Pembina Pipeline Corporation (NYSE:PBA) Q1 2023 Earnings Call Transcript

Rob Hope: Good morning, everyone. Questions on capital allocation, you re reiterated kind of the view that 2023 cash flow would be quite strong and CapEx would be much less than that. Just in terms of the dividend with the increase there to preserve that financial flexibility, can you maybe add some color on the future growth plans that you see out there, I guess, beyond Cedar that could give you some near term capital expenditures to eat into your financial capacity?

Scott Burrows: Yeah, Rob, I think, we continue, as we outlaid kind of some of the volume growth that we’re seeing across the basin. We think that there continues to be opportunities to invest in our core business, whether it’s incremental laterals or pump stations across the system to capture the growing volumes. In addition to that, we obviously have a suite of opportunities we’re working on in our new ventures group, such as the Alberta carbon grid and some of the other projects that we’re not quite ready to talk about just yet. But we are looking at all opportunities in the energy transition space, whether it’s ammonia, hydrogen, methanol and we’re working really hard on those projects and seeing great progress on that front.

And so we expect as we move through this year, we’re going to round out a capital program in 2024, 2025, that that’s going to have an increased capital from where we are today. So we’re making sure that we’re well positioned from a financial point of view.

Rob Hope: I appreciate that. And then just maybe turning over to your partnership to evaluate a TMX ownership stake. Can you maybe update us on your thoughts there, especially given kind of continued delays and expanded capital cost?

Cameron Goldade: Yeah. Hey, Rob. It’s Cam. I think obviously we’re very proud of our partnership that we have with WIPG and being selected as their operating partner, in evaluating the opportunity to invest and own that pipeline. I think we continue to believe that that asset from a standalone basis or a standing back is a world class asset. Obviously, it’s going to have access to one of the most long-lived and probably high valued crude markets for the next few decades here as we move through — as we move through this. I think obviously, with the increases that we’ve seen, obviously we have to justify for ourselves that the economic proposition around the pipeline remains really exciting and continue to do that work. I think that obviously we can’t buy something that’s not for sale right now.

And so, we will continue to evaluate and look at it over time. We think the asset is a great asset and obviously just like any acquisition, it’s got to be a good deal for Pembina and obviously remain within our guardrails, which is something you’ve seen from us in the past and we remain squarely committed to. So, those continue to be the parameters as we evaluate, consider that opportunity just as we would any other and we have no intention of stray from that.

Operator: Thank you. Next question comes from Patrick Kenny at National Bank Financial. Please go ahead.

Patrick Kenny: Thank you. Good morning. Just on the Northern Pipeline incident, sorry if I missed it, but is the cause still under investigation or do you have clarity on what needs to be done rectify the system? Just wondering if there could be a continued drag on cash flow beyond Q2 if there’s more integrity work that needs to be done across the system, depending on the findings?