Good morning, and thank you for joining AltaGas' Second Quarter 2026 Results Conference Call. This call is being webcast, and we encourage following along with the supporting slides that can be found on our website.

Speaking this morning will be Vernon Yu, President and Chief Executive Officer; and Sean Brown, Executive Vice President and Chief Financial Officer. We're also joined by Randy Toone, President of Midstream; Corine Bushfield, President of Utilities; and Jon Morrison, Senior Vice President of Corporate Development and Investor Relations.

We will refer to forward-looking information on today's call. This information is subject to certain risks and uncertainties as outlined in the forward-looking information disclosure on Slide 2 in the presentation.

Prepared remarks will be followed by a question-and-answer session. I'll now turn the call over to Vernon.

Thanks, Aaron. Good morning.

I'm going to start by reviewing highlights from the quarter, including our strong financial and operating performance. Then I'll walk through progress on our growth projects in Midstream and Utilities.

I'll finish by reviewing the state of the global LPG market and how that is creating growth opportunities for AltaGas. After that, Sean will cover our segmented financial results and provide more details on our increased 2026 guidance.

I'd like to start by introducing Corine, who is now leading our Utilities business. Corine has been with AltaGas for more than a decade and is a valued member of our executive team.

We're excited to have Corine step into this role, given her proven track record of operational excellence and strong financial leadership. Let's begin on Slide 4.

We delivered record financial results in Q2, reflecting strong performance from both Midstream and Utilities. I should note that Midstream's financial results in Q2 benefited from historically high global export spreads and physical sale premiums.

We generated normalized EBITDA of $391 million and normalized EPS of $0.31, increases of 14% and 15% over Q2 2025. Our strong first half gives us the confidence to raise our 2026 guidance.

We've increased normalized EBITDA guidance by 4% to a new range of $2.0 billion to $2.1 billion and normalized EPS by 6% to a range of $2.35 to $2.60 per share. Our balance sheet remains strong throughout the quarter with leverage closing at 4.4x, below the low end of our 4.5 to 5x target range.

Operationally, we exported a record 144,000 barrels per day of LPG, a 13% increase over Q2 2025. Midstream throughput continued to grow with Montney volumes up 8% year-over-year, and we added 2 high-quality partnerships to our platform.

The Groundbirch Rail Terminal with Tourmaline and the ACE rail terminal in Fort Saskatchewan with Keyera and CN Rail. In Utilities, we continue to advance our system modernization programs.

Year-to-date, we have deployed over $200 million of capital and replaced 21 miles of pipe. Let's move to our growth projects, starting with REEF on Slide 5.

Construction on REEF continues to advance and the project is now 85% complete. Onshore execution has been strong and ahead of plan.

On the uplands, all major equipment is installed, and commissioning should begin in late August. The railroad corridor is entering its final construction phase and will be completed before year-end.

While onshore execution has been ahead of plan, in-water construction has proven more challenging due to maritime conditions and weather delays. Since we started in-water construction at REEF in the fall of 2024, we have lost over 450 rig days due to extreme weather, extreme ocean swells and marine mammal activity.

These lost rig days significantly exceeded any normal contingency plans. As a result, onshore efficiencies are no longer expected to fully offset higher in-water construction costs.

We now expect REEF to come online before the end of Q1 2027 and have increased REEF's capital cost estimate by 12% to approximately $1.5 billion. With the jetty and loading platform now 80% complete, most in-water construction is set to be completed over the next 6 weeks.

We view the revised schedule and cost as highly achievable, and we'll get into those details shortly. REEF Optimization I remains on schedule for an in-service date in the second half of 2027.

And we will add 30,000 barrels per day of incremental propane export capacity. We're also advancing REEF Optimization II with key regulatory permits secured and engineering progressing towards final Class III cost estimates before the end of the year.

On Slide 6, we outlined REEF's remaining major work streams and highlight what has been completed to date. The in-water works have been the most challenging, but we're almost done.

All 48 of the piles for the jetty piers have been drilled and completed. Only 5 piles remain to be drilled for the loading platform and that should be completed by the end of August.

All of the jetty trestles that span 1.2 kilometers have been installed. The transition platform has been delivered and set.

Fabrication of the main loading platform is complete and is about ready to be loaded for an August delivery. The mooring system fabrication is nearing completion and is set to be delivered in November and installed in December.

With the in-water phase of construction, the most complex and challenging part of REEF nearing completion, we're highly confident that we'll be able to meet our revised cost estimate and schedule. Slide 6 shows how the platform and mooring system will be installed on the jetty, which is a low-risk installation and part of our modular design.

Turning to Slide 7. You will see the progress on onshore construction activity.

All modules have been received and all equipment has been set. Mechanical completion is now 90%, and we expect to commence upland commissioning by the end of August.

The rail loop and utility corridor are now 70% finished and are on track to be completed by mid-November. Slide 8 shows the progress on our other growth projects.

At RIPET, our methanol removal project remains on track for completion by year-end. Our Dimsdale storage expansions are now more than 50% complete, with pipeline tie-ins completed.

We're on track to start the drilling of the injection wells in the third quarter. Phase I will add 6 Bcf of storage by year-end 2026 and Phase II will add another 30 Bcf of storage by mid-2027.

At the Mountain Valley Pipeline, Southgate construction is underway. Pipeline welding began in early July, and the project is on track to be in service by year-end 2026, ahead of schedule.

MVP Boost continues to advance through its regulatory steps and is expected to be in service by the middle of 2028. During the quarter, we reached a positive FID on a debottlenecking project at Townsend, which will add 6,000 barrels per day of fractionation capacity.

Within Utilities, we have more than 5,000 miles of pre-1970s pipe that needs to be replaced to enhance safety and reliability. To support that, we have USD 1.5 billion of modernization programs approved by regulators across our 4 jurisdictions.

Modernization capital, system expansion and customer adds are expected to drive 10% rate base growth in 2026. This rate base will improve the safety and reliability of our system.

Every mile we replace reduces the risk of leaks and safety incidents, service disruptions and operating costs for our customers. Despite these large increases in rate base, we have been able to keep customer bill increases around 4% per year based on operating cost savings from these modernization investments and other O&M cost management initiatives.

Demand for natural gas across the U.S. continues to rise, driven by heightened commercial and industrial activity, data center and large-load development and ongoing population growth.

The mid-Atlantic sits in the center of this expansion. For example, PJM data center load is forecast to increase by fourfold over the next 8 years.

Turning to Slide 9, I want to touch on the disruption in the Middle East and what this means for the global LPG market and our global export business. LPG exports through the Strait of Hormuz are more than 70% below pre-conflict levels.

Since their disruption began, more than 160 million barrels of LPGs have been displaced from global trade. That has tightened market balances and reinforced the value of stable Canadian LPG supply.

We're seeing very strong demand across our traditional markets of Japan and South Korea and growing demand from China. We're also seeing incremental demand from other Asian markets that have historically relied in Middle Eastern supply.

Given the favorable market dynamics, we continue to advance REEF Opti II and see the need for an additional REEF phase every 2 to 3 years to meet the market demand in Western Canada. We're also seeing significant interest from China for Canadian ethane exports as a way to diversify its long-term ethane needs.

Today, roughly 500,000 barrels a day of ethane is left in the natural gas stream in Western Canada, while Asian demand keeps growing. We're actively working through the complexity of connecting these markets as we see this as another opportunity to provide Canadian energy to the best global markets.

Finally, let me close on the progress we've made on our strategic priorities in 2026. AltaGas' future is very bright.

We've executed consistently, growing, derisking and strengthening the enterprise through the first half of the year. In the second quarter, we delivered record volumes from our global export platform and higher throughput across our midstream value chain.

We continue to actively manage risk through hedging, commercial contracting and diversifying our downstream markets. We're advancing multiple rate cases in our Utilities to earn appropriate returns on our capital investments and minimize rate lag.

Our balance sheet is strong with leverage below our target range, which has allowed us to advance multiple projects that will drive long-term growth. Taken together, we're extending our competitive advantages, improving the quality and visibility of our cash flows and creating a longer runway for disciplined expansion across AltaGas.

I'll now turn it over to Sean to walk through our segmented results and increased 2026 guidance.

Thanks, Vern, and good morning, everyone. As mentioned, we are very pleased with our record second quarter performance.

The continued execution across our platform has enabled us to increase our guidance and positions us to deliver over 10% year-over-year EBITDA growth. For today's call, I'll start by walking through our segmented financial results, and then I'll discuss our updated 2026 guidance and capital budget and close with our balance sheet strength and investment proposition.

Turning to Slide 12. In the quarter, the Utilities segment delivered normalized EBITDA of $142 million, a 6% increase year-over-year.

This increase was driven by higher revenue from continued system modernization investments, new rates in D.C. and interim rates in Virginia as well as stronger retail performance.

Compared to the same quarter last year, results were partially offset by higher G&A expenses and lower asset optimization activity at Washington Gas. From a capital perspective, during the quarter, we deployed approximately $240 million in the Utilities segment, including $130 million toward modernization programs, $21 million on new growth initiatives and $86 million on system betterment programs.

Of note, our modernization spending has resulted in us replacing over 20 miles of vulnerable pipe year-to-date. These investments are focused on delivering long-term safety and reliability, while extending our network to serve our expanding customer base.

In addition, in June, we officially kicked off construction of the Keweenaw Connector Pipeline. The majority of the materials are now on site with pipe welding, bending and placement ongoing.

We continue to expect construction to be completed by year-end 2026. We are also making solid progress on our 2 data center pipeline connection projects in Virginia and Maryland, both of which remain on schedule for completion in the fourth quarter of 2026.

Though individually not material in size, these projects underscore the increasing importance of our gas utility infrastructure and enabling reliable energy delivery for large load customers. Looking forward, we continue to see a robust pipeline of opportunities with sustained interest from data center and large load industrial customers seeking reliable, scalable and cost-effective energy solutions.

Turning to Slide 13. We highlight our ongoing regulatory initiatives.

This week, we received a final order in Maryland, where the commission approved USD 38 million in new revenue, including certain costs currently recovered through the STRIDE surcharge based on an allowed ROE of 9.4%. Active rate cases in Virginia and Michigan are ongoing.

In Virginia, interim rates remain in effect with WGL seeking USD 65 million of incremental revenue, net of a USD 39 million ARP surcharge. In Michigan, we are seeking new rates and an extension to the modernization program, requesting USD 61 million in revenue and USD 284 million of proposed spending for Michigan's modernization programs through 2031.

We expect final orders in Virginia by the end of Q3 and in Michigan before year-end. Late in the second quarter, the Public Service Commission of D.C.

approved a 6-month USD 18 million extension of the existing PROJECTpipes 2 modernization program through the end of 2026. This came after our USD 150 million District SAFE ARP program was approved, but subsequently reopened as the commission determined a further hearing was necessary.

The hearing was held this week, and we expect resolution by the fourth quarter. Importantly, our Utilities investments are expected to drive 8% long-term rate base growth through 2030, supporting stable cash flows, earnings growth, dividend durability and shareholder value.

Turning to Slide 14. The strength in our Midstream business continued, delivering $285 million of normalized EBITDA, up 33% year-over-year and above our expectations.

The segment's outperformance was driven by our exports platform, which exported record volumes and delivered strong merchant margins. The segment also benefited from continued strong performance across the balance of our Midstream assets, particularly in the Montney, where producer activity remains strong and continues to drive basin growth.

From an operational perspective, we exported a record 144,000 barrels a day of LPGs across 23 VLGCs at our Ferndale and RIPET terminals, with volumes up 13% year-over-year. Strong terminal execution and logistics supported record Ferndale exports of nearly 60,000 barrels a day, driven by improved rail switching efficiency, along with higher rail, refinery and trucking volumes.

RIPET exported roughly 84,000 barrels a day of propane and continue to operate near capacity. In the rest of our Midstream platform, G&P utilization remained strong in the quarter, although margins were tempered by lower realized frac spreads due to the impact of hedging.

Harmattan was offline for 32 days for planned maintenance. Excluding the impact of the Harmattan turnaround, throughput volumes were 9% higher year-over-year.

Montney growth remained a key driver, supported by our strategic footprint across liquid-rich areas of the basin and continued producer activity. In the Alberta Montney, our Pipestone complex continued to perform well, averaging roughly 90% utilization through the quarter as area volumes continue to increase.

In Northeast B.C., strong volumes continued across our Montney assets with North Pine throughput up 23% year-over-year, continuing to operate near its 25,000 barrel a day capacity. But looking across our system, the underlying growth we are seeing reinforces the value of our Northeast B.C.

liquids expansion projects, which are designed to unlock additional value from Townsend and North Pine while deepening our strategic producer relationships. Looking ahead, we are well hedged for the balance of 2026 and have derisked much of our Q4 exposure.

With approximately 91% of expected remaining 2026 global export volumes, either tolled or financially hedged with an average FEI to North America spread of approximately U.S. $21.81 per barrel on non-toll volumes, while 9% of volumes remain open to market pricing.

In addition, our entire 2026 Baltic freight exposure is hedged through a combination of time charters, financial instruments and tolling arrangements. We also continue to manage frac spread exposure and had 84% of expected volumes hedged at an average price of $22 a barrel.

Closing with the discussion on our financial results, the Corporate and Other segment was lower year-over-year, primarily due to higher employee incentive costs tied to our rising share price. Turning to Slide 15.

Year-to-date, we have seen outperformance from both business segments with significant strength in our LPG export business driving an increase to our guidance. We have raised our EBITDA guidance to a range of $2 billion to $2.1 billion, representing a 4% increase over the original guidance midpoint and 10% growth year-over-year.

At the same time, we are raising our EPS guidance to a range of $2.35 to $2.60 per share, a 6% increase over the original guidance midpoint and 11% above last year's levels. Additionally, as outperformance is more weighted to our Midstream business, we've adjusted our estimated year-end 2026 segment EBITDA mix with Midstream now expected to contribute approximately half of normalized EBITDA, resulting in a range of 48% to 52% for both segments.

As shown on Slide 16, we've also increased our 2026 capital budget, which now sits at $1.8 billion, up from $1.7 billion previously. This increase reflects higher capital expenditures for the construction of REEF as well as capital associated with the positive FIDs of the Northeast B.C.

liquids expansion project and the Groundbirch Rail Terminal. 61% of 2026 capital is now expected to be allocated to the Utilities segment, 36% to the Midstream segment, with the balance to the Corporate segment.

Utilities capital is primarily directed towards modernization and system betterment initiatives, which are expected to drive 10% year-over-year rate base growth. Midstream capital remains focused on REEF, including Opti I, Dimsdale and our new Northeast B.C.

project announcements, all of which underpinned the segment's robust growth outlook. As shown on Slide 17, our $1.8 billion capital program remains well within our investment capacity.

Our relatively low dividend payout ratio, along with our strong business performance has allowed us to increase our 2026 capital program while remaining within our debt target ranges and deliver on our 5% to 7% EBITDA and EPS CAGR. Looking forward, our capital allocation priorities remain the same as we look to cover maintenance spending and advance key growth projects that position the business to deliver on its long-term growth guidance.

As shown on Slide 18, we exited the quarter with a trailing 12-month adjusted net debt to normalized EBITDA ratio of 4.4x, modestly below our target range. With the increase and shape of our 2026 capital program and considering the seasonality of our business, we expect our leverage metric to trend towards the midpoint of our 4.5 to 5x target range as we progress through the year.

On Slide 19, we highlight AltaGas' consistent track record of delivering per share growth in earnings, EBITDA and dividends, which has translated into sustained share price outperformance. The updated 2026 expectations have driven an increase to our 5-year EPS CAGR to 8% and our 5-year EBITDA CAGR to 7% from 6% previously.

Our investment proposition, which has remained the same, is highlighted on Slide 20. A resilient, low-risk infrastructure platform underpins stable and growing cash flows and a diversified business mix that provides earnings visibility and capital allocation flexibility.

Visible organic growth opportunities position the company to grow earnings and cash flow per share while maintaining financial flexibility and drive sustainable dividend growth. With that, I'll turn the call back to the operator and open the line for questions.

Operator, we're ready for questions, if there's any in the queue.

I want to dive a little bit deeper into the potential for further producer partnerships up in Northeast B.C. Are you having conversations up there to support incremental infrastructure builds that could be a header in essence for your global export business?

Rob, it's Vern. I'll start that off and then hand it over to Randy.

I think in Northeast B.C., we're in a great position. I think as you know, it's somewhat -- sometimes challenging to build infrastructure up there, given the precedence with the First Nations.

So the good news is we're well situated with our Townsend and North Pine assets to add significantly more volumes up there. And obviously, we've sized up our rail facility to -- at North Pine to handle unit trains.

This new partnership with Tourmaline gives us a second and significant loading opportunity where if other volumes come in, we're able to capture those as well. So I'll turn it over to Randy, and he can just fill in a little bit more color.

Yes. Thanks, Vern.

I would just add that we do think that LNG Canada Phase II is likely going to be FID here soon. And also the federal government has been very supportive of other LNG projects.

And so that's just going to add more supply in the Montney, and we think that our assets are well positioned to take advantage of that.

Right. Appreciate that.

And then maybe just moving over to the global export business. I understand that pricing is volatile, but we are hearing about physical premiums to the posted FEI pricing.

Can you speak to how you're benefiting from this dynamic? And do you realize that even when you do hedge relative to FEI as well as moving forward, how it is informing kind of your hedging profile?

I think the way to characterize that, Rob, is with this massive disruption in global supply and demand remaining relatively constant is the fact that often times, people are not -- want to show their physical sales on the index. So that's why there's particularly a disconnect between a physical sale and the index.

So going forward, on our merchant capacity, we're able to capture the actual physical sale premium over FEI, and we're seeing that continue as we work through this situation.

Maybe just on the new tolling agreement with Tourmaline. Just wanted to get your initial thoughts here on their 1-year pause on growth spending and any read-through to perhaps any broader temporary slowdown in activity across Northeast B.C.?

And I guess what that could mean timing-wise for some of your unsanctioned growth opportunities, whether it's Opti II or further upsizing at North Pine, Pipestone or Dimsdale?

Patrick, it's Randy. Yes, we totally understand why Tourmaline wanted to take a pause given where the natural gas prices are.

But when you look at what their Phase II expansions that was Conroy and Doe and that's really not kind of feeding our existing infrastructure. So it doesn't change our plans.

Obviously, we want to see that development and we know it will be developed, but it doesn't impact our long-term plans.

Yes. And I'm just jumping in here.

I think, obviously, we're seeing heightened activity from other producers, which is really driving the Townsend debottlenecking that we announced today. And I think the demand we're seeing on -- for Opti II is extremely high, Patrick.

We expect to be concluded on commercial negotiations on incremental tolling arrangements within the next couple of months here.

Okay. That's great.

I appreciate that. And then I guess, Vern, as you think about your portfolio of tolling contracts, you've had good uptake from Midstream peers as well as Upstream customers, and now you're seeing increased demand from China.

I guess as you think about maximizing realized margins going forward, how are you thinking about the right mix in terms of customer type and maybe an update on where you're at today versus your longer-term target?

Sure. Patrick, we're still targeting to be 60% tolled on a long-term basis.

So as we bring Opti II to FID later this year, we're still wanting to have at least 60% of the total export capacity under tolling agreements. We're starting to see early signs of Asian demand for more Canadian product.

We're in active discussions on all kinds of supply arrangements between Japan, Korea, China and other jurisdictions. So the disruption we're seeing in the Middle East obviously is highlighting how important it is to have a secure and reliable supply and Canada is obviously a great place for that.

So as we approach the end of the decade and have 300,000 barrels a day of export capacity, we think there's going to be very high demand for tolling contracts, and we'll see that play out over the next couple of months.

And I guess as you look to potentially add ethane exports to the franchise, can you provide just a bit more color on maybe how those discussions are progressing to secure the offtake contracts? And also along the value chain, how you're thinking about sourcing the ethane and securing the rail logistics and whatnot?

Yes. Ethane is obviously in an earlier stage than Opti II and even Opti III.

We've made great progress in one of the most critical elements, which is just the rail logistics. We've recently received Transport Canada approval to use a pressurized car to move ethane.

So that removes a significant gating item. I think where we're at now is obviously to get better line of sight on the capital cost involved on all the logistics from loading and then export facility-wise.

The dynamic is the China imports almost 100% of its ethane today from the U.S. Gulf Coast.

With global trade tensions, China is extremely eager to get different -- a variety of supply sources and Canada is well positioned for that. I think as we mentioned on our prepared remarks, there's 500,000 barrels a day of ethane in the gas stream with lots of facilities across Alberta and B.C.

for that ethane to be railed. So we think a lot of the parts are already there.

We just need to do a little bit more work on figuring out what is a competitive rate. And then with ethane, given that it's a new product with probably one buyer or a series of buyers in one location, we're going to look to target a much higher percentage of tolling on that kind of a transaction.

Just wanted to clarify on the Groundbirch Rail project that there is an ability to accommodate third-party volumes, and it's not exclusive to Tourmaline?

Rob, this is Randy. We do have rights to participate if there's any available space.

But for the first initial phase, it is entirely Tourmaline, but we do have rights to bring in third parties if there is a capacity available, and we also do have rights to potentially participate in expansion.

Can you provide updates on -- how do I say this, the aspirational Trigon LPG project? I know there's been a couple of project filings from Trigon and also your reply.

So maybe you could just summarize where we're at there. And then in your response, maybe you could touch on where you see First Nations support lying for your export assets versus some of the other projects?

Rob, maybe I'll just comment on Trigon, and I'll hand it over to Randy to talk about our stakeholder relations. At the end of the day, I think it's pretty clear that there's only one entity on Ridley Island that has the ability to develop LPG handling and export and that's us.

That's been reinforced several times by the Prince Rupert Port Authority. And obviously, there's a legal court case coming up here in the spring of 2027.

I think our case is extremely strong, and we are not very worried about it. And just to reiterate, we will make sure that we protect our commercial rights all the way in any possible way.

And then finally, before Randy chimes in is our goal is to have all of our stakeholders aligned with us over the long term. We've done that over and over.

And I think Northeast B.C. is a great example of how we have really positive relationships with our First Nations.

So with that, I'll let Randy talk about the particular situation with the Mét.

Yes. So we've been -- had a strong relationship with the Mét for over a decade since we've been in Prince Rupert.

We see them as a long-term partner. We do think that we're making positive progress on the issues in hand, and we think we'll have a positive outcome in the end.

Okay?

Okay. And my last question is for Corine.

I know it's early days as you step into the role here, but I wondered if there was any thoughts on possible changes to regulatory strategy, especially as it relates to those building emissions performance standards or on the efforts to narrow the ROE gap.

Rob, thank you. So I'm excited to be here today.

Just want to say upfront, there really is no change in our Utilities strategy. The team has done a great job making improvements in the Utility, and we're going to continue to build on that foundation.

As we think about the regulatory strategy tied to what you were mentioning, I'm going to just maybe go right to gas bans. And we're going to continue to oppose gas bans as they limit customer choice and customer affordability.

The Mid-Atlantic, it needs natural gas to support reliability, long-term energy security and customer affordability. And restrictive policies only increase regional energy challenges.

So we're going to continue with both our legal and our advocacy strategy that supports ultimately what we're trying to earn our regulatory strategy. And at a high level, we have no change and we're going to continue to close our ROE gap.

There's no change in our focus there. And we're going to continue to put safe pipe into the ground to improve the safety and security of our system.

And customer affordability is obviously top of mind. So we're going to double down on our operating costs and our capital cost efficiencies so that at the end of the day, it's more affordable for our customers.

Rob, I was just going to add a little bit there on the gas bans. Like if you think about it, PJM is short energy and short energy in a big way.

For a county or a city to think about limiting the available sources of energy and trying to shift that to the power grid is just nonsensical. You're making an energy shortage problem even worse.

And then finally, you've seen different outcomes on a legal basis at different district courts in the U.S. This obviously is leading to the Supreme Court.

And we just recently see the DOJ and the DOE really weigh in on these items. So we're very -- we have a real positive lean that this will ultimately get resolved at the Supreme Court in a fashion that makes sense for everybody.

Yes, I agree. It just doesn't make sense for everybody to focus on affordability and then at the same time, turn around and limit choice.

This is Eli on for Jeremy. I just wanted to touch on MVP quickly.

I know that the pipe is flowing and there's some expansions in the works. But if you could just remind us on your broader strategy with that asset?

And how should we think about the opportunity for future monetizations there?

Eli, this is Jon. So if we broke it into the 3 pieces, we would agree with your take.

The mainline continues to perform very well. And with each passing month, our investment thesis to retain that asset continues to be reiterated.

So we're very happy with the investment there. MVP Boost continues to push forward for a mid-'28 in-service date.

One permitting issue continues to get worked through. And ultimately, we think that's very resolvable and in line with what we've talked about in the past.

The build economics on that are very strong around a 3x build multiple. And then lastly, on Southgate, it's progressing very well.

All the regulatory approvals are in place. Construction currently taking hold right now.

Welded pipe started going in the ground in July, and you would have seen this out of EQT's disclosures, but the partnership elected to accelerate capital spending and ultimately try to target an early year-end in-service date. So things are progressing along very well there.

From a long-term holding perspective, I think you should probably consider it as a perpetual investment. We're very happy with obviously how all those things are going and the EQT team is very strong.

And ultimately, we think there is going to be incremental growth opportunities that come over the long term.

Awesome. And then I know there's been a lot of discussion on REEF and future optimization phases, and there is sort of the further expansions bucket on one of your slides.

So maybe we can just dive into that a little bit and think about the size there and the cadence of sort of future FIDs we might get across other projects that could kind of fit within your Midstream portfolio. Just any color on that bucket would be great.

I think, Eli, if you look at, I think, one of the slides we have in the deck, we show that there's significant growth potential coming out of our global export platform. Really, that's on the back of incremental gas egress and the development of the data centers in Alberta.

So for every incremental Bcf a day of gas that's needed or can get to export markets, we see somewhere in the range of 35,000 to 50,000 barrels a day of incremental LPG supply becoming available for export. So if you work that through from 2030 to 2040, you kind of see that you need about -- you need an incremental phase of REEF every 2 or 3 years.

So we're targeting Opti II to be in service by -- in the late 2020s. So that would point to an Opti III in the early 2030s and then Opti IV in the mid-2030s and so on and so forth.

Obviously, ethane is an incremental opportunity on top of that, where the initial phase would be something in the range of 60,000 barrels a day, but that could grow substantively over time. The great news is that the REEF common facilities are able to handle 500,000-plus barrels per day of exports.

So that gives us a tremendous growth platform over the next decade. And as egress comes forward, as exports grow, there will be the need for incremental gas processing, fractionation, rail loading and all these great things.

And we have irons in the fire across our footprint in Alberta and in Northeast B.C., and we see strong opportunities with further debottlenecking in Northeast B.C. plus the North Pine expansion.

And then gas processing opportunities in the Alberta Montney. So we're super excited about the potential growth outlook that we have in our Midstream business.

I just want to go back to the propane export position and you have a bridge there with respect to Opti II potential service, Opti III and then ethane Phase I. I'm just curious, you're thinking about sequencing that -- those projects, are you able to just think about your manpower and the site and your balance sheet?

Are you able to build or start construction on more than one of those? Or do you need to sequence it in a way that spread out those projects?

So with Opti II, Ben, we have our permits in hand. So we're able to start construction any time now.

The issue that we want to -- the issues that we want to finalize before we go to FID is, number one, having a firm capital cost estimate at the Class III level. We should have that in the next few months.

The second is what we talked a little bit earlier about is making sure that we have sufficiently derisked the cash flows for any expansion, and we're -- we have line of sight -- very strong line of sight for incremental tolling contracts, again, which we expect to have in hand within the next couple of months. So that would lead obviously to an Opti II FID.

With ethane and Opti III and so forth, we would need to make regulatory filings to get the appropriate permits to start building. But those all can happen.

If you ever -- if you have a good look at our REEF plot plan on our website, there's lots of room for all of this to happen. Really, the gating items is the timing of the regulatory approvals.

Remember that most of this equipment is -- we don't need to build another wharf. We don't need to add any loading platforms or things like that.

So all the common infrastructure is completed, and we're just bringing in extra storage and compression that's predominantly being built off-site and can be transported to REEF. So we're very well positioned and risk managed about how we continue to expand the export platform then.

Yes. And I think the only other thing, Ben, is I think you have balance sheet in there as well.

I mean we are not concerned on the balance sheet perspective at all. I mean I talked about in my prepared remarks, but we've got the capacity to deploy $1.6 billion to $1.8 billion a year.

I mean so we certainly, from a funding capacity perspective, wouldn't have any concerns. And that's one of the real benefits of the balanced business model we have between Utilities and Midstream.

And you would have seen that over the last couple of years that if we have attractive projects in the Midstream business, we can flex a bit more capital there. And then in periods like this year, when REEF is nearing completion, we flex more in Utilities.

So from a financing and balance sheet perspective, not concerned.

Got it. And maybe another one on the Utilities side of the business.

You mentioned the Maryland case was a constructive outcome. Can you unpack that a bit, just maybe some of the things you like, some of the things you didn't like?

And then maybe just broader related to that, the 70 basis points looks like a nice improvement from what you've been highlighting before overall. What's been a key driver of the change?

Thanks, Ben. I would say that the key driver for the constructive outcome was our planning process and us working with the commission and the staff to better understand at the beginning of the process, what they were looking for.

So as we were prepping and going into it, I think we were just better planned to be blunt. And we have seen positive movements with Maryland PSC.

So we're in general -- we're encouraged with what we're seeing for results there.

And I just wanted to check the previous messaging on the ROE was the 100 bps plus or minus around that, and you're doing about 70 basis points you're expecting this year. Is that more cost reductions that's driving the gap moving that any more?

So we're a little bit higher than that this year, Ben. Last year, we exited around 100 basis points.

This year, we'll narrow the gap a bit. You're right, though, on a target basis over the long term.

We want to be to that 50 to 75 basis points because factoring in, as you well know, the historical test year lag. But with optimization, we do have the ability to help fill that gap.

Just sticking with the ethane theme here. Can I confirm if ethane is covered under the exclusive right your JV has to export LPGs?

And if not, is there an opportunity to form partnerships locally, particularly if REEF is capped at 500,000 barrels a day of capacity?

Well, I think I'm just going to kick that over to Randy. Thanks.

Yes, ethane is included in that exclusivity. As far as we are looking at partnerships for ethane, so we are looking at supply partnerships.

We do -- as Vern talked about, there is 500,000 barrels a day of ethane being reinjected into the gas stream, and there's the straddle plants that can just cool down and capture those -- that ethane. So we don't think there's a lot of investment or significant investment upstream and the ethane supply will be available.

But we need to look at the railcars, and so we're looking at partnerships for that and also the offtake would likely be a partnership as well.

And I think, Maurice, ultimately, to get to the global export part of it, there is more land that we can acquire on Ridley Island should there be extremely robust demand for both LPGs and ethane.

It's great to hear. And if I could just quickly follow up with that.

I think you mentioned earlier in the call that you're going to seek higher level of tolling for these ethane exports. Just wondering what other aspects of commercial or even a return perspective of an ethane infrastructure differ from an LPG propane-butane infrastructure?

Yes, I would think of it more as traditional energy infrastructure where you want to do it under a take-or-pay contract, effectively, Maurice.

Apologies if you had addressed this before, but I wanted to ask about the economics of the Groundbirch Rail venture with Tourmaline. It looks like there is at least like a minor amount of CapEx that got thrown into the budget this year.

So curious what the quantum of CapEx might be? And then like is the EBITDA contribution just simply the 10,000 barrels a day that's getting tolled?

Or is there other contributions? Just trying to frame the build multiple around this project.

It's Randy. Yes, it's very minimal capital for us.

It's less than $20 million for us to participate in the rail yard. But the benefits of that rail yard is that we see significant savings in the rail costs, both in rail -- our fleet, our rail cost getting to the export facility, our storage costs.

And so that's why we want to make that investment. We also see that our North Pine facility and this Groundbirch facility, there should be some synergies between the 2, and we do see them additional rail savings.

And of course, the export tolling is an added benefit.

It's an extremely lucrative transaction for us on a capital deployed basis just because there's a huge opportunity to -- for us to reduce our operating costs.

Yes, yes. Okay.

That makes total sense. And then last one, on shipping costs, like I understand that you guys have locked in the 2026 exposure already.

So covered on that. But curious if all of 2027 remains open.

And just like as things stand, I mean, is there any risk of upward pressure on costs and downward pressure on margins in the export business from shipping exposure next year?

It's Sean here. I'd say the answer is essentially no.

I mean we have 3 time charters right now. We're getting another one delivered next year.

So we remain very comfortable with the exposure we have from a time charter perspective. So we definitely are not open as we enter next year.

We are taking on an additional time charter. So we'll have 4 next year and are comfortable with our position as we move into '27.

Thanks, everyone, for joining the call this morning. The Investor Relations team is around if anyone has any further questions.

Have a great day.