Topics Du Jour - Carbon Agreement Reaction; Arder Meeting Takeaways

Research evidence excerpt

Topics Du Jour - Carbon Agreement Reaction; Arder Meeting Takeaways

tees and direct subsidies

would be required to make the project genuinely viable for ENB (as mgmt had outlined previously).

BC remains opposed to the project, as do some First Nations, suggesting Ottawa would need to be

forceful in pushing the project through if it's to become a reality. We are of the view that producers

are not especially keen on compromising much for a West Coast pipeline given the easier/cheaper

potential for >1.5 mmbpd of incremental egress via SBT, MLO2 and TMX expansions. There's

also the political dimension of Premier Smith being perceived to have accepted a suboptimal deal,

despite what we view as strong leverage, and against the backdrop of a possible Alberta separation

referendum this Fall (even more to unpack there). All told, we think the political/carbon situation

will continue to evolve.

Arder Meeting Takeaways (PPL Greenlight Advantages): We hosted investor meetings with

consultants Arder Energy last week in Toronto. Arder was not positive on AECO prices, primarily

given the lack of demand growth at least until larger LNG projects arrive. Arder believes LNG Canada

Ph 2 takes FID this Fall and could be in service in 2031-32. One interesting comment that was

new to us was on Bish LNG (Haisla Nation owned, and formerly CVX's Kitimat project) being more

advantaged in several respects relative to the further along Ksi Lisims project, citing the latter's

pipeline costs, power supply and some First Nations opposition. Another key takeaway was on data

center development. Arder does not expect very much of the 20 GW data center queue to be built

anytime soon, but agreed with us that the large AESO grid allocation is a critical advantage for PPL's