Q4 2021 Enterprise Products Partners LP Earnings Call

February 1, 2022

Speaker 1: Ladies and gentlemen, thank you for standing by and welcome to the Q4 2021 Enterprise Product IT ALL IN

Ladies and gentlemen, thank you for standing by and welcome to the Q4 2021 Enterprise product Partners Conference call.

Speaker 1: At this time, all participants on a listen only mode. After the speaker's presentation, there will be a question and answer.

At this time all participants are in a listen only mode.

The speaker's presentation, there will be a question and answer session to ask a question. During this session you will need to press Star then one on your telephone.

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If you require any further assistance. Please press star Zero I would now like to turn the conference over to your speaker for today, Randy Burkhalter, Vice President Investor Relations you may begin.

Speaker 1: I'll now like to turn the conference over to you. Speak up for today. Randy Burke-Hotler, Vice President, Investor Relations. You may be.

Thank you would want to good morning, everyone and welcome to the Enterprise products Partners conference call to discuss fourth quarter and year end 2021 earnings our speakers today will be co chief executive officers of Enterprise's General partner, Jim Teague, and Randy Fowler other members of our senior management team are also in attendance today.

Speaker 2: Thank you, Dwanda. Good morning, everyone, and welcome to the Enterprise Projects Part.

Speaker 2: to discuss fourth quarter and year end 2021 earnings. Our speakers today will be Coach Chief Executive Officers of Enterprise as General Partner, Jim T. and Randy Fowler. Other members of our senior management team are also in attendance today.

Speaker 2: During this call, we will make four looking statements within the Meaning of Section 21E of the Securities and Exchange Act of 1934 based on the beliefs of the company, as well as assumptions made by an information currently available in a prizes measure.

During this call we will make forward looking statements within the meaning of section 21 E of the Securities and Exchange Act 1934 based on the beliefs of the company as well as assumptions made by and information currently available to enterprises management team.

Speaker 2: Although management believes that the expectations reflected in such forlooking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Please refer to our latest filings with the SEC for a list of factors that may cause actual results to differ, until you're from those in the forlooking statements made during this call. And so without I'll turn it over to Jim.

Although management believes that the expectations reflected in such forward looking statements are reasonable it can give no assurance that such expectations will prove to be correct.

Please refer to our latest filings with the SEC for a list of factors that may cause actual results to differ materially from those in the forward looking statements made during this call and so with that I'll turn it over to gymnast. Thank you Randy.

Speaker 3: We reported net income attributable to common unit holders for 2021, a $4.6 billion or $2.10 cents per unit compared to $3.8 billion or $1.71 per unit on a fully deleted basis for 2020.

We reported net income attributable to common unit holders for 2021.

$4 $6 billion or $2 10 per unit.

Compared to $3 8 billion or $1 71 per unit on a fully diluted basis for 2020.

Speaker 3: Cash flow from operations was 8.5 billion for 21 compared to 5.9 billion for 2020.

Cash flow from operations was $8 5 billion for 'twenty, one compared to $5 9 billion for 2020.

Speaker 3: Both 21 and 20 were impacted by large changes in working capital and opposite directions brought about by significant storage operations.

Both 'twenty one 'twenty were impacted by large changes in working capital in opposite directions brought about by a significant storage opportunities.

Speaker 3: We generated 6.6 billion of DCF in 2021 compared to 6.4 in 2020.

We generated $6 6 billion of DCF in 'twenty, one compared to $6 for 2020.

Speaker 3: We had 1.7 times coverage. We retained 2.6 billion of DCF and 21 and head into 22 with significant financial flexibility.

We had one seven times coverage.

We retained $2 6 billion of DCF in 'twenty, one and head into 'twenty two.

Difficult financial flexibility.

Speaker 3: Also increased our distribution again in 2021 to $1.81.5 per common unit, making this the 23rd consecutive year of distribution growth since our IPO in 1998.

Also increased our distribution again in 2021 to $1 81.

Per common unit, making this the 20 <unk> consecutive year of distribution growth since our IPO in 1998.

Speaker 3: In addition, 2021 marked another year of records for enterprise, including 12 financial records and 5 operating records.

In addition, 2021 marked another year of records for enterprise, including 12 financial Records in five operating records.

Speaker 3: RNGL pipelines and services, and natural gas pipelines and services segment. Segment is a gross operating margin, Rick.

Our NGL pipelines and services and natural gas pipelines and services segment segment gross operating margin records.

Speaker 3: We've also been focused on growing our petrochemicals and refined product services segment, which had a record gross operating margin of $1.4 billion for 2021, with a huge contribution in petrochemicals where gross operating margin exceeded $1 billion for 2021.

We've also been focused on growing our petrochemicals and refined products services segment, which had a record gross operating margin of $1 4 billion for 2021 with a huge contribution in petrochemicals, where gross operating margin exceeded $1 billion for 2021.

We set five operational performance records in 'twenty, one including <unk>.

Speaker 3: We set five operational performance records in 21, including.

Speaker 3: record ethane marine volumes, record natural gas transportation volumes, record refined products and petrochemical transportation volumes, record propylene production volumes and record

Record ethane marine volumes record natural gas transportation volumes record refined products and petrochemical transportation volumes.

Propylene production volumes and record.

Speaker 3: Proplane production volumes. We also finished 2021 with a solid board quarter reporting total gross operating margin of $2.1 billion.

Propylene production volumes. We also finished 2021 with a solid fourth quarter reporting total gross operating margin of $2 $1 billion. Our quarterly results were driven by another strong quarter from petrochemicals, our natural gas processing margins and increase in equity in.

Speaker 3: quarterly results were driven by another strong order from petrochemicals, higher natural gas processing margins, an increase in equity in gel production, the continuing recovery in crude oil pipeline volumes, the near pre-COVID levels, and record natural gas pipeline volumes.

<unk> production.

<unk> recovery in crude oil pipeline volumes to near pre COVID-19 levels and record natural gas pipeline volumes.

Speaker 3: As to CapEx, I growth capital spending in 2021 was $1.8 billion, with approximately $2.2 billion of major projects currently under construction.

As to Capex, our growth capital spending in 2021 was $1 8 billion with approximately $2 2 billion of major projects currently under construction.

Speaker 3: The largest projects put into service in 2021 include a C5 hydrotreater at Mombeldu. And we added pipeline capacity to move that thing from Mombeldu to Boma. Another project to provide feedstocks to the growing Gulf Coast Patrick Hema.

The largest projects put into service in 2021 include CPAP Hydro treater at Mont Belvieu, and we added pipeline capacity to move ethane from Mont Belvieu to Beaumont. Another project provide feedstocks to the growing Gulf Coast Petrochemicals, and our natural gas services group, our gillis lateral and <unk>.

Speaker 3: In our natural gas services group, our Gillis lateral and Akkadian Haynesville expansion were put into service in December of 21. These projects move growing volumes from Haynesville down to the LNG quarter in South Louisiana.

Katie and Haynesville expansion were put into service in December 'twenty one.

These projects move growing volumes from the Haynesville down to the LNG order in South Louisiana.

Speaker 3: In our petrochemical segment, we completed our ethylene export terminal and ethylene storage and pipeline.

And our petrochemical segment, we completed our ethylene export terminal in ethylene storage and pipelines.

Speaker 3: Our second PDH remains on budget and on schedule for in service the first half of 2023. Our project team has done an outstanding job to ensure supply chain issues would not impact project schedule and Gramminist team are happy to report that almost all major equipment is now on site significantly de-risking any major equipment issues.

Our second PTH remains on budget and on schedule for in service the first half of 2023.

Project team has done an outstanding job to ensure supply chain issues would not impact private project schedule and Graham and his team are happy to report that almost all major equipment is now on site significantly this risk derisking any major equipment issues.

Speaker 3: We were also excited to announce the agreement to acquire Navitas mid-

We were also excited to announce the agreement to acquire <unk> midstream.

Speaker 3: Navitas gives us an attractive entry point for our natural gas processing and NGL businesses in the Midland Basin.

<unk> gives us an attractive entry point for our natural gas processing and NGL businesses and the Midland Basin.

Speaker 3: We anticipate closing this acquisition in the first quarter of 2022, subject to customary regulatory approval.

We anticipate anticipate closing this acquisition in the first quarter of 2022 subject to customary regulatory approvals.

Speaker 3: Navitas plans for the construction of another natural gas process processing plant, which would also provide us additional organic growth.

<unk> plans for the construction of another natural gas projects and processing plant, which will also provide us additional organic growth.

Speaker 3: Last year, we have announced that we'll join forces with Magellan and ICE to promote a U.S. Gulf Coast Futures crude oil contract.

Last year, we have announced that we joined forces with Magellan and iced promote a U S Gulf coast futures crude oil contract.

Speaker 3: Early indications are that the contract is going to be well received, as ICE announced last week that the contract traded well over 1 million barrels a day in just the first few days of trading. We're excited about what this contract means, not just for the U.S. producer, but for the global oil industry.

Early indications are that the contract is going to be well received as ice announced last week that the contract traded well over 1 million barrels a day and just the first few days of trading.

Trading we're.

We're excited about what this contract means not just for the U S producer, but for the global oil industry.

Speaker 3: We learned the hard way in April of 2020, that the perils that come with a futures contract that doesn't have adequate physical infrastructure.

We learned the hard way in April 2020 at the apparel that come with the futures contract that doesn't have adequate physical infrastructure. The ice Midland WTS AGC futures contract is access to 14 ship docks in the Houston area.

Speaker 3: The ICE Midland WTI AGC futures contract has access to 14 ship docks in the Houston area, providing significant direct access for exports. In addition, Enterprise and Magellan's combined distribution systems offer access to approximately 150 million barrels of total total crude storage capacity, and four and a half million barrels of refining capacity.

Adding significant direct access for exports. In addition enterprise in Magellan's combined distribution systems offer access to approximately 150 million barrels of total crude oil storage capacity and $4 5 million barrels of refining capacity as we.

Speaker 3: As we finish up 21 and move into 22, I'd also like to highlight the momentum from our evolutionary technology.

Finish up 'twenty, one and move into 'twenty two I'd also like to highlight the momentum from our evolutionary technology team.

Speaker 3: This team, led by Angie Murray and from a commercial perspective, Carrie Weaver, is home to bright and creative people.

This team led by Angie Murray and from a commercial perspective, Kerry Weaver is home to bright and creative people, we have a number of initiatives underway with major players in each segment of the energy value chain and.

Speaker 3: We have a number of initiatives underway with major players in each segment of the energy value chain.

Speaker 3: In addition to working on lower carbon opportunities in areas like hydrogen, carbon sequestration, circular plastics, and renewable fuels, this team and our big data group constantly have a number of important projects underway using the billions of pieces of data that Enterprise has.

In addition to working on lower carbon opportunities in areas like hydrogen carbon sequestration circular plastics and renewable fuels. This team and our big data group constantly have a number of important projects underway using the billions of pieces of data that enterprise has.

Speaker 3: in order to improve the reliability of our systems and optimize these systems every day. For Enterprise, in addition to supplying the developing world with the cleaner fuels it needs today, these teams are on a path to developing lower-carbon projects that both complement our systems and are profitable. We would not have thrown the amount of horsepower into these initiatives if we didn't believe in their potential and profitability for our future. We had our best year ever.

In order to improve the reliability of our systems and optimize these systems every day for enterprise. In addition to supplying the developing world will be cleaner fuels. It needs. Today. These teams are on a path to developing lower carbon projects that both complement our systems and are profitable.

We have not we would not have thrown the amount of horsepower into these initiatives. If we didn't believe in the potential and profitability for our company.

We had our best year ever for safety in 2021.

Speaker 3: There's no doubt in my mind that our employees truly care about one another and the communities where we operate.

There's no doubt in my mind that our employees truly care about one another and the communities where we operate as we said in the press release, we are extremely proud and grateful for the teamwork and contribution of our 7000 employees to enterprises financial operating and safety.

Speaker 3: As we said in the press release, we are extremely proud and grateful.

Speaker 3: teamwork and contribution of our 7,000 employees to enterprises, financial operating and safety performance in 2021.

Performance in 2021.

Speaker 3: Over the last two years, COVID-19 has whipsawed the global economy, including the U.S.

Over the last two years COVID-19 has slips out the global economy, including the U S energy sector.

Speaker 3: As always is the case, our people responded.

Always is the case our people responded in 2021. It was their efforts that enabled three of our four business segments to report record earnings that resulted in our company posting record gross operating margin cash flow from operations and free cash flow regardless of the situation.

Speaker 3: In 2021, it was their efforts that enabled three of our four business segments.

Speaker 3: to report record earnings that resulted in our company posting record gross operating margin, cash flow from operations, and free cash flow. Regardless of the situation, whether it's a freeze that shuts down the entire state, the world going into a dark hole caused by a global pandemic, or the complete opposite in 2021, when demand and prices for our products and services soared, our people proved to be creative and determined.

Whether it's a freeze that SEC shuts down the entire state the world going into a dark hole caused by a global pandemic are the complete opposite in 2021, when demand and prices for our products and services. So sword are.

People proved to be creative and determined we want to thank each and every one of them.

Speaker 3: We want to thank each and every one of them for yet another outstanding performance in 2020.

Yet another outstanding performance in 2021.

Speaker 3: Today, Randy and I are largely going to focus on 21 results. And you'll probably have a lot of questions about 2022. But before we get to Randy, I'll finish with our thoughts on the changing sentiments around oil and gas.

Today, Randy and I are largely going to focus on 'twenty. One results, you'll probably have a lot of questions about 2022.

But before we get to Randy I'll finish with our thoughts on the changing sentiment around oil and gas.

Speaker 3: For some time now, the sentiment towards all traditional forms of energy, especially in political circles, has been very negative.

For some time now the sentiment towards ultra traditional forms of energy, especially in political circles has been very negative.

Speaker 3: Many said that the world should pull the plug on traditional energy as soon as possible and completely devote our capital and efforts toward renewable energy. Without a doubt, this

Many said that the world should pull the plug on traditional energy as soon as possible and completely devote our capital efforts toward renewable energy.

Without a doubt this was always naive.

Speaker 3: The world now realizes that an overnight transition to renewable sources of energy is not at all possible as evidenced by the rapid development of various global crises.

The World now realizes that an overnight transition to renewable sources of energy is not at all possible as evidenced by the rapid development of various global crises, including high natural gas and LNG prices crude oil prices and not seen since <unk> not seen since <unk>.

Speaker 3: including high natural gas and LNG prices, high crude oil prices, and not seen since 2014, and runaway inflation not seen for about 40 years. Europe is starved for gas and is faced with eat or eat, while Russia, with its major oil and gas supplier, is amassing troops on the Ukraine border. Try as you may, it's hard to blame these crises on the pandemic.

2014, and runaway inflation not seen for about 40 years Europe historic for gas and is faced with either eat while Russia with this major.

Major oil and gas supplier is amassing troops on the Ukraine border.

Tries you may.

It's hard to blame these prices on the pandemic.

Speaker 3: Over one-third of the world lives in energy poverty, mainly in developing countries.

Over one third of the world lives in energy poverty, mainly in developing countries. Europe's energy policies have now made energy poverty a reality in first world countries.

Speaker 3: Europe's energy policies have now made energy poverty a reality in first world countries.

Speaker 3: As an oil analyst said, energy is the economy.

As in all analysts said energy is the economy.

Speaker 3: We in the United States live in a country of plenty. We're a rich nation with a high quality of life, a creative culture, now also blessed with abundant energy.

We in the United States live in a country of plenty.

We're origination where the high quality of life of creative culture, now also blessed with abundant energy.

Speaker 3: Maybe that has distorted our thinking about the situation in other countries or regions.

Maybe that has distorted our thinking about the situation in other countries or regions.

Speaker 3: People who don't want developing nations to have what we have are either in denial, hypocrites, or both. At Enterprise, we've been outspoken that it's going to take all of the above, not for a few years, but for decades.

People, who don't want developing nations to have what we have are either in denial hypocrites or both.

At enterprise, we've been outspoken that is going to take all of the above not for a few years, but for decades to come look to comments made by a variety of sources everyone from the IEA to the head of Saudi Aramco members of the European Union and even the U S Energy Secretary.

Speaker 3: Look to comments made by a variety of sources, everyone from the IEA to the head of Saudi Aramco, members of the European Union, and even the US Energy Secretary. Ultimately, they all message the same thing.

Ultimately they all message the same thing.

Speaker 3: Investment in oil and gas needs to ramp up sharply.

Investment in oil and gas needs to ramp up short point sharply.

Speaker 3: in order to provide the badly needed baseload traditional sources of energy that will be needed alongside low carbon fuels and green energy to meet the world's growing demand.

In order to provide the badly needed baseload traditional sources of energy that will be needed alongside loan low carbon fuels in green energy to meet the world's growing demand.

In enterprise, we've never seen.

Speaker 3: applying energy to meet growing needs is two competing paths. We're going to.

Supplying energy to meet growing needs to competing pads, we're going to remain focused.

Speaker 3: applying the world with acclaimed low cost and reliable fuels that needs to die, while also playing a role in important parts in developing lower cargo alternatives.

On supplying the world with the clean low cost and reliable feels it needs today.

I'll also playing a role an important part in developing lower.

<unk>.

I think I've said enough Randy.

Speaker 4: I think I've said enough, Randy, I'll let you. All right, thank you, Jim. Good morning. Starting with the fourth quarter income statement items, net income attributable to common unit holders for the fourth quarter was $1 billion or 47 cents per unit on a fully diluted basis, compared to $337 million or 15 cents per common unit on a fully diluted basis for the fourth quarter of last year.

Thanks.

Alright, Thank you Jim good morning.

Starting with the fourth quarter income statement items net income attributable to common unit holders for the fourth quarter.

It was $1 billion or <unk> 47 per unit on a fully diluted basis compared to $337 million or 15 cents per common unit on a fully diluted basis for the fourth quarter of last year.

Speaker 4: Net income was reduced by non-cash asset impairment charges of $120 million for $0.05 per unit in the fourth quarter of 2021. This compares to $800 million or $0.36.

Net income was reduced by a noncash asset impairment charges of $120 million four five cents per unit in the fourth quarter of 2021. This compares to $800 million 36.

Speaker 4: for common units, RASDAD and parametchargers of 4.4 or 2020. So before the imparametchargers, EPU was 52 cents per unit for 2021, compared to 51 cents per unit for 2020.

Per common unit for asset impairment charges of fourth quarter 2020, so before the impairment charges <unk> was 52 cents per unit for 2021 compared to <unk> 51 per unit for 2020.

Speaker 4: Moving on to cash flows. Cash flow from operations was 2.1 billion for the fourth quarter of 2021 compared to 1.6 billion.

Moving on to cash flows cash flow from operations was $2 1 billion for the fourth quarter of 2021 compared to $1 6 billion.

Speaker 4: for the fourth quarter of 2020. On a full year basis, cash flow from operations was 8.5 billion in 5.9 billion for 2021 and 2020. Respect.

Fourth quarter 2020 on a full year basis cash flow from operations was $8 5 billion and $5 9 billion for 2021 and 2020, respectively.

Speaker 4: Cash flow from operations benefited from approximately 1.4 billion of net cash provided by changes.

Cash flow from operations benefited from approximately $1 4 billion of net cash provided by changes in.

Speaker 4: in working capital accounts in 2021, by comparison, cash flow from operations was reduced, by $768 million in 2020 through the changes in working capital. So if you would, a swing of $2.2 billion between the two years.

In working capital accounts in 2021 by comparison cash flow from operations was reduced by $768 million in 2020 due to changes in working capital. So if you would a swing of $2 $2 billion between the two years.

Speaker 4: Again, doing the math cash flow from operations before changes in working capital was $7.1 billion for 2021 compared to $6.7 billion in 2020.

Again doing the math.

Cash flow from operations before changes in working capital was $7 1 billion for 2021 compared to $6 7 billion in 2020.

Speaker 4: Freakash flow for the year ended, December 31, 2021, was $6.3 billion compared to $2.7 billion for 2020. Before cash provided by changes in working capital, Freakash flow was $4.9 billion in 2021 compared to $3.4 billion in 2020.

Free cash flow for the year ended.

December 31, 2021 was $6 3 billion compared with $2 7 billion for the.

For 2020 before cash provided by changes in working capital free cash flow was $4 9 billion in 2021 compared to $3 4 billion in 2020.

We declared a distribution of <unk> $46.05 per common unit.

Speaker 4: We declared a distribution of 46.5 cents per common unit of with regard to the fourth quarter of 2021, which represents a 3.3% increase compared to the distribution that we declared for the fourth quarter of 2020. But this distribution will be paid February 11th to all common unit holders of record as of the close of business January 31st.

With regard to the fourth quarter of 2021, which represents a three 3% increase compared to the distribution that we declared for the fourth quarter of 2020.

This distribution will be paid February 11th to all common unit holders of record as of the close of business January 31 here.

Speaker 4: Here in the fourth quarter, we also repurchased approximately $125 million or $5.8 million?? Lamb

During the fourth quarter, we also repurchased approximately $125 million or $5 8 million common units. This brought our repurchases under our buyback program for $200 million or $9 2 million common units for 2021.

Speaker 4: This brought our repurchases under our buyback program for $200 million or $9.2 million common units for 2021.

Speaker 4: As of year end 2021, we have utilized 24% of our outstanding $2 billion buyback program, which was authorized in 2019.

As of year end 2021, we've utilized 24% of our outstanding $2 billion buyback program, which was authorized in 2019 and.

Speaker 4: In addition to these five acts, enterprises distribution re-investment plan and employee unit purchase plan purchased to combine $37 million of the PD common units in the open market during the fourth quarter of 21 and $144 million for the full.

In addition to these buybacks enterprise's distribution reinvestment plan and employee unit purchase plan purchased a combined $37 million of <unk> common units in the open market during the fourth quarter of 'twenty, one and $144 million for the full year.

Speaker 4: Our payout ratio, which we defined as the sum of our cash distributions and buybacks as a percent of cash flow from operations before working capital changes was 58% for 2021. The payouts, the return of capital to investors includes 4 billion of declared distributions and 200 million of common unit buybacks.

Our payout ratio, which we define as the sum of our cash distributions and buybacks as a percent of cash flow from operations before working capital changes was 58% for 2021.

The payout the return of capital to investors includes 4 billion declared distributions and $200 million of common unit buybacks.

Speaker 4: our 2021 payout ratio as a percent of free cash flow before cash provided by changes in working capital was 84 percent. As we previously

Our 2021 Patriot payout ratio as a percent of free cash flow before cash provided by changes in working capital was 84%.

As we previously discussed.

Speaker 4: Our capital allocation strategy remains focused on an all the above approach, investing in quality, midstream infrastructure with attractive returns, supporting and growing distributions, executing buybacks opportunistically, all while maintaining a strong balance sheet and financial flexibility.

Our capital allocation strategy remains focused on and all of the above approach investing in quality midstream infrastructure with attractive returns supporting and growing distributions executing buybacks opportunistically, all while maintaining a strong balance sheet and financial flexibility.

Speaker 4: In terms of capital investments in the fourth quarter, total capital investments were $424 million, which included $325 million of growth cap-X and $99 million for sustaining capital expenditures. Total capital investments in 2021 were $2.2 billion, which included investments in growth capital projects of $1.8 billion and $430 million for sustaining cap-X.

In terms of capital investments in the fourth quarter.

Total capital investments were $424 million, which included $325 million of growth Capex and 99 million for sustaining capital expenditures.

Total capital investments in 2021 were $2 2 billion, which included investments in growth capital projects of $1 8 billion and 430 million for sustaining capex.

For 2022.

Speaker 4: We estimate growth capital investments to be approximately $1.5 billion. This estimate does not include capital investments associated with a partnership proposed seaport all-terminal spot, which remains subject to governmental approval.

We estimate growth capital investments to be approximately $1 $5 billion. This estimate does not include capital investments associated with the partner partnerships proposed.

Seaport oil terminals spot, which remains subject to governmental approval.

Speaker 4: We currently expect assigning capital expenditures for 2020 to be approximately 350 million.

Currently expect sustaining capital expenditures for 2020 to be approximately $350 million.

Speaker 4: We currently expect the acquisition of Navitas to close in the first quarter 2022, and our estimate of $1.5 billion in growth cat-backs in 2022 includes any Navitas-related cat-backs in the year.

We currently.

We expect the.

The acquisition of <unk> to close in the first quarter of 2022, and our estimate of $1 5 billion in growth Capex. In 2022 includes any NAV and avatars related capex and in the year.

Speaker 4: Our total debt principle outstanding was $29.8 billion as of December 31, 2021, assuming the first call date or final maturity date of our high rates, the average life of our debt portfolio was 16 and a half years and 20.7 years respectively. Our effect is average cost of debt is 4.4%.

Our total debt principal outstanding was $29 $8 billion as of.

December 31, 2021, assuming the first call date for final maturity date of our hybrids. The average life of our debt portfolio was 16, and a half years and 27 years respectively.

Our effective average cost of debt is four 4%.

Our consolidated liquidity was approximately $7 3 billion at December 31, 2021, including available availability under our bank credit facilities and approximately $2 8 billion of unrestricted cash on hand.

Speaker 4: Our consolidated liquidity was approximately $7.3 billion at December 31, 2021, including availability under our bank credit facilities and approximately $2.8 billion of unrestricted cash on hand.

Speaker 4: This amount of cash on hand while elevated by his historical standards was reduced this morning as we retired $750 million of Clean Your Notes that matured and we will retire an additional 650 million of senior notes on-

Out of cash on hand, while elevated by historic Storable standards was reduced this morning, as we retired $750 million of senior notes that matured and we will retire an additional $650 million.

<unk> senior notes on February 15.

Speaker 4: Further, as we previously communicated, we expect to fund our acquisition of Navitas with a combination of cash on hand and borrowings under the partnership's existing commercial paper facility and bank credit facility.

Further as we previously communicated we expect to fund our acquisition of <unk> with a combination of cash on hand, and borrowings under the partnership's existing commercial paper facility and bank credit facilities adjust.

Speaker 4: Adjusted EBITDA for the fourth quarter of 2021 was $2.1 billion and $8.4 billion for the 12 months ended December 31, 2021. Our consolidated leverage ratio was 3.1 times after adjusting debt for the partial equity trade of hybrid securities by the rating agencies and also being reduced by the partnership's unrestricted cash rate.

Adjusted EBITDA for the fourth quarter of 2021 was $2 $1 billion and.

<unk>.

$4 billion for the 12 months ended December 31, 2021, our consolidated leverage ratio was three one times after adjusting debt for the partial equity trade of hybrid securities by the rating agencies and also being.

Being reduced by the partnerships unrestricted cash on hand.

Speaker 2: With that, Randy, we can open it up for questions. Okay. Thank you, Randy. Duwanda, we're ready for the questions from our listeners now.

Randy we can open it up for questions. Okay. Thank you Randy.

Wanda we're ready for the questions from our listeners now.

Speaker 1: Thank you. Ladies and gentlemen, as a reminder to ask the question, you will need to press star then one on your telephone.

Thank you, ladies and gentlemen, as a reminder to ask a question you will need tomorrow.

One on your telephone.

Speaker 1: We ask that you limit yourself to one question and one follow-up, please. Again, that's star 1 to ask the question. To withdraw your question, you can press the pound key. Please stand by while we compile the Q&A.

I ask that you limit yourself to one question and one follow up please.

Again, Thats star one to ask a question to withdraw your question you can press the pound key.

Please standby, while we compile the Q&A roster.

Our first question comes from Milan, Colton Bean with Tudor Pickering.

Line is open.

Good morning, now that you have the updated capital budget in hand can you update us on how you're evaluating your payout ratio for 2022, and I think based on the budget today. It seems like the increase in free cash sit outpace the distribution raise by hoping to understand it and advertise spending would steer you to lower payout.

Speaker 5: Good morning. So now that you have the updated capital budget in hand, can you update us on how you're evaluating your payout ratio for 2022? I think based on the budget today, it seems like the increase in free cash should outpace the distribution raise, but hoping to understand if Navitas funding would steer you to lower payout.

Speaker 4: Colton, this is Randy. You know, our payout ratio has really been averaging between 56% and 62% of cash flow from operations before working capital changes, and I think we'll most likely be in that range in 2022.

Colton this is Randy.

Our payout ratio is really been averaging between 56% and 62%.

Cash flow from operations before working capital changes and I think we will most likely be in that range.

In 2022.

Speaker 5: Okay, so the Navitop acquisition, does that factor into the thinking?

Okay.

Now the <unk> acquisition does that factor into the thinking.

Speaker 4: Well, I mean, it is an allocation of capital for three and a quarter billion dollars that we'll pay for, so some of our, as we mentioned, we'll have some cash on hand after we come in and pay this, the debt maturities in February , so some of the cash would go towards the purchase price as well as borrowings on our bank credit facility.

Well I mean, it is an allocation of capital for three and a quarter billion.

We will pay for it so some of our.

We mentioned, we will have some cash on hand, after we'd come in and pay this debt maturities in February .

So some of the cash would go towards.

The purchase price as well as borrowings on our bank credit facility.

Understood.

Speaker 5: And then just on the operational front, a significant step up in frac unit margins relative to recent history. Can you expand a bit on what you're seeing in that market and the sustainability of those margins in 22?

Great and then just on the operational front, a significant step up in Frac unit margins relative to recent history, you expand a bit on what youre seeing in that market and the sustainability of those margins in 'twenty two.

Zach.

Some of that as well.

Speaker 6: A little bit of commodity exposure that the fracs have, so there's some blending margins. Some of that on the revenue side is we have a variable cost component, and so as gas prices go higher, you're seeing our revenue go up, but our expenses are also going up.

A little bit of commodity exposure that the fracs have so there's some blending margins.

Some of that on the revenue side is we have a variable cost component. So as gas prices go higher you're seeing our revenue go up but our expenses are also going up.

Okay and in terms of the operating expenses that.

Speaker 5: It seems like that would have been backed out of the unit margins or the operating margin, but I just want to clarify that.

It seems like that would have been backed out of the unit margins or the operating margin, but I just want to clarify that.

Yeah, it should be a lot of what youre seeing on the increases.

Speaker 6: Yeah, it should be. So a lot of what you're seeing on the increase is the quantity exposure on the blends on the blending margins. Uh, as far as frack margins as a as a fee base, there hasn't been a significant change there.

The commodity exposure on the blends on the blending margins.

As far as Frac margins.

As a fee base.

There hasnt been a significant change there.

Speaker 6: Nor do we sort of see one in the near future. But as gas prices go up, your bracket goes up. Correct. As gas prices go up, our fees go up. All set by some higher operational expenses.

Nor do we nor do we sort of see one in the near future.

As prices go up.

Frankly, it goes up correct.

Gas prices go up our fees go up.

Offset by some higher operational expenses.

Great I appreciate the time.

Thank you.

Speaker 1: Next question comes from Melana of Cates, Wolverhill with Bank of America, Yelana.

Our next question comes from the line of Chase Mulvehill with Bank of America. Your line is open.

Speaker 7: Hey, good morning, everybody, so.

Good morning, everybody.

So.

Speaker 7: Quick question, I guess there's growing concern when you think about the permeant and the potential bottlenecks on the natural gas side.

Quick question.

Yes.

Concern when we think about the Permian and the potential bottlenecks on the natural gas side as we kind of go through 2023.

Speaker 7: Go through 2023 and so I'd kind of be curious on, you know, some of your thoughts around this topic and and kind of how this bottleneck bottleneck potentially gets resolved. I mean, we've got obviously per median piece, you know, driving a majority of the growth.

And so I'd be curious on some of your thoughts around this topic.

Kind of how this bottleneck bottleneck potentially gets resolved I mean, we've got obviously Permian e&ps driving a majority of the growth.

Speaker 7: which makes it a little bit more difficult to sanction, you know, large greenfield projects just given that everybody's going to want, you know, a 10-year take or pay contract.

<unk> makes it a little bit more difficult to sanction large greenfield projects, just given that everybody is going to want a 10 year take or pay contracts and the profit e&ps may not be willing to kind of give that because they just don't have 10 years of drilling inventory. So just kind of curious your thoughts on kind of how you think this ultimately gets resolved.

Speaker 7: And the private EMPs may not be willing to kind of give that because they just don't have 10 years of drilling inventory. So just kind of curious your thoughts on kind of how you think this ultimately gets resolved.

I wanted to take it Brian and you want me to.

Speaker 8: Take it, Brent, or you want me to? Yeah, this is Brent Seacrest.

Yes. This is Brent seacrest.

Speaker 8: You know, it feels like a lot of the majors and the bigger publics out there are fairly.

It feels like a lot of the majors in the bigger published out there are fairly.

Speaker 8: well-set in terms of the gas takeaway capacity.

Well set in terms of the gas takeaway capacity.

<unk>.

Speaker 8: you know, most of the customers that we deal with, and you can see our customer lists, they seem like they're in pretty good shape. So when it comes to basis

Most of the customers that we deal with and you can see our customer list they seem like they're in pretty good shape. So when it comes to basis.

Speaker 9: In the past, the private guys have probably been.

In the past the private guys have probably been.

Speaker 9: the last ones to step up for capacity, and it's benefited them in this environment from a crew perspective, from a guest perspective, and some other things that they haven't had to, and there was other people that stepped up to get projects done and to remove those type of basis dislocations.

The last ones to step up for capacity and its benefit of them in this environment from a credit perspective from a gas perspective, and some other things that they have.

If I had to and there is other people that stepped up.

To get projects started and to remove those type of basis dislocations.

Speaker 9: Ultimately, somebody is going to need to step up, or a collection of people are going to need to step up. And every month that goes by without a gas pipeline being announced is just going to add to the problem.

Ultimately somebody is going to need to step up or a collection of people are going to need to step up and.

And every month that goes by without a gas pipeline being announced.

The problem.

Speaker 9: But there's certainly opportunities for us as enterprise.

But there are certainly opportunities for us as enterprise.

Speaker 9: In terms of the capacity that we have remained open to participate in these type of dislocations, we talked to our customers about a potential for a pipeline project, but you know, right now we haven't been able to get anything done on that side.

In terms of the capacity that we have remained open.

To participate in these type of dislocations.

We've talked to our customers about a potential for a pipeline project, but.

Right now, we haven't been able to get anything done on that side.

Speaker 7: So, can I just follow up on this a bit and ask, I mean, it seems like obviously somebody's going to have to take more risk, whether it's the private EMP, whether it's the person going to build the pipe and, you know, do, you know, not 10 years or five years, which they're probably not going to do, or is it going to be the gas processor? Like, you know, obviously now you're going to be the largest.

Yes.

Can I ask can I just follow up on this a bit in <unk>.

Ask me it seems like obviously somebody is going to have to take more risk whether it's the private E&P, whether its the person going to build the pipe and do not 10 years or five years, probably not going to do or is it going to be the gas processor.

Obviously, now youre going to be the largest gas processor in the Permian and so.

Speaker 7: So let me ask you the question, are you willing to take more risk in the Permian on the gas processing side and maybe the contracts may have to be, you know, signed by the gas processor versus kind of, you know, the property.

Let me ask you. The question are you willing to take more risk in the Permian.

On the gas processing side, and maybe the contracts may.

Have to be.

Signed by the gas processor versus kind of the private E&P.

Speaker 9: Now, that's just something in the past, you know, we haven't done Chase.

Yes that is something in the past, we havent done chase.

<unk>.

And it's hard.

Speaker 9: And it's hard, I mean, there's times when we step up for some last bit of remaining capacity that we can overperform from an operational standpoint, and we'll take on a minute amount of risk. But ultimately, the focus...

There's times when we step up for some last bit of remaining capacity that we can over perform from an operational standpoint, and we will take on my new what amount of risk, but ultimately.

Folks that are realizing.

Speaker 8: $85 a barrel, and the folks that are realizing, you know, gas prices at these levels and NGL prices at these levels.

$85, a barrel and the folks that are realized.

Gas prices at these levels of NGL prices at these levels.

Speaker 9: And in terms of how we go pitch projects, those are the ones that probably need to step up. Can we be complimentary to it? Possibly. But to me, ultimately, this is about producers stepping up to get this project done.

And in terms of how we go pitch projects those are the ones that probably need to step up so it would be complementary to it possibly.

But to me ultimately this is about producers stepping out to get this project done.

Okay perfect.

Speaker 7: Okay, perfect. Quick follow-up on FA and exports. You know, during the quarter, you averaged 171,000 barrels a day.

A quick follow up on ethane exports during the quarter, you averaged 171000 barrels a day.

Speaker 7: And I think your dock capacity is 240,000 barrels a day. So.

And I think your dock capacity is 240000 barrels a day.

So I don't I don't know if Justin there I don't know if somebody can kind of comment on where you think you can take this do you take it to the 240000 barrels a day.

Speaker 7: I don't, I don't know if Justin's there. I don't know if somebody can kind of comment on, you know, where do you think you can take this, you know, do you take it to the 240,000 barrels a day, or are there actually some constraints, you know, with with vessels or, or imports on the other side, you know, these docks that would present some constraints.

Or are there actually some constraints.

With vessels or or imports on the other side.

These docs.

That would present some constraints.

Speaker 6: Hey, Chase. I think that as we think about dock capacity or at the next port capacity, we think 200 a day, maybe slightly above is a going run rate.

Hey, Jason.

I think that.

As we think about dock capacity or ethane export capacity, we think 200, a day, maybe slightly above as it going run rate.

But more often than not when we start approaching those levels. They are things that are outside of our system that start becoming constraints primarily around freight. So it's the milacron business and freight has to be there on a consistent basis for the units to be able to run at those rates and more often than not we don't we don't see that over time, we expect that market to get more.

Speaker 6: But more often than not, when we start approaching those levels, there are things that are outside of our system that start becoming constraints, primarily around freight. So it's a milk run business, and freight has to be there on a consistent basis for the units to be able to run at those rates. And more often than not, we don't see that. Over time, we expect that market to get more mature and us to be able to get closer to those sustainable rates of 200, maybe slightly

Mature or us to be able to get.

Closer to those sustainable rates of 200, maybe slightly above two.

Speaker 3: 40 is really your instantaneous, 200 is basically your operating. That's right.

<unk> is really your instantaneous 200 as basically operating that's right.

Speaker 7: Right. Perfect. All right. Thanks, Justin. Thanks, Rick.

Okay perfect Alrighty, Thanks, Jeff Thanks, Brett.

Speaker 1: Thank you. Our next question comes from the line of Tristan Richardson with Troy's Securities. Your line is open.

Thank you. Our next question comes from the line of Tristan Richardson mature with Securities. Your line is open.

Yes.

Speaker 10: Hey, good morning, guys. Appreciate your comments on Natacost and the opportunity in the Midland. I mean, should we think of that asset base as running pretty full today and that's driving the new plant investment? And then should we think of a development schedule as planned activity by existing customers or maybe recent commercial wins with new customers?

Hey, Good morning, guys. Appreciate your comments on <unk>.

Pertaining to Midland I mean should we think of that asset base is running pretty full today and thats driving the new plant investment.

Should we think of the development schedule.

As planned activity by existing customers or maybe recent commercial wins with new customers.

Yes.

We think that we know.

I think everybody knows they are bringing a new plan on as we speak we understand they have plans.

For an additional plant frankly.

I don't think we know where they're at.

They are existing customers of what their plans are.

Doug into deep going through this regulatory process.

Understood and then just on the LPG side.

Talked about obviously, we saw substantial growth in total U S exports as part of the overall global recovery, but recently you guys have also noted that there is a competing incremental domestic Paul that's emerged.

May create one off opportunities here or there to keep molecule state side, but can you talk about what youre seeing is sort of as we start the year and how 2022 unfolds on that dynamic.

Right.

Started out and take it from there.

Sure.

When we see increases on the domestic side those are weather related at the end of the day Tristan.

Market for the incremental Ngls from the United States, which are substantial.

Going to be at the dock and there's just no doubt about it.

Unless Justin feels otherwise, we're going to say they are largely pointed towards Asia among men.

Now that said everything has grown balance at $1.

Thank you.

Speaker 1: Our next question comes from the line of Janine Salisbury with Bernstein.

Our next question comes from the line of domain Salisbury with Bernstein. Your line is open.

Speaker 11: Hey, good morning. This is probably for Brent. Your NGO pipeline segment was down 200 million in 2021 versus 2020 and you gave some helpful color in the release that Permian and Rocky's pipes had pipeline relapse. I guess my question is what ending are we in in terms of these NGO contract relapse? Obviously, a ton of Permian processing plans kind of came out in the last five or six years. So should we think of more contract roles could still be to come?

Hey, Good morning. This is probably for Brent Your NGL pipeline segment was down $200 million in 2021 versus 2020, and you gave some helpful color on there or at least that Permian and Rockies pipes had pipeline or less and I guess my question is what inning are we in in terms of these NGL contract roll offs.

Obviously, a ton of Permian processing plans kind of came out in the last five or six years.

So should we think of more contract trials could be taken.

Speaker 9: So I think this is the first full quarter that we've seen the Rocky Mountain contract roll off in effect.

So I think this is the first full quarter that we've seen the rocky mountain contract roll off in effect.

On the Permian side, there is some incentive rates that are in place so.

Speaker 9: On the Permian side, there's some incentive rates that are in place. So those are there to stay for a while. And then if you look at across the MAPL system, the fact of the matter is in the fourth quarter, we didn't really get much of a winner. So from a propane demand perspective, fourth quarter to fourth quarter, we saw some effects of that. We're seeing a good January and a good start to the year, but there were definitely some effects of the propane lack of demand domestically.

So those are there to stay for a while and then if you look at across the map will system. The fact, the matter is in the fourth quarter, we didn't really get much of a winter so from a propane demand perspective quarter.

Fourth quarter and the fourth quarter, we saw some effects of that.

We're seeing a good January and a good start to the year, but there was some definitely some effects of the propane market demand domestically.

Speaker 11: Okay, that's helpful. And then as my follow up, this one might be for Tony. What is your latest projection of when Permian-Angiel production will warrant and surprise either building more Angiel takeaway or possibly switching seminal back to Angiel?

Okay.

That's helpful.

And as my follow up and this one might be for Tony what is your latest projection of when Permian NGL production will warrant enterprise either building more NGL takeaway or possibly switching back to Ngls.

It certainly.

Go ahead Tony.

Speaker 10: Well, I'll tell you what, let's talk. Do you want to take it? Sorry, Tony. I didn't mean to clear that.

Well I'll tell you what Doug do you want to take it.

Sorry, Tony I, Didnt mean to cut back.

Yes, I mean, if you look at our system, we have a lot of.

Options and you mentioned that we can repurpose certain assets, but call it.

Late 2024 will be assessing whether we can do some.

Brownfield expansions or evaluated a greenfield project.

Gina and I wouldn't make the assumption that it's.

<unk>.

Two.

It gets very purpose I mean, there are some other better cost alternative has been potentially that one.

Okay.

Great. Thanks, a lot.

Thank you.

Our next question comes from the line of Michael Blum with Wells Fargo. Your line is open.

Good morning, everyone. Just just one follow up on the last set of questions on the map all contract Rolling off I. Just wanted to clarify was that renewed at a lower rate or is it just not renewed in its operating more on a spot basis.

I believe Tom correct me on this but Michel those those were not renewed.

Those contracts were to support the expansion from a number of years ago.

And.

Those volumes are still flowing almost there just kind of roll on it.

At.

If the tariff rate that's right.

Deficiency revenue, we are recognizing that we're no longer recognizing.

Got it thank you for that.

Second question I was wondering if you can just give us a little bit of insight into your current conversations with producers are you seeing any change in their approach and your willingness to add more rigs or is it pretty much status quo in terms of.

The real disciplined youre seeing certainly from the public.

Thanks.

Good Tony.

Obviously the public's.

We remain very committed to discipline.

That said if you look at what Chevron has said in the last couple of days you can look what Exxon said this morning.

The Permian is there is there are hot basin.

And they're both going to increase activity there for 2022 and beyond the.

The other thing that's very hard to get your arms around is there's a lot of acreage and I hate to just use that term generically that's changing hands.

What I would call it.

Tier two acreage.

And that will be drilled.

The private equities are picking it up in the privates are picking it up.

So that's how we see it we see rig counts completions continuing to be added.

It's very profitable.

As <unk> talked about the gas takeaway situation has to be resolved.

But we've been really really.

Outspoken about a large number of people thought it was very large one 8 million barrels for 'twenty, one 'twenty two and 'twenty three that's crude oil production and you can think about somewhere between 800 900000 barrels of Ngls associated with that.

If you look at the crude oil number that the EIA published in December we're talking 600000 barrels a increase in 2021.

So it's not a stretch to say that that one H, probably a little on the low side just the liquids number.

Does that answer your question Michael Yes, Thank you very much.

Thank you.

Our next question comes from the line of Spiro <unk> with Credit Suisse. Your line is open.

Thanks, Operator, Hey, Tim.

First question is just on spread opportunities heading into the year I know you in the past you talked about anywhere between $500 million to $800 million in spread opportunities in any given year. So curious on two fronts. One do you have a sense of what that number ended up being in 2021 and as you look out into 2022, because it seemed like this can be an environment to improve upon.

That number.

Good morning, Matt.

Yes.

But last year.

'twenty one is between 800 and a $1 billion.

And I would say.

In 2022 is probably going to be between 500 $900 million.

Back to the average got it that makes sense. Thanks, Tim.

Second one just I know youre going through the <unk> process Nasty, you probably can't say much but would just love to get your general thoughts on M&A in general I'm. Just curious if there are other assets out there that checks a lot of those same boxes as nabil to US and then just to get your overall appetite to do more tuck in transactions that fit nicely into the PD system.

I think.

I Love Randy's, what Randy says price matters.

And it has to fit our value chain.

So.

I don't think you never say never but it's got to make some criteria.

If you'd look at.

If you look at if you look at anything that enterprise has ever done.

Terms of acquisitions and Bearably it brings something to the total value chain.

And that's that's a criteria we are not going to breach.

And Spiro. This is Randy I would just add novel toss, a special and because not only did it broaden our natural gas business into the Midland Basin, where we didnt have anything.

It also broadens.

Relationships with customers that we already had.

And as Jim said, it's complementary to our system and again the other thing is.

The cash accretion on the deal.

Was superior to any assumption on buybacks and also no matter, where we assume synergy capture even if we don't.

For a dollar of synergies this was superior to doing a leverage priority buybacks. So very excited about.

The <unk> deal and again.

Special transaction.

Great I appreciate the color guys. Thanks.

Thank you.

Next question comes from the line of Keith Stanley with Wolfe Research. Your line is open.

Hi, Good morning, I wanted to start on Capex. So the $1 billion five spend for this year. That's obviously consistent with the $1 billion to 1 billion or have you said that you thought you'd get to but it's up from $800 million I guess committed spend that you had talked to you last time. So can you talk to specific.

<unk> that were added and then on the on the major capital projects slide It looks like it's about $2 2 billion for 'twenty, two and beyond was $2 billion. Previously just is that apples to apples or how can I think about.

Comparing those two data points.

Yes, hi, good morning.

Yes.

We were what we were finding is when we were coming in and just talking about sanction projects only it was tending to.

I guess it was understating.

Really where we thought our capex would be in.

And I think Jim has highlighted that we are working on a number of projects.

And we came out this year and said look rather than coming in and trying to do.

Surgery on what sanctioned and what's not sanction that we're working on the $1 5 billion is just where we think we're going to wind up for the year.

And those are the sanctioned projects that we've been talking about.

That are included on that sheet that you saw in our supplemental slides that we posted this morning.

And it was also some.

So we included these projects under development as well.

The difference between the $2 2 billion and $2 1 billion I think there are some small things that we're doing from a natural gas gathering standpoint over the next two or three years that.

Aggregate it enough it rounded to another $100 million. So if you wouldn't mind that schedule.

Okay got it that makes sense.

Separate question just on <unk>.

Do you have any can you give us a sense just of how much of the I guess revenue or DCF, you're thinking for 2023 is <unk>.

Hi to commodity prices is it similar to your existing processing business in terms of fee floors or is there more or less commodity exposure in this business versus your existing business.

Yes.

I'll take a shot at this and Jim and Brent might want to come in and add some color I think the way we look at it just when we think about.

Our equity NGL production, we're probably adding probably an incremental 30 to 35000 barrels a day of liquids exposure.

As a result of the novel <unk> steel.

The way we look at.

What we see over the next few years.

Commodity exposure isn't necessarily a bad thing.

No.

For us.

I think Chris.

Chris I think you said we had.

18% commodity exposure last year was that churn number.

Yes.

Sure.

But it's not my point is in this environment.

A little more commodity exposure is not a bad thing.

Yes, and what Jim's highlighting is excellent on page nine of our supplemental slide deck. If you look over the last few years and really put that on the other side when we come in and think about our fee based earnings.

Range from 82% to 87% over the last three years in 2021, it was 82% so spread related and commodity based.

The 18%.

Coming in and.

And what we've said in the past.

We really don't mind, a lower fee.

This means our commodity businesses are doing better.

And again I think just expanding on what Jim said in this world, where there are and again, we think some of this is turning but where there is an under investment in oil and gas globally. We just think.

From a structure standpoint.

Commodity prices.

<unk>.

Hold up well and we just want more exposure to it.

Got it thank you.

Thank you. Our next question comes from the line of Kyle May with capital One Securities. Your line is open.

Hi, Good morning, everyone. Just one question for me today.

You mentioned the Haynesville is an area that could drive growth. This year can you talk more about what youre seeing in that area and what kind of growth you expect this year.

Natalie.

You want to answer it.

Right.

You can take your mascot answered okay.

We're seeing growth in fact, one of the things we're doing right now is bringing <unk> back up it is cotton valley has been jailed.

We're bringing that processing plant back as far as lean gas our systems are starting to bill in our vision is that we're going to have to probably go through some expansions.

As far as trading.

So all good things are seeing is increases in production.

Okay.

The Wonder this is Randy we have time for one more question before we.

Terminate the call.

Alright I'll final question comes from the line of.

Segal with Eagle asset.

Your line is open.

Well. Thank you good morning, everybody.

Just a quick question how do you how do you think about the northeast.

Natural gas and Ngls.

Even.

Problems with.

Takeaway capacity.

Yes. This is Tony.

We've always felt that that area was challenged the rock the resource is tremendous.

For dry gas and for NGL rich the resources incredible.

But.

Getting it out and getting it to market.

<unk> is a challenge and so I think you see the producers in the capital markets calibrating in that way.

The question, just so I wondered three or four years ago, whereas the incremental gas can come from is it going to come from Appalachia Haynesville.

Well it is clear now that it's going to come from from the Haynesville.

50 rigs 2020, Frac crews working.

And as Natalie mentioned Cotton Valley well.

See the Haynesville on the marginal gas molecule is being the provider outside of oil related gas.

Does that answer your question Sir.

Really well, yes. Thank you.

Okay.

That's it from me thanks, Okay.

Before you give the replay information we'd like to thank everyone for joining us today for our call and that comes is going to sign off now and if you would go ahead and give the replay information drivers. Thank you goodbye.

Thank you, ladies and gentlemen, a digitized replay of the discussion will be available beginning today February one 2022 at one P. M. Eastern standard time and will end Tuesday February eight 2022 at 11 <unk> P M Eastern standard time.

To access the digitized replay please dial eight plaza eight Batman to zero Bob Thanks.

40453734 is the real estate.

Ladies and gentlemen. This concludes today's conference call. Thank you for participating you may now disconnect everyone have a wonderful day.

Okay.

[music].

Ladies and gentlemen, thank you for standing by and welcome to the Q4 2021 Enterprise product Partners Conference call.

At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During this session you will need to press Star then one on your telephone please.

Please be advised that today's conference is being recorded.

If you require any further assistance. Please press Star then zero I would now like to turn the conference over to your speaker for today, Randy Burkhalter, Vice President Investor Relations you may begin.

I think you'd want to good morning, everyone and welcome to the enterprise products Partners conference call to discuss fourth quarter and year end 2021 earnings our speakers today will be co chief executive officers of Enterprise's General partner, Jim Teague, and Randy Fowler other members of our senior management team are also in attendance today.

During this call we will make forward looking statements within the meaning of section 21 E of the Securities Exchange Act of 1934 based on the beliefs of the company as well as assumptions made by and information currently available to enterprises management team.

Management believes that the expectations reflected in such forward looking statements are reasonable it can give no assurance that such expectations will prove to be correct.

We reported net income attributable to common unit holders for 2021.

$4 $6 billion or $2.10 per unit compared to 318 billion or $1 71 per unit.

Diluted basis for 2020.

Cash flow from operations was $8 5 billion for 'twenty, one compared to $5 9 billion for 2020.

Both 'twenty one 'twenty were impacted by large changes in working capital in opposite directions brought about by a significant storage opportunities.

We generated $6 6 billion of DCF in 'twenty, one compared to $6 for 2020.

We had one seven times coverage.

We retained $2 6 billion of DCF in 'twenty, one and head into 'twenty, two and significant financial flexibility.

We also increased our distribution again in 2021 to $1 81.

Per common unit.

This 23rd consecutive year of distribution growth since our IPO in 1998.

In addition, 28 21 marked another year of records for enterprise, including 12 financial Records in five operating records.

Our NGL pipelines and services and natural gas pipelines and services segment.

Segment gross operating margin records.

We've also been focused on growing our petrochemicals and refined products services segment, which had a record gross operating margin of one 4 billion for 2021 with a huge contribution in petrochemicals, our gross operating margin exceeded $1 billion for 2021.

We set five operational performance records in 'twenty, one including.

Record ethane marine volumes record natural gas transportation volumes record refined products and petrochemical transportation volumes.

Propylene production volumes and record.

<unk> production.

<unk> recovery in crude oil pipeline volumes to near pre COVID-19 levels and Red record natural gas pipeline volumes.

As to Capex, our growth capital spending in 2021 was $1 8 billion with approximately $2 2 billion of major projects currently under construction.

The largest projects put into service in 2020 . One include CPAP Hydro treater at Mont Belvieu, and we added pipeline capacity to move ethane from Mont Belvieu to Beaumont. Another project for about feedstocks to the growing Gulf Coast Petrochemicals, and our natural gas services group, our gillis lateral and <unk>.

Katie and Haynesville expansion were put into service in December 'twenty one.

These projects move growing volumes from the Haynesville down to the LNG corridor in South Louisiana.

And our petrochemical segment, we completed our ethylene export terminal and ethylene storage and pipelines are second PTH remains on budget and on schedule for in service the first half of 2023.

<unk> team has done an outstanding job to ensure supply chain issues would not impact product project schedule and Graham and his team are happy to report that almost all major equipment is now on site significantly this risk de risking any major equipment issues.

Whereas we were also excited to announce the agreement to acquire <unk> midstream.

<unk> gives us an attractive entry point for our natural gas processing and NGL businesses and the Midland Basin.

We anticipate anticipate closing this acquisition in the first quarter of 2022 subject to customary regulatory approvals and.

<unk> plans for the construction of another natural gas projects and processing plant, which would also provide us additional organic growth.

Last year, we have announced that we joined forces with Magellan and iced promote a U S Gulf coast futures crude oil contract.

Early indications are that the contract is going to be well received as ice announced last week that the contract traded well over 1 million barrels a day and just the first few days of trading.

Trading we're.

We're excited about what this contract means not just for the U S producer, but for the global oil industry.

We learned the hard way in April 2020 at the perils that come with the futures contract that doesn't have an adequate physical infrastructure. The ice Midland WTS AGC futures contract is access to 14 ship docks in the Houston area, providing significant direct.

Texas for exports. In addition, enterprise in Magellan's combined distribution systems offer access to approximately 150 million barrels of total crude oil storage capacity and $4 5 million barrels of refining capacity.

As we finish up 'twenty, one and move into 'twenty. Two I'd also like to highlight the momentum from our abled evolutionary technology team.

In order to improve the reliability of our systems and optimize these systems every day for enterprise. In addition to supplying the developing world with a cleaner fuels. It needs. Today. These teams are on a path to developing lower carbon projects that both complement our systems and are profitable.

If not we would not have thrown the amount of horsepower into these initiatives. If we didn't believe in their potential and profitability for our company.

We had our best year ever for safety in 2021.

Performance in 2021.

Over the last two years COVID-19 has flipped solve the global economy, including the U S energy sector.

As always the case our people responded in 2021. It was their efforts that enabled three of our four business segments to report record earnings that resulted in our company posting record gross operating margin cash flow from operations and free cash flow regardless of the.

<unk>, whether it's a freeze that SEC shuts down the entire state the world going into a dark hole caused by the global pandemic are the complete opposite in 2021, when demand and prices for our products and services. So sword, our people proved to be creative and determined we want to thank each and every one.

One of them, but you had another outstanding performance in 2021.

Today, Randy and I are largely going to focus on 'twenty. One results, you'll probably have a lot of questions about 'twenty one 'twenty two.

But before we get to Randy I'll finish with our thoughts on the changing sentiment around oil and gas.

For some time now the sentiment towards ultra additional forms of energy, especially in political circles has been very negative.

Many said that the world will the plug on traditional energy as soon as possible and completely devote our capital efforts toward renewable energy.

Without a doubt this was always naive.

2014, and runaway inflation not seen for about 40 years Europe historic for gas and as fate faced with either eat well, Russia with this major.

Major oil and gas supplier is amassing troops on the Ukraine border.

Try as you may have.

It's hard to blame these prices on the pandemic.

Over one third of the world lives in energy poverty.

Developing countries Europe's energy policies have now made energy poverty a reality in first world countries.

As in all analysts said energy is the economy.

We in the United States live in a country of plenty.

We are origination where the high quality of life of creative culture, now also blessed with abundant energy.

Maybe that has distorted our thinking about the situation in other countries or regions.

People, who don't want developing nations to have what we have are either in denial hypocrites or both.

Ultimately they all message the same thing.

Investment in oil and gas needs to ramp up sharply sharply.

In order to revise the badly needed baseload traditional sources of energy that will be needed alongside loan low carbon fuels in green energy to meet the world's growing demand at <unk>.

Enterprise, we've never seen.

Supplying energy to meet growing needs to competing pads, we're going to remain focused on supplying the world would be claimed low cost and reliable appeals that needs today, while also playing a role an important part in developing lower.

Alternatives.

I think I've said enough Randy.

Alright, Thank you Jim Good morning Star.

Starting with the fourth quarter income statement items net income attributable to common unit holders for the fourth quarter.

It was $1 billion or <unk> 47 per unit on a fully diluted basis compared to $337 million or <unk> 15 per common unit on a fully diluted basis for the fourth quarter of last year.

Net income was reduced by a noncash asset impairment charges of $120 million four five cents per unit in the fourth quarter of 2021. This compares to $800 million 36.

Per common unit for asset impairment charges of fourth quarter 2020, so before the impairment charges <unk> was 52 cents per unit for 2021 compared to <unk> 51 per unit for 2020.

Moving on to cash flows cash flow from operations was $2 1 billion for the fourth quarter of 2021 compared to $1 6 billion.

Fourth quarter 2020 on a full year basis cash flow from operations was $8 5 billion and $5 9 billion for 2021 and 2020, respectively.

Cash flow from operations benefited from approximately $1 4 billion of net cash provided by changes in.

Again doing the math.

Cash flow from operations before changes in working capital was $7 1 billion for 2021 compared to $6 7 billion in 2020 free.

Free cash flow for the year ended.

December 31, 2021 was $6 3 billion compared with $2 7 billion for the.

2020 before cash provided about <unk>.

Changes in working capital free cash flow was $4 9 billion in 2021 compared to $3 4 billion in 2020.

We declared a distribution of <unk> $46.05 per common unit.

Regard to the fourth quarter of 2021, which represents a three 3% increase compared to the distribution that we declared for the fourth quarter of 2020.

This distribution will be paid February 11th to all common unit holders of record as of the close of business January 31.

As of year end 2021, we've utilized 24% of our outstanding $2 billion buyback program, which was authorized in 2019. In addition to these buybacks enterprise's distribution reinvestment plan and employee unit purchase plan purchased a combined $37 million.

<unk> common units in the open market during the fourth quarter of 'twenty, one and $144 million for the full year.

Our payout ratio, which we define as the sum of our cash distributions and buybacks as a percent of cash flow from operations before working capital changes was 58% for 2021.

The payouts that return of capital to investors includes 4 billion declared distributions and $200 million of common unit buybacks.

Our 2021 Patriot payout ratio as a percent of free cash flow before cash provided by changes in working capital was 84%.

As we previously discussed our.

In terms of capital investments in the fourth quarter.

Total capital investments were $424 million, which included $325 million of growth Capex and $99 million for sustaining capital expenditures.

Total capital investments in 2021 were $2 2 billion, which included investments in growth capital projects of $1 8 billion and 430 million for sustaining capex.

For 2022.

We estimate growth capital investments to be approximately $1 $5 billion. This estimate does not include capital investments associated with the partner partnerships proposed.

Seaport oil terminals spot, which remains subject to governmental approval.

And we currently expect sustaining capital expenditures for 2020 to be approximately $350 million.

We currently expect the.

The acquisition of <unk> to close in the first quarter of 2022, and our estimate of $1 5 billion in growth Capex. In 2022 includes any NAV nabokov's related capex and in the year.

Our total debt principal outstanding was $29 $8 billion as of <unk>.

December 31 2021.

Assuming the first call date for final maturity date of our hybrids. The average life of our debt portfolio was 16, and a half years and 27 years respectively.

Our effective average cost of debt is four 4%.

This amount of cash on hand, while elevated by historical <unk> standards was reduced this morning, as we retired $750 million of senior notes that matured and we will retire an additional $650 million.

Senior notes on February 15.

Adjusted EBITDA for the fourth quarter of 2021 was $2 1 billion and eight.

<unk>.

With that Randy we can open it up for questions.

Thank you Randy the Wanda we're ready for the questions from our listeners now.

Thank you, ladies and gentlemen, as a reminder to ask a question you will need to press Star then one on your telephone.

We ask that you limit yourself to one question and one follow up please.

Again, Thats star one to ask a question to withdraw your question.

Please standby, while we compile the Q&A roster.

Our first question comes from Milan, Colton Bean with Tudor Pickering your.

Your line is open.

Good morning, now that you have the updated capital budget in hand can you update us on how you're evaluating your payout ratio for 2022, and I think based on the budget today. It seems like the increase in free cash sit outpaced the distribution raise by hoping to understand it and advertise funding would steer you to lower payout.

Colton this is Randy.

Our payout ratio is really been averaging between 56% and 62% of cash flow from operations before working capital changes and I think we will most likely begin that range.

2022.

Okay and to the <unk> acquisition does that factor into the thinking.

Well I mean, it is an allocation of capital for three and a quarter billion dollars that we'll pay for so some of our.

As we mentioned we will have some cash on hand, after we'd come in and pay this debt maturities in February .

Some of the cash would go towards the purchase price as well as borrowings on our bank credit facility.

Understood.

And then just on the operational front, a significant step up in Frac unit margins relative to recent history.

And a bit on what youre seeing in that market and the sustainability of those margins in 'twenty two.

Mr. Zack.

Some of that is.

Bit of commodity exposure that the frac size, so there's some blending margins.

Some of that on the revenue side is we have a variable cost component. So as gas prices go higher you're seeing our revenue go up but our.

<unk> are also going up.

Okay and in terms of the operating expenses that.

It seems like that would have been backed out of the unit margins or the operating margin, but just wanted to clarify that.

Yeah, it should be a lot of what youre seeing on the increases.

The commodity exposure on the blends on the blending margins.

As far as Frac margins.

As a fee base.

Hasn't been a significant change there.

Nor do we nor do we sort of see one in the near future, but if gas prices go up.

Youre frankly goes up correct.

Gas prices go up our fees go up.

Some higher operational expenses.

Great I appreciate the time.

Thank you.

Our next question comes from the line of Chase Mulvehill with Bank of America. Your line is open.

Hey, good morning, everybody.

So quick.

Quick question.

Yes.

Going concern when we think about the Permian and the potential bottlenecks on the natural gas that as we kind of go through 2023.

And so I would kind of be curious on some of your thoughts around this topic.

How this bottleneck bottleneck potentially gets resolved I mean, we've got obviously Permian e&ps driving a majority of the growth.

Which makes it a little bit more difficult to sanction.

Large greenfield projects, just given that everybody is going to want a 10 year take or pay contracts and the profit e&ps may not be willing to kind of give that because they just don't have 10 years of drilling inventory. So just kind of curious your thoughts on kind of how you think this ultimately gets resolved.

I want to take it Brian and you won't maintain.

Yes. This is this is Brent <unk>.

It feels like a lot of the majors in the bigger published out there are fairly.

Well set in terms of the gas takeaway capacity.

Most of the customers that we deal with and you can see our customer list.

It seem like they're in pretty good shape, so when it comes to basis.

In the past the private guys have probably been.

The last ones to step up for capacity and its benefit of them in this environment from a credit perspective from a gas perspective, and some other things.

I Havent had too and there is other people that stepped up.

To get projects started and to remove those type of basis dislocations.

Ultimately somebody is going to need to step up or a collection of people are going to need to step up and.

Every month that goes by without a gas pipeline beyond the unannounced.

Just going to add the problem.

But there are certainly opportunities for us as enterprise.

In terms of the capacity that we have remained open.

To participate in these type of dislocations.

We've talked to our customers about the potential for a pipeline project, but.

Right now, we haven't been able to get anything done on that side.

Can I ask can I just follow up on this a bit and ask I mean, it seems like obviously somebody is going to have to take more risk whether it's the private E&P, whether its the person going to build the pipe and do not 10 years or five years, probably not going to do or is it going to be the gas processor.

Obviously, now youre going to be the largest gas processor in the Permian and so let me ask you. The question are you willing to take more risk in the Permian on the <unk>.

Gas processing side, and maybe the contracts may have to be.

Signed by the gas processor versus kind of the private E&P.

Yes that is something in the past, we havent done chase.

And it's hard I mean, Theres times, when we step up for some last bit of remaining capacity that we can over perform from an operational standpoint, and we will take on minute amount of risk, but ultimately.

The folks that are realized.

$85, a barrel and the folks that are realized.

Gas prices at these levels in NGL prices at these levels.

And in terms of how we go pitch projects. So those are the ones that probably need to step up.

It would be complementary to it possibly.

To me ultimately this is about producers stepping up to get this project done.

Okay perfect.

Quick follow up on ethane exports during the quarter, you averaged 171000 barrels a day.

And I think your dock capacity is 240000 barrels a day.

So I don't.

I don't know if Jeff is there I don't know if somebody can kind of comment on where do you think you can take this do you take it to the 240000 barrels a day.

Or are there actually some constraints.

With vessels or or imports on the other side.

These docs.

That would present some constraints.

Hey, Jason.

I think that.

As we think about dock capacity or ethane export capacity, we think 200, a day, maybe slightly above as it going run rate.

But more often than not when we start approaching those levels. There are things that are outside of our system that start becoming constraints primarily around freight. So it's the milacron business and freight has to be there on a consistent basis for the units to be able to run at those rates and more often than not we don't we don't see that over time, we expect that market to get more.

Mature or us to be able to get.

Closer to those sustainable rates of 200, maybe slightly above.

Two <unk> is really your instantaneous 200, as basically youre operating that's right.

Okay perfect Alrighty, Thanks, Jeff Thanks, Brett.

Thank you. Our next question comes from the line of Tristan Richardson materially Securities. Your line is open.

Yes.

Hey, good morning, guys.

<unk> your comments on <unk>.

Pertaining to Midland I mean should we think of that asset basis, it's running pretty full today and thats driving the new plant investment.

And then should we think of the development schedule.

As planned activity by existing customers or maybe recent commercial wins with new customers.

Oh.

No.

Sure.

We think that we.

No.

Everybody knows they bring in a new plan on as we speak we understand they have plans for an additional plant frankly, I don't think we know whether they are existing customers or what their plans are.

I haven't dug into deep going through this regulatory process.

Understood and then just on the LPG side, you've talked about obviously, we saw substantial growth in total U S exports as part of the overall kind of global recovery.

Recently you guys have also noted that there is a competing incremental domestic Paul that's emerged.

May create one off opportunities sooner there to keep molecule state side, but can you talk about what youre seeing is sort of as we start the year and how 2022 unfolds on that dynamic.

Ryan I'll start it out and take it from there.

When we see increases on the domestic side those are weather related at the end of the day Tristan.

The market for the incremental Ngls from the United States, which are substantial.

Going to be at the dock, there's just no doubt about it.

Unless Justin feels otherwise, we're going to say they are largely pointed towards Asia.

Now that said everything has grown balance at the dollar.

Thank you.

Our next question comes from the line of domain Salisbury with Bernstein. Your line is open.

Hey, Good morning. This is probably for Brent Your NGL pipeline segment was down $200 million in 2021 versus 2020, and you gave some helpful color on the or at least that Permian and Rockies pipes had pipeline or less and I guess my.

My question is what inning are we in in terms of these NGL contract gorilla and obviously a ton of Permian processing plants kind of came out in the last five or six years.

Should we think of more contract trials could still be telecom side.

So I think this is the first full quarter that we've seen the rocky mountain contract roll off in effect.

On the Permian side, there is some incentive rates that are in place so.

Those are there to stay for a while and then if you look at across the Marpol system. The fact, the matter is in the fourth quarter, we didn't really get much of a winter so from a propane demand perspective quarter.

Fourth quarter to fourth quarter we.

We saw some effects of that.

We're seeing a good January and a good start to the year, but there were some definitely some effects of the propane market demand domestically.

Okay.

That's helpful and then as my follow up and this one might be for Tony what is your latest projection of when Permian NGL production, well warrant enterprise either building more NGL takeaway or possibly switching and then I'll back to Ngls.

It certainly.

Go ahead Tony.

Well I'll tell you what Doug do you want to take it.

Sorry, Tony I, Didnt mean to cut back.

Yes, I mean, if you look at our system, we have a lot of options and you mentioned that we can repurpose certain assets, but call it.

Late 2024 will be assessing whether we can do some.

Brownfield expansions or evaluate a greenfield project.

Jean Ann I wouldn't make the assumption that it's.

<unk> <unk> two.

The one that gets very purpose I mean, there are some other better cost alternative has been potentially that one.

Okay great.

Great. Thanks, a lot.

Thank you.

Our next question comes from the line of Michael Blum with Wells Fargo. Your line is open.

Thanks. Good morning, everyone. Just just one follow up on the last set of questions on the map will contract rolling off just wanted to clarify was that renewed at a lower rate or is it just not renewed in its operating more on a spot basis.

I believe Tom correct me on this but Michel those those were not renewed.

Those contracts were to support the expansion from a number of years ago.

There is.

Volumes are still flowing on those are just kind of roll it.

It.

With a tariff rate that's right.

Deficiency revenue, we are recognizing that we're no longer recognizing.

Got it. Thank you for that and second question I was wondering if you can just give us a little bit of insight into your current conversations with producers are you seeing any change in their approach.

Any willingness to add more rigs or is it.

Much status quo in terms of.

The real discipline, you're seeing certainly from the public banks.

Yes.

Yeah.

Obviously the public's.

We remain very committed to discipline.

That said if you look at what Chevron has said in the last couple of days you can look what Exxon said this morning.

The Permian is there is there are hot basin.

And they're both going to increase activity there for 2022 and beyond.

The other thing that's very hard to get your arms around is there's a lot of acreage and I hate to just use that term generically that's changing hands.

And what I would call tier two acreage.

And that will be drilled.

The private equities are picking it up in the privates are picking it up.

So that's how we see it we see rig counts completions continuing to be added.

It's very profitable.

As <unk> talked about the gas takeaway situation has to be resolved.

But we've been really really.

Outspoken about a large number of people thought it was a very large $1 8 million barrels for 'twenty, one 'twenty two and 'twenty three that's crude oil production and you can think about somewhere between 800 900000 barrels of Ngls associated with that.

If you look at the crude oil number that the EIA published in December we're talking 600000 barrels of increase in 2021.

So it's not a stretch to say that at one point H, probably a little on the low side as theirs to liquids number.

Does that answer your question Michael Yes, Thank you very much.

Thank you.

Our next question comes from the line of Spiro <unk> with Credit Suisse. Your line is open.

Thanks, Operator, Hey, Tim.

That number.

Hi.

Yes.

And that last year.

'twenty one is between 800 and a $1 billion.

And I would say.

In 2022 is probably going to be between 500 and $800 million.

Back to the average got it that makes sense. Thanks, Tim.

Second one just I know youre going through the <unk> process and as you probably can't say much but would just love to get your general thoughts on M&A in General I'm. Just curious if there are other assets out there that checks a lot of those same boxes as nabil to US and then just to get your overall appetite to do more tuck in transactions that fit nicely into the PD system.

I think.

I Love Randy's, what Randy says price matters.

And it has to fit our value chain.

So.

I don't think you never say never but it's got to make some criteria.

If you'd like.

If you look at if you look at anything that enterprise has ever done.

Terms of acquisitions and Bearably it brings something to the total value chain.

And that's that's a criteria, we're not going to breach.

And Spiro. This is Randy I would just add novel <unk> special and because not only did it broaden our natural gas business into the Midland Basin, where we didnt have anything.

It also broadens.

Relationships with customers that we already had and.

And as Jim said, it's complementary to our system and again the other thing is.

The cash accretion on the deal.

Was superior to any assumption on buybacks and.

So no matter, where we assume synergy capture even if we don't.

After a dollar of synergies this was superior to doing a leverage priority buybacks. So very excited about.

The <unk> deal and again.

Special transaction.

Great I appreciate the color guys. Thanks.

Thank you.

Next question comes from the line of Keith Stanley with Wolfe Research. Your line is open.

Hi, Good morning, I wanted to start on Capex. So the 1 billion and a half spend for this year that that's obviously consistent with the billion dollars to 1 billion or have you said that you thought you'd get to but it's up from $800 million I guess committed spend that you had talked to you last time. So can you talk to specific projects that.

Were added and then on the on the major capital projects slide It looks like it's about $2 2 billion for 'twenty, two and beyond was $2 billion. Previously just is that apples to apples or how can I think about kind of comparing those two data points.

Yes, hi, good morning.

Yes.

We were what we were finding is when we were coming in and just talking about sanctioned projects only it was tending to.

I guess it was understating.

Really where we thought our capex would be in.

And I think Jim has highlighted that we are working on a number of projects.

And we came out this year and said look rather than coming in and trying to do.

Surgery on what sanctioned and what's not sanction that we're working on the $1 5 billion Theres, just where we think we're going to wind up for the year.

And those are the sanctioned projects that we've been talking about.

That are included on that sheet that you saw in our supplemental slides that we posted this morning.

And it was also some also.

So we included these projects under development as well.

The difference between the $2 2 billion and $2 1 billion I think there are some small things that we're doing from a natural gas gathering standpoint over the next two or three years that.

Aggregate it enough it rounded to another $100 million. So if you wouldn't mind that schedule.

Okay got it that makes sense.

Separate question just on <unk>.

Do you have any can you give us a sense just of how much of the I guess revenue or DCF, you're thinking for 2023 is tied to commodity prices is it similar to your existing processing business in terms of fee floors or is there more or less commodity exposure in this business versus your.

Existing business.

Yes.

I'll take a shot at this and Jim and Brent might want to come in and add some color.

The way we look at it just when we think about.

Our equity NGL production, we're probably adding probably an incremental 30 to 35000 barrels a day of liquids exposure.

As a result of the novel <unk> steel.

The way we look at.

What we see over the next few years.

Commodity exposure isn't necessarily a bad thing.

No.

For us.

I think Chris.

Chris Thank.

Thank you said we had.

18% commodity exposure last year was that churn number.

Uh huh.

Whereas Sean.

But it's not my point is in this environment.

A little more commodity exposure is not a bad thing.

Yes.

What Jim's highlighting is actually on page nine of our supplemental slide deck. If you look over the last few years and really put that on the other side. When we can come in and think about our fee based earnings.

Range from 82% to 87% over the last three years in 2021, it was 82% so spread related and commodity based.

The 18%.

Coming in and.

And what we've said in the past.

We really don't mind, a lower fee.

This means our commodity businesses are doing better.

From a structure standpoint.

Commodity prices.

<unk>.

Hold up well and we just want more exposure to it.

Got it thank you.

Thank you. Our next question comes from the line of Kyle May with capital One Securities. Your line is open.

Hi, Good morning, everyone. Just one question for me today.

You mentioned the Haynesville is an area that could drive growth. This year can you talk more about what youre seeing in that area and what kind of growth you expect this year.

Natalie.

You want to answer it.

Right.

<unk> mascot to answer okay.

We're seeing growth in fact, one of the things we're doing right now is bringing <unk> back up it is cotton valley for Ngls.

We're bringing that processing plant back up as far as lean gas our systems are starting to bill in our vision is that we're going to have to probably go through some expansions.

As far as trading.

So all good things are seeing is increases in production.

Okay.

The Wonder this is Randy we have time for one more question before we.

Terminate the call.

Alright I'll final question comes from the line of.

Segal with Eagle asset.

Your line is open.

Well. Thank you good morning, everybody.

Just a quick question how do you how do you think about the northeast Nash.

Natural gas and Ngls.

Even.

No problems with that.

Takeaway capacity.

Yes. This is Tony.

We've always felt that that area was challenged the rock the resource is tremendous both for dry gas and for NGL rich the resources incredible.

But.

Getting it out and getting it to market.

<unk> is a challenge and so I think you see the producers in the capital markets calibrating in that way.

The question, just so I wondered three or four years ago, whereas the incremental in gas can come from is it going to come from Appalachia Haynesville.

Well, it's clear now that it's going to come from from the Haynesville.

50 rigs 22, Frac crews working.

And as Natalie mentioned Cotton Valley.

We see the haynesville on on the marginal gas molecule is being the provider outside of oil related gas.

Did that answer your question Sir.

Really well, yes. Thank you.

Okay.

That's it for me thanks, Okay.

Before you give the replay information we'd like to thank everyone for joining us today for our call and that company is going to sign off now and if you would go ahead and give the replay information to our listeners. Thank you goodbye.

To access the digitized replay please dial 858, Batman to zero Bob Thanks.

Or 4045373 for their real estate.

Ladies and gentlemen. This concludes today's conference call. Thank you for participating you may now disconnect everyone have a wonderful day.

Q4 2021 Enterprise Products Partners LP Earnings Call

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