Tidewater Midstream's Record Quarter: The SAF Catalyst and Debt Reduction

Record throughput, raised guidance, and a $1.2B SAF project poised to reshape the story.

TWM.TO · Earnings Call · 2026-08-13

A Record Quarter

The second quarter delivered a step-change for Tidewater Midstream. The HDRD complex ran at 111% nameplate, capturing record margins on renewable diesel and the new biofuels production incentive. As CEO Jeremy Baines put it, “During the second quarter, the HDRD complex achieved record average daily throughput of 3,315 barrels per day, representing a 111% utilization rate.” — Jeremy Baines, Chief Executive Officer · 2026-08-13 This operational excellence translated directly into financials: “Tidewater Renewables generated record adjusted EBITDA of $56 million during the second quarter.” — Ian Quartly, Host / Investor Relations · 2026-08-13 Consolidated adjusted EBITDA hit $88.9M, a quarterly record, and management raised full-year guidance to $230-250M, up 20% at the midpoint.

The SAF Project: A Strategic Catalyst

The most significant strategic development is the SAF project, which is advancing toward a final investment decision (FID) in Q4 2026. Management is awaiting final regulatory amendments but expressed confidence in funding the $1.2B project. As Baines stated,

We do see that an ability to, over a 3-year build period for that project, contribute funds out of cash flow from operations to fund that build.
Jeremy Baines, Chief Executive Officer · 2026-08-13

This builds on the earlier momentum around the biofuels incentive, which was first flagged in the prior quarter: “So we are waiting for the final release of the details, but they have clearly stated it will be in place for January 1, 2026.” — Jeremy Baines, CEO · 2025-11-13 The successful execution of the HDRD facility and the new incentive provide a template for the SAF project's financial structuring.

Balance Sheet and Market Tailwinds

The company made significant progress on debt reduction, with consolidated net debt down $44.4M in the quarter. Leverage is back within the target range. Combined with the strong crack spreads—Prince George crack spread averaged $118/barrel—management acted opportunistically on hedging. They added 40% of 2027 crack spread exposure at prices "significantly above both mid-cycle and 2026 realized hedge pricing," according to Baines. This prudent risk management aligns with the crack spread exposure strategy, which remains a core theme across quarters. The operational confidence extends beyond the HDRD, as management earlier noted on the refinery's turnaround cycle: “We think we can go all the way without seeing impacts to throughput and yield.” — Jeremy Baines, CEO · 2025-11-13 With global energy supply disruptions supporting refined product margins, the company is well-positioned to deliver on its increased guidance and the upcoming SAF decision.