TC Energy Corporation (TRP) Earnings Call Transcript & Summary

Thank you for joining us for TC Energy's 2022 Investor Day. My name is Gavin Wylie, Vice President of Investor Relations. So I want to begin our meeting this morning by recognizing the traditional territories of indigenous peoples and to express gratitude to these traditional stewards of the land. Here in Toronto, we are on the traditional territory of many First Nations, including the Mississaugas of the Credit, the Anishinaabe, the Chippewa, the Haudenosaunee and the Wyandot peoples. The city is also home to many diverse First Nations, Inuit and Métis peoples. I say this in the spirit of reconciliation, which TC Energy is committed to advancing and which I'm personally committed to advancing. So as we begin every meeting here at TC Energy, we'll start with a safety moment and inclusion moment which, Tina Faraca, who's our President of U.S. Natural Gas Pipelines, will walk us through that in a few minutes here. But before that, we just want to get through a couple of housekeeping items, obviously. So I'll remind you first that remarks made today may contain forward-looking statements and non-GAAP measures which we use to -- as a part of our analysis, and they may not be comparable to similar measures presented by other companies. Now don't worry, you don't have to read all this. Well, of course, it's in the disclosure, it's in the presentation material, and then you can get it available online through our regulatory filings at tcenergy.com, under the Investors section. In the case of an emergency, we'll ask you to just please remain seated. You'll get an announcement or we'll wait an announcement from the hotel, and then should we be required to evacuate, you'll see some illuminated signs on both the right and the left-hand side of the stage. We'll proceed out in the back that way, and the hotel fire wardens will escort us to the muster point. So that's it for that. I think we can start the day. Tina, we'll have you come up and join us. Thank you.

Good morning, and thank you. At TC Energy, we aim to create a culture of safety, diversity and inclusion. And these core values are highly interdependent. A diverse and inclusive environment can foster a strong safety culture, and that will lead to operational and financial results. We start every meeting, whether in the fields or in the office, with a safety or an inclusion moment. And we do that to create trust and share different ideas. It allows us to learn from one another and share best practices and identify areas of improvement. And by supporting diversity and inclusion, it helps us to drive out fear and create a safe space to speak up about any unsafe conditions. It helps us to foster a workplace that benefits from diverse viewpoints and unique viewpoints. And importantly, it enables better decision-making and more collaborative solutions to enhance our safety performance. We embed safety systematically across our organizational culture to ensure our people go home safely each day and that we're able to live up to our commitments to the communities where we operate and deliver the energy people need every day, reliably and responsibly. I've had the opportunity to oversee several pipeline projects, and I've seen firsthand that the teams that have the best safety performance also tend to have the best quality, cost and scheduled results. And our field operations teams exemplify the strong correlation between safety and operational performance. And what makes these teams standout is that they've created an environment that's very inclusive, and the leaders and all the team members have a high degree of trust, open communication and accountability to each other. At TC Energy, we strive to learn from one another, and we are on a journey of continuous improvement. We will advance our safety culture through a disciplined and inclusive approach. And that's because safety is foundational to our company for reasons that go beyond operational excellence and asset and financial performance. At the end of the day, nothing matters more than the well-being of our greatest assets, our people and the communities and the environments that we operate in. And now I'll turn it over to Francois for the strategic overview. Thank you.

Thanks, Tina. Thanks for reminding us all of the importance of providing a psychologically safe work environment. Welcome. It's been 3 years since we've been able to do this in person. Those of you who are able to join us for our reception yesterday, I very much enjoyed the conversation, the dialogue and the questions, and I look forward to our conversations throughout the morning. I must say that in my over 30 years in the infrastructure -- energy infrastructure industry, I have never seen as robust an opportunity set as we have today. When you think about economies and nations needing to invest capital not only to deliver the energy people need today, reliably and affordably, but also to invest in sustainability and decarbonizing their economies. For a company like TC Energy that has incumbency that has franchises, it's going to create and has created just a huge set of opportunities. So with respect to the agenda today, Joel and I are going to begin with the strategic and financial overviews, outlooks, respectively. We'll hold off Q&A. After a break, we're going to have Stan, Bevin and Corey provide a deeper dive on our 5 business units. And then we'll allow for some Q&A with each of those individuals throughout the morning. And then Joel and I will come back for some Q&A at the end. This year, the program is a little bit shorter. We're doing this a little bit differently. At the back of the room and the next room over actually, we're going to have some breakout sessions from 11:00 forward, where you'll have the opportunity to ask perhaps some more detailed questions that we weren't able to answer during the formal part of the program and also meet additional members of the TC Energy management team. Now with respect to our objectives today, each of the presenters is going to speak to these 3 key themes. The first is that we are confident in our ability to deliver sustainable cash flow growth out to the end of the decade. This is underpinned by our $34 billion fully sanctioned capital program which provides the foundation. But also, as you'll hear from all of the presenters today, we are very opportunity-rich and already working on the development of a large number of projects that we hope to sanction in the back half of the decade. Second, that by virtue of having 5 business units in 3 business areas in 3 countries, we enjoy strong diversification. And with the opportunity to develop assets and businesses and lower carbon forms of energy supply, our aim is to actually increase our diversification over time. And that diversification is going to provide us with the resiliency to prosper irrespective of the pace and direction energy transition takes. And then finally, we have a clear funding plan. Capital rotation will be the source of our deleveraging goals in 2023 as well as an ongoing tool in our toolkit to allow us to fund an opportunity set that exceeds our free cash flow after dividends. So those are the 3 themes that we'd like you to take away from our day today. And our value proposition has not changed in decades. We ground our capital allocation in fundamentals. And what hasn't changed is that we have always focused on allocating capital to investment opportunities with low business risk. All of our investments are supported by either regulation or long-term contracts. We do not rely on commodity price improvements or increase volumes and volumetric risk to earn the returns to sanction the projects to which we allocate capital. Now what has changed constantly over the decades is where we allocate our capital. That's the benefit of having 5 business units. At different points in time, each of them has provided us with various growth opportunities, be it in the '90s in our Power business; in the 2000s, converting our underutilized natural gas pipelines to what's today our base Keystone system; and then, of course, over the last 7 to 10 years, we've been investing and significantly expanding our natural gas assets and our footprint in the United States. We will also increasingly focus on policy direction in our capital allocation, not only fundamentals but also policy direction. And when Stan talks to you about our Southeast Gateway project and how we made that decision, you'll hear from him that we spend a great deal of time with the government in Mexico, and indeed we are partnered with the CFE on that project, and we've spent a great deal of time focusing on policy alignment. This approach has allowed us to maximize the spread between our earned returns and our cost of capital through all points in the cycle. And that is what's delivered 22 consecutive years of dividend increases, and that's what will deliver our expected 3% to 5% dividend growth per annum throughout the rest of the decade. Now we've obsessively managed where we invest. Footprint matters. Footprint is what delivers incumbency. And footprint is what delivers franchises. Our natural gas network spans the entirety of North America unlike any other company. We can move gas from Northeast British Columbia, and when Southeast Gateway is completed, all the way down to the Yucatan Peninsula. No other company can deliver that type of service. We serve the largest basins, the most competitive, the lowest-cost, the fastest-growing basins and the highest value demand markets. We have a franchise in the WCSB. We have a franchise in the Appalachian. And with the backbone of the infrastructure we have in service in Mexico, along with the partnership that we've established with the CFE, we are establishing a franchise in Mexico as well. In Liquids, we serve the largest refining complex in the U.S. Gulf Coast. And actually with the risk profile that is similar to our gas business -- with a risk profile that's similar to our gas business, and I'll explain why in just a few slides. And of course, we've been in the power generation business for 30 years. Why is that important? Because over the next 5 to 10 years, GHG emission reductions will come through electrification. Cross-functional synergies between our business units is very valuable, and it also better equips us to help serve our customers. And you'll hear more from all of the presenters on that throughout the day. Now coming back to our first principle. Our strategy is grounded in fundamentals, so let's spend a minute or two on fundamentals. And the fundamentals say that global demand for energy will continue to grow for decades to come. By 2050, we'll have 2 billion more people on the planet. We have 1.7 billion people today who have no access to affordable and reliable energy at all. We have developing countries who are looking to improve their standard of living which occurs by having access to affordable and reliable energy. And of course, recent geopolitical events have demonstrated the need to balance reliability, affordability and sustainability. So demand for natural gas and oil will continue, but we will be expected to deliver those with as low an emissions profile as possible. That is our responsibility as an industry. And we'll also look to expand new lower-carbon forms of energy supply as well. So it's when you combine those 2 drivers, that's what creates a very large opportunity set for a company like ours. Now this slide here is a compilation of some of the external forecasts that we acquire as well as our own internal forecast. And what you see here is the North American energy supply mix today in 2022 as well as in 2030 and 2050. And what it tells you clearly is that the supply mix will evolve over time. It will happen very gradually, but it will evolve over time, and so will where we allocate capital. That's why expanding our capabilities and building relationships and establishing partnerships in new energy solutions and in renewables are very important for us. Our focus is to ensure that the risks are allocated to the parties that are best suited to mitigate and manage those risks. And the goal is diversification, as I talked about before, because diversification is what provides resiliency and allows you to prosper irrespective of the pace and direction energy transition takes. So when I think about capital allocation over time, I'd like to think about the Goldilocks principle. If your portfolio falls behind the evolution of the North American supply mix, you're putting the terminal value of your assets at risk. If you advance too far ahead of the North American supply portfolio, that means you're investing in forms of energy supply that are not yet affordable, reliable and sustainable, which also puts the value of your portfolio at risk. I'd like to see us allocate capital to closely mirror, actually be just a little bit ahead of the evolution of the energy supply mix in North America over time. Why just a little bit ahead? Because I believe that there is a premium return to be earned if you are an early mover. The caveat to that is that you have the capabilities and the capacity to manage those risks and make a proper assessment of risk as you make your capital allocation decision. So let's dive a little deeper into natural gas. Natural gas markets are showing strength through 2050. Today, our systems are running at very high utilizations and every quarter we announce that we've reached a peak day deliverability somewhere in our systems. On the supply side, we serve the strongest basins. The health of our producer customers is very strong as they've enjoyed the high commodity price environment for the last few years and they are making commitments to lower their emissions profile to maintain their carbon competitiveness. The demand drivers are twofold. The first and the most significant one is LNG export growth. This has been a big area of focus for TC Energy over the last 2 years, to grow our market share in a growing market. So we've increased our market share of feed gas to U.S. LNG facilities from approximately 25% to now 30%. And what you'll hear from Stan in his section is that we expect rapid growth in LNG capacity in the United States out to 2030. And actually, our ambition is not only to maintain our market share in a growing market but to actually increase it further. In Canada, we're providing the first direct link to global LNG markets through the Coastal GasLink pipeline. And Mexico also has ambitions to serve the world's LNG needs. And the backbone infrastructure that we own and that we are extending down to the Yucatan will enable them to do that. The second demand driver is coal to gas conversion, which creates a twofold opportunity for us. It allows us to extend and expand our natural gas network with a fuel that is 48% lower in emissions than coal-fired generation. In fact, within 15 miles of either Columbia or ANR, 17 gigawatts of coal-fired generation are scheduled to be retired by 2030. If 50% of that capacity is converted to natural gas-fired generation, this will create 2 Bcf a day of incremental demand within a very short distance of our pipelines. The other benefit is this dynamic will allow us to expand our power and energy solutions platform. We're going to serve our regulated affiliates in their decarbonization needs, and we are going to serve our customers in their decarbonization journeys as well. In our Liquids business, we expect production to remain robust. I'll remind you that we directly connect the WCSB to the largest refining market in the U.S. Gulf Coast. Oil sands, let's think about this for a minute. Oil sands is a manufacturing process with a very large upfront investment and then a flat production profile for decades. So if you're an oil sands company, and that is your -- the size of your investment and the tenor of your reserves and production profile, you want to secure your distribution channel upfront. That's why we were able to garner 20-year contracts. No other basin has the same production characteristics than the WCSB than oil sands in the WCSB. And that's why, in my view, our Liquids business is very low risk and akin to the risk in our natural gas businesses because of that dynamic. And when those contracts are due for extension, we're very confident they will be extended exactly for the reasons that I just mentioned. We also have among the shortest transit times by weeks to the Gulf Coast. And as we're investing in increasing access to export markets, we're also expanding our customer base. Now we do focus on the resiliency of our assets. We assess all of our portfolios in the context of various scenarios of decarbonization, including a 1.5-degree scenario. And what we see is that the U.S. Gulf Coast refining complex under all scenarios continues to enjoy high utilizations. So that's why I talk about footprint matters. The basins you serve are important and the markets you serve are also important. Their cost competitiveness is important. On the power side, it's decarbonization that will drive growth. I'll remind you that TC Energy has owned and/or operated virtually every fuel type of power generation in its history, whether it's all forms of natural gas-fired generation, nuclear, wind, solar, hydro, we've developed, owned and/or operated all of those forms of energies of power generation. Our flagship asset is Bruce Power. We own 48.5% of Bruce Power. It provides 30% of Ontario's electricity needs. And we'll be investing on average between $700 million to $900 million a year, we, TC Energy, that's our share, over the next decade to extend its life by 40 years under long-term contract and increase its capacity. We plan on, through our upgrade initiative, adding the equivalent of a ninth unit at Bruce by the end of the decade. The other dynamic in our power and energy solutions business is that -- and we've seen this already empirically in each of the markets in which we operate our natural gas pipelines, as penetration of renewables increases, so does the use of natural gas for firming. But it also increases the need for firming resources like batteries -- lithium-ion batteries. We're investing in our flow battery project as well in Alberta. And then, of course, our 2 pump hydro projects, Canyon Creek in Alberta and Ontario Pumped Storage. Now focusing on our customers' decarbonization needs through the conversations we're having with them on electrification allows us to delve into new energy solutions with them like CCUS and hydrogen. So we might be selling them gas today. We're talking to them about renewables to lower their carbon footprint tomorrow. And we're also talking to them about CCUS and hydrogen for the day after tomorrow. That's the value of incumbency. So hydrogen and CCUS will provide potential long-term incremental investment for us. What we've learned over the last 2 years is that not only our footprint, but our relationships with customers, regulators, indigenous rights holders and other stakeholders are very valuable. And actually, those are the barriers to entry into this business. Our approach is to partner with end users because when you're developing new markets and new energy solutions, the demand is not mature. The rare commodity, if you'll pardon the pun, is actually a buyer for the commodity or the service. So rather than focus on developing a technology and finding a customer for it, we take the reverse approach, we find the customer, figure out what problem they're trying to solve and then work our way backwards. That develops trust and it also allows us to build confidence in our ability to have a proper commercial underpinning for our projects. So rest assured, if and when we allocate capital to new forms of energy supply, they will be underpinned by long-term contracts or regulation. We will not take commodity price or volumetric risk on capital we allocate into any business, let alone hydrogen or carbon capture. Now these strong fundamentals point to an all-of-the-above approach being required in terms of our investments and what we're pursuing in terms of opportunities. And with the $34 billion secured capital program as our foundation, on the right-hand side of this slide you can see the various list of projects that are not yet sanctioned there that we are working on. We're essentially full until 2026. So we're looking at allocating capital and sanctioning projects for the back end of the decade. And when you look at this list, when you look at the track record we've established, we're very comfortable with our ability to sanction $5 billion or more of new projects in the back half of the decade to supplement the $34 billion fully sanctioned projects we have. In fact, in 2022, we've sanctioned nearly $8 billion of projects. And that's after $7 billion of projects being sanctioned in 2021. At the beginning of 2021, when our presidential permit was revoked on KXL, we had a meeting and decided, okay, we need to focus on origination and fill our backlog. Well, we've delivered $15 billion of new projects in under 2 years. I think that's strong performance. And I think that's a demonstration of the value of incumbency and the franchises we own. Let's move on to the next slide. Now when we assess opportunities, we're going to continue to follow our risk/return preferences as we always do. And we consider a multitude of factors that are on this slide. I do want to make a point, however, and that's that in a rising interest rate environment, we are adapting our hurdle rates accordingly. And we've been able to maintain the spread above our cost of capital. You look at the 3 projects at the bottom of this filter, Southeast Gateway, that's roughly a 7x EBITDA build multiple. Gillis Access, roughly a 6x EBITDA build multiple. Our 24x7 product in Alberta where we're combining our renewable PPAs along with our Canyon Creek project, that will deliver an unlevered after-tax IRR at the upper end of our 7% to 9% targeted range. In fact, when you combine these 3 projects together, in aggregate, they are well in excess of our 7% to 9% long-term target after-tax IRR. As I said, the key is to invest in your franchises where the barriers to entry are high. That's how you command a premium return. Now we need to balance dividend growth with balance sheet strength. While our growth pipeline, in my view, is our differentiator among our immediate peers, we need to stay within the guardrails of our human and financial capacity. On our third quarter results call, we announced our process to proceed with a capital rotation program that will be concluded in 2023 of at least $5 billion. And I can tell you, it will be a continuous process going forward. This will allow us to accelerate our deleveraging by up to 2 years. It will allow us to self-fund high-value growth opportunities. It will support our longer-term portfolio migration. Now what are the things that we're going to consider in determining what to monetize? We want to arbitrage any valuation differences between private and public markets. We'll consider pro forma impacts on our per share and credit metrics. We want to maintain a simple capital structure. And of course, as I talked about, we'll focus on our sustainability goals. Now we've demonstrated a core competency to the right-hand box in capital rotation. Let's talk about that. Post the Columbia acquisition in 2016, our leverage was in excess of 6x debt to EBITDA. From 2017 to 2020, we monetized over $11 billion in assets, lowering our leverage to below 5x debt to EBITDA by year-end 2019. And we still grew TC Energy's EBITDA by a compound annual rate of 8% over that time frame. So our intent going forward is to grow and deleverage simultaneously as we did back then. In the future, as I said, capital rotation will be a continuous tool in our toolkit. If we can monetize an asset at a low-teens EBITDA multiple and take the proceeds and redeploy them at a build multiple of 7x to 8x, we're creating value. And you might even see us self-fund within a business unit. You might see us invest in a 6x build multiple in U.S. gas, for example, and we're actually monetizing an asset in U.S. gas to do so. Maintaining our capital discipline is an extremely high priority. Now we're also focused on meeting our global climate goals. Emission reductions are a part of our capital allocation framework, as I mentioned. Last year, we made a commitment to reduce our Scope 1 and 2 emissions intensity 30% by 2030 and to position ourselves to achieve net zero by 2050. And I want to reaffirm that commitment to you today. We're already making progress. Most of our emission reductions to the end of the decade, 70% to 80% will come from decarbonizing our own consumption and lowering our emissions intensity. So we've got the Virginia Reliability Project and the Wisconsin Reliability Project where we're replacing old, inefficient gas turbines with newer, more efficient and lower emitting turbines. We just announced the VNBR project in Canada Gas where we'll be using electric motors to provide compression. And of course, those electric motors are non-emitting. The other 20% to 30% of our emission reductions over the course of this decade will come from modernizing our systems and using digital solutions. Examples are some of the innovations we've undertaken around reducing venting with portable compression, methane venting during our maintenance process, or using data optimization to increase the capacity on our pipelines without any incremental investment. So as I said, we remain on track to meet our targets. So our priorities to 2026 are on this slide. And while we are going to focus on all 4 of these priorities, the 2 priorities on the left-hand side are more important: accelerating our deleveraging; and focusing on project execution and operational excellence. On the second priority, our existing assets are operating very well. Our reliability is high and it's actually improving, but we have some work to do on project execution, specifically in bringing Coastal GasLink in at the lowest possible cost and as scheduled by year-end 2023. And you'll be hearing more on this from Joel and Bevin throughout the morning. Now in addition to financial capacity, the other guardrail is our human capabilities and our human capacity. You'll hear from some of our executives today. And we have a team I'm very proud of. But most of our employees are out in the field generating, storing and delivering the energy people need every day, and I'd be remiss if I did not tip my cap to them during this presentation. So thank you for your attention, I'm now going to pass it over to Joel for our financial outlook.

So thanks, Francois, and good morning, everyone. It's certainly great seeing most of you last night at the reception, and it's certainly nice to be here finally in person this year to walk you through our financial outlook. So when I think of TC Energy, what comes to mind is the resilience of our business model. Being resilient ensures that we have the financial strength and flexibility to act at all points of the economic cycle and enables us to capitalize on opportunities that ultimately creates incremental shareholder value. Now these 2 charts really demonstrate our resiliency. First, we have delivered 22 consecutive years of dividend growth, and we are poised to grow our dividend by 3% to 5% per year going forward. And second, we have created value despite market volatility and macroeconomic challenges, and I'm confident in our ability to continue to do so going forward. Now these boxes on this slide illustrate the diversity of our portfolio. Today, more than 95% of our EBITDA is underpinned by regulated or long-term contracted assets, and this provides certainty to our earnings and cash flows. Now breaking down the EBITDA a little bit further, 67% is regulated within our U.S. and Canadian Natural Gas Pipeline business. And this ensures that we earn an appropriate return of and on capital. 28% is a combination of our Liquids and Mexico pipelines, along with Bruce Power, all underpinned by long-term contracts. And where we have variability our portfolio, such as our Alberta power assets, we take a portfolio approach in how we manage the risk and we always look to capitalize on any upside opportunities by ensuring that we have peak availability at peak prices. But the key takeaway here on this slide is that we are largely insulated from commodity and volumetric risk. And this is what really differentiates us from our peers. Now our well-established conservative risk preferences inform when and how we invest our capital. And we expect this approach to deliver a 6% growth in our comparable EBITDA through 2026. At the same time, we're going to strengthen the balance sheet, as Francois mentioned. And that, in turn, is going to create additional flexibility for us to capitalize on opportunities for our company going forward. Now while our company has and will continue to evolve with changing markets and customer needs, the principles that have guided our strategy have remained constant. As Francois mentioned, we take a long-term view grounded in fundamentals. Our disciplined approach allows us to capture incremental returns that maximize the shareholder value over time. And we allocate our capital in a manner that strikes a balance between paying a sustainable and growing dividend and reinvesting in our business. And finally, we believe maintaining a strong balance sheet makes us resilient and it provides us with the ability to act at all points of the economic cycle. So instead of make you breakout the rulers, I hear this a lot in meetings with investors, we are providing you the numbers this year. So driven by our $34 billion fully sanctioned capital program, we expect to deliver a 6% growth in our comparable EBITDA through 2026. Similar to today, 95% of our EBITDA in 2026 will be underpinned by regulated and long-term contracted assets. Now it's important here to note that the outlook does not factor the impact of any potential asset sales that we've earmarked at $5-plus billion through 2023, and the ultimate impact of the -- on our EBITDA, our per share metrics and our credit metrics will be determined with the timing and amount of the divestment program. However, we believe that there is no shortage of opportunity in the market that will offer incremental contributions to offset any potential divestments. And as you're going to hear throughout the presentations this morning, we have visibility beyond our current project roster, and we expect to continue to sanction projects to support our growth through the decade. However, it is worth noting that not all projects that we sanction will have spending in the next few years. Now let's take a little bit of a deeper dive here on the capital spending profile. As a reminder, our capital spending includes our secured capital projects, maintenance capital as well as capitalized interest and debt AFUDC. 90% Of our maintenance capital, which equates to approximately $10 billion through this period, is ultimately recoverable through tolls, so we think of it as capacity or growth capital. As you can see, the capital program is very front-end loaded, and this reflects the Southeast Gateway project that Francois alluded to earlier, that we expect to deliver at a 7x build multiple, and this is going to yield material EBITDA once it's in service by the summer of 2025. And where we expect our capital expenditures to exceed our $5 billion to $7 billion per year run rate, we will utilize internal equity through the form of portfolio management and not external equity. So let me repeat that. $5 billion to $7 billion from outside of that band, we're going to use internal equity going forward, not external equity. So next question is, how we're going to pay for it all? So you can see here, our robust cash flow of approximately $39 billion through this period provides the majority of the funding. As our EBITDA and balance sheet grows, so does our capacity to issue additional debt in hybrid securities. And we have the ability to issue $11 billion of long-term debt in hybrids while reaching our 4.75x debt-to-EBITDA metric by 2026. Now from a liquidity standpoint, our strong balance sheet and credit ratings ensure that we have access to the capital markets in both Canada and the U.S. We also have very robust commercial paper programs, both in Canada and the U.S. that total $7.5 billion and we have $11 billion of committed bank lines in place. Now we've intentionally left portfolio rotation off this slide again, until such time that we've made formal announcements, but it obviously will be featured more prominently going forward. Any portfolio management will serve to reduce the $11 billion that you see in the light blue box and will further accelerate the strengthening of the balance sheet. Now we do get asked a lot of questions about when are we going to be self-funding. So I'm going to walk you through an illustrative example of how we build a self-funding model here at TC Energy. So for illustrative purposes, we began with our 2026 comparable EBITDA of $12.5 billion. After factoring financial charges and cash taxes, approximately 70% of our EBITDA is converted into cash flow. And this leaves us with plenty of capacity to fully fund our dividend growth of 3% to 5%. When you take the discretionary cash flow plus incremental debt capacity, while still adhering to our 4.75x debt-to-EBITDA ratio, it supports annual spending, as you can see here, of up to about $8 billion. And so this includes approximately $2 billion of maintenance capital, again, of which about 90% is ultimately recoverable in tolls, and that leaves us from anywhere from $5 billion to $6 billion of remaining growth capital, our ability to reduce our leverage further, buy back shares or increase our dividend, could be an all-of-the-above strategy going forward. But as you can see here, our portfolio is only going to get stronger over time. So next, I want to take a few moments here to just walk you through how we optimize and manage our capital structure. We pride ourselves in having an exceptional business risk profile, and we do put a lot of value on our credit ratings. The strength of the left-hand side of the balance sheet provides us with the ability to carry more leverage than some of our peers with similar ratings. And I want to remind everyone here today, the 4.75x is a choice that we have made to enhance our balance sheet and financial strength. By lowering our leverage and strengthening the balance sheet, we are aligning to one of the core tenets that I talked about earlier, and this creates significant optionality and it will add shareholder value for us over time. So for a lot of you in the room here that have known me for some time as from my career at TC Energy, I've grown up in the corporate finance area, and one of the first things I was taught was to have a balanced and very manageable debt maturity profile. And this graphic here shows this. Next year, approximately $1.8 billion of our debt will be maturing with an average coupon of 4.4%. And frankly, this is not much different than the indicative funding levels that we're seeing today, so I'm not worried about refinancing this debt. And let me repeat, I'm not worried about this. And why am I not worried? Well, approximately 85% of our debt is fixed rate, average duration 20 years, with a weighted average coupon of 4.8%. So we are largely insulated from any changes in interest rates. We take a long-term disciplined approach in how we manage our portfolio of interest rate exposure. We don't react on a motion or market volatility. And we have plenty of flexibility to access the capital markets in Canada and the U.S. across the term spectrum, 2 years right up to 30-plus years. And if necessary, we have the ability to hedge. So we can put in forward starting swaps on any future debt issuances to manage the underlying exposure. So we have a lot of tools in the toolkit here to manage any changes in interest rates. So I'm not going to spend a lot of time here talking about ESG this morning. It's embedded in our strategy and you'll hear it throughout the presentations this morning. But that all being said, we're already planning for our next ESG forum next summer. Hopefully, we're going to host it at our Bruce Power facility, so more to come on that in the new year. Now we continue to align our ESG reporting with investor-preferred and global standards, and we are preparing for mandatory reporting when that day comes. And I'm pleased that we will have our first sustainably linked loan in place for $3 billion by year-end, and this will align with our GHG reduction and our diversity targets. So while 2022 has been a great year for us, 2023 is shaping up to be even better. As Francois mentioned on our Q3 results, we revised our 2022 comparable EBITDA outlook higher. We now expect 2022 EBITDA to be about 4% higher than last year, and we are very well positioned to continue to deliver strong results into 2023. We now expect our 2023 comparable EBITDA outlook to be between 5% and 7% higher than last -- than this year. Continued safe and reliable operational performance, combined with $6.5 billion of assets entering commercial in-service this year, along with $4 billion of assets entering commercial in-service next year, gives us a lot of confidence in this forecast for 2023. Now we've also taken the liberty here to highlight some of the key sensitivities. And you can see here that changing interest rates has a modest impact. And we arrived at this sensitivity based on the 15% floating rate exposure on our 15% floating rate component on our debt portfolio. With regard to FX, obviously, a stronger U.S. dollar serves as a tailwind given that approximately 60% of our EBITDA is generated in U.S. dollars. Our U.S. dollar net income for next year is currently approximately 90% hedged at approximately $1.30. So any movement in exchange rates will only have an impact on hedged portion of our net income. And as we've stated before, we are largely insulated from inflation. Every 1% move equates to approximately $0.01 per share. So of course, any fluctuations in these variables or other factors could impact our '23 outlook, and we'll look to revise throughout the year, if necessary. Power, as I've stated, the stability of our business model, high utilization of our assets, along with the fact that most of our debt is fixed rate gives us a lot of confidence in this outlook. Now just a few notes about below-the-line items. Consistent with previous years, we expect our normalized tax rates to be in the mid to high teens. In terms of depreciation, it does vary somewhat. On average, depreciation is approximately 2.5% of our gross PP&E, and it is a key lever that can either be accelerated or decelerated to ensure return of capital based on the economic life of our assets. Our U.S. dollar-denominated EBITDA streams are partially offset by interest expense on our U.S. dollar debt, along with depreciation expense, and we actively hedge the residual exposure, so think of that as around $2 billion per year on a rolling 36-month basis with real emphasis over the next 12 months. So I'm excited when I look ahead. We have increased our dividend for 22 consecutive years, and we're poised to grow it even further. Our dividend -- our shares are currently yielding 5.5%, which I think is very attractive, while still adhering to our targeted payout ratios. We've delivered an average total shareholder return of 12% going back to 2000. And our business model continues to deliver stable results, regardless of the market that we're facing, and you can see that in our 2023 comparable outlook. So again, I look at our plan, and you're going to hear more about here this morning, we have a huge opportunity set in front of us. We have the ability to fund this plan that you see. So I'm very, very confident in our ability to execute not only this year, next year, but going forward. So that's the end of my prepared remarks here this morning. We're going to take a quick break, I think, for about 10 minutes. And then we're going to hand it over to Stan as he's going to walk you through both U.S. Gas and Mexico Gas. And then as Francois mentioned, we'll be back up on stage later on for Q&A. So thanks for your time, everyone. [Break]

So what you'll see up on the slides here, we have, at all the breaks, there's a QR code that's being presented here. Today is Giving Tuesday, and TC has committed. So anybody in the room here, if you scan the barcode, you'll actually be able to choose the charity of your choice, and TC is committed to matching that donation today at a 3:1 basis. So it's a nice way to give back to the community. So with that, I will invite Stan Chapman, who is our -- to talk about our U.S. and Mexico business on stage here. So Stan.

Thanks, Gavin, and good morning, everybody. Francois and Joel presented the TC Energy corporate overview today, and I'm going to kick off the business unit section and talk to you about, first, our U.S. Natural Gas business and how it fits into the overall broader context of our company. So in the past, I've talked to you about our pipeline footprint being best-in-class. And today, I'm asking you to look at it in a similar yet slightly different viewpoint. See, I believe what sets us apart from the rest is the fact that it's virtually impossible to replicate both the depth and the breadth of our assets across the United States. Given the additional challenges and the longer time lines to bring new critically needed energy infrastructure into service, the demand for and the value of existing pipe in the ground continues to grow, continues to grow. And we've seen that play out yet again during 2022. It was our sixth consecutive year of record EBITDA. Our year-over-year throughput was up over 4%. Nine of our 13 assets have contracted over 90% of their capacity contracted for. And now we nearly deliver about 30% of all LNG feed gas, an amount, and as I'm going to show you here shortly, I expect to grow in the coming years. Now equally important, equally important is that as we continue to grow, we have not deviated from our low-risk, utility-like business model where over 90% of our revenues are insulated from market volatility and shocks via take-or-pay contracts that are largely long term in nature and with investment-grade counterparties. Now another thing that makes us unique amongst our peers is the fact that we are a critical part of the highly integrated North American energy infrastructure company that leverages the United States, the world's largest gas market to safely deliver, generate and store the energy that people need every single day. Our Western pipelines GTN, Norther Border, Great Lakes Transmission effectively provide a ticket south for Canada's Western Canadian Sedimentary Basin production and that they transport about 35% of that gas to markets in the U.S. Similarly, our Portland Natural Gas Transmission System provides critical connectivity from Canada to the Northeast U.S. Over the past couple of years, the PNGTS system effectively doubled its capacity to Eastern markets, a clear demonstration of the value that our connectivity plays within the region. On our Southern border, our North Baja pipeline is -- our Northern Border pipeline is currently undergoing an expansion to provide additional supplies to LNG facilities in Mexico and is poised to capture additional growth in the form of either further LNG exports or natural gas-fired power generation growth in Mexico. Also in Mexico, our Sur de Texas pipeline now delivers over 15% of gas that's imported from the United States. And as you're going to hear about in a few minutes when I talk about our Mexico business, our Southeast Gateway pipeline is likely to increase that and may also serve as an enabler for additional LNG exports from Mexico. Now the combination of our long-lasting track record of delivering our commitments, our history of operational excellence whereby we safely, reliably and efficiently meet our customer needs; our irreplaceable asset base whose value continues to increase; and the strong fundamentals for natural gas has us positioned to grow our business at a 5% compounded annual growth rate through 2026. Now to get there, we're going to take a holistic approach, which is going to include several things. The filing of rate cases on a more frequent basis to ensure the timely recovery of increasing maintenance capital costs, not that unlike what we recently did with the ANR rate case where, I'm happy to announce, that just 2 weeks ago we reached a settlement in principle with our customers and with work staff. It also includes the continuation and potential expansion of some of our modernization programs; innovative ways to increase revenues and drive down our cost; investing what I call bite-sized, in-corridor growth opportunities that are permittable and constructible under attractive growth multiples; and leveraging Corey's team in our Power and Energy Solutions Group to deliver low carbon solutions all across our footprint. So I'd like to take a few minutes now to step back and maybe share with you in a little bit more detail why I'm so confident that we can deliver this growth, and it all starts with energy fundamentals. Most importantly, given the war in Ukraine, common themes have reemerged around energy security, energy reliability and energy affordability. And while the war in Ukraine exacerbated the issue, the concerns around these themes actually came to light towards the end of 2021 prior to the Russian invasion. You see it was then when an imbalance in Europe's energy sourcing began to drive up prices and exposed the risk of implementing an energy transition too quickly without the consideration for the security, reliability and affordability that natural gas provides. Demand abroad and demand at home continues to grow. They are driving the need for the U.S. to step in and fill the void. Natural gas demand in the U.S. is expected to grow by over 27% between now and 2030. And while growth is disproportionately led by LNG exports, nearly all sectors are expected to see some increase in throughput throughout the end of the decade. On the supply side, there are plenty of resources in the ground to support growth in the Permian, the Haynesville and, most importantly, the Appalachian Basin. While the Permian and Haynesville basins are prime to feed rapid growth in the LNG and Gulf Coast markets, they're also subject to near-term production declines. And this underscores the importance of the Appalachian Basin whose production is greater than the Haynesville and Permian combined, in sustaining long-term demand and underpinning energy security, reliability and affordability. Perhaps nothing is more telling than a pending energy crisis in Europe than pricing. It's shown on the bottom left of this chart. Pricing for natural gas has increased modestly in the U.S. before settling into the $6 to $7 range. But prices in Europe and prices in Asia are many, many multiple times higher than U.S. prices. These price signals, along with abundant U.S. reserves and production capabilities, uniquely position U.S. LNG supplies to increase by more than 70%, from 12 or 13 Bcf a day today to 21 Bcf a day or more by 2030. As evidenced by our recently announced Gillis Access project and our irreplaceable pipeline footprint, I expect us to continue to compete for and win our fair share of midstream expansion opportunities and continue to increase our share of LNG feed gas deliveries. For example, today, we routinely deliver more than 3 Bcf a day or around 30% of current U.S. LNG exports. Come 2025, just 2 years or so from now, we're on track to see that number grow to greater than 6 Bcf a day or 35% of a growing market. And while many assume this growing LNG demand will be sourced from the Haynesville and the Permian Basins, don't discount the potential for Permian gas, in particular, to flow south to meet growing Mexico demand, thereby providing a greater potential to further expand our Columbia systems, which directly connect Appalachian supply to Gulf Coast markets. So while LNG opportunities are the topic du jour, and while we're strongly focusing on those, as I think you now have seen, our irreplaceable pipeline network has so much more to offer, so much more. Our country, our continent, the world needs more energy, and we're operating in a target-rich environment right now. And as I've said many times before, and more importantly as we've continued to demonstrate, I expect that we'll maintain our track record of advancing our fair share of projects that we have in origination. Right now, the suite of opportunities stands in excess of $5 billion of capital investments, covering over 12 Bcf a day of new capacity opportunities with various in-service dates throughout the end of the decade. Given this opportunity set, this is why I have a belief that we'll continue to sanction about $1 billion of new growth projects annually at attractive build multiples of around 6x to 8x, which is consistent with the expectations for capital allocation and deployment from our U.S. gas business. Our irreplaceable pipeline network ensures that wherever there is an opportunity across the U.S., we're likely going to be well positioned to compete for and win our fair share of growth. Some of the opportunities that we're currently working on include ensuring affordability and reliability for our LDC customers in meeting both their average day and peak day needs; getting additional supplies to markets for producers, especially in growing basins like Haynesville, Appalachia and the Bakken, where we can leverage our existing infrastructure; building new laterals to new natural gas-fired generation facilities that are going to be built in the coming years to backfill for the 17 gigawatts of retiring coal facilities that are within 15 miles, sit right on top of our pipelines basically; and lastly, low-carbon opportunities linked to our partnerships with entities like GreenGasUSA, where we're going to increase the amount of renewable natural gas that we're taking into our pipelines, and a hydrogen blending pilot program that we're going to initiate on the GTN system in early 2024. It's also worth noting, however, that while we're busy originating new projects, we're also placing a lot of projects into service. Right now, we're tracking to place about $1.8 billion of capital in service in 2022 and expect to bring a similar amount of capital in service in 2023. So by now I'm sure you've grown to appreciate our long-standing track record of saying what we mean and doing what we say. 2022 represents our sixth consecutive year of record EBITDA across our U.S. natural gas business and our irreplaceable footprint has us poised for continued sustainable cash flow for years to come. Our assets remain in high demand as evidenced by our strong contracted capacity across the vast majority of our pipelines and through the consistent growth in our throughput across various economic cycles. Equally important, equally important, we continue to grow our EBITDA and throughput while at the same time reducing our emissions intensities, and we're committed to furthering those reductions by working with our Power and Energy Solutions team to provide innovative solutions, including opportunistic electrification of our compressor fleet. So looking forward to 2023, we remain focused on safely and reliably delivering the energy that people need every day, on executing our portfolio of projects on time and on budget and in seizing several of the exciting opportunities that we have in front of us. And speaking of exciting opportunities, let's shift our attention to Mexico. [Foreign Language], that's as much Spanish as you're going to get from me for the rest of the day. This has been a transformative year for our Mexico business. It's hard to believe, but we've been safely and effectively operating in the country for 30 years now and our investment in pipeline and related infrastructure exceeds $11 billion. 99% of our business in Mexico is underpinned by long-term take-or-pay contracts with an investment-grade counter-party that generates predictable and growing cash flows. And not surprisingly, much like we've seen in the U.S., demand for our assets in Mexico continues to grow. Our Tamazunchale pipeline has showed year-over-year utilization increases of 20% through the third quarter of '22. And flows on our Sur de Texas pipeline have remained above 800,000 a day on average for all of this year. Now notwithstanding that growth, the energy fundamentals in Mexico strongly support the need for additional gas supplies to meet growing demand across the industrial heartland in Central Mexico as well as in Southern Mexico and the Yucatan Peninsula. And most importantly, with the agreements that we've executed earlier this year, we now have a real strong alignment with the Mexican government at both the federal and the state levels and a first-of-a-kind partnership with CFE where we can leverage each other's strengths. Now I'm going to elaborate on this more here in a second, but when taken in the aggregate, this is how we get comfortable allocating additional capital within the country which ultimately will increase our EBITDA by about CAD 1 billion by 2026. Now I'm an American, but I heard you Canadians like your double-doubles, and I want to share with you that we have a double-double brewing of our own in our Mexico business. After more than doubling our EBITDA between 2016 and 2021, our Mexico business is now poised to more than double it again in the 4-year span between 2022 and 2026. Now as you can see on the chart, that $1 billion of additional EBITDA that I just mentioned underpins an impressive 23% CAGR from our Mexico operations between 2022 and 2026. Now much of that is going to come from our $4.5 billion capital investment in our Southeast Gateway pipeline, which is slated to come on service, come online here in the summer of 2025 at an estimated EBITDA build of 7x. However, a not insignificant portion of that increase is derived from the resolution of the historical arbitration proceedings and the fact that we are now cash flowing several of those assets. And remember, this was a critical negotiating point for us as we could only get comfortable with investing additional capital in the country by first ensuring full recovery on and of the historical capital that we've invested in Mexico. Now consistent with the resolution of the arbitration, we now have combined all of the TGNH contracts into one service agreement, and effective July 1 of this year, have initiated to service to CFE on the Villa de Reyes North and the Tuxpan-Tula East segments. The Villa de Reyes lateral is now mechanically complete, and we're working with the CFE to resolve the remaining stakeholder issues on the VdR South segments so it, too, can be completed and placed into service. On the remaining sections of the Tuxpan-Tula pipeline, we're working with the CFE to advance the West portion. I expect to have more information on that to you shortly. And then lastly, we're continuing to evaluate the Central section, we refer to as the rebound of the Tuxpan-Tula pipeline, and are targeting an FID for that in the first half of 2023. So again, all of this yields an impressive, if not unprecedented, growth rate for our Mexico business. So consistent with that theme of impressive growth, I wanted to expand a bit further on why we committed to allocating additional capital in the country via our investment in the Southeast Gateway pipeline. And it basically comes down to 3 key pillars, all of which uniquely center around our alliance with CFE. The first pillar relates to the fact that macroeconomic and energy fundamentals, particularly for natural gas, are robust in Mexico. Mexico is the world's 50th largest economy, and it continues to grow as evidenced by strong employment numbers this year and record export figures in the month of September. We expect Mexican natural gas demand to increase by 3% per year across the country from 9 Bcf to 12 Bcf in 2030, with strategic government projects creating over 1 Bcf a day of incremental gas demand in the southeast alone by 2025. Now given Mexico's limited natural gas production, this increase in demand will likely be served by supplies in the U.S., and more specifically the Permian, as we believe Mexican imports from the Permian are likely to increase by 45% from 6 Bcf a day in 2022 to 9 Bcf by 2030. Mexico's dependency on the U.S. gas market continues to grow as discussions around an establishment of a strategic gas reserve, which would be supported by U.S. gas storage, recently commenced with various parties to ensure Mexican demand can be met without interruption, particularly on peak days. Now much of the increased demand will come from new natural gas-fired power generation facilities as the CFE plans to build more than 10 new power plants by 2025, which equates to over 7 gigawatts of installed capacity, and will reduce existing reliance on higher-emitting fuels. We're really excited that the majority of these plants are going to be served by our assets. The second pillar resonates from the fact that through the resolution of the arbitration proceedings and the significant relationships that we've built up over the years, we now have a real strong alignment with federal, state and local governmental entities. Over the past several months, this alignment has been tested at various levels, including meetings with President López Obrador himself, with certain members of his cabinet and with governors of key states across Mexico. All are supportive of our efforts to build new and critically needed energy infrastructure in Southern Mexico. The third pillar comes from the allocation of risk and project returns. Now as I mentioned earlier, TC Energy and CFE each bring unique strengths to our alliance in building the Southeast Gateway project. For example, our technical expertise in building pipelines and related infrastructure is unmatched, especially with respect to offshore pipelines in the region given our recent completion of the Sur de Texas pipeline in 2019. CFE, on the other hand, will exercise its expertise and will be responsible for securing land and accelerating permits for the project, a task that they know well given the hundreds of thousands of miles of linear infrastructure that they operate in the form of transmission power lines. So we take a comprehensive long-term view to help guide our capital allocation decisions, which entails being honest about the in-country risks but also understanding them in the context of our assets and our relationships and how we can derisk the overall proposition for us. With respect to the Southeast Gateway Pipeline Project, let me share some additional thoughts with you, including some other key risk mitigation factors. So first of all, recall that the project is a $4.5 billion capital investment to build a 715-kilometer pipeline originating in the Tuxpan area, which is near the terminus of our Sur de Texas pipeline, to deliveries in Southern Veracruz, we will serve industrial demand and potentially some LNG export markets, and to Tabasco, where we'll tie into a third-party downstream pipeline to support incremental power generation growth. There are a few key features about this project that I want to highlight to you, including the fact that the project costs and time lines completed a Class III quality estimate that has been independently verified. All but about 30 kilometers of the pipeline will be built offshore, thereby limiting the number of indigenous consultations and communal land negotiations. Over 70% of the capital costs are either fixed or paid on a lump sum basis, thereby limiting potential cost overruns. And to the extent there are any potential cost overruns, CFE and TC Energy will share in those on a 50-50 basis. And any forecasted cost overruns to our account that would exceed 20%, we would have the right to terminate and recoup from CFE any nonrecoverable cost. And then lastly, in exchange for a $340 million capital contribution, subject to certain regulatory approvals, the CFE will obtain a 15% equity stake in the project. So with a country risk-adjusted return that's at the higher end of our overall growth portfolio, our decision to sanction the Southeast Gateway project supports our commitment to ensure long-term sustainable EBITDA and to achieve a compounded annual growth rate of 6% across all of TC Energy. So with FID having been secured in August, the team is working diligently to secure the necessary land and permits. We're tracking against our plan, with the next major milestones being related to securing our construction permits by the end of the first quarter of next year, commencing the laying of the subsea pipeline towards the end of 2023 and ultimately placing the project in service in the summer of 2025. So to conclude, I am really, really proud of what we're doing in Mexico. And as I wrap up, let me just leave you with these thoughts. Our predictable and sustainable growth in cash flow will come from a combination of resolving the historical arbitration and cashflowing those assets as well as from the Southeast Gateway Pipeline Project post it's in-service. The macroeconomic factors and energy fundamentals support the notion that natural gas is an enabler across Mexico, bringing affordable, reliable, secure energy to millions of people. And recall that in Mexico, energy transition is all about getting off of high sulfur fuel oil and on to more natural gas, which is exactly what our assets provide for. And lastly, as Joel noted, we can do all this consistent with our funding plan, which includes things like a $340 million cash contribution from CFE for its initial equity stake subject to the regulatory authorizations; Mexico-specific funding plans, which will leverage our recent experience with successfully refinancing our Sur de Texas pipeline; and a general commitment to limit our overall exposure in Mexico to about 10% of TC Energy's overall consolidated EBITDA. With that, let me just say [Foreign Language], and I will turn the stage over to Bevin to talk about Canada Gas. Thanks.

Thanks, Stan. It's a pleasure to be here today. It's good to actually not have to do this in front of just a screen and actually be in front of some friendly faces, so thanks for coming. I'm going to first talk about our Canadian Natural Gas Pipelines business, and then I'll come back after the break and talk about our liquids business. So let me start with what is so compelling about Canada Gas. If you look at our asset base, it is extensive. It reaches 39,000 kilometers across Canada or 24,000 miles. It's operated safely, reliably and sustainably for decades, and it's going to operate that way for decades to come. This NGTL System, it connects us to one of the most prolific low-cost and competitive supply basins not only in North America, but globally. To put in context our NGTL System, 1 in 10 molecules of natural gas in North America touches our NGTL System. As Joel noted in his remarks, our business, the Canada Gas business, is the lowest risk source of stable and predictable earnings. We're a utility-like model. Some people call it a cost of service-type model. And we're able to deliver reliably through all economic cycles and through tremendous market volatility. That earnings certainty is supported by the settlements that we achieve with our customers on our NGTL System as well as our Mainline system. And when we work through those settlements, it was important that we we're going to be able to deliver the most competitive tolls on behalf of our customers. And so we have an incentive mechanism within our toll structures to share the upside with our customers to maintain the competitiveness of the basin. I'll speak to in a few slides the demand for our system. It's never been stronger. We're seeing record flows, and I'll speak to that in a couple of slides. As Stan pointed out earlier, our footprint is a North American footprint. Our systems integrate seamlessly from Canada all the way through the U.S. natural gas systems all the way down to Mexico. And our NGTL, our Foothills and our Mainline assets in Canada are instrumental in safely and reliably delivering that supply. TC can offer our customers a highly integrated energy solution. We have customers taking advantage of doing just as what Francois pointed, taking gas all the way from Northeast BC down into even LNG export contracts in the Gulf Coast. So we're able to serve not only domestic markets, but international markets. And soon, West Coast Canadian LNG as well. So what are we going to do going forward? Basically, more of the same: disciplined growth, investing prudently and leveraging our unparalleled asset footprint. Our footprint across Canada is going to be a springboard for a lot of the low-carbon opportunities that Corey's Energy Solutions team are going to advance. So I'm going to now turn to what is our Canada Gas value proposition? So you'll see on this slide, in our other business units, we talk about EBITDA and EBITDA growth. For Canada Gas, actually a more appropriate measure to use is net income. So why is that? So when you take the -- to build up an EBITDA number, you have items like interest. Well, in our regulated toll framework, interest is a pass-through to -- through our tolls and recoverable. You'll also see from the chart that we get a return of capital by way of a cash depreciation. So we take that cash depreciation and reinvest it back into the business. Net income also more closely reflects the -- our asset base and how it's growing. And we've added 11% in 2022 to our asset base. So while you see a fairly modest growth profile, 1%, that's moderated from last year when we spoke to 2%, we're coming off of a hypergrowth history here in the last number of years in Canada Gas. We're going to moderate that going forward. But not included in that outlook are some unsanctioned growth projects that I'll speak to in a few slides when I talk about what's coming for Canada Gas. So what I want to leave you with on this slide is that we're the -- Canada Gas is the most insulated piece of our portfolio. Whether it's market volatility, rising interest rates, inflationary pressures, our commercial models and our business is resilient to that. So let's move from value proposition to our business model. We have a strong history. I've been in the energy industry for nearly 30 years, and we've seen the cycles in Canada. And you can see from this chart that even beginning with the shale boom, that caused tremendous amount of transformational change in our natural gas business. But we've been able to capture a growing supply while maintaining our disciplined and prudent approach. The way we've been able to achieve that is listening to our customers, and collaborating with our regulators. Historically, we could plan in a 1-, 2-, 3-year increments in our Canada Gas business. Now given the changes in the regulatory environment and the needs of our customers, we're entering more 5- and 10-year planning cycles on that business. So what has been the demand for our system? Our assets are strategically positioned to capture abundant and affordable economic supply. And as I mentioned, our job for our customers is to maintain the competitiveness of this basin. So each year, we have been able to continue to build on previous record levels. And our maintenance capital and growth capital through 2022 allowed us to deliver peak receipts that are up 2.3 Bcf a day since 2015 levels. So when did we add this substantial capacity? Well, we actually added it during a bit of a slowdown through the COVID pandemic. But as the market responded and the demand for gas in Canada increased, we are now seeing record flows. So you'll also see on the chart that the Western Canadian Sedimentary Basin has nearly 50 years of reserves, not resource, this is reserves, that have a breakeven cost of less than $1.50. So that underpins the long-term useful life of our assets in Canada. So we've had a strong and tested history. You combine that with basin fundamentals, and that's going to drive long-term future success. So let's -- I'm going to now speak to our fundamentals. So let's step back, and you look at the map, and you'll see starting with the supply where the little target is on the chart, our job is to serve our customers and prudently expand and respond to where the supply migration is going within Canada. But it's also very critical to match our focus of where the supply is coming to where the markets are demanding our product and provide our customers access to those markets. So we've often referred to our NGTL and our Mainline business as utility-like, I mentioned that earlier, it actually really is more like a true midstream utility. Our costs to do what we do, the interest and the tax, as I described through our net income discussion, that all flows into our tolls without any regulatory lag. We've had in the last -- our program going forward includes an $11 billion capital program. And that is to continue to invest safely and reliably, and that's going to add another incremental 4 Bcf a day of capacity, 2 Bcf of that within the NGTL System and 2 Bcf headed to the West Coast LNG. So our asset base provides significant optionality. As we've accommodated supply migration, we have tremendous inter-basin demand that's growing as well. And in addition to the inter-basin demand, we're seeing the need for expanding our egress outside of the basin. So in Alberta alone, we anticipate demand growth to be over 10% over the next decade. Since 2015, we've seen about 0.5 Bcf a day of gas offset and replaced the fuel to support 6,000 megawatts of coal-fired power generation. The emissions intensity reduction alone from that transition from gas to coal reduced 25 megatons per year of carbon emissions or that's the equivalent of taking 5 million cars off the road every year. So it's not just the coal-to-gas switching that's occurring in Alberta. Our systems, they gather a very competitive supply of gas that is going through our systems through the U.S. and Mexico and offsetting emissions, as both Stan and Francois pointed out in their remarks as well. So what is our capital allocation approach for Canada Gas? When we have such an extensive NGTL System, how do we make the determination of where to allocate our capital? So we have an abundant capital set forward in Canada Gas. And not only do we have to be very thoughtful about supply migration, where to prudently expand and serve the basin, it's not about single laterals or pipelines, we operate the Canada Gas business as a system. And so when we think about the $11 billion of capital going forward, a good component of that is our recoverable maintenance, the modernization of our fleet, but also $7.5 billion in sanction growth. And while we have year-over-year visibility to $1 billion to $2 billion of incremental sanction projects that we have visibility to, we have a significant amount of decarbonization initiatives that we can pursue through our nonregulated assets. And that also will provide growth for TC. So while we have a huge potential to decarbonize, we have to balance our emissions reduction as well as serving our customers and making sure we can deliver their product to market. One example of the types of projects that we've been advancing, as Francois mentioned, is we sanctioned a $600 million Valhalla North Berlin River, VNBR project, which is using that non-emitting compression to drive those volume capacity increases. But it's important to note that those types of projects are competitive for our customers as well because they offset the future cost of carbon. So again, our toll competitiveness is really what's driving us to ensure we invest capital appropriately. So it's not, though, just through capital that we can reduce our emissions intensity. As discussed earlier, it's how we operate our assets that can also reduce emissions without that capital expense. So how we prioritize our pipeline capacity, utilizing technology to understand how to get the most out of our systems, whether it's recirculating natural gas instead of venting during maintenance, there are tremendous ways of that through operational excellence we can reduce emissions intensity. And beyond our own decarbonization work, our systems, our infrastructure, our right of ways, our positioning, and you'll hear from Corey's remarks coming up, that they can facilitate additional investments in the hydrogen space as well as carbon capture. So now I'd like to give an update on Coastal GasLink. So it's -- Coastal GasLink is one of the most complex projects and, certainly in my career, a project that I've never seen before. You'll see from the little picture that's inset on the top of the slide that we even used ski lifts to lift pipe up mountains. So incredibly complex. We've -- we are at our peak of execution right now with over 6,300 workers on site. This past year, what I'm really proud about is we had some really complex and critical sections of the projects to advance. And we actually added flow to our critical path this year on Cable Crane Hill, that's the picture you see there, as well as Icy Pass. That said, we're seeing significant cost pressures. The labor cost and the shortages of skilled labor are intense. We're competing against a very significant project going on in Southern BC. And some of that complexity through the pandemic, contractor underperformance has been challenging. And that underperformance has led to continued disputes. Some of the other challenges that we have had are erosion and sedimentary control measures that are required on this project. We've had over 500 regulatory inspections on the project alone in the past year as a result of these new measures. In addition, in British Columbia this past year, a drought was declared. And unfortunately, that impacted our ability to hydro test on a schedule that we are looking for, for certain sections of our pipe. So as a result, as you saw in our disclosure this morning, we expect a material increase in project costs and our corresponding funding requirements that TC will have to carry. But we are actively pursuing cost mitigation opportunities. The team has been extremely innovative in finding different ways to continue to execute the complexity of the project. And we're looking at how -- what our strategy will be to work with our contractors, our primes. And we will seek significant recoveries from our contractors. But the visibility to what those will be won't be until the end of the project. With all that, as we complete some of the most challenging parts of the project in this construction season right now before the holiday season, we're going to take stock of where we got to, look at our contractor plans for next year, and we'll provide an updated cost estimate very early in the new year once we have confidence that we know what the scope is remaining for 2023. That said, I am very confident that we've improved our likelihood of achieving our mechanical completion by the year end of 2023. And while we are very disappointed making this announcement with respect to the increase in cost, our focus and the way we'll get to the finish line is to continue to safely put our focus 100% on safely pursuing the rest of the balance of the construction activities. That safety is the #1 priority not in terms of -- not only in terms of protecting the people on the site, but the communities that we operate in and safety and impact to -- mitigating any impact to the environment. So we continue to see a long-term value in the project. We see it's going to be not only helpful for our customers, but it's honestly strategic for the broader basin and with our co-investing partners, our indigenous communities that are investing alongside us in the project. So with that, this is critical infrastructure for Canada. We're working hard to deliver one of the most challenging and complex projects in our history. So I'd like to conclude with talking about how Canada Gas fits into TC's strategy. So you've heard from Stan's presentation, we've got a lot of great growth going on in the U.S. and Mexico businesses. Canada Gas is going to be a more -- is a critical piece of the portfolio, but we're going to be a stable deliverable provider of that earnings, modest earnings growth. We have an irreplaceable asset base. Our cost of service model continues to demonstrate its resiliency. And so with that stable cash flow and that steady increase in net income and our low-risk portfolio, that really serves to support our investment-grade rating, and our Canada Gas business unit is able to carry an above-average leverage versus peers. So our industry-leading connection to the Western Canadian Sedimentary Basin is going to afford us a tremendous amount of opportunities for decades to come. And as we operate as truly a midstream utility, that gives, within the context of the portfolio, tremendous stability. And again, as I mentioned earlier, protection and insulation from inflation concerns, interest rate rise -- interest rates rising and market volatility. So with that, I'll hand it over to Gavin, who will facilitate a Q&A for our gas segments.

Thank you very much, Bevin. Thank you, everybody. So we'll just -- we've got a few minutes set aside for Q&A, and then we'll make a quick break here, and we'll return with Bevin for the liquids perspective. We'll just remind everybody that -- in the room, we are webcasting. So if you don't mind just waiting for a microphone, there should be some folks walking around. So we'll just ask you to raise your hand, state your name and ask your question. So I think we've got a couple of questions over here. I saw Linda first.

Linda Ezergailis from TD Securities. Question, realizing this is an evolving situation. But with Coastal GasLink phase 2, are you in active discussions? Or how are the cost overruns impacting those discussions?

Yes. Thanks, Linda. The at the time of settlement, one of the key drivers of getting to an agreement with our customers and our equity partners was to reset the project in terms of the relationship was a prime driver. We had been in dispute for quite some time. Our relationship is extremely strong at this point. We have the LNG Canada team colocated with us in our building now and in the field. And so that relationship has been really pivotable and able to -- be able to execute safely as well when you're not under this cloud of dispute. So that is number one. It's been able -- helped us be safe in our execution. The second thing is that we've been working really hard alongside them and with them as they're pursuing considering a phase 2 development of the project as well as the Cedar Link project that is an extension to phase 1. And so those -- that work is underway. And the strength of the global LNG market that Stan pointed out is a key driver in seeing the LNG partner's ambition to kind of seek phase 2. So right now, we're highly confident that we can provide a good solution. And it is part of the economic recovery of our overall project if our LNG Canada customers take FID on the project.

And just as a quick follow-up, if I may. Some of the contractor underperformance and the other challenges, what are the early learnings, if any, that your -- that can be parlayed into future work?

Yes, absolutely. The -- in British Columbia, I mentioned there's a competing project. Everyone probably knows which one I'm referring to. There is -- we have 6,300 workers going on our site. There's nearly 12,000 workers on the other project executing half of the scope that we are executing right now. And so our challenges and key learnings, Linda, is attracting and retaining the right contractor team and labor force has been challenged when you put those 2 projects overlapping. So when we think forward to phase 2, one of the key learnings that we're going to bring forward, and I've been speaking to our customers at LNG Canada, is how do we modify our contracting strategy to have a liquefaction development occurring at the same time that we would be developing 6 facilities. So we wouldn't be developing any more linear infrastructure going forward, but how do we manage the contractor workforces when they're effectively the same types of skill sets. And so we're actively focusing on our contracting strategy for phase 2 with LNG Canada today. And so that will be a key learning for us is not to put ourselves in competition with ourselves in terms of access of labor. And that has been a challenge and a learning, I know, from each of our prime contractors as well. They would tell you their learnings are is that they've been stretched beyond their capability. They've signed up with -- to do more spreads than they have ever delivered before. And so that -- there's been a lot of lessons learned on the project, Linda, but certainly on the contracting strategy, that would be the key one.

We've got a question over here with Theresa.

Theresa Chen from Barclays. A question for Stan on the idea of providing additional egress out of the Appalachian Basin to the Gulf Coast. If you could provide us some more color on the cost scope time line of the potential Columbia Gulf expansion, and what would need to be done, please.

Sure. Early days, so I'll caveat my response with that. And obviously, the growth opportunities are largely tied to additional LNG export opportunities. So the first thing we need to think about is where is that LNG terminal going to be sited. And there are some that will tell you that it's possible to build the LNG terminal on the East Coast of the U.S. and there'll be some that will tell you that that's not going to happen that any new terminals are going to be on the Gulf Coast. While we would love for there to be an East Coast LNG terminal and while our Columbia Gas system, in particular, is uniquely situated to be expanded to serve it, we just think that, that's just not permittable. That the permitting risk of building something, an LNG terminal in a place like Chesapeake Bay, is just not going to happen. So from our perspective, we believe any new LNG terminals, additional LNG terminals, are likely built in the Gulf Coast. The opportunity set that exists for us would be effectively adding a fourth line on the Columbia Gulf system. Right now, Columbia Gulf is made up of 3 trunk lines that are effectively fully compressed with the projects that we've had from our Leach/Rayne Gulf XPress projects. Costs, let's just say, I'll give you a very wide 2-way, somewhere around $2, more or less than $2, to get a sizable quantity of gas down to the Gulf Coast. In terms of timing, we're talking that still several years away because, again, we are in what I would call cursory or initial discussions with producers to see if we could underwrite such a project. And the other thing to think about is, with respect to permeability of the midstream infrastructure, if I had to build a new pipeline, and again, this is an in-corridor expansion, so this is not a greenfield necessarily, it's in-corridor, building it in places like Kentucky, Mississippi, Alabama, Louisiana, that's probably as favorable of an environment as you're going to get, at least in the U.S.

So Andrew, next.

Andrew Kuske, Credit Suisse. It builds upon some of the past comments, and given the incumbent advantage you have, is there a way to quantify what that translates into in extra return? And then maybe the contrast with this is it somewhat binary that you have in-corridor capability to expand, those that don't, they can't do anything, given the permitting challenges for the most part?

It's a fairly competitive market when you look at the other infrastructure that has pipelines that are similar to ours. And unfortunately, all of the early expandability in terms of compressive expandability has been played out. So for the most part, I think if you're going to get any sizable quantities down to the Gulf Coast, somebody is going to need to either lift and relay a new line or build new line, and it's probably going to be less of a competitive advantage than I would like to have, all things equal.

Jeremy?

Jeremy Tonet, JPMorgan. Stan, thanks for all the information in the presentation today. I want to go back to Mexico, if I could. A few years back, there was -- there were some issues with this current administration as far as kind of getting pipelines developed. Just wondering if you could speak to how things have evolved there over time. It seems like you said there's a lot more stakeholder alignment now than there was before. So just kind of curious what drove that change and I guess, your confidence in continuing in a more constructive environment as you've talked about there.

Yes, great question, Jeremy. And when we have the breakout sessions in the back on the left-hand side, there will be the U.S. and Mexico session. With me here today is Tina, who runs our U.S. gas business; and then Jennifer Pierce, who's President of TC Energia. Jennifer could give you some additional comments around it, but here's a couple of things. One, we learned from Keystone XL that having strong fundamentals and having market support isn't good enough. If you don't have government support, you still can't get a project built. So remember that old Meat Loaf song from the 80s, Two Out of Three Ain't Bad, that doesn't apply to us, unfortunately. So having learned that lesson, the next thing that we realized is when negotiating in Mexico, it's more than just a typical commercial negotiation. You must have to treat it as a political campaign, and you have to get to know the government officials. And that's why it was critical for Francois, for myself, for Jenn and others to spend time with President López Obrador himself and hear his vision and hear him tell us why he needs us to build this critically needed energy infrastructure in Mexico. And then to spend time with Secretary Nahle, the Energy Secretary, and other members of the Cabinet and hear them show their support for the project. And then take it down to the state levels and meet with the governors of Veracruz and the governors of Tabasco and hear them say, "Yes, we need this. We need new natural gas infrastructure so we could build out our industrial demand." And again, keep in mind, this is bringing reliable, secure, affordable energy to millions of people, some for the very first time in Mexico. And that's what this is all about from President Lopez Obrador's viewpoint. This is about a social project creating energy wealth in the southern part of Mexico to match the energy wealth in the northern part of Mexico. So it was resolving the historical arbitrations. It was building these new relationships. Having an alliance with CFE where they are not our competitor, they're our partner. They're going to have a 15% equity stake in the project day 1, we're 100% aligned. And then being able to leverage each other's strengths, as I mentioned earlier, us with respect to construction expertise, them with respect to bringing the land and the permits and navigating that side of things all came together to get us comfortable with allocating additional capital in the country. But again, I encourage you to come see us after the breakout session, and Jenn, I'm sure can supplement my comments.

That's really helpful. And just going back to Coastal GasLink, if I could. Just as far as the known higher cost levels, is that embedded in the current CapEx forecast? Or is that going to be added at a future date, the known kind of higher cost? And is there any way for us to kind of think about cost inflation? Any bookends or ways we can think about it in general?

Jeremy, there's -- as I mentioned, we expect a material increase, a material increase over what we've disclosed. We're working through, in particular, some of the contractor disputes that have just come to us very recently, within the last couple of weeks. So we're still assessing what the implications of those disputes are in terms of the execution going forward. And that is -- there's no way I can provide kind of a rule of thumb or otherwise to know what the implication is. But we do know, given that we're carrying the funding of the project, that it is material, and that's why we're disclosing it today.

So that's not in the current CapEx?

That's not in the current CapEx, no.

I think we have Rob Catellier.

Rob Catellier, CIBC Capital Markets. As you've outlined here, there's a lot of opportunity in the U.S. Gulf Coast for LNG, but there's also obviously considerable competition. So I'm wondering what can you do to really press your advantage in the U.S. Gulf Coast and ensure your fair share of those projects and keep that market share?

Yes, well, again, I'll encourage you to come talk to us this afternoon and we can elaborate a little further with Tina. But it really is leveraging our incumbency and our footprint that's there. And that's exactly what we're doing with our Gillis Access Project, for example. That project is going to add about half a day of capacity. And we're going to do it in such a way where we could bring the project online in a relatively short amount of time, and that has a summer 2024 in-service date. In that respect, there were competing projects out there that offered a lower rate, all things equal, than we did. But the fact that we are who we are, have the incumbency that we have and can get the project in service faster is what differentiated us from our customers going forward. So again, I go back to our footprint, which is just irreplaceable. It doesn't matter where in the U.S. something is happening, we're going to have skin in the game and we're going to compete for it and win our fair share of the projects. North Baja, getting more gas down into Mexico for power generation or for LNG growth. Pacific Northwest with respect to GTN. Growth out of the Bakken. Appalachian growth. Northeast United States and PNGTS and our position in Millennium. It's leveraging our incumbency and our footprint that gives us that competitive advantage.

So I think we've got time for one more question. Robert Kwan over here. Middle of the room. Yes.

Just coming back to CGL here. Can you just summarize what the settlement, what the sharing is with both your equity partners and your customer and the timing of when those recoveries might actually happen as well as what the dispute resolution mechanism is on any of those recoveries.

Yes. Thanks, Robert. So at the time of settlement, what you do in any settlement is allocate risks appropriately amongst all parties. So at the time of settlement, the risks that our contractors carry, the risk that our customers carry and the risk that we carry and our equity partners were all agreed through commercial agreements that are confidential. What I can say is that our -- for example, our -- how they get settled. So for example, with our contractors, there's a variety of dispute mechanisms that we already have been in arbitration processes, and some of arbitration processes that have already concluded, we've been very successful in those recoveries. But in many cases, the arbitrations, or if we choose to settle directly with our contractors, the time lines of those are dependent on our strategies in managing the best recovery for the project. And so some of those -- a good amount of those recoveries will be determined at the end of the project or even after the project. And so we'll need to be carrying those costs through past the end of the project. In addition to the contractor space, there are provisions within our commercial agreements that attend to allocating the risk appropriately around, say, the terrorist-type attack that we received on our pipeline this year. And so those types of issues are really outside of our control. And so they're not risks that we take or hold solely as TC. But as we aggregate these risks over time and through the balance of the project, those determinations of what is the final settlement of where we land won't be determined until after the project is developed. So the key thing that we wanted to highlight today is, a, we know we have to carry these costs going forward. We have a provision to do so. Any overrun with respect to that is -- that becomes material, as Francois and Joel pointed out, we will flex our internal equity to match to cover those costs. We're not going to impact our deleveraging through the balance of this project.

That's great. And if I can just ask about the electrification opportunities. Generally speaking, I think you've talked about end-of-life compressors as being the obvious ones for electrification. But just with the higher natural gas prices and what that means for fuel rates on the pipelines, does that accelerate the ability to take some compressors out early and fully electrify or go to dual drive?

I was careful in my comments to talk about opportunistic electrification opportunities. And while the factors that you're setting forth clearly come into play, it's a little bit more complex than that. What we're looking for when we're going to electrify our compressor fleet are things like old aged inefficient compressors, ideally where we have a project or the ability to expand our systems and then, most importantly, access to poles and wires because that tends to be the limiting factor a lot of times. So when you put those 3 together and you optimize. Your sample size kind of shrinks a little bit, but we have been very successful in finding locales in Virginia that fit that description and possibly in Wisconsin with our Wisconsin Reliability Project as well. So yes, I think the environment that we're in right now where you have $5, $6, $7 gas is a bit of an aberration. We have plenty of molecules of gas in the ground to produce, and we can get back to an environment of $3, $4 gas longer term. But all those are factors that we'll take into account when we consider the electrification of our compressor fleet.

All right. Well, thank you, everyone, for the questions. We'll take a short break, and we'll resume here with Bevin on the liquid side. Thank you. [Break]

All right. I think we'll try to get everybody seated here and get started again. So again, just a reminder that on these slides and in your presentation deck, you'll see the QR code here for Giving Tuesday. And as I mentioned at the last break is a great opportunity that TC is committed to matching 3:1 on any contributions made today. So just thank you for that. So I guess we'll get going here, and I'll hand it over to Bevin to talk about our liquids business.

Thanks, Gavin. So I'm back. I'm going to talk about our Liquids Pipelines business. And that's -- this is the business that I joined just over 3 years ago. And I want to talk to you about the progress that we've made over that time and reaffirm our value proposition for the business. And that includes, I see an enduring competitive advantage in that business. I see an ability to leverage our strategic footprint through continued operational excellence as well as continuing to deliver strong operational performance and results. And then finally, I want to talk about what the future looks like for the liquids business. So I'll start with our competitive advantage. We own and control, as Francois pointed out in earlier, a highly strategic corridor. It's irreplaceable. We connect a strong and stable supply market to 2 of the strongest demand markets in North America. That direct linkage from a world-class supply to some of the most sophisticated refineries is going to be an enduring competitive advantage. The long-term fundamentals for both our supply as well as our demand remains strong. The Western Canadian Sedimentary Basin is set to grow by 600,000 barrels a day through by the end of the decade. And the basin is long-life assets that have been capitalized, low decline, stable production base. And what's critical is the sustaining capital to keep that production flat is some of the most competitive sustaining capital not only in North America, but globally. Shifting from the supply to the demand. If you go to PADD 2 and PADD 3, the 2 markets that we serve, the Mid-Continent and the Gulf Coast, those 2 PADDs represent 70% of the refining capacity of North America. And that -- the utilization in those PADDs remains strong through 2050. So while we do anticipate refining capacity to be turned down broadly in North America, the assets that we deliver to the customers that we serve remain resilient out through 2050. Another key attribute of why we have such an enduring competitive advantage is that our customers, 97% of them are investment grade. And those customers have signed on to long-term contracts. And those commercial structures basically underpin and support 90% of our EBITDA for a very long tenure. So our focus, how are we going to protect this enduring competitive advantage. It's going to be our disciplined focus on safety, reliability and operational excellence. And while we're very proud that we've delivered 3.6 billion barrels of oil to our customers down in the Mid-Continent and Gulf Coast, it's that relentless focus that's going to help us continue to deliver increased value over time. And I'll -- in my remarks, I'll speak to how that -- we see that going forward. This past year, as Stan pointed out, we had some tremendous impacts to the market through the geopolitical events of the tragic invasion in the Ukraine. That added so much volatility to the crude markets, not only globally, but it impacted our Gulf Coast system. The unprecedented moves by the government to release the strategic petroleum reserves this year, which is about 1 million barrels per day, those barrels were a direct competition to our uncontracted barrels that flow through our Marketlink asset. But even with that, through our marketing affiliate, we moved more barrels than we have before, albeit at much lower volumes. So while the contribution from our Marketlink asset is not as strong as it was historically, our performance in ensuring that we get a return on that invested capital has been a success this past year. We've also flowed record volumes on Keystone. This is a real proud point for me. We -- when I joined the organization, we were delivering 590,000 barrels of contracted volumes. We've now since grown that to 622,000 barrels per day, and we see line of sight to adding it incrementally more. And those are long-term, long-haul Keystone contracts. We've also been successful, even despite the market challenges that are facing us, last year I spoke to a key strategy of recontracting our Marketlink asset. We ran 2 open seasons this year. And in the face of this market, both open seasons were successful. So now I'm going to talk about our approach to customers, and why it is such a focus for us. So when we look at our strategies around our Liquids business, really, our strategy is informed by our supply customers so -- our supply customers as well as our demand customers. We don't just serve customers that are producers. We have very strong demand customers in the refining sector as well. And we look at -- we are designing our approach to what both those customer sets need. And what we're delivering on our base Keystone asset, for example, are very competitive tolls. That's number one. Shortest transit times. Industry-leading product quality preservation on our system. And most importantly, and what we've added in the last couple of years is additional flexible delivery options for our customers. They're trying to maximize the value of the barrel, the barrel that they're selling from supply and the barrel that they're buying when they're refining to create other refined products. So we have strong alignment between those 2 customer sets. That, paired with the resource potential of the Western Canadian Sedimentary Basin and our strategic path, again, goes to that long-term enduring competitive advantage. So near term, you won't see us need to allocate a tremendous amount of capital to this business, to the Liquids business, because we continue to see ways of optimizing our existing assets and extend receipt and delivery connectivity to further enhance our return on invested capital with capital-light opportunities. So what is going to be our focus going forward? So in 2023 and beyond, we're going to continue what we do in terms of our operational excellence and our focus on that front. That's what got us to add incremental capacity to the system, and that's what's going to see us deliver increased capacity going forward. So how did we do that? So we've increased our system reliability. We've -- our assets are performing better than ever. The team utilized data analytics, predictive analytics. We had our commercial teams embedded with our field operations teams looking at ways of where we could value engineer and get more out of our systems. And that resulted in increased process safety. Our system reliability and our safety records have both improved tremendously. And collectively, that delivered over a 7% improvement in our system operating factor since 2019. So these initiatives unlocked incremental capacity without capital. And going forward, to give some context, we're doing some math, every 1,000 barrels a day that we add to a Keystone contract by adding this incremental capacity, that equates to $2 million of EBITDA at very competitive tolls. So that enables additional responsibly developed Canadian crude to reach key markets in North America and globally. We now have more tidewater access through 3 terminals that we can deliver to. So we're going to continue to find innovative ways to unlock underutilized capacity and provide flexible commercial solutions that are tailored to those customer sets that I've spoken to. One thing I'm really looking forward to in the new year is that we're bringing on our Port Neches Link pipeline project. In terms of project execution, I'm happy to say on time and under budget. That last-mile connectivity goes to North America's largest refinery. As we go forward, another thing that we can provide our customer set is working with other peers to create joint ventures and joint tolling opportunities to, again, provide our customers with another way of delivering their either attractive barrels to the refineries or delivering from our supply basins. So while we saw significant headwinds from the SPR releases this year, those turned into tailwinds for us at some point. And if we can provide the most competitive delivery path to the Gulf Coast to refill those SPR reserves, that's going to bring the balances of inventory in Cushing up, and we will be competitive in grabbing those barrels and bringing them to refill the SPR. So over the long term, I'm very confident about our long-term position. The market fundamentals underscore the ability to recontract in the future as well as we extend our long-haul and full path service that Keystone can provide and, as I mentioned, optimizing the utilization of the already pre-invested capital that we have in our Marketlink asset. So how does that translate to our financial outlook? So the liquids business unit is impressive. We -- as I mentioned, we don't need a lot of capital to continue to deliver significant free cash flow. We only need less than 5% of our EBITDA per year for maintenance capital spending, and that's on average through 2026. So while the macro environment in the near term caused us to reduce our outlook, you'll see on the chart that we've moderated our growth from last year. We still see a tremendous opportunity to fill up our Marketlink capacity targeting by 2026 once we see market fundamentals return to kind of pre-COVID, pre-pandemic and pre-Ukraine invasion fundamentals. So -- and all that growth, again, no capital required. So we have a strong return profile with that. Want to switch to -- there's been a lot of talk around an incremental egress that's coming out of Alberta in the next number of years as TMX comes into service. I just want to remind everyone that our base Keystone volumes, 94% are contracted ex Hardisty. So even though there are going to be some supply-demand shifts in the Alberta market and egress increases, our earnings and our EBITDA will be stable through the forecast period. Once the basin recovers and grows, we'll be in a very strong position when we're -- when it's time to recontract our Keystone assets. I'd also like to point out that our Alberta assets, that our Grand Rapids, White Spruce and our terminal operations in the Heartland and Edmonton region, those are going to see potential increased utilization going forward to serve the growing movements from Fort McMurray down into that Edmonton Heartland region as they head west through TMX. So long term, we're very confident that the continued need for the assets that we've invested in as the world-class resource that we serve continues to pair with world-class demand. So I want to just make sure that when we think about our focus on operational excellence to capture further market opportunities. That's not that we don't see opportunities to invest capital, it's just that we're able to leverage our strategic footprint, as I mentioned earlier in my slides, that is so -- a key focus for our team. So I'm going to end by showing or discussing how our Liquids business supports our TC Energy strategy. I have continued confidence and excitement in the resilient future of our Liquids business. It aligns with our corporate strategy, as Francois addressed earlier today. And in the near term, we can find continued solutions to unlock additional throughput and enable flexible, tailored customer solutions. This resiliency is also supported by the ability to decarbonize our liquid assets, and Corey is going to speak to our plans around that. So our unparalleled asset base, paired with the business fundamentals, are supportive of our long-standing commitment to deliver safe, secure and sustainable oil while providing long-term value for our customers, our stakeholders and investors. So now I'll hand it over to Corey.

Good morning, everyone. Thank you, Bevin. When Gavin was telling me about the agenda for today, he let me know that the reason I was going last was they were saving the best for last. And when I asked my colleagues about why I was going last, they said, "Well, we don't want to go last." So I'm not really sure where all that lands with you, but I'm taking it as we're saving the best for last, and we'll enjoy a little time together here today. I'm here to talk about Power and Energy Solutions, and I'm very proud and excited to share our team's accomplishments this year. First, I want to recognize that we've updated our name since we last spoke to Power and Energy Solutions. And this is sort of a nod to our historical business in the power sector, and it gives credence to what the diverse and large set of opportunities that we have in front of us for the future. Second, I want to just take a moment to remind you of the commitments we made last year. First, we would deliver the energy people need safely, reliably every day while investing in zero-carbon energy. Next, we would remain resilient across a range of future energy scenarios. Third, we would enhance our key capabilities. And fourth, we would grow our renewable energy portfolio by leveraging internal demand. And finally, ensure our growth is aligned with our corporate risk preferences and values. Today, I'll tell you how we're executing on these commitments. We are leveraging TC Energy's network of assets, customers and suppliers. This allows us to capitalize on a substantial low carbon opportunity set, all driven on customer solutions. This map may look familiar from earlier presentations today, but this particular version shows our incumbency in action. By leveraging our foundational assets across North America, our strong relationships and over 30 years in the power business, we are advocating and advancing renewable power and low-carbon solutions. We are executing on this by focusing on our customers and providing energy solutions tailored to their needs. This includes securing approximately 825 megawatts of wind and solar generation in the U.S. and 390 megawatts in Alberta. It also includes initiating hydrogen and renewable energy, renewable natural gas production opportunities, exploring carbon capture and storage as well as opportunities to leverage our nuclear position into small modular reactors. Long term, there will be a growing need for a reliable supply of a wide range of energy resources. Power and Energy Solutions will play a vital role by sourcing zero-carbon growth opportunities, new technologies and markets while decarbonizing our existing assets to serve our internal and our external customers. On the next slide, I'm going to walk through how we think about the changing energy needs in North America and how we will develop solutions to meet the needs of our customers. Our origination process starts with talking to our customers. As Francois mentioned earlier, we actually start from the end and go backwards. We're trying to figure out the problems they are trying to solve. Our disciplined and systematic approach to developing a solution set considers leveraging TC Energy's based business to develop opportunities that align with our core expertise, whether it's electrons or molecules, matching supply to demand and to design customized financial and physical solutions that manage risk and create value. We're pursuing low-risk investments in power generation and increasing diversity and are generating fuels. So we think about our opportunity set in 4 buckets. The first is nuclear, and that's anchored on our 19-year partnership in Bruce Power. Second, other matured generating technologies like wind and solar. Third, storage and firming resources, especially like our Ontario pumped storage project, which I'll talk about in detail a little further on. And the decarbonization solutions such as hydrogen and renewable natural gas. Over the coming decade, Power and Energy Solutions will have a substantial opportunity for growth across these categories, driven by internal and external customer needs. Our competitive advantages allow us to align low carbon investments with our corporate targets. These opportunities have attractive returns, flexible financing options and fit well within TC Energy's risk profile. In our renewables business, we can create value beyond contracted asset returns. We can increase returns through levers such as commercial marketing and environmental attributes associated with those products. Bruce Power also continues to play an important role in our portfolio. For example, investments in the MCR, our major component replacement program and Project 2030 are expected to double Bruce Power's equity income by 2030. As you can see in the lighter shaded bar, we have visible incremental growth beyond our sanctioned projects. I'm confident we can continue to grow this opportunity set. And our investment in Bruce Power is an excellent example. Bruce Power provides critical and emission free low-cost and reliable electricity to the constituents of Ontario. And Ontario remains a core market for us. And in Ontario, as Francois mentioned, Bruce Power supplies 30% of the total electricity supplied in the province and has done so safely for over 45 years. Additionally, we are very proud of Bruce Power and its support and the fight against -- this global fight against cancer. It serves as a critical supplier of medical isotopes for the sterilization of medical equipment and to fight individual cancer types. This past November, Bruce Power joined the Canadian delegation at COP27 to promote the role of nuclear energy in global decarbonization. This conference had the largest representation from the nuclear industry in its history, marking a growing recognition that there is no path to net 0 without nuclear energy. Nuclear is safe. The Bruce facility continues to achieve excellent safety and operating results. As demonstrated by this year, both Bruce A and Bruce B had recent recognition from INPO and WANO as top industry performers. Directly and indirectly, Bruce Power's annual operations includes 22,000 indirect and direct jobs. It contributes $4 billion to Ontario's economy annually, spending on operational equipment, supplies, materials and labor. Their management team is strong and attracts world-class talent. And next, I will demonstrate how critical Bruce Power is to continuing to serve Ontario's electricity needs. As shown in the slide, Ontario's electricity system is facing a period of increasing demand. This is driven by growth in population, growth in electrification and growth in the overall economy. At the end of this decade, the province will face a supply-demand gap. The first priority of meeting the demand is maintaining state reliable zero carbon electricity supply like Bruce Power. Bruce Power's Life Extension program ensures that this key generation endures well beyond the end of the decade. In addition to enhancements to Bruce's existing capacity alongside investments like Ontario home storage, we will help close the province's energy supply gap. Bruce Power has a deliberate program to enhance and extend its power generation capabilities. Under an IESO agreement, the Life Extension program includes refurbishing all 8 reactors, during regularly scheduled maintenance outages and extending the facilities like to 2064. Units 3 through 8 will undergo a major component replacement between 2020 and 2033. Unit 6 is currently underway and on time and on budget with work on Unit 3 to begin in 2023. As Bruce Power continues to progress through the MCR, [indiscernible] will be incorporated and each refurbishment is expected to be shorter and less costly than the previous. Project 2030 is another initiative to enhance Bruce's value. Its goal is to increase total generating capacity at the site to 7,000 megawatts by 2030. This supports kind of change targets and future clean energy needs. Project 2030 includes continued asset optimization, innovation and leveraging of new technology. It also could include some integration with storage and other forms of energy. When complete, Project 2030 will actually add what's an equivalent to another reactor on the site with no new net infrastructure. We are confident that the $7 billion we are investing in Bruce Power will continue to deliver strong cash flows for decades to come. In the near term, our capital requirements for the life exaction program are primarily funded through our share in the Bruce Power distributions. Near-term results will fluctuate primarily due to units being offline for the MCR program and the frequency, scope and duration of planned and unplanned maintenance outages. However, when the MCR program is complete in 2033, Bruce Power has the potential to generate significant sustainable free cash flow. It's important to note that we mitigate risk through our long-term contract with the IESO. Bruce Power leases the facilities from Ontario power generation has no spent fuel risk and we'll return the facilities to OPG at the end of its operating life. We also negotiated key risk management provisions in our contract will include adjusting price for inflation each year and prior to each MCR unit going offline. Bruce Power and its life extension program play a key role in meeting Ontario's power needs. Ontario Pumped Storage as one of Canada's largest zero-carbon generation development projects is another energy solution for Canada. Together with our prospective partner the Saugeen Ojibway Nation, we are developing a 1,000-megawatt pump storage project. Pumped storage is the world's largest battery technology, accounting for 94% of installed global storage capacity. The project will play a critical role in meeting Ontario's growing energy demand by providing zero carbon affordable power using water and gravity just or electricity for when it's needed most. Some people will even say, pumped storage is mother nature's battery. OPS can power 1 million homes, while reducing the cost of electricity for Ontario's rate payers by $250 million each year. We continue to advance the project, including undertaking technical reviews and moving into the third stage of the IESO's review process in 2023. Continuing community consultation, including formalizing our partnership with the Saugeen Ojibway Nation, and we are evaluating commercial framework options that would support an appropriate risk return profile. This includes traditional cost of service rate regulation or alternatively, a long-term contract similar to what we have at Bruce Power, which would be sort of a more tailored solution for this particular project. Our final investment decision is expected in 2025. But given the size of the investment of our deleveraging goals, we expect most of the capital spend to beyond -- be beyond 2026. Project costs continue to be refined to ensure on-time, on-budget execution with an in-service date of 2030. Now I will speak to how we leverage our expansive footprint to serve internal and external customer need for decarbonization needs. Last year, we issued an RFP to decarbonize the U.S. portion of the Keystone Pipeline System. Ultimately, our goal was to use existing asset base to add renewable generation to our portfolio in the broader market. In addition to serving our internal customers, we look to secure 2 gigawatts of low-carbon renewable generation, matching our portfolio growth to our customers' needs. While the response to our initial phase has been outstanding, we have taken a disciplined approach in securing renewable power. This year, we were able to quickly capitalize on the most attractive opportunities created from the RFP and locked down a significant portion of our portfolio. We have procured approximately 825 megawatts of wind and solar at very competitive prices. However, when it became clear that supply chain disruptions and inflationary pressures were negatively impacting pricing, we slowed down our prospects and took some time to consider our options. We have considered the option, or the implications of the Inflation Reduction Act and reassess our options. Therefore, we are issuing a second RFP to seize what we believe an incremental opportunities will be available due to the IRRA. As a result, we now expect to complete the U.S. portion of this project in 2023. The portfolio to date is predominantly virtual power purchase agreements, or vPPAs. vPPA, also known as a contract for differences is the type of renewable energy contracting structure that provides a financial hedge against future energy price fluctuations. The buyer does not see or take a lead ownership of the energy. And on the slide, we show an example of how this vPPA structure works. And it demonstrates how it allows us to generate revenue, provide environmental benefit and manage risk. The key takeaway, we can earn an incremental return without taking on incremental project development risk. vPPAs can also be used to create a diverse renewable energy portfolio, such as our first-of-a-kind 247 carbon-free power product in Alberta. This unique product position customers to manage hourly power needs with cost certainty and achieve decarbonization goals by sourcing power from emissions-free assets. This portfolio includes 300 megawatts of wind, 81 megawatts of solar and 75 megawatts of pumped storage. These assets are complemented by our trading and risk management capabilities that can address the challenges of intermittent renewable resources. No other company in Alberta has combined these physical and financial solutions to eliminate renewable generation variability. This is truly innovative. Customers who signed up for this product include Keyera and International Petroleum. This is a highly contracted portfolio and is expected to deliver returns at/or above the high end of our unlevered after-tax IRR range of 7% to 9% and will be available in mid-2024. Moving on to our last suite of decarbonization solutions. I want to spend a minute to talk about how we can leverage our footprint and expertise to enter new markets with high barriers to entry, like hydrogen. By now, I hope it's becoming very, very evident that our incumbency is a significant competitive advantage. TC Energy is one of the largest -- has one of the largest natural gas networks in North America, well positioned near demand centers. So we are literally at the intersection of molecules and electrons. Our strategy is focused on developing integrated partnerships from production all the way to the end user, which ensures we secure demand before we create supply. We've entered into 2 joint development of agreements to support customer-driven hydrogen production. And they fall into 4 categories, what their uses are, long-haul transportation, power generation, large industrial applications and heating across the U.S. and Canada. In April, we announced we would leverage our existing footprint to explore the hydrogen market. And with our focus on creating low carbon solutions, we've identified our cross field gas storage facility as an ideal hydrogen hub. We continue to evaluate this opportunity to generate 60 tons of hydrogen today with up to 150 tonnes per day with some expansion at some point in the future. Our key goals in this process are to clarify the commercial framework, get comfortable with the technical viability and the -- of the application before committing significant capital. We anticipate making final investment decision by the end of 2023. Carbon capture, transportation and storage is another great example of leveraging our footprint and expertise to enter a market with high barriers to entry. The Alberta carbon grid is a hub-based infrastructure solution accessible to Alberta's largest cross-industry emitters. When fully developed, ACG has the potential to transport a store up to 10 million tons of CO2 annually. The project recently reached an important milestone after officially entering into a carbon sequestration evaluation agreement with the government of Alberta. This agreement allows the ACG to move forward into the next phase of the province's CCUS process proving out the project's carbon storage capabilities. We're working with indigenous groups, communities and the government and customers with whom we are seeking long-term take-or-pay contracts that support our prudent risk return profile. The Alberta carbon grid is a great example of the type of opportunity that can emerge from strategic partnerships, focusing on customer needs. The greatest benefit of being a customer-driven and solution-oriented company is earning trust. By helping our customers develop solutions to navigate the energy transition, we deepen our own insights. And our ability to pair that insight with development in commodity risk management allows us to provide differentiated in a broader solution set. We can and will solve the decarbonization needs of our traditional customer base while expanding into new industries. Over the past few years, we have actively expanded our customer-focused origination platform across North America with examples, including our 24x7 product in Alberta, our hydrogen partnerships with Nikola and Hyzon, our recently -- and our recently announced RNG production hub at Jack Daniel Distillery in Tennessee. In all cases, we're partnering with the end user. These examples further demonstrate that we can profitably provide energy solutions to help customers decarbonize. While we will develop custom tailored solutions, the core underpinning remains consistent. Every opportunity we undertake will ultimately be driven by customer needs. This allows us to complement each other's capabilities, diversify risk and share earnings or shared learnings. That's why it all starts with the customer. So to conclude, I want to leave you with a few key takeaways on the important role Power and energy solutions will play in TC Energy's larger portfolio. First, our Energy Solutions has a significant growth opportunity that will diversify TC Energy's portfolio. Next, we will enhance the resilience of our existing footprint and contribute to sustainable growth and cash flow for decades to come. By leveraging TC Energy's unparalleled network of assets, customers and suppliers, we will have a significant opportunity to tailor solutions for those who do not have access to the same network. Our opportunity set of low-carbon projects provides attractive returns, flexible financing and fit well within our risk preferences. And with that, I want to invite Gavin and Bevin back up on the stage for a question-and-answer session. Thank you.

Thank you so much, Corey. I appreciate that. So we're running a little few minutes late here. No big deal. We'll try to keep this to maybe a couple of questions and then we'll invite Francois and Joel up on the stage. But the entire senior leadership team will be available for questions thereafter. So we'll just start with any questions for the floor here, Theresa?

Theresa Chen from Barclays. I had a question for Bevin on the liquids business. As we look out to when you eventually do have to recontract, the volumes on your system and in light of several midstream competitors investing heavily in downstream capability to put barrels on the water with the LCC capability. And also layered in with your comments about additional interest out of the WCS basin, what is your view on potentially needing to invest in that last mile infrastructure in order to keep your volumes on the system upon the recontracting period?

Yes. Thanks, Theresa. I may not have touched on it directly in the presentation, but we've extended -- when we were under development of Keystone XL, one of the key messages that we made to the U.S. government was that, that supply was going to stay within the U.S., and it was serving that U.S. demand. Since we've pivoted away from Keystone XL and are looking to maximize the value of that investment of Marketlink we're adding terminal access directly to Tidewater. And our Port Neches Link connectivity with Motiva is one great example of that is that they collectively also have kind of a Tidewater access availability potential. And so we're working with a number of our downstream customers to determine if we can extend that service for our customers. And so how we've done that is we've actually brought on capability on to our marketing affiliate team who has Tidewater marketing FOB experience from industry to help bring in that capability so that we can start launching that service for our customers. The next question is in the middle there with Ben.

Ben Pham with BMO Capital Markets. Maybe back to liquids. Could you comment on this [indiscernible] scenario you see that liquids EBITDA could get back to $1.8 billion plus?

Sure. Thanks, Ben. Our run rate on our base Keystone contracts, I mentioned 94% contracted. That represents that kind of CAD 1.3 billion ratable EBITDA going forward. How we achieved getting to the CAD 1.8 billion in history was when we saw the urban differentials between Cushing and the Gulf Coast be about 3x to 4x what we see today. And so we'd have to see market fundamentals and between Cushing and the Gulf Coast really return back to an era where we saw tremendous buildup in volumes in Cushing, driving to the Gulf Coast. Why I think that is at risk is that not only because of the demand pressures from the pandemic and now the SPR releases, there was a number of pipelines built in Texas from the Permian that used to -- those volumes used to head up to Cushing and then down to the Gulf Coast. Those volumes are now pipe connected down into corporate and into the Houston markets. So while we see a tremendous amount of upside in terms of our value of utilization of Marketlink, I don't believe that we'll get to differentials that we saw historically that were 3x to 4x the margins of what we're seeing today.

Maybe for Corey, the slide on unsanctioned capital driving 10% EBITDA growth. Is that reflective of more gross power or is there alert list of other investments you highlighted today?

Yes. Thank you for the question. Pretty straightforward that I mentioned sort of in some of the other slides. So the Ontario pumped storage project is not sanctioned yet. Canyon Creek is not sanctioned yet. So those are some of the projects of that nature that will be coming for sanctioning at the end of '23, early in 2024 that will make up the bulk of that component.

Thank you. Praneeth over there.

Praneeth, Wells Fargo. Just wondering a few M&A deals in the renewable natural gas space in the U.S. over the last few weeks just wondering how you view the RNG market and your appetite to either grow that organically or via acquisitions.

So I'll take it from our view -- I won't speak to the acquisition side, but our view from the growth side. It's an emerging market. It is not -- if you look at the actual number of MMBTU, it's a relatively small amount of MMBTU being added to the system, but it's a demand driven by customers. So as we grow our customer base on the -- our Power and Storage -- our Energy Solutions side of the business, we will follow the customers leads to help them meet those demands. And what we'll do is we'll do just like we did at the Jack Daniel's project where we partnered with an existing industry respected leader to deliver that solution.

So maybe we'll take one more and then I'll ask Francois, Joel and Stan to take the stage here, and we'll just move right into the -- the final Q&A. But any other questions from the audience here? All right. Rob.

Rob Catellier, CIBC Capital Markets. I wondered if you could give some color on what impact inflation is having on the Unit 3 MCR? In other words, the inflation environment has changed since that was probably priced an enough there to accommodate the new cost environment.

Yes. Thank you, Rob. The answer is yes. The inflation costs are in our contract. And the Unit 3 -- almost all of the equipment, almost all of the necessary acquired supplies to execute that outage. Were ordered in our on-site for a number of years. So -- and our labor contracts have all been negotiated as well. So we are fairly -- we are well insulated from inflation impacts for Bruce Power MCR-3.

Excellent. Thank you, everyone. We'll ask Francois and Joel to join us on stage here. So first time I see is Mr. Joel on front here. If we have -- sure, why don't we start -- there. We'll get to Rob next on the left-hand, my left. Thanks.

Brian Reynolds from UBS. Maybe to touch on the 5% to 7% EBITDA growth rate 2026. First, does this estimate include any asset sales? And then perhaps secondly, how should we think about the dividend growth rate, the context of potentially lower EBITDA from the asset sales going forward to support future growth and obviously protecting the balance sheet.

Yes. So it's a great question. So in my prepared remarks, I said that we haven't factored asset sales into our EBIT growth. But I also mentioned that we're not factoring any projects that we may sanction an interim that could offset some of the EBITDA from the divestment that we pursue. With regard to the 3% to 5% dividend growth doesn't change a thing. We have plenty of capacity to fund our dividend growth, whether it's on cash flow basis or on an earnings basis when you look at our payout ratios. So certainly, whatever we do with our divestment program will not have any impact whatsoever on our dividend.

Great. And as one follow-up. Coming back to Mexico. It really seems like the segment is viewed as a significant growth driver going forward. From the 2021 Analyst Day, there were 3 separate projects in the slide deck. It seems like Southeast Gateway has now FIDed one of those. Can you maybe talk about future expansion projects down on the Yucatan Peninsula. And then perhaps would those projects be new greenfield type projects or would that be our expansions on projects?

Let's Stanley take that one. Stanley, if you mind standing up?

[indiscernible] back to last year's presentation, you did outline a couple of opportunities, one of which is Southeast gateway pipelines, we can check that box off. Another one was a further extension south into the Yucatan. And if you saw yesterday, CFE announced a deal in principle with Engie to do exactly that. So effectively, the Engie owns the Mayakan pipeline. And that will be extended back to interconnect with our Southeast Gateway pipeline and provide additional supplies to Tier 3 power plants in Southern Mexico. So check that box. The third opportunity was related to LNG. And as things sit right now, there's probably around somewhere north of 20 million tons of potential LNG projects being discussed. Some of those are on the West Coast of Mexico. Some of those are on the Gulf Coast side, potentially connected via the transit corridor. Our Southeast Gateway pipeline could provide supplies to some of the Gulf Coast facilities or could be expanded to go over to the West Coast. But again, very early days with respect to Mexican LNG. The other opportunities that we have are what I would call smaller bolt-on opportunities to build laterals off of our backbone systems to fuel some of the industrial growth that we expect to see in Mexico as the overall pipeline grid gets built out. But again, keep in mind, we are going to limit our overall exposure to Mexico to about 10% of TC Energy's consolidated EBITDA.

Rob?

Rob Hope, Scotiabank. Just hoping you could provide some clarity on the 2023 capital plan and the funding outlook there. So I would imagine the $5 billion-plus asset sale figure that was announced with Q3 was prior to the knowledge of the coastal gasoline cost increase. So as we look at 2023, how do you balance the funding plan with the higher Coastal GasLink cost increase as well as the fact that you could get some recoveries, but that would be key beyond 2023.

Yes. Rob, so again, anything over and above $7 billion. So if you think about next year, we showed you earlier today, it's $9.5 billion. So think of that as I think over the $7 billion is going to come from portfolio rotation including this year, we got about $1.5 billion as well. So we -- that's where we kind of get to that $5-plus billion to think about over the next couple of years. To the extent that we are wearing any additional costs on our balance sheet with respect to CGL, basically I think that is going to increase the investment program accordingly.

All right. And then just as we take a look at the capital plan for 2023 in Canadian gas pipelines. Based on the cost gasoline comments, it feels like that was mainly on the labor side and the contractor side. Wouldn't it be fair to say that the NGTL program would also be seeing similar increases there? Or how are you managing that cost pressure there?

Yes, I can take that one, Rob. So certainly on our 2021 programs and 2022 programs, we've seen some similar challenges. Some of the trains that we're developing on our NGTL build-out are very similar to the train that we have on Coastal GasLink. So we have had some challenges, obviously, between our labor, and we're drawing on the same labor pool as that we are in British Columbia. So we have seen some escalation in those costs and some scheduled challenges from the regulatory perspective as well. So we're in the same market, executing similar. I would say the complexity and the stress against the contractors, though is much less on the NGTL side than it has been on the Coastal GasLink side.

Jeremy?

Jeremy Tonet, JPMorgan. I suppose that you're probably not going to give us a list of the asset sales and expected multiples, but maybe trying to provide a little bit more into details of potential sales, I guess, could you help us think through your methodology, I think, on the call, you outlined some of the thoughts. And just wondering if there's any updated thoughts you could share there as far as what could be prioritized for sale versus other?

So all of those who are listening to this call who are potential buyers for our assets, I'll just reiterate, Jeremy, what we shared before, which is we're going to look to arbitrage valuation differences between private and public markets. We're going to consider the simplicity of our corporate structure. On the long term, this is going to allow us to continue to migrate our portfolio in the direction we're looking for. But we're going to be very disciplined from a valuation standpoint. We have a clear handle on the intrinsic value of our assets should we hold them. And any monetization we're going to consider is going to have to compare favorably with the whole value of our assets. Beyond that, I think I'm going to refrain from making any comments.

If I could just take a bit more. It seems like there might be a preference for existing assets as opposed to project JVs that you've done in the past. Is that fair to say? And then timing is more of like kind of an end of '23 event, so '23 EBITDA, the 5%, 7% growth is probably a good number to think about for the year?

I think you can think of -- in absence of providing any detail on any specific initiatives, think of mid-year announcements on average, in order for us to close by the end of the year, we're going to need to be announcing transactions throughout sort of the core 3 or 4 months in the middle of the year. I would say in terms of what we're going to monetize, we're not focused on shedding future capital investment. We are not focused on doing that. But having said that, to the extent a third party is willing to offer because of the higher growth trajectory and the ability to invest future capital. On a dollar basis, to the extent we have the opportunity to monetize a piece of a portfolio that has some growth in it, and we can get a better valuation from that, we'll consider that. But a driver for us in our monetization program is not to reduce the amount of our future capital that we're looking to fund. It's purely how can we arbitrage valuation differences.

Okay. So we'll go with Praneeth and then Robert in the middle.

Just staying on the asset sale theme here. If you do hit the $5 billion-plus target, would you expect any cash tax leakage? And maybe if you could review the shields that you have in Canada or the U.S. to protect against that?

Yes, Praneeth. So in Canada, we have a high amount of tax shield. It's in the billions of dollars. Similarly, in the U.S., we have tax shield there as well, not quite the same amount that we have in Canada that was driven from Keystone XL. So again, we've got tax shields in both jurisdictions. And ultimately, whatever asset you divest, it depends on the tax basis of that particular asset, that has been factored as well.

I can just start with some of the back to the key financial metrics, you have adjusted the EBITDA, 6%. There's some puts and takes there and that the dividend looks like you're very solid on that outlook. But what about the leverage number in that 4.75x?And you've got CapEx coming down in the back end, but you've expressed a lot of confidence that you can secure more projects. So that 4.75x a burn target that you're going to achieve? Or is that potentially going to remain going to be elevated you sign more projects for you?

Yes, Robert. Again, under the existing plan, we can get the 4.75x by 2026. But obviously, with asset sales, we can accelerate that to a couple of years, and that's our aim to do that. Once we get to 4.75x, we're staying there. We're not going to go higher. So it's like paying off a credit card bill, we're not going to ramp up the tab and -- further. We're going to stay. We feel like that's the appropriate level to be at. We're [indiscernible] now is we're not having a lazy balance sheet, but we also create some headroom with our credit metrics. So once we get to that level, we're certainly not going to be ramping it back up. We'll stay at that level.

Yes. Just to add to that, Robert, why is that? I think that's an important feature. We have been very successful with M&A over the last 20 years by being opportunistic. And as Joel mentioned in his prepared remarks, we haven't been pushed to 4.75x by the rating agencies. Their level continues to be in that 5x area. Our desire is to maintain a little bit of dry powder so that we can take advantage of dislocations in the marketplace. And right now, we don't have that dry powder. So our highest priority in 2023 is to accelerate our deleveraging because we do see over the ensuing years, some opportunities for us that could potentially enfold for us to be opportunistic in M&A. And you can't do that unless you build some cushion. And so that's really the strategic driver for the desire to accelerate our deleveraging and then leave it there. As Joel said, going forward, this is going to be our target area.

If I can finish just I mean that asset sales, I think you want to talk about what you might be looking to sell. Can you comment on any assets though that you feel are untouchable in the portfolio. And one specifically that historically has been used on touchable has been in Canadian gas system. And just given it's the lowest return in the portfolio but with low risk or maybe higher valuations? Is that something that is still untouchable?

I remember reading a book on -- it's called Sacred Cows Make the Best Burgers. There are no sacred cows, Robert.

That is up in a research report, that would be really [indiscernible] anybody put that in.

It's a good book. You should read it.

Stein, in the middle there.

Stein from Norges Bank. It was at that hydrogen could be used in industry, heat, power and transportation. Now that's a quite big opportunity set. So can you tell us what you're working on beyond the Crossfield hydrogen hub or how we should think about how this will play out over time?

Sure. Perhaps I'll start and I'll ask Corey to provide some examples. I agree with you. We see hydrogen as a very interesting potential asset class for us over the course of the next decade. Each hydrogen hub we're developing could depending on whether it's blue hydrogen or green or whatever color you want to ascribe to it, could be $1 billion to $3 billion investment opportunity for us. So over time, you could certainly see that market developing in it being a substantial portion of our asset base and of our portfolio. We do need to see regulation allow us to invest more quickly than it allows us to do today. I'm encouraged by the incentives that we've seen, particularly in the U.S., and I think Canada has done a good job at trying to level that playing field. But on the regulatory side, it still takes 5 plus years to sanction projects. And if we have a goal as a country here in Canada to reduce our emissions substantially by 2030 in absolute terms, we need to be able to sanction and put assets to work much more quickly. So we are working with various levels of government to accelerate the regulatory process. Right now, that's going to be, as it stands, it's going to be a constraint to our ability to go as fast as we would like to. But perhaps, Corey, you can provide a little bit more color on the types of things we're pursuing.

Yes, I think that's a great answer. The only thing I would add, and would invite you to come back after we wrap up here at the back and speak to myself and Omar is that in the U.S., the government has appropriated about $1 billion for new hydrogen hubs to help that funding issue. And what that will do is it will accelerate the permitting component because it will have the government funding and in turn the government support move the permitting process along as well. So I think what you'll see in the coming months and years is that those projects that are awarded government funding in the U.S. will help solve the problems that Francois just alluded to.

So I think we've got time for one more, if there's any other questions. If not, we can break and just head back to these sort of informal breakouts that you'll see at the back of the room where the entire leadership team is available, and we're welcome to stick around for the next hour to take advantage of that. But -- yes, any other questions? Not seeing any. So with that, I'll maybe just hand it over to Francois.

Just in closing, we'll remind you of the 3 key messages we wanted you to take away from today. The first is our confidence in our ability to deliver sustained cash flow growth over the balance of the decade. The second is with the diverse portfolio of businesses across 3 geographies we own and the growth we see in new energy solutions, we're going to deliver diversification that will provide the resiliency that you're looking for from an energy infrastructure owner. And thirdly, we have a clear funding plan, and we are going to be very disciplined around achieving the deleveraging targets we're looking at. We're going to use internal equity, which is shorthand for asset sales to get there. And we are going to maintain that capital discipline going forward. And to the extent we see opportunities that exceed our free cash flow after dividends, north of that $7 billion range on an annual basis, we are going to be using capital rotation to fund that growth. We do have a short video to close out the session. I want to thank you for joining us today, this is the end of the formal part of our agenda. And I would invite those of you who'd like to continue discussions and formally in the back room, and Joel and I will also be available to answer any further questions you have. So thank you very much.