Welcome to the Enbridge Incorporated Second Quarter 2021 Financial Results Conference Call. My name is Frenzy, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session for the investment community [Operator Instructions]. Please note that this conference is being recorded. I will now turn the call over to Jonathan Morgan, Vice President Investor Relations. Jonathan, you may begin.

Thank you. Good morning, and welcome to our Enbridge Inc. Second Quarter 2021 Earnings Call. Joining me this morning are Al Monaco, President and Chief Executive Officer; Colin Gruending, Executive Vice President and Chief Financial Officer; Vern Yu, Executive Vice President, Liquids Pipeline; Bill Yardley, Executive Vice President Gas Transmission and Midstream; Cynthia Hansen, Executive Vice President, Gas Distribution and Storage; and Matthew Akman, Senior Vice President Strategy and Power. As per usual, this call will be webcast and I encourage those listening on the phone to follow along with the supporting slides. A replay of the call will be available later today and a transcript will be posted to the website shortly after. We will try to keep the call to roughly one hour. And in order to answer as many questions as possible we will be limiting to one plus a single follow up if necessary. We'll be prioritizing calls from the investment community. So if you are a member of the media, please direct your questions to our communications team who will be happy to respond. As always, our investor relations team will be available for any detailed follow-ups after the call. Onto Slide 2, where I'll remind you that we'll be referring to forward-looking information on today's presentation and Q&A. By its nature this information contains forecast assumptions and expectations about future outcomes which are subject to the risks and uncertainties outlined here and discussed more fully in our public disclosure filings. We'll also be referring to non-GAAP measures summarized below. With that, I'll turn it over to Al Monaco.

Okay. Thanks, Jonathan. Good morning, everybody. Well, first just to kick it off, as you see on this cover slide here, it really illustrates one of the key points we'll be speaking to today, which is the strong recovery that's underway right now. I'm going to start with the mid-year recap followed by an update on the fundamentals and how our business is nicely positioned for the energy transition. Colin will take you through the numbers and this time around our progress on sustainability. This next slide is our 2021 priorities dashboard. Our core businesses performed very well, high utilization across Liquids, Gas Transmission and the Gas Utility. That drove strong first and now second quarter numbers, so we're confirming full year EBITDA and DCF guidance as you saw in our release. The $17 billion capital program is on track with $10 billion scheduled for in-service this year and that will drive our three-year 5% to 7% Bcf per share CAGR outlook. Our balance sheet is in great shape. In fact, Moody's upgraded us to Baa1. So we're now at that level across our four agencies. And the sale of our minority stake in the Noverco provides more buffer and releases great value for a non-strategic asset. While upstream investment remains disciplined, we're seeing a pickup in commercial activity around the U.S. Gulf Coast in particular, system modernization and low-carbon opportunities. And we continue to bolster our industry-leading ESG position. MSCI reaffirmed our A rating, so we're pleased with that. So the message is that we're on track to deliver on the 2021 priorities we laid out at Enbridge Day last November. Moving to Slide 5. The economic recovery is gaining momentum. Global fuel demand has rebounded but not fully back to pre-pandemic levels. Transport sectors came back with gasoline,…

All right. Thanks Al and good morning everyone. I'll start with a quick overview of our $17 billion capital program. As you know, it's a big growth driver for us, but not our only one. We're making great progress on our program across the footprint. And we're on track as Al said, to deliver $10 billion of projects into service this year. This well-diversified growth portfolio should generate, a significant step-up in cash flows really a conveyor belt, if you like of additional cash flows for many years. And in turn, considerable financial flexibility and investment capacity which is clear on Slide 19. In addition to our secured growth execution, we've actively recycled capital, at attractive valuations over the last few years, high-grading the portfolio and further strengthening our financial position. Our recently announced sale of our interest in Noverco at 29 times earnings multiple is a great example of this. When that transaction closes we'll have completed over $9 billion of asset sales since 2018, all while growing total cash flows. And as you know deleveraging while growing is not exactly an easy feat. Today our balance sheet is where we want it to be and across the board our agencies recognize the strength currently, even now prior to executing on our 2021 capital program. We've been BBB+ rated with three agencies for a while now and the upgrade from Moody's last month makes four-for-four. And as I mentioned our execution will lead to even stronger metrics in 2022 towards the bottom of our target range or even below. Our preference even then will be to live near the lower end of that target range to preserve a maximum optionality. On to Slide 20 and a quick overview of our capital allocation priorities, we said this before but it…

Okay. Thanks, Colin. Just before we open it up just a few takeaways. I think 2021 is -- it should be clear from that run through a pivotal year to delivering on the three year outlook that we outlined at Enbridge Day last year and progressing well. The businesses are running at high utilization and financial performance as you just heard is strong. Execution of the program is tracking to plan with that $10 billion that Colin just referred to. The pace of the economic recovery gives us confidence around demand for conventional energy over the medium-term. And importantly, our assets are essential to the energy transition. As you heard we're making good progress on our low-carbon investment strategy in a number of areas. And finally our leading position on ESG is getting stronger yet and good progress on our goals there. So we'll begin the Q&A session now. The team is on the line here. I'll hand off as required on specific issues.

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Jeremy Tonet of JPMorgan is on the line.

I just want to start off here on the RNG side really. I just want to dive into the strategy a little bit. Just wondering what the current C&I demand for RNG that you're seeing here? Is there any differentiation by sourcing carbon attribute? Just wondering if commercial industrial customers are interested in RNG for the negative attributes.

Okay, Jeremy. Hi. Well, I think maybe Cynthia will have her speak to this given she is moving that strategy along and has good engagement with the customers there. So -- and then if Bill has anything to add on the Gas Transmission front.

Thanks, Al. Yes, Jeremy, we're having some really strong interest from various commercial and industrial users of course across Ontario and Fort of Quebec we have the opportunity to deliver that. And then our -- we've been able to facilitate the delivery of RNG across North America because of course it trades in a fungible way. So we are seeing lots of strong interest. There is a really great opportunity to continue to build on that as we have the partnerships as Al mentioned with Comcor and Walker Industries to really help build that out across Canada. So it's something that we're seeing some strong interest. We've been able to facilitate some of those transactions and we look forward to the opportunity to expand on that in the future. William, you wanted to add some.

Yes, I'll just add a couple of things. First of all, I think, on the C&I side, yes, we are seeing direct interest. But in a lot of cases, Jeremy, it's the local distribution companies like some peers that are, as you know, our major customers that are looking to work with us to bring RNG in from various sources. And they're motivated. Their main trade associated is in EGA, even if it's just for residential mode so getting away from C&I and saying, hey this could be half of our gas in the -- by the middle of the century. So there's an awful lot to do here between Cynthia's utility and our fairly substantial transmission system.

Got it. So it sounds like it could be a supply diversification away from Russian LNG in the winter in the Northeast.

You have to get...

I wanted to shift gears a little bit here on carbon capture. I just wanted to see how you guys think about the total addressable market here? It seems like there's been a lot of focus on the oil sands producers, but it also seems heavy industry -- there's no other path to be carbonized besides CCUS. And just wondering how you think about that and the opportunity set both in Canada and I guess the U.S. as well.

Yes. Maybe I'll start it off and Vern can add, Jeremy. Well, first of all, you're absolutely right. And the numbers on the total addressable market vary. I mean, the bottom line is, it's a big number. It's likely in the order of $2 trillion. And I go back to my comments earlier on. If you look at the sources of emissions reductions opportunities, I think everybody is familiar with them, but energy efficiency certainly renewables will be a big chunk, but a very significant and for certain chunk will be CCUS. We just don't see how we meet the goals without CCUS. So the capital is going to be large. And obviously, existing infrastructure players like ourselves are going to be involved. And as I said earlier in the comments, we're thinking that the opportunity set for us really covers from the upstream capture part through of course the transportation and ultimately sequestration. And if you look at the assets, for example, in the utility good storage assets there that are applicable. Bill's gas transmission has got great storage there. And, of course, if you look at the overall picture here in Canada and the oil sands and the future of the oil sands, it's pretty obvious that CCUS will be a big part of that. So it's large. As I said earlier, it's not immediate. These things will take some time to work out especially as the policy and incentive framework rolls out here over the next little while, but no doubt big opportunity. Vern?

Okay. Thanks, Al. Jeremy, you're absolutely right. The industrial opportunity is very substantial. As you know, cement, plastics, power generation all kinds of other things are really critical to what we do as a society and CCUS can make a meaningful difference in our emission reductions. So, I think the EIA has put out stats out there that to meet global net 0 goals and CCUS is anywhere between 9% and 30% of the total carbon abatement we want to see by the middle of this century. So, we're actively talking with customers both in the oil sands, as well as across heavy industry to see what we can do to help reduce emissions. Obviously, in Canada, we need a little bit more clarity on the investment tax credit. But in the U.S., we're also very active. So, I think in our announcements today, we talked about an opportunity to work with a new technology player, Svante, and we will be focused with them looking at industrial CCUS implementation across North America.

Got it. That’s very helpful. Thank you.

Okay. Thank you.

Your next question comes from the line of Robert Kwan from RBC Capital Markets. Your line is now open.

Hey, good morning. Questions here just on capital allocation. And starting with asset monetization. Your strategy has really shifted away from as needed for funding to something more opportunistic like you've done with Noverco. So, I'm just wondering are there other material opportunities to do more that we might see in the relatively near future? And if so, how do you think about the timing of that? Is it just selling it down when it's opportunistic and deploy the capital later, or is it going to be more about timing for when you've got deployment opportunities?

I think the main driver is the former. And really, it's driven by, I guess, Robert, the constant look at the portfolio and whether or not, we can monetize assets at a superior value as you've seen. I mean, I think the bigger picture we're generally happy with our asset mix, certainly, the commercial structure that underpins them. We have very little G&P exposure now. We see ample conventional runway in those businesses. And as I just went through, the businesses support our strategic actions to support the transition. We look at every possible opportunity to release value. I think we've proven that we'll take action. I think over the last three years, it's been about $9 billion of assets and with this latest one Noverco as well. So we'd certainly consider looking at other things if we received full -- more than full value for them. So it's going to be opportunistic. As Colin pointed out, the balance sheet is in very good shape. So it will be selective monetization to generate value where we can on a, I guess, a specific basis when we see those opportunities.

Got it. And then if I kind of continue on capital allocation you spent a lot of time today talking about a lot of the energy transition opportunities. And it seems like that portfolio of opportunities is getting bigger and bigger. So, I guess first what approach do you take to ascribing value to some of the soft factors around it being ESG friendly. And I guess specifically thinking about your willingness to accept single-digit equity returns to some of the solar self-powering? And then I guess the second part of it is as this pool of potential projects grow. If you exceed that $3 billion to $4 billion in capital threshold that you set out does that change how you approach capital allocation with respect to the pecking order or your priorities of maintaining that leverage range and your self-funding constraints?

Okay. Well Colin go ahead.

Yes, Robert. Yes, thanks for that question. We've got a robust and mature investment framework that we've used with discipline for many years here. And we don't generally accept single-digit returns maybe anywhere except in Cynthia's business where there's a regulatory compact. So, our return thresholds are generally higher than that. And -- as we think about energy transition investments, we think about it generally in the same lens. We're an infrastructure company. We want to secure a return of and on our capital. And we're not thinking about energy transition investments really in an R&D, bleeding edge kind of way. So we're going to be pretty disciplined. As we mentioned, there is room for energy transition, capital investment in our financial capacity outlook within that $5 billion to $6 billion per year. We've got excellent line of sight to $3 billion to $4 billion and everything else will kind of compete against each other, including energy transition. However, there is -- just around this maybe this is where your question was going. We do consider ESG and have for a couple of years in our framework to either reward or penalize different investments around our hurdle rates. So, that's how we're thinking about it. It's probably more of the same, Robert?

It's all -- I think maybe just to round that out, the way we're thinking about the transition at 50,000 feet, it's really a parallel effort with the core conventional growth that we have. So, if you look at what Colin said about the capital capacity that we have, it's pretty clear that at least $3 billion to $4 billion of the $5 billion to $6 billion in total capacity, let's call that core conventional business, and with that, the returns that you're used to seeing from us. So that extra $2 billion in capacity really is -- projects will have to compete straight up whether it's Matthews' renewables business or whether it's solar cell power or other types of investments, including more organic growth. And if you look at how we've prosecuted RNG and hydrogen in Cynthia's business, it's basically the same type of returns that we've seen. So Colin's point about being disciplined, I think is the key here. And although, it's important to carve out some capability for the transition, we don't expect to take a significant reduction in return.

Hey, that’s great. Thank you very much.

Okay. Thank you.

Your next question comes from the line of Shneur Gershuni from UBS. Your line is now open.

Good morning.

Hi.

I was wondering if we can start off -- or I guess can really continue the discussion on the CCUS side, since it's been topical today. You announced the MOU today that you have in place. I was wondering if we can sort of talk about the technical aspects. You made a comment in your prepared remarks, I think it was $1 billion of capital equals, I think it was one mega ton for example. I was wondering if how -- if you can sort of talk about utilizing your existing pipeline systems for moving carbon, what are the technical aspects that we need to think about handle the higher pressures. Do you need thicker pipeline walls? Do new systems really have to be built, or can some of the more recently laid pipe actually handle? I'm just kind of wondering if you can sort of talk us through the technical aspects that we should be thinking about.

Okay. Thanks. Those are great questions. I think from a technical perspective, our view is that new pipelines are better than existing pipelines to manage carbon CO2 precisely. They need to operate at significantly higher pressures to deal with the liquified CO2. So, I think what we've been most focused on, is that when you go ahead and execute this kind of infrastructure, you're most mindful of kind of minimize the overall cost. So while there's going to be a need for hubs throughout North America, the shortest pipeline you can build to those hubs will be the most cost advantageous. So from our perspective, it's really looking at the individual customers' need, the emitter and trying to figure out what is the cheapest and most reliable system to set up for them. And I think in most circumstances, that's going to involve building new pipelines that have a very short distance to sequestration hub.

That makes perfect sense. And then, maybe to continue on here, I really enjoyed this slide talking about your connection flexibility and two-thirds of the $46 billion of going high-priority investments and so forth. And so you kind of have this $2 billion flex. And then, when I look at your $17 billion of secured backlog, just trying to understand how that number is going to grow over time in context of the discussion that's been going on today? How much capital are you looking at, or how many projects in terms of dollars are you looking at that could move into the secured backlog that would be classified by most investors as energy transition related capital? Is it something where the backlog can grow by $5 billion over the next three to five years, or is it something that it grows by $10 billion, $20 billion?

Okay. Well, let me start off then Colin can add. I think we've outlined certainly at the Enbridge Day and in other places. If you look at the backlog in traditional terms the way we've added it all up, they're somewhere in the order of $30 billion in that. Now we've, obviously, emphasized that not as much because we're continuing to focus on the efficiency of capital and minimizing large-scale investments. But it's around $30 billion over the next few years, and so that translates to roughly $5 billion to $6 billion a year, Shneur, and so if you kind of back into each of the businesses. You're looking at liquids roughly $1 billion or $2 a year in terms of optimizations expansions and extensions and what Vern is looking at. I think GTM is probably in the $2 billion category those modernizations expansions. We've got a lot of LNG to look at. In the utility, I mentioned it's probably $1 billion, $1.5 billion, again reinforcements, customer adds, the new community expansions that we were talking about. And then I think in Matthew's business and renewables, it's somewhere in the order of $1 billion a year. So my point is it doesn't take too much to fill up the $5 billion to $6 billion a year of capacity with our -- what looks to be our organic backlog. But again I think the $3 billion to $4 billion we've identified, we think that's locked. And then the other two are going to be very discriminating let's put it that way. So I think there's a good backlog there. We're just going to be careful on how we deploy it. Anything to add Colin?

Well, maybe just a reminder that I think Shneur you're asking about energy transition oriented capital. I'm not exactly sure what you've got in that bucket everybody's defining that a bit differently. But I think we would argue a lot of our core businesses will contribute to energy transition. So I think Al's answer captures that globally. Within a more refined definition of energy transition, I think Al mentioned there's not an immediate scalable investment opportunity in some of these areas other than renewables, which I think Matthew is pretty excited about and we can allocate $1 billion to $2 billion a year in that business in the immediate term. I don't know if that helps round that out Shneur.

No it perfectly does. Really appreciate the color today and I hope you guys enjoy your weekend.

Okay. Thank you.

Your next question comes from the line of Rob Hope from Scotiabank. Your line is now open.

Good morning everyone. Question is on the gas modernization capital of $0.5 billion to $1 billion a year. In your comments you did highlight that adding new compressors or upping the compressors can significantly reduce emissions there. I just wonder is there some additional upside here adding CCUS to the compressors or even just going straight to electric drive, plus adding in some additional on-site solar. Just want to get a sense of how you're thinking about upside flex to that modernization level.

Okay. Bill go ahead.

Yeah. So, kind of, all of the above Rob. For now the modernization that we've done to date that we're currently doing is gas for gas. So it's a replacement of gas where we're adding -- we're basically putting a new equipment that's far more efficient. But the future including things like the TVA project that Al mentioned, electric compression looks pretty good in those circumstances. And those circumstances have to be that you've got really good reliable power going to those units. It could be to your point an opportunity to site gas or to look at our existing gas and put the CCUS, a new pipeline and carbon capture on site are very close. And I will say Rob there are some places where our storage we've already proven out that there -- it's good storage for carbon. So pretty good opportunities and that like I'll just go back all of the above and with the focus on what's most economical and what reduces our emissions footprint the best.

And then maybe as a follow-up to that. If you are able to eke some additional capacity just with new compressors there, could you get customer support in terms of contracts initially, or do you think this would largely be related to new rate cases there so often?

Well, any time we add capacity, we have to go to the FERC to put it into service. So yeah I mean there are some cases where you add -- you put a new compressor in just by its nature, it's more efficient than the prior unit that it has the same rated horsepower. But in order to deliver more and get certificated, you have to go back to the FERC if that's helpful. But it makes for a very economical expansion when it does happen.

Thank you.

Thanks, Rob.

Your next question comes from the line of Michael Lapides from Goldman Sachs. Your line is now open.

Hey, guys. Thank you for taking my question. Real quick on the Liquids segment and I know this is the old economy stuff. But just curious, you've always kind of outlined at Investor Day or Analyst Days a myriad out of potential growth projects, once you got Line 3 done. Just curious, how you're thinking about some of those, meaning I don't know the extra 100,000 barrels at Southern Access or maybe Flanagan South expansion and some of the stuff on the western part of the system as well?

Okay. Thanks. Yeah we're -- you're absolutely right. Liquids Mainline and the downstream pipelines have latent capacity expansions available to them. I think we're -- the best way to describe it right now is we're in active discussions with our customers, post Line 3 to see how and when we execute those.

Got it. Okay. But do you see those as things that kind of happen not long after Line 3 come online, or is this something that could take another few years and you need to see a ramp in either production out of Western Canada kind of reaccelerate further than kind of what the producers are talking about now before those become economic?

Well, they're low cost, low permitting and fairly quick to market expansions. And I do think as we see the economy recover and as producers get confidence that the economy is coming again, we should see some good progress on those.

Got it. And last this would impact you guys that impact all the takeaway options, what you all hearing about the timeline for Trans Mountain expansion coming online? And how do you think about the dynamics of a market that's been short egress for multiple years, potentially becoming long pipeline takeaway once Trans Mountain and Line 3 are both in service?

So, I'm not going to comment on Trans Mountain's in service that I think it's best for them to talk about that. But we've been expecting Trans Mountain to come online and provide egress for quite some time now. So -- our understanding of the market here in Western Canada is there's a significant amount of heavy crude wanting to come to market from producers that hasn't just been started up yet. That's in the range of 400,000 to 500,000 barrels a day. There are some very close to completion brownfield projects with the producers that would come to market very quickly as well with sufficient egress. So once Line 3 goes into service, we'll provide a little bit more egress. Trans Mountain will provide some more egress and that should fill up relatively quickly with all of these projects that are really just waiting for that egress to show up.

Yeah. I think just a quick add-on to that Michael. If you look at the fundamentals here and we just saw this through 2020, the fundamentals for heavy are very attractive to US refiners. So, I think given that and the fact that cash costs have really come down in the oil sands, in terms of break-evens. And they've done a good job in bringing down full cycle costs. So, I think there's a pretty good opportunity here for the oil sands to surprise again going forward given those factors.

Got it. Thank you guys. Much appreciate it.

Okay. Thanks, Mike.

Your next question comes from the line of Robert Catellier from CIBC World Markets. Your line is now open.

Thanks for taking my question. And I apologize for the background noise. But I'll follow-on to what you just talked about there. There seems to be just a general attitude in producer community to conserve capital and -- ramped up production quite as quickly. And so, I'm wondering how do you see that change in customer behavior impacting US Gulf Coast strategy and also the appetite for Mainline contracting?

Well, I think our US Gulf Coast strategy remains unchanged. We see strong demand for terminaling options in the Houston area, whether that's for tankage or VLCC export having that optionality will always be important for our customers to maximize the netback on their barrels. As we talk with producers, we see a very robust demand for capacity on our system and certainty for that capacity. So, I think both dovetailing through each other were a good set of our customers want to know what they have on our system, they can use it day in and day out then they can move their crude to the best markets and maximize the value of production and refining. So, we feel very good about the US Gulf Coast strategy. And I think with Mainline contracting, I think we've done a really good job at CER and providing evidence that the offering is good for industry as a whole, that is supported by more than 75% of our current shippers and we are very hopeful for a positive decision later this year.

Yeah, Robert, I think you're right about the conservation of capital. I don't think that's going to change anytime soon. But if you think about the fundamentals of crude, obviously like primarily in this case, they're still pretty strong in terms of exports. And we know that there's a runway for crude demand going forward. You're seeing that happen today. So the export strategy that we have around the Gulf, I think that's intact including on the LNG front that Bill runs. But the key to all of this is and you're seeing more pressure on this keeping costs down. So we're focused on being as competitive as we can and really working supply chains and doing what we can to make sure that tariffs and tolls are low enough to attract these customers.

Thank you. That's a good answer. But also, a good segue to the other question, I had probably more appropriate for Matt. As you mentioned, we're seeing an inflationary environment in terms of capital spending. And that seems to be translating also into the offshore wind market. So I'm curious to know, if there's been any improvement in the behavior, if the bid activity is becoming more rational in the offshore wind business.

Go ahead Matt.

Sure. Hey, thanks Rob. Probably, the answer industry-wide is no. Not a lot of – not as much discipline as we'd like to see generally in that market. I don't think that's just relative to inflation, but just general appetite for the asset class. So we're taking a really selective approach to the business. We've got our existing pipeline of assets, which have largely fixed price contracts associated with construction that were locked in previously, and we're on track and on budget on those construction projects, which is great. Going forward, we're just going to be very disciplined, especially in terms of these high-priced leases, we're going to go to places where we don't have to put up that kind of speculative dollar in quantity, because as you point out the discipline hasn't exactly been there across board, but we're finding select opportunities, where we see good value still in that market. And based on our partnerships and competitive advantages and capabilities our pipeline continues to move forward on the development side.

Okay. That's great. Thank you.

Okay. Thanks, Rob.

Your next question comes from the line of Ben Pham from BMO. Your line is now open.

Hi. Thanks. Good morning. Also a question on renewable power, you had the East West Tie line coming in 2022. Can you comment on whether electric transmission – is that – is that something you want to build on to expand look at new transmission opportunities, or is that more in that noncore opportunistic bucket?

Matt, do you want to respond to that or…

Sure. Hey, thanks Ben. I think it is opportunistic. I think, it's the latter category, primarily. Transmission is something that is still very challenging from a permitting standpoint. Obviously, it's – we need more transmission for renewable, but it's easier sort of said than done. So our focus is going to be primarily on the contracted renewable power projects. And we don't have a lot of plans to invest in transmission. As far as East west Tie the project has gone really well. And so that one we like a lot. It is a rate base regulated return type structure which we like. And it's right on track and should be in service early next year. So at that time, we'll see what we do with that, but we like the asset a lot and it's got a good solid safe return.

Okay. Great. And then moving to the Canadian LNG export opportunity, I haven't asked you guys this for a while. There's some news flow out there new partnerships formed. Could you remind us your position there on LNG export? And any sort of maybe more higher conversations you had recently?

Okay. Well, Bill do you want to take that one?

Yeah. Sure. There are obviously big opportunities, and would like to see things get organized. It's actually quite exciting to see what the Niska announced recently and them having a project that's sort of led by First Nations. So that's good and that fits well with us. We engage with the local communities pretty well and with First Nations as well. I think our West Coast Gas Connector project is actually pretty well situated for anything new that happens in Western Canada. So those are real big opportunities. And then and you're going to approach those obviously very cautiously, but good opportunities. And then, I'll just give in a comment about the Gulf Coast. The Gulf Coast is actually seeing a bit of a resurgence or at least a pickup from where they left off maybe 1.5 years ago. And our efforts there though, they're not as grand. They're very manageable and there are a number of them. So good opportunities in LNG for us. Hope you didn't mind if I got that in Ben.

Just one other thing I'll add to in BC. Of course, the good news is we're well situated there on our West Coast mainline. And so whatever happens out there into the future aside from the connector itself that Bill was talking about it's going to be good for our existing business there.

Hi, it's very helpful. Thank you.

Great. Thanks, Ben.

Your next question comes from the line of Linda Ezergailis of TD Securities. Your line is now open.

Thank you. From an operational perspective recognizing that your energy services are dealing with a number of factors compounding the negative results. I'm just wondering, if you could give us a sense of what sort of demand charges we might expect prospectively, or will they be diminishing over the next year or two? And would you, just renew them opportunistically? Can you comment on your strategy within energy services generally?

Colin?

Linda, yes Colin. Yes, good question. So I think what you're seeing flow through our quarterly results right now is pretty much worst-case scenario. So I don't see any worse than this. It should get better as a conditions improve. Any one of those three strategies we typically see some value from. And secondly, if not we do have contracts that roll off in the later days and taper down. So I look forward to seeing this improve.

But no change to strategy?

No. No. It's a small business. It's -- I think it's smaller than our peers marketing businesses. It's typically back to back. It's tightly risk controlled. It's worked well for us last year was a huge year. This year not, but it still fits and it typically generates 0 to 1% of our EBITDA. So it's well contained.

Okay. And recognizing about the Alliance pipeline is not a big part of your business but maybe just a comment generally on recontracting in the natural gas pipeline, specifically Alliance and how that might be influenced if at all by some of the emerging West Coast LNG export opportunities potentially influencing duration or level of interest for that asset?

Bill?

Yes. So I think you hit it, Linda. Our Alliance pipeline is probably one of two assets, where we look carefully at recontracting for the future. The rest of them they really -- we really don't see an issue with. An Alliance is all about basis. However, it has the added benefit of going to Aux Sable with liquids. And that's a major selling point that differentiates it from others. So we had a pretty big recontracting year over the last 12 months and we were able to recontract albeit for shorter term understandably. And we expect that to continue. I will say lately, we've seen some movement -- some positive movement there in basis. The future I don't know. I mean LNG is a ways away. So it's a bit difficult to tell whether, that's going to have a material impact. But overall you would think that would be a positive for Alliance.

Thank you.

Thanks. Good morning. So I see you've got 10 to 15 RNG projects underway in Canada. I guess my question is do you plan to enter the US market at some point? I know the trade-off would be you wouldn't have your utility as a customer. But clearly you have expertise in the market there as big. So would you be open to producing and selling RNG in the US to third-party customers?

Okay. Well maybe conceptually we'll have Cynthia answer that. But I know Bill has got some comments here too on how this relates to his Gas Transmission business.

Sure. Thanks Al. You're right. The experience that we're gaining by developing these projects the RNG projects, how we're working with the various participants and our customers is something that we can build on. So we have obviously, the relationship that we've announced in Canada with Walker and Comcor that's going to help us continue to build that expertise and across. And I know both Bill's team and my team have been talking about what that future could look like with US. And while there are instances where we could tie into some of the existing infrastructure that Bill has in the US we do have obviously, an opportunity to take and leverage the knowledge. So I think it's something that Bill, can expand on but we're looking at it and again it fits within all of the criteria that Al and Colin have talked about. It's something that could eventually be developed, but maybe Bill you can expand on how your team has been addressing the US interest.

Yes. Thanks Cynthia. Yes, I mean, this is a huge opportunity for us in the US, and we're very lucky to have the experience that Cynthia's team has and has generated and continues to generate with the sort of cutting edge projects on the RNG front. For us, our infrastructure from the Gulf Coast over to Florida and all the way up to the Northeast, we would go by an awful lot of potential source sites for RNG. And it's probably two opportunities. One, serving the local distribution companies, which is an obvious one and partnering with them to do that. But then second, some of these more closed-loop opportunities where you have major industries, major farms that want to get credit for their operations, and basically serve them with the RNG that they actually gets produced into our system. So I think the opportunity because of our reach is tremendous.

Great. Thanks. And then can you just give us a sense of how large the Ridgeline expansion project would be either from a CapEx or capacity perspective just looking for some bookends around the project. Thanks.

Go ahead Bill.

I'm sorry. I know it's about a $1 billion project and it's basically living in compression along our existing right of way in Tennessee.

Okay. Thank you.

We have reached our time limit and are not able to take any further questions at this time. I will now turn the call over to Jonathan Morgan for final remarks.

Thank you and thank you for taking the time to join us this morning. We really appreciate your ongoing interest in Enbridge. As always, our Investor Relations team is available to address any questions you may have following the call. And once again, thank you and have a great day.

Thank you, ladies and gentlemen. We appreciate your participation. This concludes today's conference. You may now disconnect.