asset base. As well, we like to talk about it as a natural hedge. And there's a few different ways that plays out. I think a good example that I've heard [ Cam ] used before is we like higher natural gas prices. Higher natural gas prices support our customer, customers support drilling support all the volumes that come come down our pipelines. And so for the long term, we want higher gas prices. In the short term, however, when gas prices are low, it creates an opportunity for us in the Frac Spread business where our feedstock becomes relatively cheap and we can do quite well on the marketing side and frac spread. Being in the marketing business also provides us with unique insights into the market, which supports both our general business as well as our investment decisions. And I think you've seen through examples like Cedar. It's also allows us to really provide commercial support to catalyze development. So with Cedar, we've taken a position in Cedar for the time being with the intention of leading that position, but ultimately allows us to catalyze development that we might not otherwise be able to catalyze. And then finally, it's really about expanding our service offering. So it's an offering to our customers to bring our size and scale to bear to support their business to improve their netbacks and to add yet another component to the Pembina store. So in short, it's strategically advantaged assets across our base. We've got a significant supply base. And when we combine that with fundamental analysis and a really experienced and capable team, we think it adds value for Pembina and frankly, adds value for our customers. So with that, I'm going to kick us over to a 15-minute break. So we'll break now and reconvene in 15 minutes with new ventures. [Break]

All right. I think we'll get started here again. Again, it's great to be back, and we're talking [indiscernible]. It's been 2019 since our last Investor Day. Great to see some of the people here and again, an enjoyable reception last night. So I'm Stuart Taylor, Senior Vice President, Corporate Development Officer. I look after the New Ventures component of Pembina, and we've talked about some of that, as Chris has gone through the strategy and Jaret has talked about some of the integration. I'll go into a bit more detail on what New Ventures are actually doing. So we focus on the strategic priorities of thriving and meeting global demand. We're working on projects that are focused on decarbonization, new energies, meeting global markets that are adjacent and can be integrated with Pembina's core businesses. Some of these projects that you've heard of before, and we'll talk a bit briefly about some of them are things such as our carbon capture and storage, our Alberta Carbon Grid project. I'll talk more about that in the upcoming slide. We have been looking at energy transition fuels and chemicals that we look at placing our low carbon complex, immediately adjacent to our Redwater fractionation site. And lastly, Cedar LNG, and I'll talk in more detail about Cedar as well. I think one of the unique aspects of Pembina and as we look at these New Venture opportunities, one of the key things is that we continue to look to structure them commercially, that mirrors our core business, essentially fully contracted, primarily take-or-pay and based on a tolling model. That takes some time, and that is, in many cases, that's not the current market that many of these facilities are being created in, but we stick to our plan of how to execute them and what our commercial models will look like. With respect to ACG, we've been working on this project for about a year and a bit. Again, just to remind everyone, it's a 50-50 JV with TransCanada. And the purpose of this JV is the development of CO2 transportation and sequestration for solutions in Alberta. Our first hub is planned to serve existing and future emitters in or around the Alberta's Industrial Heartland. We know we've made some progress. We did secure our evaluation agreement from the Government of Alberta in October of 2022. That gave us the access to plots of lands on which we identified as future sequestration sites. And we've been reviewing that as we go forward. We've been doing preliminary engineering on the compression and the pipeline right away. But first and the biggest progress that we've made is we actually completed our appraisal well in Q4 of 2023. And are currently processing the data that we did acquire by the drilling of that well for some subsurface models in 2024. I'm a geologist by background. I get pretty excited. I don't get to drill too many wells at Pembina. So that's pretty interesting. I will say the core porosity and permeability came in the data from there, compares exceptionally favorable to the current Quest sequestration project. We are extremely excited about what the data is telling us. And for those of you in the room, we have somewhere between this well has permeability in the [indiscernible] ranges. And as we looked and we test our injectivity, we actually have 2 cap rocks. This will keep the CO2 in the rest for the cap rock and the foot rock. And upon injectivity testing, we could not crack the cap or the foot rocks. So we have extreme pressure capability to inject large quantities of CO2 in those reservoirs. We're going to continue our work on the appraisal wells. The work is from the data and the subsurface models, how much more seismic do we need to shoot? How much -- where will we place our sequestration wells? How many will be required? And obviously complete our typical engineering on the pipeline in the compression. So that work will go forward in '24. At the same time, we'll begin our enhanced conversations with potential customers, those who have emissions, what are their plans for capture and how could ACG serve their future needs. With respect to our Low Carbon Complex, we've had the opportunity to work with developers to build the Low Carbon Complex. Again, on this map, it's the blue area, the highlighted blue area there. It's immediately adjacent, as I said, to our Redwater fractionation facilities. We're looking at sustainable energy infrastructure. We're focused on innovation, sustainable fuels, chemicals and this is where we would include our joint venture with Marubeni on our ammonia project. We were joking at the table. That land base gives you a size is 2,000 acres. It's large enough to host numerous world-class chemical facilities. And if you actually employ a shared service model of OSBL services, i.e., power, water and others, you could actually host many more. Conversations with table, I would say is that or we could host many, many data centers onto that site. So why are we exploring our low carb -- Low Carbon Complex. Again, it's customer driven. We have inbounds on a weekly basis of people looking to site future facilities. We believe that we can offer services that Pembina could build and offer. Those would include gas feedstock supply, water supply, other services that we are very familiar within doing. We actually believe it's a new growth opportunity to deploy capital. It enables to capture CO2 and would be a customer of ACG. It's a natural -- it's an extension of the natural gas value chain in many cases, again, feedstock and a demand sync for natural gas. It is diversification from our existing portfolio, many new opportunities. We are at the forefront in conservations of what innovation is taking place, what are the new projects, what are the new technology that people are looking to employ. We believe it's repeatable. We have the site in the area that numerous projects could be built on there. And it increases Pembina's brand as moving forward with new portfolios, new strategies and moving along in energy transition. I'll jump down to Cedar LNG, a pretty exciting project. I've been consuming lots of our time. It's the most advanced New Venture's project. We recently announced significant developments. And again, we expect to be moving forward with FID in June. Brief summary of the project itself, it's 3.3 mtpa floating LNG facility in Kitimat, British Columbia, entirely within the traditional territory of the Haisla Nation. The project is 50.1% owned by the Haisla Nation and 49.9% owned by Pembina. Pembina has been the developer, we'll be the builder and we'll be the operator of Cedar LNG. Commercially, we've underpinned the project with 20-year take-or-pay tolling agreements. ARC and Pembina have stepped up for each 1.5 mtpa. Pembina intends to assign its capacity to a third party in the near future post FID. We have contractors. We have an EPC lump-sum contract with 2 of, we think, world-class engineering and construction partners, Samsung Heavy Industries, out of Korea and Black & Veatch out of Kansas City. It's a lump-sum contract for the entire flowing LNG vessel. The cost estimate is USD 3.4 billion or $4 billion, including IDC. From an environmental perspective and one of the major changes that this project undertook, we were powered entirely by renewable energy from BC Hydro. And we are, if not going to be the lowest emitting LNG facility in the world will be at the very, very bottom of those plants. And that was a key value that we had to engage with and work with the Haisla along. We do have all of our regulatory permits, our key regulatory permits. And again, as I said previously, we were expecting to FID a project in 2024. Cedar financing has been launched and is on target for that FID timing. Critical product components are in place. We have very well-defined plans that have been completed and the successful execution of Cedar LNG is well on its way. The project advances, as Chris ran through our strategic pillars and where we're going to go and I mentioned. New Ventures focuses on thriving global markets, but we do believe we actually touch all of the 4 strategic priorities. The project advances every strategy as we go forward. It increases our exposure to lighter hydrocarbons that will serve the fastest-growing markets in the most resilient markets in Asia. It's one of the lowest emitting LNG projects in the world and will displace higher remitting fuel sources. It transforms Western Canadian products, i.e., natural gas and delivers them into higher-priced markets for our customers. It creates sustainable long-term benefits for the Haisla Nation, which we're very proud -- we are very proud as our partners on this project. Just briefly for the benefit, what are -- who is the Haisla Nation? We've had the privilege of being bidding on this project, being selected by the Haisla Nation. We've been working closely with them for the last 2 years. The Haisla Nation is comprised of approximately just over 2,000 nation members. The nation has been working on Cedar for over 10 years. They had the concept of -- and they took a chance and bet on themselves that they could get this project off the ground where they would be an owner and not just receiving your typical First Nation benefit agreements that would actually be an owner of the project. We embraced with similar values, the environmental aspects that would be required. And have minimum impact on the land, the air and the water as we build this floating LNG facility. Again, Cedar provides direct ownership and at the table participation in a major industrial development within their territory and will provide long-term sustainable prosperity for its members. And I'm happy to say, even the adjacent nations will benefit from Cedar and the job and employment contracting opportunities. This is economic reconciliation in action. Even with the floating LNG vessel largely being built in Korea, there will be up to 500 jobs during the 4 years of construction at site. Again, a dramatic decrease when you're comparing it to LNG Canada, they add up to 5,000 people on site. We will have 500. And as we get into operations, there will be 100 stable family supporting jobs available at that time. We have a brief video. Hopefully, it works, and we'll show you from about Cedar LNG. [Video Presentation] Thank you. I really love this line. This is the entire project. And it's been designed, as I said previously, to minimize land disturbance and reduce cost overrun risk by building the pipeline and the transmission lines adjacent to existing infrastructure and service roads. I don't have a pointer, but if you can just follow my arm waving, which I usually do. Our site is on the far top left. We have a very small marine terminal site. The LNG vessel will be moored approximately 70 meters offshore. And again, our site is small. It's essentially an electrical substation that comes in and the gas pipeline running through it. To compare that's LNG Canada site, which is kind of in the very middle of the page, to be fair, they are 4x larger than we are, but their footprint is dramatically larger than anything that we will do. People ask many times. So the pipeline in meter station, coastal gasoline comes into LNG Canada. You'll see the CGL delivery point into Cedar. There is a pipeline that we will build called CedarLink. It's 1.1 kilometers. It will be adjacent to the LNG Canada site. And coming into the Cedar LNG meter station. From that meter station, our pipeline goes along the area and then follows just north of a service road called the Bish Creek Road, along Rio Tinto site and heading to our site, it's 8.8 kilometers of pipeline. People -- again, 8.8 kilometers compared to 600 kilometers on Coastal Gas Link, a dramatic difference of infrastructure need. It is a challenging pipeline, but we've got -- we've been working on pipelines. We think it's something that Pembina and why the Haisla picked Pembina is our capability to build the infrastructure, the onshore infrastructure as best can be done. In the far right-hand side is the [indiscernible] power station substation. Our transmission line, 7.4 kilometers, 287 kV will go from that [indiscernible], again all the way to our site. The mooring system to hold a ship is a spread mooring system. It's been developed and used globally all over. And again, our Cedar LNG project, it's a dual-train liquefaction and we mentioned 3.3 mtpa. We have a very small footprint. We have a very controlled environment of which we're building and we break up and I'll discuss it a bit more our onshore infrastructure that needs to be required to be built. As mentioned, we have cost estimate $4 billion include gross capital, including IDC. We have $2.3 billion of that is for the floating LNG vessel itself, which is going to be built under a lump-sum contract with cost and schedule commitments. The $1.1 billion encompasses many other items, including things such as PST. We've also built in contingencies, which have been reviewed by independent engineers. The onshore infrastructure is approximately 1/3 of the $1.1 billion, and we're confident in our ability to deliver those projects on time and on budget as we've done with other Pembina projects over the last decade. Peak spend on the project, as you can see in the bar chart, is just over -- it's approximately $1 billion per year beginning in 2024, '25 and '26. As soon as we FID, there will be long-lead equipment orders and a lot of work being done in '24. Net adjusted EBITDA to Pembina has a range of between $200 million and $260 million annually. And as I say, in -- financing is ongoing, and we expect to have that completed in June for FID. With respect to the EP lump-sum contract, yes, again, we have a well -- we have well-defined plans for the execution of Cedar, 70% of our project capital is secured under a lump-sum contract with date certainty, construction certainty, and it's going to be built in Korea in an environmentally controlled shipyard. It's not a remote site. It's well -- there's obviously, it's controlled and we're confident in that build. The consortium of Black & Veatch and Samsung are probably have the most extensive flowing LNG delivery track record in the world. Samsung themselves have delivered the last 3 floating LNG vessels. Cedar has already retained highly experienced project management commissioning and start-up teams with direct and proven successful LNG experience. We've had them on staff, again, floating LNG experience on staff for 1.5 years already. Onshore construction scopes, pipeline transmission line terminal, we'll ressemble Pembina development projects in terms of size and complexity. This part of the project will be executed using Pembina's proven project management and delivery strategy. So again, as we go forward and we reach our June FID timing, what are the advantages? Indigenous and environmental benefits this project delivers well above other LNG facilities. Competitive build costs compared to global precedent LNG projects, we can compete and was one of our goals is to ensure that we can deliver LNG into the Asian markets cost competitively with U.S. Gulf Coast projects. Cedar LNG lands in the Asian marketplace on cost-competitive pricing, both from an oil index perspective and on long-term contracts. Our economics are driven by and the benefit that we have is a structural AECO pricing discounts relative to Henry Hub. Our geographic proximity to the Asian markets, which Scott showed in his slides. Again, we're in a 10-day sailing time compared to the 20-day sailing time. If you can get through the Panama Canal. And if you have to go around the horn, you're up into the 30-day time frame. Those changes, every one of those changes is about $1 an MMBtu. Canada has abundant gas reserves, and Cedar LNG is poised to deliver responsibly produce Canadian energy to global markets by 2028. Thank you. I look forward to your questions. Okay.

Good morning, everyone. So now that you've heard from my peers, I get the opportunity to sort of take us home and talk about the financial implications of all this. And as you've heard from us, everything starts with strategy. And so when you think about what you've heard today, Chris, along with my partners, talked about our strategy. Ultimately, how we measure our performance against strategy is through financial performance, and we call that capital excellence. Capital excellence really comes down to 3 ingredients and one outcome. Firstly, we seek to grow fee-based adjusted EBITDA per share by 4% to 6% annually. We achieved this within our financial guardrails, meaning that we are not changing our risk profile. We increased the return on our existing invested capital, and ultimately, by doing these things, we believe we should generate industry-leading returns. If we execute on those 4 pieces and achieve this notion of capital excellence, and we believe we will remain at the front of the pack and relevant as the world evolves. So when we think about capital excellence, obviously, that goes hand-in-hand with capital allocation. Capital allocation reflects how we drive growth and returns and also manage our risk profile. At Pembina, it has and continues to start with the balance sheet. As you've heard, and we'll hear again from us, we have the track record to back that up as well. Maintaining a strong BBB rating has been a consistent and transparent priority for us. And again, we've shown that in time. Ultimately, a strong balance sheet has proven to be a competitive advantage for us because it affords us the ability to seize opportunities when they become available. For example, the Alliance Aux Sable consolidation that occurred earlier this year. Next comes the dividend. Our dividend is core to Pembina's investment proposition, and we recognize that our investors depend on it. In that regard, our objective is to produce sustainable, reliable and growing dividends, which is supported entirely by our fee-based business. Our next call for capital is on accretive gross capital. This reflects capital, which adds economic value and extends and enhances our franchise and reflects the risk parameters of our financial guardrails. It's worth noting that growth capital must compete with other discretionary uses as well. And that's where we get to the last piece at the bottom of the slide here. After all those pieces, we will look at risk-adjusted returns for the remaining discretionary cash flow. This will include debt reduction, share repurchases, incremental dividends, and in the past few years, we've done all 3. And I think the reasons for that have often been judging based on internal factors such as the capital outlook we have, what risks we see or what opportunities we see in our business as well as what we see going on externally. For example, in the face of rising interest rates, we felt it made economic sense to retire debt as well looking forward to the capital opportunities that we have. Likewise, and we saw dislocations, we felt it was opportunistic to repurchase some of our shares and did that. And so we remain very disciplined about capital allocation, always looking at where the risk-adjusted returns are. Moving forward and coming back to accretive growth capital as it's obviously instrumental to our growth target, there's really three buckets that we focus on. And first of all, I'll start on the left and talk about the sanction projects that we have underway. Here, we highlight over $1.2 billion worth of major projects under execution. Starting with the Peace Phase VIII expansion and the Northeast BC Midpoint Pump Station, which come into service in 2024, obviously, as Jaret mentioned earlier today, a positive progress on the Phase VIII, and that is effectively online. Next after that, we've got our Redwater IV fractionator along with a couple of the opportunities in the Pembina Gas Infrastructure space, which come online in 2026. And again, returns on these projects and the commercial structure match what you come to expect and come to see from Pembina with returns consistent with historical levels. Next, we have a $4 billion suite of projects under development. These projects can be thought as highly probable, but not quite yet at FID. These would include our Cedar LNG project, our Alberta Carbon Grid, some of the ethane supply solutions for the Dallas supply agreement as well as our future Northeast BC system expansion, cogeneration facilities, and other laterals and connections. 3/4 of that capital roughly falls into the 2024 to 2026 timeline, which is why you'll see us highlight that timeline consistently throughout this presentation. There's obviously a balance between greenfield and brownfield projects. And again, the returns on these projects and the commercial structures match the types of experience you've come to expect and come to see from Pembina. And then finally, on the right-hand side of the page are the earlier-stage projects under evaluation. These are opportunities which are less advanced and yet provide foundational new business opportunities for Pembina as we evolve our strategy. So now as we think about the growth target, I want to take a moment in baseline on the near term. For 2024, we expect adjusted EBITDA to raise between $4.05 billion and $4.3 billion, which, as you recall, reflects a $300 million increase from our original guidance for 2024, set back in December. As a result of the closing of the Alliance and Aux Sable consolidation transaction, that grew Likewise, as we've all seen, there's been positive momentum in the commodity space, particularly supporting a more robust forecast for our marketing business in 2024. Likewise, we refreshed our current tax expense guidance for 2024, just slightly up by about $5 million at either end. And the reason for that, despite the outsized increase in the Alliance Aux Sable consolidation and the marketing increase has to do with the transaction structure and the U.S. basis that we have. Finally, we've updated the sensitivities to that adjusted EBITDA for 2024 and the balance of the year. I think the takeaway from these sensitivities is that, obviously, when you look at where they were for the full year compared to where they are now, they're relatively similar. That reflects, obviously, one quarter in the books. It reflects an increase, obviously, and essentially doubling the size of the Aux Sable platform, but also incremental hedges that we've layered on. And now that we have owned the majority of the Aux Sable platform and simplified some of the commerce there. We're able to hedge that business in a much more similar way to the approach that we take on our wholly owned business or our previous wholly owned business. And essentially, as you can think about going forward for the balance of the year, we've effectively hedged just over 50% of that Aux Sable business. So stepping away and taking a little bit longer-term view now, I want to talk about our approach through 2026. I spoke earlier of our target to grow fee-based adjusted EBITDA per share by 4% to 6% annually. And today, we're formalizing that outlook, using 2023 to 2026 as that proxy. Let me spend here -- spend a minute talking about why we've chosen that metric and why we've chosen that time frame. First of all, on the fee-based adjusted EBITDA per share, what you can clearly see is out of line with our strategic pillars, it's the basis of our strategy, it's how we orient our business internally, and it's appropriate that, that be reflected externally. Secondly, it normalizes the noise associated with forecasting commodity prices, which we've all heard and all experienced is subject to great debate. Thirdly, the fact that it's a per share metric, aligns very well with shareholder interests, provided the capital structure does not change, which obviously, I think you'll hear from me later, that we don't see it changing. And finally, it really isolates business performance from the core infrastructure business which I think is obviously the backbone of our business. So if I look at the guidance through 2026 of 4% to 6% EBITDA per share -- fee-based adjusted EBITDA per share. It really reflects a few points. One, obviously, growing volumes along with overall basin growth. Obviously, I think you look forward to many forecasters talking between the low to mid-single-digit volume growth range. And as you heard from my colleagues earlier the fact that we have the full hydrocarbon value chain across all the commodities, we feel like we're well positioned to continue to match that growth internally. Secondly, obviously, the integration of the Alliance Aux Sable platform and realizing the value and the synergies that come from that consolidation. Thirdly, margin enhancement across our business that Chris referenced and Jaret did as well. And what that really means is continuing on our path of operational excellence. It means finding ways to be more efficient. It means finding ways to align outages. It means finding ways to move more volume through existing capacity. It's really sort of working those pieces of a high-quality operator. And the prize there, it can be quite meaningful. Finally, mostly tailwinds, but obviously a few headwinds, one of them which we've already been clear about. Obviously, we had recontracting on the Cochin pipeline at the end of 2023, that has a moderate impact for 2024. And obviously, a full impact come 2025, as you get a full year run rate, obviously, that plays into this forecast as well. One final thing I'll note is in this forecast, there are -- it's completely organic -- organically driven. There's no bolt-on or tuck-in acquisitions in here. Obviously, that's something that is part of our business, we're -- Jaret talked about integration being a core competency and always something that we can look for opportunities for. Switching to funding. Obviously, you can't speak to growth without funding. And the takeaway here is that we have the capability to self-fund our currently sanctioned projects, along with our Cedar equity contributions and our under development projects, all with cash flow after dividends. Likewise, if for some reason, the execution of those opportunities downshifts for whatever reason, we generate substantial free cash flow. So let me talk about the components of this for a moment. Firstly, you'll see on the far left bar, we have cash from operating activities of $9.1 billion to $9.9 billion over that 3-year period. This creates a consistent range around the annual outcomes similar to what we practice in our annual guidance. You're often used to seeing a $200 million to $300 million range in our annual guidance, and this range reflects that outcome as well. Obviously offset by some of the margin enhancement activity that I just talked about. Secondly, on the dividend piece, roughly $5.3 billion of dividends. This reflects both our common and our preferred share dividends and obviously reflects common share dividend growth over the period, along those same lines as well as preferred share rate resets in the phase of the current prevailing interest rate environment. Finally, the third bar from the right -- or third bar from the left, excuse me, would be capital and contributions to equity accounted investees. And as you can see, on that bar, we have roughly $2.2 billion of capital from sanctioned projects. That includes our growth capital. That includes our annual sustaining capital, and it also includes our digital investment program. When you layer on Cedar equity contributions, that being Pembina's share of the equity after project finance on Cedar and unsanctioned projects, that total over the 3-year time period gets to roughly $4 billion. Obviously, culminating in the fact that we are effectively self-funding through that period. And ultimately, as I said, if capital does downshift or shift out in periods, we generate meaningful free cash flow. So after we talked about growth and how to fund it, it's important to give you comfort that this growth does not come at the expense of a change in our risk profile. That's where the financial guardrails come in, as they're eventually -- essentially the financial risk parameters for strategy. I think most people are familiar with the concept of the financial guardrails, but it's really important that the proof points are here to show that they mean something. And so what we've done is, obviously, showed you those same parameters from 2018 to 2023, as well as where we are today. And I think the point I'd like everyone to take away is that, obviously, through that time period, a lot of change in the energy industry, a global pandemic and including the alliance in Aux Sable consolidation, over $10 billion worth of capital investment and yet well within the guardrails that entire period. I think you've probably gotten the theme from my colleagues and hearing from us that we're very big on doing what we say we're going to do, and this is the proof of that. This next piece obviously speaks to, again, the risk profile of our business and two points worth taking away from this slide. As you've heard from us previously, we feel it is a unique and differentiated characteristic of Pembina that we are balanced across the hydrocarbon chain, and we have exposure to all of the value chains. Likewise, our business is highly contracted with 65% to 70% of our business coming from take-or-pay or cost-to-service cash flows, obviously, with full revenue and cost protection or revenue and partial cost protection in those cash flows. I would invite people to dig into that stat with our peers. I think if you do that, you'll find that the stat compares more closely to the lower-risk peers in our space as opposed to those with more commodity exposure. Finally, on the fee-for-service and commodity-exposed cash flows, this really represents the fee-based cash flows, firstly, on top of that core take-or-pay or cost-of-service component. Where there is some volume exposure. And in some cases, we also have cost protection as well as on these cash flows. And then finally, the commodity-based cash flows really reflect the marketing business. To zoom in for a second on our leverage and our approach to managing the capital structure, I want to talk about the history. We've long said and long demonstrated that we have a commitment to prudent financial management and a strong BBB credit rating. And I think this chart -- this slide shows it. When we look at managing the balance sheet within Pembina, we look at it from multiple vantage points. One is a proportionally consolidated view, which obviously takes the proportion of debt both under the Pembina corporate umbrella, but also with our equity accounted investees. In many cases, notwithstanding the fact that these are nonrecourse lending arrangements. The second aligns with our rating agency methodology, ultimately as our financial guardrail is governed on the strong BBB rating. So on the proportionally consolidated debt for a moment, let me just walk through that. And obviously, Scott referenced early on that we went from 4x down to sort of below that level between 2019 and 2023. It's worth mentioning, obviously, that 2019, and if you recall, we closed the Kinder Morgan Canada acquisition late in the year. And so that figure reflects a disproportionate reflection of both, the full amount of the debt but only effectively 15 days of EBITDA for that. If you were to normalize for that, our leverage on a proforma basis for 2019 was about 3.6x, Again, very consistent with the previous year, very consistent with the trend. Obviously, the next year, 2020, we all remember that, that was COVID. And I think that sort of proves to the resilience of the business. Even through all that occurred in that, we took decisive action to protect the balance sheet, reducing capital, cutting costs, all without doing equity. Through 2021 and 2023, obviously, we reduced leverage as we foresaw increasing interest rates and capital opportunities coming at us and felt that, that was prudent to do so. And finally, as we look forward to 2024 to 2026, which is not explicitly on this page, what I can say is that taking the last slide into account and looking forward to our Cedar opportunity, even if you start to take the proportionate amount of nonrecourse debt associated with Cedar and include us in our structure and our leverage structure, we remain well below our 4x leverage level and the leverage does not change materially from this profile. Finally, I want to mention the FFO to debt or the second metric at the bottom of the page here. Obviously, if you look into some of the disclosures from the third-party rating agencies, we often orient to the BBB range, which is 15% to 20% FFO to debt. You'll note that our target is above that or stronger than that. And the reason for that is we've anchored to a strong BBB rating, meaning we've always wanted to stay in the upper half or the stronger half of that because, a, you never know what can happen. We can have something like a global pandemic. The world can change, and we've never wanted to put ourselves in a position where we get surprised by something within our control or outside of our control. And I think the track record again shows that. Third pillar to the capital excellence involves increasing return on capital. Return on capital is something that, again, is very crucial to the growth trajectory. For us, return on capital, again, is a proportionally consolidated look. And so we look at our adjusted EBITDA, which is proportionally consolidated against the proportionally consolidated view of capital in service. Again, I think it's important to reflect that or recognize that for us, internally, when we look at this metric, this is an undepreciated view of capital and includes maintenance and sustaining capital as we spend it. And so for us, it provides a true view into the efficiency of our capital deployment. I think the track record shows here, obviously, coming out of 2020 that we've successfully grown and increased our return on capital. And how have we done that? Obviously, by integrating assets integrating acquisitions, integrating new assets, integrating organic investment by operational excellence by focusing on efficiency, on cost reduction, on utilization increases by margin enhancement along the same flavor, by synergies from the acquisitions that we've seen, brownfield investment as well as the upside in our marketing business. So obviously, I mentioned three ingredients and an outcome. This is really the outcome. We believe that if we do the other three, the fourth one really takes care of itself and should culminate in market-leading returns. And looking back, when we look back over a long period, we believe this is the case. What it shows is us consistently meeting and exceeding our industry peers and obviously providing a very strong and predictable return to our shareholders over time. Likewise, our dividend track record. This goes all the way back to Pembina's time as a public company. And as you can see, over that time period, our compound annual dividend growth rate has been 4.3% over a 25-year time period. This is a very long track record. And obviously, you can see that the dividend is core to us. I think what we also try and highlight on this page is that the dividend is core. And we are a distinguished few in our sector who have not cut our dividend throughout a conversion from a trust, in the significant incremental tax that came along with that through price collapses in our energy industry and through COVID. We're very proud of that fact. Likewise, we've accomplished all this growth, but at the same time reducing our payout ratio and increasing the sustainability of our dividend over time. Focusing on covering that dividend with our fee-based cash flow. So I have the opportunity to wrap up today and really bring it back to base principles. I would offer that, in our view, Pembina is a differentiated investment. As I said, there's a common theme of doing what we say we're going to do. And I think what you've hopefully heard today demonstrates that. As we see it, the distinguishing factors from Pembina are here. Firstly, we have a full value chain across all the commodities with integrated commercial framework, wellhead to market, which we believe provides and generates option value in the company. And over time, some of that value and that growth recognition you've seen from Pembina is a function of a realization of that option value. I think it also speaks to our ability to win opportunities. And an excellent example of that is our ability to supply Dow with a meaningful portion of their ethane in the future and all that will come with that. Next, we've got visible growth, underpinned by 4% to 6% fee-based adjusted EBITDA per share growth and obviously a multiyear trajectory. Fourth, financial discipline, underpinned by our financial guardrails. Next, very predictable cash flow stream, underpinned by a strong fee-based component, including 65% to 70% take-or-pay and cost of service. Likewise, all that is driven by investment underpinned by exemplary project execution demonstrated by $6 billion of on-time and on-budget investment since 2017. And finally, this all enables us to position for the future with the strategy for long-term hydrocarbon demand and energy transition. So with that, I'm going to wrap up. I want to thank you all for your time today, both in person and on the webcast. And I'd like to invite my peers up for Q&A session.

Hello, everybody. We have two ways to answer questions today. One is in the room here, and there are two microphones that will be mobile and will help you be heard. And then we also have a -- we have a feed of questions from online participants. I see a couple on the screen here that we could start with, and then we'll move back to -- in the room or we can start in the room. How about that? Please go ahead.

It's Linda Ezergailis from TD Cowen. Very interested to see your 3-year outlook, as outlined on Slide 68. I'm wondering if you could help us understand a little bit more some of the assumptions embedded behind that in terms of underlying commodity prices, recognizing that's even harder to predict maybe than what goes on in the capital markets especially through unforeseen scenarios. But how do you think about that range? Like what might push you towards the lower end of that CAGR, the 4% versus the 6%? And can you remind us what the current cadence of recontracting or maturities are recognizing that you've been doing a lot of blending and extending?

Thanks for the question, Linda. So I'll start and maybe ask Jaret to chime in on the contracting piece as well. So I think the big drivers for that range are, firstly, exactly -- and some of it, when you establish sort of a specific time frame, obviously, some of it comes down to timing as everyone knows, in this room. So that in itself is some of the uncertainty, whether we see something show up in 2026 or 2027, can obviously play into this. But I think our expectation embedded in that, as I mentioned, is an expectation across our business and across the base of low to mid-single-digit volume growth. If you look at our asset base, and I think most of the people in this room know, I mean, there's obviously areas of it where there is more white space as we call it, more free capacity than others in a couple of parts of our business. We're actually running at very, very high utilizations. Some areas of our business we have more capacity. And some we're working to unlock capacity and some of that capacity is just showing up kind of in that 2026 year. So as we think about that proxy for the basin growth, as Scott said in his piece, being the conventional business. Again, I think that low to mid-single-digit volume growth is probably a good proxy for both pieces of those ranges. Likewise, it has to do with the view and the timing of some of the margin enhancement opportunities that we see our broader executive team. It's been one of their core 3 focuses for this year, is crystallizing that margin enhancement opportunity, types of things that I talked about in my presentation. And so exactly when that shows up in what year is some reflection of that range as well. Obviously, this being fee-based, fee-based adjusted EBITDA, it doesn't have an explicit commodity sensitivity associated with it. What I would say is, and as you've come to experience from us, when we do our commodity outlooks, we just take the forward strip. We think that that's as right or as wrong as anything, and it's something that we can all see. So we use that. So as you always see in the forward strip, there's always a backwardation and that will not necessarily show up in this. It will show up more so in our 3-year cash flow. But we also do take approach to say, okay, we recognize that there may be some conservatism there, and so we create a range around that. Jaret, do you want to talk about the contracting?

Just a little bit on the contracting. So it's probably not something we don't talk about enough, but we're constantly engaging with our customers as they're rolling out their 2-year, 5-year, 3-year plans, et cetera. I think this is working. So constantly doing that, Linda, between now, mid-2024 and 2026. Switch that up. We don't have any major contracts actually coming up for expiry, but we did have Cohen, which was identified as a bit of a headwind, but we did contract that for a higher volume, albeit at a slightly lower toll. But like I mentioned earlier, we've actually got some extra capacity out of that pipeline from the time we acquired it. So there is IT volumes that can make up a lot of that shortcoming. But with all that said, we continually work with the customers, but there's not a lot of big ones coming up in that time period. Now as RFS II and RFS III come off, like those were 10-year contracts and that it was 2020 -- 2016, 2017, we'll be looking at extending those. But our confidence level in building like RFS IV, for example, or new facilities, pipelines, et cetera. We're always very prudent to make sure that the base assets are highly contracted for a long period before we deploy new capital.

Thank you, Jaret. Perhaps we can move to an online question now and then Rob will get back to you. Could Cedar LNG be expanded with the Phase II?

So I think this is on. Yes, there we go. Cedar LNG, we are building our infrastructure, the transmission line, the pipeline, our terminal. We will -- it is designed for 2 Cedar vessels. It would be very easy. We'd love to use the same engineering and kick off another vessel. Our challenge at Cedar is natural gas pipeline capacity. The Coastal GasLink pipeline, we have guaranteed capacity in the Phase I with a compression addition, 400 million cubic feet per day for us to do Cedar 2, we need additional gas egress to that site. That could come perhaps on Coastal GasLink, interruptible service. It could come if one of the existing JVPs chooses not to go forward in their space, we could maybe secure that capacity. There are other pipelines that do exist that would need expansion. And that opportunity is there. And there are pipelines that are permitted another very large pipeline job to get done. But yes, Cedar could be -- the site at the site, we have space. Our facilities are built for double. We just need to work on a pipeline project.

Thank you, Stu. Go ahead, Rob.

[indiscernible] first of all, thank you for the presentation and the [indiscernible] today. I wondered if there's a particular response [indiscernible] that you can have or any [indiscernible]...

Yes. So for those on the phone that couldn't hear, the question was -- was there any gaps in the Pembina value chain that we're currently pursuing or looking at? And secondly, do we have appetite to expand off of a U.S. platform, I believe, this was the question, Rob is that correct? Yes. So on the first one, I think right now, we're pretty focused on expanding the store, but it's on all the projects that you heard today. So obviously, Cedar LNG will be a big piece of that offering. In addition to many of the projects that Stu's team is progressing in new ventures. That team is very busy. They have a lot of things on their plate, but they're early stage. Some of which we alluded to today, but there's many others that we didn't get into today. And that is always looking how to leverage our franchise, how to leverage our footprint, where do we have rights to win. One of the things when we did our revised strategy was making sure that any asset we looked at, we had to have a right to win. It had to be adjacent to our asset base. You weren't going to see us go off and do something randomly in the Permian where we have no right to win. So we're really focused around the core assets. Some of those were just too early to talk about today, but we do have a very active new ventures group that's looking to expand that Pembina store. As it relates to the U.S., one of the things we identified coming out of the Aux Sable transaction was in the future, end of decade, we will have our hands on, call it, 80,000 to 90,000 barrels a day of incremental NGLs and we'll have the right potentially to market those barrels. And so we are starting, just starting because there's still a lot of time to think about what it looks like for Pembina to have a Midwest NGL franchise, in addition to its Western Canadian LNG franchise. And so when we start thinking about the U.S., it's with the same strategy of it's got to be around our asset base, it's got to be an integrated value chain offering. And so logically, you point to our Aux Sable alliance assets and see what we can do around those. Again, we're not looking at new platform step-outs in the U.S.

Thank you, Scott. That answer and that question also addresses an online question with respect to our Alliance and Aux Sable platform and appetite to grow. Staying online, there's a question about referencing additional hedging at Aux Sable and what the hedging level for 2024 is and do we expect hedging at similar levels going forward, this is for Cam -- I apologize for Chris.

Also can take it. Yes. So we decided to take a similar approach at Aux Sable as we've taken with the rest of our frac spread business around hedging. So we're in around 50% hedged on the frac spread exposure both in our traditional frac spread businesses as well as now Aux Sable for the rest of 2024. As we absorb these assets and absorb this business more fully, we've obviously been in the business for a while as we absorb it more fully. We are paying attention to what the relative volatility looks like at Aux Sable versus our other business. We are paying attention to whether or not that's exactly how we want to run that going forward in 2025. But for now in 2024, we're 50% hedged effectively.

I would maybe just add on top of that, that I think those who have been around the Pembina story for some time, may have heard us talk about a pretty disciplined approach to hedging historically where we would want to be 50% hedged by the time we set our budget in the fall for the upcoming year. We took the opportunity to take a second look at that in the past year or so, again, always in the vein of sort of continuous improvement and looking is there a way we can do things better. And I think what we came to recognize and agree on is that with our perspective into particularly the NGL market and the visibility we have into that market, we have the opportunity to use some of the market intel and market knowledge that we have to optimize that. And to use an example, for example, if you are at the bottom of a market at a sort of a P10 on a probabilistic level, would you still pile and hedge that same level, recognizing that there was probably more upside than downside, maybe that's not the optimal approach. Likewise, if you're at the other end of the spectrum, then you can sort of take a lot of profits and reduce downside, you might hedge more. And so ultimately, we -- in between, we end up probably in the same spot around that 50% level, but just trying to optimize around the edges to use our knowledge where it makes sense.

Praneeth, Wells Fargo. I was just wondering if maybe you could comment philosophically on how you think about being free cash flow positive after dividends. Looking at the 3-year funding outlook through '26, it shows that you will be free cash flow positive even including Cedar. But I guess as you evaluate new projects, do you expect to stay within that band and stay free cash flow positive? Or are you willing to go free cash flow negative for the right project. Just trying to see if this forecast for being free cash flow positive. Is that just -- is a consequence of your funding plan or a new guardrail?

It's obviously something that has evolved in our market over time. And even today, there are obviously multiple data points around this in the market. I think that we continue to receive feedback from our investors, from folks like yourself, Praneeth, that this element of self-funding is important in today's day and age. I think what we recognize and obviously, we put out the 3-year outlook is that like anything, not every year is exactly sort of going to follow that line. And over -- if we're slightly free cash flow negative in 1 year and free cash flow positive the next. I think over -- that to us is in that same ballpark. What I will say is I think when we've looked at opportunities internally, which could potentially violate that. It's been a major part of the conversation. And so you would have to see something truly transformational, I think, to get away from that because, obviously, as we've heard, it's very important. And so I guess, to really summarize what I'm saying is it's a pretty critical piece of our value proposition and our outlook and our planning continues to be anchored around that as one key ingredient.

Go ahead, Robert.

Rob Hope, Scotiabank. I was hoping we could dive a little bit deeper into the ethane opportunity and kind of what the upside scenarios are for EBITDA. So I would imagine that there's roughly two buckets of kind of EBITDA generation would be your return on capital on that incremental $300 million to $500 million of capital spend. But it would also be an element of improving returns on existing capital. Can you help us understand kind of what the size of the relative opportunities are?

Yes, Rob, thanks for the question. So we kind of actually see 3 separate cash flow streams. One is the incremental utilization of base assets such as the eggs pipeline, our C2+ system, et cetera, deploying incremental capital that will obviously -- to bring on the supply, but then also the actual incremental supply, selling that 50,000 barrels to Dow. So it's actually 3-pronged utilization, new capital deployment for our own supply and/or others and then the actual sale of the product. And then the fourth kind of leg of that stool is the incremental C3+ that will come a lot of that ethane that will be sold -- will be -- those will be primarily proprietary marketing barrels that will be sold through our marketing team. So those are kind of the 4 areas where we'll be generating returns, but we haven't really broken out which is which.

Rob Kwan, go ahead.

If I can just kind of go back to an offshoot of the free cash flow side of things. When you look at your proportionate debt to EBITDA with this build and the debt that's going to be accumulated at Cedar. You made the statement last year that first, the top end of the guardrail, at 4.25% is just somewhere you don't want to go and frankly, you don't want to be above 4%. So can you just talk about through the multiyear period on a proportionate basis that you don't exceed that? And then even just taking a step back as you think about new projects, in the past, there's been a willingness to exceed the top end, if you knew you were going to bring yourself back in. Is that still the case or for kind of almost a hard cap going forward.

I'll take the second part of that question, and maybe you can take the first part. I actually think for Pembina. I think your comment is relevant for industry. One of the -- One of the things we saw, I'll call it, in the super cycle of growth from 2012 to '20 was people would build these major projects and you would be above your downgrade threshold with this commitment to getting below once the projects came into service. And what we found was typically projects went over budget or they were late or companies continue to grow, so you never really got off that treadmill because you were adding the capital, so you never really got below it. So we designed the guardrail specifically so that through that whole period and now as we look forward, that in our peak capital spend, so call it Cedar, where you've spent all the capital and you have none of the EBITDA, we don't exceed any downgrade threshold. And that's been core to us because there's -- we don't want to be in a situation where we're promising. We're going to get there. We're going to get there and then something goes wrong. And so a lot of our leverage metrics are designed to withstand big capital programs. Last year, when we were repaying a lot of debt. We often get the question why debt versus more share buybacks. And we were saying we're paying down debt in 2023, not necessarily to structurally lower it. but we knew that we were coming into what was potentially a heavy capital cycle spend just with all the growth opportunities we had in Cedar. And we wanted to go into that cycle with a really, really strong balance sheet so that when we reach peak capital spend we don't put or -- put our thresholds at risk on the balance sheet. So that's just a bit of a history of how we've thought about it and how we've tried to run the company. Cam, do you want to answer the second part?