Gibson Energy Q3 2026 Earnings Call Transcript

Gibson Energy (TSX:GEI) reported third-quarter financial results on Tuesday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

Gibson Energy reported record third quarter 2026 results, with consolidated adjusted EBITDA reaching $193 million, driven by strong infrastructure and marketing performance.

The company completed the Wink to Gateway project and sanctioned the Chauvin expansion, which is expected to increase system capacity by 50%.

Future outlook includes targeting at least 7% average annual infrastructure adjusted EBITDA per-share growth through 2030, with potential to deploy up to $1 billion in growth capital.

Gibson Energy’s marketing division excelled with $35 million of adjusted EBITDA, exceeding the $0 to $40 million guidance range, primarily due to strong refining margins.

Management emphasized continued focus on cost reductions, efficient business growth, and maintaining a strong balance sheet, with leverage improving to 3.9x from 4.2x the previous quarter.

Full Transcript

OPERATOR

Good morning, everyone. Welcome to the Gibson Energy third quarter 2026 conference call. Please be advised that this call is being recorded. I would now like to turn the meeting over to Tom Hades, Manager, Capital Markets and Treasurer. Mr. Hades, please go ahead.

Tom Hades (Manager, Capital Markets and Treasurer)

Thank you and good morning, everyone. We appreciate you joining us this morning to discuss Gibson’s third quarter 2026 results. Joining me today is Curtis Philippon, President and Chief Executive Officer, and Riley Hicks, Senior Vice President and Chief Financial Officer. Before we begin, I’d like to remind listeners that today’s call will include references to non-GAAP financial measures and forward-looking information, which are subject to certain assumptions and risks. Additional information, including reconciliations of these measures and related disclosures, is available in our investor presentation and continuous disclosure documents on SEDAR+ as well as on our website. With that, I’ll now turn the call over to Curtis.

Curtis Philippon (President and Chief Executive Officer)

Thank you, Tom, and good morning, everyone. We had a great third quarter with record infrastructure and consolidated adjusted EBITDA and very strong marketing results. I’ll start, as always, with safety and execution. Safe and reliable operations are foundational to everything we do at Gibson. During the quarter, our team safely completed the operational integration of Chauvin and brought the final components of Wink to Gateway into service while continuing to operate reliably and deliver for our customers. As our growth program builds, maintaining that execution discipline will remain critical. Wink to Gateway is a good example. The project is now complete and in service. We completed the twinning of the Harvest connection at Gateway earlier this year, and the new 100,000-barrel tank at Wink is now in service.

Together, those investments complete the integration and debottlenecking work between the two assets. We are already seeing the expected operating benefits. Gateway continues to deliver in a challenging export market. Historically high tanker rates and broader disruption in global crude shipping are affecting export economics and changing customer shipping patterns. Our team has worked closely with customers and remained flexible as the market has changed.

That customer focus, together with Gateway’s ability to accommodate a range of vessel sizes and operating requirements, has allowed the terminal to continue to deliver despite the difficult backdrop. We do not expect freight rates to normalize quickly. Over time, we expect growing Permian production, improved connectivity and a more normal shipping environment to position Gateway for meaningful additional upside. More broadly, the disruption in global energy markets is reinforcing the importance of secure and reliable North American production, and Gateway helps our customers connect that supply to the world.

Turning back to Canada, Chauvin has exceeded our initial expectations. Production in the Mannville remains strong and we are seeing potential opportunities to bring additional barrels into the system and ultimately through Hardisty. The Hardisty connection remains on track for completion in the first half of 2027. Today we are also announcing that we have sanctioned the Chauvin expansion project. The project will increase system capacity by approximately 50% upon completion and is supported by strong commercial interest.

We’ll advance the expansion work through 2027. We also see potential opportunities to add producer connections and laterals over time. This is exactly what we expected Chauvin to do: extend our reach into the basin, bring more barrels into our network and create additional value at Hardisty. The market has also demonstrated the value of our integrated platform. Strong crack spreads created attractive opportunities at Moose Jaw, while wider Canadian heavy crude differentials increased the value of the terminaling, logistics and market access services we provide across our network. Strong Canadian production, higher Venezuelan heavy crude imports into the U.S. Gulf Coast, high tanker freight rates and pressure on available pipeline capacity have combined to produce some of the widest Canadian heavy crude discounts we’ve seen in recent years.

Those conditions create real challenges for our producer customers. Our role is to help them work through those challenges, access the best available markets and improve their netbacks across our Canadian and U.S. network. Terminaling, logistics, pipeline connectivity and market access give customers options when markets are disrupted. At Hardisty, our connections to crude-by-rail and diluent recovery services provide additional flexibility when pipelines are apportioned and differentials widen.

Our marketing team works alongside those physical assets to develop practical solutions for our customers to access the best available markets and improve their netbacks. The assets create flexibility and the marketing team helps customers use it. Looking beyond the quarter, the need for additional Canadian infrastructure is becoming increasingly clear. Production continues to grow, existing transportation systems are operating under increased pressure and industry attention is turning towards the next wave of egress. For Gibson, we do not need to predict which major pipeline moves first. All pipes are good pipes. More production and more egress create demand for gathering connectivity, terminaling and market access.

With our positions at Hardisty and Edmonton, Gibson is well placed to benefit regardless of which projects proceed and when. We are already seeing that translate into increased commercial activity. A number of opportunities have advanced meaningfully since Investor Day. There’s still work to do and every project must have the right customer support and meet our return thresholds. But the quality and scale of the opportunity set continues to improve and we expect to have more to say as those discussions progress.

That growing opportunity set reinforces the targets we presented at Investor Day. We are targeting average annual infrastructure adjusted EBITDA per-share growth of at least 7% through 2030. We continue to see a path to deploy up to $1 billion of growth capital across storage, pipeline, producer connections and new services, while also getting more from the assets we already own. We will remain disciplined, but we also intend to move with urgency when the right opportunities are in front of us.

Overall, it was a great quarter. We delivered record results, completed Wink to Gateway, sanctioned the Chauvin expansion and continued to advance an increasingly attractive infrastructure opportunity set. And with that, I’ll turn the call over to Riley.

Riley Hicks (SVP & Chief Financial Officer)

Thank you, Curtis. I’ll begin with our third quarter results, followed by an update on our financial position and capital allocation priorities. Starting with infrastructure, we delivered another record quarter, generating $177 million of adjusted EBITDA compared with $154 million in the same period last year. This represents an $8 million increase over our previous record, which we set last quarter, and it reflects contributions from recent investments and the continued optimization across our existing asset base. We benefited from a full quarter of contribution from the Schauban pipeline system alongside improved utilization across our Canadian terminals, including record volumes moved to TMX during the quarter.

What is particularly encouraging is that our performance reflects contributions from across our business. Our results demonstrate both the strength of our existing infrastructure platform and our ability to generate incremental earnings through commercial execution and optimization. Looking ahead, we expect further contributions from the Wink to Gateway integration project and the growth projects associated with Schauban, alongside continued opportunities to increase utilization across our asset base.

Together, these initiatives position us well for continued infrastructure growth. Turning to our marketing business, we delivered an excellent quarter, generating $35 million of adjusted EBITDA compared with $7 million in the same period last year. Performance was driven primarily by exceptionally strong refining margins at Moose Jaw, reflecting the value of our product diversification efforts and the team’s ability to capitalize on favorable market conditions. While margins remained elevated relative to historical levels, we recognize that these conditions will normalize over time.

As a result, we have taken steps to lock in a portion of these profits by hedging some of our distillate exposure into 2027, providing greater visibility into our future earnings. Within our crude marketing business, steep backwardation and low inventory levels continue to constrain traditional storage opportunities. However, market volatility and widening heavy differentials can create other opportunities for our team, and we have an exceptional team that remains focused on capturing value as the market evolves.

At the beginning of this year, we outlined an expected range of $0 to $40 million for adjusted EBITDA from our marketing business. With the strong performance in the third quarter, we have already exceeded the upper end of that range on a year-to-date basis. As we look ahead, we continue to see a constructive environment for our refined products business supported by strong crack spreads and weaker feedstock prices. However, we expect the normal seasonal slowdown at Moose Jaw to partially offset these favorable conditions in the fourth quarter.

Taking all of these factors together, we expect marketing to deliver approximately $80 million of adjusted EBITDA in 2026, in line with our historical five-year average. As Curtis highlighted, our marketing business plays an important role in helping customers navigate changing market conditions and improving their netbacks while also generating incremental cash flow for Gibson Energy. While the current conditions will not persist indefinitely, the additional cash flow strengthens our balance sheet and provides greater flexibility to fund our growth initiatives.

Moving to costs, G&A was $18 million in the quarter, including approximately $2 million of project development costs. Excluding these costs, our underlying G&A was approximately $16 million, reflecting our continued focus on cost reductions. As we prepare for our next phase of growth, we are focused on simplifying processes, leveraging technology and reducing complexity while continuing to invest in the capabilities needed to support a larger business.

Importantly, these initiatives are about more than reducing costs. They are about creating the capacity to grow the business more efficiently and ensuring we continue to get more out of our existing operations. Bringing this all together, we delivered record consolidated adjusted EBITDA of $193 million. This was an exceptional result supported by record infrastructure performance and the team’s ability to capitalize on a particularly favorable refining environment. Distributable cash flow was $120 million compared with $86 million in the same period last year, representing a year-over-year increase of $34 million. The strong cash flow generation supports our dividend, accelerates deleveraging and provides additional capacity to invest in attractive infrastructure growth opportunities.

And that brings me to our financial position, where we made meaningful progress during the quarter. On a consolidated net debt to adjusted EBITDA basis, we improved to 3.9 times from 4.2 times last quarter, while our infrastructure leverage declined to 4.2 times from 4.4 times on a pro forma basis, reflecting a full 12 months of contribution from the Schauban acquisition. Our overall leverage was 3.7 times and our infrastructure-only leverage was 4 times.

This improvement reflects the strong performance of the business, including the incremental contribution from Schauban and the outstanding performance in our marketing business. While we are pleased with the progress, our focus remains on returning leverage to our long-term target of 3.0 to 3.5 times on a consolidated basis, which we expect to achieve in early 2027. Our trailing twelve-month payout ratio improved to 82% from 88% last quarter, reflecting the stronger cash flow generation.

On an infrastructure-only basis, our payout ratio was 83%, comfortably below our 100% target. We exited the quarter with a strong liquidity position, with our billion-dollar revolving credit facility fully undrawn. Taken together, our improving leverage, strong liquidity and the supportive market backdrop provide a solid financial foundation as we prepare for our next phase of growth. As Curtis highlighted earlier, we are encouraged by the growing opportunity set across our infrastructure business, particularly in Canada where increasing production and the need for additional connectivity is creating attractive opportunities for investment. Our priority is advancing commercially supportive projects that generate attractive risk-adjusted returns and build on the competitive advantages of our existing assets. At the same time, we remain committed to protecting our investment-grade credit ratings and maintaining a strong balance sheet.

As these projects advance, we will evaluate the appropriate funding strategies to support growth while preserving financial flexibility and maintaining our disciplined approach to capital allocation. Overall, we are very pleased with the quarter. Infrastructure continues to deliver record results, marketing is generating meaningful incremental cash flow and we are making progress in strengthening our balance sheet. We believe this positions us well to capitalize on the growth opportunities ahead while maintaining the financial discipline that has been central to our strategy. With that, I’ll turn the call back to Curtis.

Curtis Philippon (President and Chief Executive Officer)

Thank you, Riley. It was a great quarter both financially and strategically. We are safely delivering the projects we have sanctioned, getting more from the assets we already own and advancing the next set of growth opportunities. We have the assets, commercial capability and financial capacity to execute. Our focus is on converting those advantages into contracted infrastructure growth and increasing value per share. Thank you to our team for another great quarter.

And with that I’ll turn the call back to the operator for questions.

OPERATOR

Thank you. At this time, we will conduct the question-and-answer session. As a reminder, to ask a question, you will need to press star-1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star-1-1 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Jeremy Tone. Your line is now open. Please stand by. Our next question comes from the line of Sam Burwell of Jefferies.

Your line is now open.

Sam Burwell (Analyst at Jefferies)

Hey guys, good morning. On the marketing, curious to get your take on how much contango in the WCS curve you need to get short-term storage demand to drive some material upside in marketing EBITDA from that leg of the stool. My understanding is that the implied WCS curve is pretty flat now, since you are fighting against such steep WTI backwardation. Were the periods where you did really strong marketing EBITDA in, say, ’23 and ’24 periods where you had very steep WCS contango?

Just trying to figure out how to frame that.

Riley Hicks (SVP & Chief Financial Officer)

Yeah, thanks, Sam. It’s Riley here. I think as we think about short-term storage opportunities on the heavy side, you’re typically looking at two components. So you’re looking at the backwardation in the WTI curve and then you’re looking at the curve on the WCS. And so the math has to work. The contango on the WCS curve has to outstrip the backwardation on the WTI curve, or else really there’s no storage opportunities. So when you think back historically to how we made a bunch of money in the marketing on the storage side, you would have seen less backwardation in WTI and then kind of strong winter-to-summer storage contango opportunities on the WCS front. So we’re looking for those opportunities and we think they will happen here over time, but obviously today they don’t exist.

Sam Burwell (Analyst at Jefferies)

Okay, understood. Just to tie that to the guidance you just laid out for marketing, that implies Q4 stepping down from Q3, and that would reflect just a moderation of the Moose Jaw performance for seasonal factors and then really no contribution from spot storage contribution in Alberta.

Riley Hicks (SVP & Chief Financial Officer)

Yeah, I think that’s exactly right. I think we continue to see strength within our refining business, but slightly less in Q4 and Q1 than in Q2 and Q3, just given the seasonality of that business. And then there’ll be some opportunities on the volatility side in marketing, but we don’t expect massive storage opportunities to kind of drive that side of the business.

Sam Burwell (Analyst at Jefferies)

Okay, got it. Thanks, Riley.

OPERATOR

Thank you. Our next question comes from the line of Maurice Choi of RBC Capital Markets. Your line is now open.

Maurice Choi (Analyst at RBC Capital Markets)

Thanks, and good morning, everyone. Just continuing with the marketing theme here. I recognize your comment about steep backwardation and low inventory levels that limit storage opportunities. But if I could try to conservatively use the $0 to $40 million of outlook that you used for the start of 2026, and assuming that that frame applies to 2027, how should we think about the actions that you’ve taken so far in terms of locking in profits for distillate exposure in reference to the $0 to $40 million of outlook?

Riley Hicks (SVP & Chief Financial Officer)

Yeah, thanks, Mo. I think when you think about the $0 to $40 million framework that we put out at the start of the year, we were in a pretty substantially different market environment. So I think when we looked at the world back then, we saw a challenging crude environment with the backwardation that still exists today. But we also saw kind of weak crack spreads, strong heavy differentials. And so as we look at the world today, I think it’s materially different, specifically on the refined products side.

So I think our view for ’27 is we see continued strength in that refined products business with strong crack spreads persisting. And I don’t—you know, we have wide WCS differentials and I don’t necessarily see that changing anytime soon with the freight rates that are kind of driving that weakness. And so I think we don’t give out guidance for 2027, but I think you’d continue to see some strength in our marketing business going into that year. I think at the end of the day, I think the market is changing very rapidly, and so we’re not giving out guidance for the full year 2027. But I think as we look at the next couple of quarters, we continue to see strength within our marketing business similar to what we’re seeing today.

Martin

That’s fine, thank you. And maybe I could just finish off with some more color on what you’re seeing and hearing at Gateway. You mentioned earlier that you don’t expect the high freight rates to normalize quickly. I suppose what does that do to your customer demand for service at Gateway? And alongside that, what are the pluses and minuses for the facility from higher Venezuela crude imports into the U.S.

Curtis Philippon (President and Chief Executive Officer)

Martin, Gateway has had an interesting year. This freight dynamics and really just all of the crude shipping flows being disrupted in the world has caused our customers really to scramble and find different solutions for how crude will move. We’ve seen a real shift in the vessel mix in Gateway this year. Obviously we did all the dredging work and we did all the facility expansions to really have Gateway set up to be the ideal VLCC loading facility in the U.S., and what we’ve seen with these freight rates is VLCCs are at an extreme premium.

And there’s a real shortage of them around the world. And so as you look over 2026, the biggest thing we’re seeing is that less than half of the vessels coming through Gateway this year are actually VLCCs. And that’s not something we would have said if we look back when we did the dredging. We expected this facility to be primarily a VLCC dock, and that’s what our customers would primarily utilize it for. And so we’ve seen a lot more Suezmax and Aframax vessels going through there, and the team’s done a nice job keeping busy with those vessels.

But there definitely is a lost throughput opportunity when you don’t have sort of the maximum efficient vessel going through there each time. And so I’ve been quite pleased with how we’ve performed despite all this volatility in customers’ disruption and sort of smaller vessels going through. But I do think as this normalizes, there’s an interesting upside opportunity for Gateway as you look out likely beyond 2027. I don’t think these freight rates on VLCCs are going to normalize anytime soon. But as you look out a little bit further, there’s obviously somewhere. There’s a lot of these being built right now.

And I think in time you’ll see some normalization of geopolitical and you’ll also see some sort of increased supply of VLCCs that we’ll see sort of an increased supply of that vessel type and better throughput at Gateway as a result. So I guess that’s the big thing to watch. I think you’ll see us continue to be nimble, work with the team in the near term, work with customers in the near term, but watch for an uptick in volume as the vessel mix changes in time.

And then on the Venezuelan side, really, it gets more of a heavy story. And so the Gateway story is really around exporting Permian light. And I don’t know that you’re seeing a significant story from Venezuelan crude coming in that’s really directly impacting the Gateway operations today.

Martin

It’s very clear. Thank you very much for that.

OPERATOR

Thank you. Our next question comes from the line of Robert Hope of Scotiabank. Your line is now open.

Robert Hope (Analyst at Scotiabank)

Morning, everyone. Want to follow up on the South Texas discussion that you just had? So I understand that the world is volatile, and there is an expectation that tanker rates do normalize at some point. But when you take a look at the duration of contracts, as well as kind of the next wave of contracts that are coming due in South Texas, are you moving conversations more towards the smaller tankers or could you see more spot capacity there as you look for kind of the VLCC dynamics to normalize there?

Just want to get a sense of how you’re thinking about contracting that asset on a longer-term basis.

Curtis Philippon (President and Chief Executive Officer)

Sure. Thanks, Rob. Really early on in the conflict, we saw customers having a very difficult time thinking beyond sort of the prompt month. And then there was a lot of scrambling with vessel flows and figuring out what they were going to do to supply crude around the world. And so it was a difficult situation for our customers to make any sort of commitments beyond very short-term commitments earlier on in the conflict. Over the last few months, we’ve seen a bit of shift in that and people are starting to realize that some of these disrupted crude flows may be the new normal and they’re looking to secure supply longer term.

And so we’ve seen an uptick in the amount of sort of term activity, longer-term activity on recontracting. And we don’t get into commenting on the specifics of it, but I’d say there’s been a notable pickup in contracting activity over the last three to six months.

Robert Hope (Analyst at Scotiabank)

Appreciate that. And then maybe going back to the commentary that you have a number of projects in the next wave that are making progress, can you maybe add a little bit more color on kind of what buckets of opportunities you’re seeing move fastest? Whether that’s kind of like pipeline opportunities, storage or anything?

Curtis Philippon (President and Chief Executive Officer)

Sure. When we look at the opportunity set in front of us, I feel pretty good about it. We’re pretty confident about the opportunity set in the background. Since Investor Day, things have advanced meaningfully both in the customer discussion side as well as some of the detailed engineering work that Riley referenced in our G&A comments that’s going on in the background to advance these projects? I’m looking forward to seeing which one gets over the finish line first. But we’ve got some nice chunky opportunities that are in development and what you’ll see from those as we come out and announce them is they line up very nicely to what you saw us talk about at Investor Day, sort of following those same five buckets that we talked about at that time, same sort of strong customer contract backing, our focus on crude around our crown jewel assets, and really meeting our return thresholds.

Looking forward to getting those announced.

Robert Hope (Analyst at Scotiabank)

Great. Thank you.

OPERATOR

Thank you. Our next question comes from the line of Aaron McNeil of TD Cowen. Your line is now open.

Aaron McNeil (Analyst at TD Cowen)

Good morning all. Thanks for taking my questions. Riley, I want to sort of pin down this distillate hedge comment specifically — like what share of your exposure in 2027 would be sort of hedged? And can you, for us simpletons, sort of translate that into what you’ve locked in from a margin perspective for next year?

Riley Hicks (SVP & Chief Financial Officer)

Yeah, thanks, Aaron. I don’t think we’ll get quite into the specifics of what margins we’ve locked in so far, but if you think about our distillate production out of the refinery, it’s just over 40% of what comes out of a refinery. About half of that is distillates that we sell into the U.S., and that’s really the portion that we’re able to hedge really well. And so we’ve done quite a bit of that piece of the business so far, and we’re continuing to look at layering on more.

And then the other side of the refinery that we are looking at starting to hedge out as well is the feedstock costs. So we’re happy to do up to kind of like 25, 30% of our feedstock costs through the year just to lock in some of the profitability. So I think we see that as a very beneficial thing to our facility, ensures that we have the earnings visibility that we need to help fund our growth going forward.

Aaron McNeil (Analyst at TD Cowen)

Gotcha. And then maybe switching gears to Chauvin — you noted that it exceeded your initial expectations. Again, maybe some simple math here, but at acquisition you said seven and a half times in terms of the transaction multiple with line of sight to come down to 5 to 7 through sort of the optimizations and expansions. But you also mentioned that it’s performing better than you expected. So what’s the sort of implied transaction multiple today? And then what could it look like once all these expansions come through?

Curtis Philippon (President and Chief Executive Officer)

Thanks, Aaron. We love that asset. The Chauvin asset’s come in, performed exceptionally well. Got a great team out there. So on announcement date, we talked about a seven and a half times build multiple, talked about adding the Hardisty connection, and now we’re adding on the Chauvin expansion project. That project is effectively a $20 million capital project with a sub 5 times build multiple. You put sort of all the optimization work, the Hardisty connection and the expansion work together and the multiple on this acquisition starts to get sub 7 and sort of in the 6 to 7 range.

Aaron McNeil (Analyst at TD Cowen)

Gotcha. Okay, well, appreciate the answers and happy to turn it back.

OPERATOR

Thank you. Our next question comes from the line of Robert Coutelier of CIBC Capital Markets. Your line is now open.

Robert Coutelier (Analyst at CIBC Capital Markets)

Hey, good morning. Just a couple quick questions here. We started to hear about crude by rail perking up in the industry again. I’m curious to gauge your ability and interest to participate in any potential crude by rail projects, whether they’re associated with DRU or otherwise.

Curtis Philippon (President and Chief Executive Officer)

Yeah, Rob, we’re very, very happy to work with our partner on that. So Strathcona owns the rail terminal adjacent to our Hardisty facility. We work very closely with them on that, and they’ve been quite vocal on driving a rail strategy. And as you look forward, we think that’s part of the solution for egress and finding new markets for Canadian crude, and we look forward to working with them on that strategy.

Robert Coutelier (Analyst at CIBC Capital Markets)

Okay. And then, you know, with the increase in the marketing outlook here both this year and potentially going forward for a little bit, I wonder what, you know, clearly you’re interested in capital projects or organic projects there, but where does the incremental dollar go before those projects materialize? You know, is there an opportunity to repurchase shares or are you continuing to work on reducing the leverage? And then related to that, you’ve had some success here with the Chauvin acquisition.

I wondered if there’s an opportunity or an appetite to further the acquisition strategy.

Riley Hicks (SVP & Chief Financial Officer)

Yeah, thanks, Rob. So maybe I’ll start with the incremental dollar or capital allocation philosophy. So I think as we sit today, we’re seeing nice deleveraging in our balance sheet. We think we’ll be nicely back within our range, kind of early 2027. But as Curtis mentioned, we’re also seeing a nice wave of growth projects. So we’re really preparing to deploy capital into infrastructure growth. And so you won’t see us buy back shares anytime soon, given the growth that we think we have coming.

So maybe I’ll start there with that one. And then turning to the kind of the second part of the comment on M&A strategy, Chauvin has been a great deal. We love assets like that that tie into our facilities, create more competitive moat, and more and more structural advantage at our crown jewel assets. So we’re always looking for assets like that. We have seen the market kind of get a little bit frothy on pricing on the acquisition side. So we’re also going to remain disciplined. So we’re out looking, we’re always hunting, but it’s going to be at disciplined levels.

And I think we have a great organic growth backlog coming. That’s going to be the priority for the next little bit.

Robert Coutelier (Analyst at CIBC Capital Markets)

Okay, awesome. Thank you.

OPERATOR

Thank you. Our next question comes from the line of Benjamin Pham of BMO. Your line is now open.

Benjamin Pham (Analyst at BMO Capital Markets)

Hi. Thanks. Good morning. May you start off on the infrastructure — EBITDA reached a record result of 177. You mentioned the Chauvin contribution, higher throughput and optimization. Can you comment maybe on your existing assets just how much room there is for upside potential when you think about the utilization of your existing assets and how that compares to your new growth projects that are getting added through 2028.

Curtis Philippon (President and Chief Executive Officer)

Ben, it’s been one of our success stories for 26 has been just being able to drive some additional utilization through the current assets. And so in 2026 we talked about going from an average utilization across all the platforms of around 85% and pushing that to over 90% by the end of the year. And we’ve nicely seen that play out that we’d be today with over 90% utilized across the facilities and on top of that seeing a nice push around some of our optimization and cost reduction activities and really all driving towards about what we expected that we talked a lot about our growth strategy being a 5 and 2 strategy. 5% driven by organic growth projects and 2% driving additional efficiencies out of the current base business. And I think we’re nicely delivering on that 2% and 2% plus on some of the optimization and utilization activities we’ve been doing this year.

Benjamin Pham (Analyst at BMO Capital Markets)

Okay, got it. And maybe just related to that as you think about your December upcoming budget and clearly the organic growth that has been exceeding expectations including Sheldon, that’s 10% the plus growth rate. Do you think you’re in a position into the budget or maybe some point in ’27 to warrant me updating that number?

Curtis Philippon (President and Chief Executive Officer)

We’re still, we’re pretty focused on that. The guidance we gave at Investor Day focused on delivering over 7% growth in infrastructure per share through 2030 is that’s the North Star for us that we’re focused on backfilling and growing. 2026 was more focused on some of these was the Chauvin acquisition and some of these smaller projects. We’ve been chipping along at and driving some of these optimizations. And as you get into the next year you’ll see some of the more the chunkier growth projects that drive towards that.

But at this point we’re not raising the 7% plus.

Benjamin Pham (Analyst at BMO Capital Markets)

Okay, got it. And just a quick cleanup for me on the marketing you’ve also mentioned. I believe by 2030 you would reach 80 million of EBITDA annually and clearly you probably will reset this year. But outside of just the crack spreads we’ve seen in the diffs, the environment we’re seeing today. Is there anything else that was driving that bridge through 2030?

Riley Hicks (SVP & Chief Financial Officer)

I think as we look at our marketing business, we recognize that it’s a volatile business that has the ability to generate outsized earnings. So, you know, I think we’ve always been convinced that our marketing business would continue to generate that over time. Our last five years, we’ve averaged kind of $80 million. And so that our expectation is that over the next five, we’ll average 80 million as well. It just is going to be probably a little bit disparate in terms of, you know, some years we’ll probably make 60 and some years we’ll probably make 100.

Right. And so I think as we think about our marketing business, we think it’s going to continue to deliver value for us over time.

Benjamin Pham (Analyst at BMO Capital Markets)

Okay, that’s really helpful. Thank you.

OPERATOR

Thank you. Our next question comes from the line of Patrick Kenny of NBCCM. Your line is now open.

Patrick Kenny (Analyst at National Bank Financial)

Thank you. Good morning, guys. Just on the Pacific Link pipeline, I know it’s still a ways away from being sanctioned, let alone coming online, but perhaps you could speak to how you might be positioned to participate alongside the project, you know, whether it be adding tankage in and around Edmonton or perhaps leveraging your export terminal expertise, you know, on the west coast with the existing proponents.

Curtis Philippon (President and Chief Executive Officer)

Pat, we’re excited to see that progress. The one maybe I’d comment on. The overall backdrop, the positivity and the momentum you see in Western Canada right now is really encouraging. And there’s growing optimism that we’ll be able to get some of these major projects completed, including the PacificLink pipeline. So that gets us excited about supporting our customers. And how can we do that and how can we participate in some way? Obviously, we’ve built the lion’s share of terminaling capacity in Western Canada over the last number of years and would expect that we’d find a way to participate in that in some way as well.

And you, you’re good to flag that. We do have some export expertise and so what’s being proposed on the PacificLink pipeline for an export dock is effectively a match for what we currently operate today in gateway. Sort of a 2 VLCC dock setup that looks remarkably a lot like what we do in Ingleside. So we have expertise around this. We look forward in finding a way to work and help and support that project.

Patrick Kenny (Analyst at National Bank Financial)

Okay, thanks for that. And then there’s been some further consolidation activity, you know, recently from your Canadian upstream customers. I was just curious what that can mean for either your throughput outlook, contracting dynamics or even, you know, potential expansions at either Hardisty or Edmonton as they look to integrate their acquired production.

Curtis Philippon (President and Chief Executive Officer)

Yeah, I think it’s sort of a trend that we’ve seen in the industry over the last number of years. So no real surprise on that. And seeing large, well capitalized companies, I think that trend is going to continue and I think it’s going to help support the production growth that we expect to see in western Canada. So I think that’s a trend we expect. I think it’ll be positive. For more throughput through our terminals. It’s likely shifted our strategy a bit more that we’ve really focused on how do we partner with these large customers and work closely and offer a broad solution across terminalling marketing.

And just in general, how do we find a way to help our customers find a better netback solution for their barrel? And it’s all the more important I would say today as the customer base gets more consolidated that you’re partnering very closely with those key customers.

Patrick Kenny (Analyst at National Bank Financial)

Okay, that’s great. Thanks Curtis. I’ll leave it there.

Curtis Philippon (President and Chief Executive Officer)

Thanks, Pat.

OPERATOR

Thank you. This concludes the question and answer session. I would now like to turn it back to Tom Hades for closing remarks.

Tom Hades (Manager, Capital Markets and Treasurer)

Thank you for joining us today. As a reminder, supplemental materials are available on our website. If you have any additional questions, please contact our investor relations team. Thank you. Have a great day.

OPERATOR

Thank you for your participation in today’s conference. This does conclude the program. You may now disconnect.

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