Q3 2022 Enterprise Products Partners LP Earnings Call

November 1, 2022

The conference will begin shortly to raise your hand during Q&A you can dial star one one.

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The conference will begin shortly to raise your hand during Q&A you can dial star one one.

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The conference will begin shortly to raise your hand during Q&A you can dial star one one.

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The conference will begin shortly to raise your hand during Q&A you can dial star one one.

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Yeah.

Hello, Thank you for standing by and welcome to the third quarter 2022 Enterprise products Partners L. P earnings Conference call.

This time, all participants are in a listen only mode. After the speaker presentation. There will be a question and answer session to ask a question. During this session you will need to press star one one on your telephone. Please be advised that today's conference maybe recorded I would now like to hand, the conference over to your speaker today, Randy Burkhalter, Vice President of Investor Relations.

<unk>. Please go ahead.

Thank you, Josh and good morning, everyone and welcome to the Enterprise products Partners Conference call to discuss third quarter 'twenty two earnings our speakers today will be co chief executive officers of Enterprise's General partner Jim.

And Randy Fowler.

Members of our senior management team are also in attendance for the call today.

During this call we will make forward looking statements within the meaning of section 21 E of the Securities Exchange Act 1934 based on the beliefs of the company.

Well as assumptions made by and information currently available to Enterprise's 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. Please.

Please refer to our latest filings with the SEC for a list of factors that may cause actual results to differ materially and that was in the forward looking statements made during this call.

I'll turn it over to Jim.

Thank you Randy today.

We reported exceptional results.

Latest quarter.

We reported adjusted EBITDA of $2 3 billion.

Okay.

For the quarter.

We also generated $1 9 billion distributable cash flow, providing one eight times coverage.

We returned $826 million in D C.

<unk> taken us to $2 6 billion for the person nine months.

We achieved six operating records, including transporting a record 11.3 million barrels per day of oil.

Oil equivalent in the form of Ngls crude oil natural gas refined products.

Chemicals.

We transported a record of 17 point.

Trillion btu per.

For a day of natural gas.

So set quarterly volumetric records for NGL fractionation.

And exports butane isomerization and fee based natural gas.

Yeah.

Liquids.

Okay.

[laughter].

Okay.

Just a minute I've lost my place.

And I won't tell you why.

Earnings from our Midland Basin, natural gas gathering and processing business and higher gross operating margin from our natural gas processing octane enhancement natural gas pipeline businesses were particularly exceptional.

The quarter.

Good day uncertainties in the global economic environment are weighing on the petrochemical industry.

Sluggish demand is leading to reduced runs and destocking.

There is some serious concerns about recession, especially in Europe , where the question is whether they go into recession, but about the depth and length of the downturn mainly.

Meanwhile, on the other side of the Globe China's GDP is.

<unk> taken a nosedive.

Double digit growth over the past number of years, so low single digits at best.

Thinking back on my career first with Dow and enterprise I can't count the number of downturns I've been threats.

Downturns are down the downturns, we're always painful.

But here in enterprise, they always bring opportunity.

In the current environment.

The uncertainties are real.

Certainly that enterprise will always deliver Israel.

Moving to Capex year to date growth Capex, excluding our Midland Basin acquisition that total $973 million and our current expectation for growth capital for 2022, and 2023 remains in the one $5 billion to $2 billion. We currently have $5 $5 billion.

Organic growth projects under construction and we look forward to bringing our PVH to Glenn.

12, one plant each in the Midland and Delaware basins, and RTW product system online in 2023.

We're back on the we've been we've been travelling domestically.

Oh, the end of 2020 and now we're back on the road traveling internationally.

We are welcome in every country, we revisit.

Brent and some of these folks just spent three weeks traveling across Asia from Japan to Korea to Singapore.

I mean, India and I joined them meetings in the last week of their trip.

In the middle of a prolonged more in Europe , and the outright weaponisation of energy by prudent our global energy and food crisis.

Inflation worldwide, our country is better positioned than any other thanks to our abundance of both the energy and agricultural products.

Notwithstanding that abundance the critically low inventories of distillate in the northeast United States were self inflicted and could have been completely avoided temp.

Temporarily waiving the Jones Act.

And our travels.

Executives and other countries no longer ask about the size of the U S energy resources.

They don't ask about where we think prices are.

If we feel U S supplies will be competitive.

Instead in most meetings, we were asked if our politicians have a clue about the realities of the world is immediate and longer longer term needs. The U S energy.

And Fortunately we.

The rhetoric that comes from our government.

And then action on badly needed permitting reform for pipelines transmission infrastructure.

Mining probably answers that question.

Our government needs to understand rhetoric matters.

The United Nations has stated that there is a direct correlation between energy consumption per capita.

And quality of life.

Much of India's population lives in poverty.

One of India's most senior executives reminded me and our meeting that they have access to ample supplies of coal.

And without access to U S resources, they are going to use any and all available resources raise the standard of living for their people.

Global coal consumption is predicted to hit an all time high in 2022, and that's a trend that could continue.

Russia natural gas shut in.

Meanwhile.

I can touch with reality Europe recently declared both natural gas and nuclear energy as clean energy resources that will be needed for years to come and Asia continues to make no bones about their long term appetite previous energy.

We had enterprise had been emphatic that is going to take all of the above in order to meet the world's growing energy needs.

In addition to traditional midstream services, we're also focused on investments and lower carbon projects select carbon capture and sequestration.

Providing move ammonia into export markets.

Hydrocarbons remained badly needed to support countries live in poverty energy poverty and to support our closest friends our allies in Europe .

Energy crisis, we currently export about 60 million barrels of oil equivalent every month, it's clear that the world wants and needs much more what we have.

We're back on the road traveling domestically internationally.

Growing existing relationships and developing new ones new opportunities.

Sorry, I'll ask someplace Randy.

Thank you Jim good morning, everyone.

Starting with the third quarter income statement net income attributable to common unit holders for the third quarter of 2022 was $1 $4 billion or <unk> 63 per common.

<unk> unit on a fully diluted basis. This compares to $1 2 billion or 52.

<unk> per unit for the third quarter of 2021.

Adjusted cash flow from operations.

Which is.

Which is net cash flows before operating yet before operating activities before and back up.

Cash flow from our adjusted cash flow from operations is our cash flow from operating activities before changes in working capital for the third.

Third quarter of this year. It was $2 billion. This is a 13% increase compared to $1 7 billion generated for the third quarter of last year.

We declared a distribution of $47.05 per common unit for the third quarter of 2022, which is five 6% higher than the distribution declared for the third quarter of last year. This distribution will be paid on November 14 to common unitholders of record as of the close of business on October 31.

During the third quarter, we repurchased approximately $3 9 million common units at a cost of $95 million for the first three quarters of this year, we repurchased.

Approximately five 3 million common units for $130 million, we plan to resume our program to Opportunistically buy back up to $350 million of units in the near term.

For the 12 months ended September 30, we paid over $4 1 billion of distributions to limited partners and bought back $255 million of common units in the open market.

This period enterprises payout ratio of adjusted cash flow from operations was 56% and our payout ratio of the adjusted free cash flow if.

If you exclude the $3 $3 billion Nabokov midstream acquisition was 70%.

In addition, during the third quarter and the first nine months of this year approximately $1 5 million common units and $4 7 million common units, respectively were purchased on the open market by our distribution reinvestment and employee unit purchase volumes.

Total capital investments in the third quarter were $474 million, which includes $397 million for organic growth capital projects and 77 million for sustaining capital expenditures.

Capital investments for the first nine months of 2022 or $4 4 billion, which included the $3 $2 billion acquisition of <unk> midstream.

$973 million invested for organic growth capital projects and $334 million for sustaining capital expenditures.

Our total growth projects under construction remains unchanged from last quarter at $5 5 billion. We continue to expect our total 2022 growth capital expenditures to be approximately $1 6 billion and sustaining capex to be approximately $350 million.

For 2023, we currently expect growth capital investments will be approximately two.

2.0 billion.

Our total debt principal outstanding.

Was $29 $5 billion as of September 32022, assuming the final maturity date for our hybrid notes the weighted average life of our debt portfolio was approximately 20 years, our weighted average cost of debt is four 4%.

At September 30, approximately 93% of our debt was fixed rate earlier. This year. We retired $1 4 billion of senior notes and redeemed 350 million of variable rate hybrid notes using a mix of cash.

Proceeds from a note issuance in September 2021, and commercial paper.

Our consolidated liquidity was approximately $3 3 billion at September 30, including availability on our under our credit facilities and unrestricted cash on hand.

With regard to near term debt maturities, we have $1 25 billion of senior notes maturing in March of 2023.

Expect our free cash flow generation.

<unk> liquidity position will provide ample flexibility regarding the refinancing of these notes.

Adjusted EBITDA was $9 billion for the 12 months ended September 32022 or.

Our consolidated leverage ratio was 326 times on a gross basis.

And if you net net out the partial equity treatment for the hybrid notes and reduce debt by unrestricted cash on hand that number on a net basis was three one times given.

Given the coordinated efforts by global Central banks to increase interest rates to temporary inflation and the likelihood of a global recession.

And just general volatility we believe that it is proven to remain at the lower end of our targeted leverage range of three and a quarter to three and three quarters times EBITDA.

Lastly, we published our 2022 sustainability report in September we encourage you to visit our website and review our discussion on the vital role of U S fossil fuels and supporting the pillars of modern civilization and providing a pathway for a better life for $2 5 billion, who still live in energy poverty.

With that Randy I think we can open it up for questions. Thank.

Thank you Randy Josh we're ready to take questions from our listeners I would like to remind everyone to please restrict your questions to one question and one follow up. Please go ahead Josh.

Thank you.

Minder to ask a question you will need to press star one on your telephone please limit yourself to two questions or one question and one follow up please standby, while we compile the Q&A roster.

Our first question comes from Michael Blum with Wells Fargo. You May proceed.

Thanks, Good morning, everyone.

I wanted to.

Ask about.

Permian growth heading into 2023.

You may add some comments last week from the majors.

Obviously, you've got tight gas takeaway.

Do you see that impacting.

Pace of growth.

Into 2003 on the oil side and the gas side I guess for the Permian.

Yes, Michael this is Tony.

We went into this year.

Our analyst meeting, we said given the momentum we have we thought that year end 'twenty one to year end 'twenty three hard to call, which year. It would land in we'd be up to mid <unk>.

I'm, just going to oil Omega and five barrels of increase.

Clearly.

Referenced what the major said argue chevron as an example sort of as a poster child.

The supply chain issues in the oilfield and labor issues are not not minor.

And so if you look at what Chevron said.

They are they are guiding to the low end of their production target, particularly as we get to year end 2022.

That said, we've got 60 rig increase in the Permian Basin.

Year to date.

If you think about what those rigs like look like compared to call. It 19, 2019 or 2020.

Some efficiency some 30% greater just is not a small number.

So if I were to guess right now okay because.

It is hard yesterday the August numbers came out from EIA for what it's worth and they showed and 100000 barrel a day increase between July and August .

So I would tell you that I think we're probably an increase and that puts us year to date increase of between 315 400000 barrels.

Which numbers you look at so.

I am comfortable saying that we're probably going to increase five to 600000 barrels in 2022 for the whole U S and in 2023 six to 800000 barrels. So when you add the two together one two to $1 4 million.

And we'll address that at the analyst meeting again next year, but we're very comfortable in that range.

Alright, thanks for that Tony I guess a related question.

Fairly Oaxaca.

Prices have been really really weak lately.

Curious if you could just speak to how much open.

Gas pipeline capacity that you have to capture those spreads and basically how much of that you've already hedged.

Hey, Michael This is Brent Seacrest.

If you look at enterprises capacity as it relates to <unk> to Gulf Coast markets were between 350, and 400 million a day of open capacity.

Just call it outright capacity for enterprise and as it stands right now none of that is hedged for next year.

Great. Thanks, so much.

Sure.

Thank you one moment for questions.

Our next question comes from Jeremy Tonet with.

JP Morgan you May proceed.

Hi, good morning.

Good morning.

Just wanted to kind of pivot to the <unk> business, if we could and we've seen a lot of commentary on the pet Chem is talking about lower operating rates.

And it looks like we're headed for a bit of a down cycle here.

And you touched on the opening remarks, but just wanted to get a bit more color on what that could mean for IPD specifically here.

I think we've talked about in the past maybe this looks like kind of a six to nine months Destocking cycle is that still how you see it and if so I guess, how would that impact TBD do you see like a big step down in pet Chem services next year or how should we frame the range range of outcomes.

Chris ill take a shot and then give it to you.

Yes.

We don't have the we don't have the spreads between <unk> and PGP that we had last year.

Saying that the spreads we have today are more like what we have traditionally.

<unk>.

Our our octane enhancement business has done well, we've got that hedged 75% next year at good numbers and then don't forget we're bringing on PTH two next year.

Our ethylene and propylene.

Distribution and export and storage facilities are going strong and growing do you want to.

Personally I think.

Yes, it's kind of based propylene is going to be softer.

I still think we're going to do pretty good.

Yes, if you look at how we how we built our split our business over the years.

Its midstream services, where we have a 50% of our of our margin is fee based 25% of our margin is fee based with the exposure to the spread when it blows out and certainly that's what you've seen over the last year and a half.

And then the last 25% is market exposed so and I think over the next six to nine months, we continue to see weakness and Destocking.

We're going to see kind of reversion to what our historical split our splitter.

Profits have been.

Would you bring it up.

<unk> will add to that.

Got it that's helpful.

And just wanted to see I guess within this context of how you think about.

Capital allocation here it seems like.

We have a bit of choppiness in the credit markets and then investors still looking for greater return of capital on the equity side and.

Just wondering how you think that all shakes out within this background.

Yes, Jeremy this is Randy good morning.

Jeremy.

I think youll continue to see us sort of followed all of the above and try to do a combination of distribution growth.

And buybacks.

Makes sense again opportunistically and.

And then I think we're in good shape.

We've managed our debt maturities very well.

We really came in an issue longer term debt. So our maturity ladder, we don't have.

Big maturities in any of the years coming up so I think we're in good shape going into 2023 to handle that maturity when it comes due.

Got it and as far as.

Return of capital to investors buyback versus dividend distributions any change in thought.

Kevin.

No no change on fall 2022 marks our 24th year in a row for distribution growth and we think next year will be 25 years in distribution growth.

But still will come in and do it all the above.

Jeremy This is Chris.

I would add there is that and talking to a lot of investors given the inflationary environment. They are in it really appreciate the five 6% distribution growth year over year.

That's helpful to a lot of our individual unit holders.

Got it thank you very much.

Thank you one moment for questions.

Our next question comes from Jean Ann Salisbury with Bernstein, You May proceed.

Hi, Good morning, just building on Jeremy's question, again about saying that they're going to cut.

Polyethylene production by 10% to 15% here and can you kind of just higher level give us your thoughts on what that means for U S ethane production and NGL prices and if it could kind of touch than other parts of your business like LPG export discretionary ethane that maybe people don't necessarily expect to be so pet chem related.

I'll start and then Brent and Chris.

Jean Ann.

I'm going to go to LPG exports.

Illinois, Brent Triple.

So.

Every month on ethane exports.

I've seen us go no less than 5 million barrels a month, I am thinking and up $2 7 million barrels of months.

I think where ethylene and propylene inventory concern to the extent they go lower I think it opens up export opportunities more for ethylene and propylene. So I think those export docks grow with value as prices go down.

Alright Thats helpful.

She then on ethane in terms of recoveries domestics.

Demand goes down it's still pretty strong Tony is around $1 nine barrels a day, so still it's still hanging in there but.

Ultimately, there's going to be a lot of ethane recovery out of the Permian basin, that's going to help our Permian.

And NGL lines.

On the discretionary ethane so when you look at Rockies and some other more challenged basins in terms of distance.

That's that's the barrel that's going to be on margin probably.

Probably for next year.

If you look at enterprise on the ethane business on the downstream side I would say there is probably about 90% of our business.

Take or pay type contracts, so think of the ethane dark and aegis and <unk> and those type of businesses, all thats fairly well.

From a revenue standpoint on solid ground.

And then ultimately on the LPG.

What we've always said is LP.

LPG is youre going to have to price and to get to go clear across the water.

So we're heavily contracted we do probably have some open spots when we look into next year that will be.

We'll probably.

<unk>.

Some.

We'll wait and see what happens but.

We'll have some opportunity across across our facilities.

Okay, great. Thank you and then just following up on one of your comments there.

You've kind of said before that as gas price widened in Baja you might start to see like material ethane opportunity more ethane being recovered there maybe 100000 barrels even I was just wondering if now that youre seeing gas price by that if that if that had been showing up.

Absolutely.

If you look across our enterprise runs their system, what's going on doesn't probably affect us as much as it does affect third party processors, but youre definitely seeing the effects of it. This month you saw towards the end of last months and we expect to see it probably for the balance of 2023.

Hey, Gena and one more thing one more thing I'm, absolutely convinced that some of what we export has been burned.

Especially in Asia in fact, no one company that is when you can land ethane cheaper than LNG.

Absolutely.

Great. Thank you for all the color.

Yes.

Thank you in a moment for our questions.

Our next question comes from Michael <unk> with.

Goldman Sachs you May proceed.

Hey, guys. Thank you for taking my question just curious.

World's changed a ton in the last six or nine months or is it just the cycle.

Credit markets, starting to get a little choppy out there, especially for some of the smaller entities public or private just curious.

Is the M&A landscape has that yet become more attractive I know you just did not have a task, but that was kind of before the credit markets got choppy.

Just curious how youre thinking about the opportunity to utilize the balance sheet to gobble up assets.

I'm thinking that we are building two more plants in the Midland Basin and two more plants in the Delaware Basin, and that's a more efficient use of capital.

Gordon.

A lot of money, we like the <unk> deal.

It's done real well, but it was it wasn't only the deal it was a strategic fit.

What bothers me.

<unk>.

As I've been through a number of second request and I don't see anything we can buy that doesn't require a second request.

Got it in other words.

Sellers haven't gotten to a point either due to leverage or anything else, where pricing has come down a lot in the market.

Yes, Michael I think it's more.

Again, expanding what.

Jim was saying is really we just see a lot of organic growth opportunity right now and.

We when we came in and leading up to the <unk> transaction, we did a pretty deep dive of Alba.

At least in the G&P world.

As far as what the opportunities were.

And.

Far avatars checked all the boxes for us and as Jim said, it's the transition has gone well the fit has been great. We didn't have anything in the Midland and we've been very pleased with it.

We continue to look at opportunities, but right now we're just seeing.

Better returns on capital.

On the organic growth.

Got it. Thank you guys much appreciate it.

Thank you in a moment for our questions.

Our next question comes from Brian Reynolds with UBS you May proceed.

Hi, Good morning, everyone, maybe to start a start on the moving pieces in 'twenty three capex. It seems like Shin Oak has gotten pushed to the first half of 'twenty five 'twenty four.

Curious if you can talk about just the moving pieces in Capex whats potentially still under development.

And what ultimately.

Some upside or downside that.

Capex number it was roughly $2 billion.

Yes.

Brian This is Randy I think where we are at with the 2023 $2 billion.

Really it's hard to see that moving materially high.

Higher.

As far as on.

The only.

Large project that's out there that we're looking for more clarity is our offshore crude oil export facility and we're still waiting on permits there.

But even even with that it is.

Hard to see.

As we sit here today hard to see that number move materially.

Great and just a quick follow up is there any fundamental change of view with session of expansion being pushed back a year.

Yes. This is Justin quieter.

No I don't think it Ed.

It changes our fundamental view I think we got a little bit more time to pull the trigger on our expansion and we still have the scope expansion ready to go.

We're just spending a little bit more time trying to understand what's appropriate for what the market needs and when it needs. It.

Great.

Super Helpful. And then maybe just as a broader question.

'twenty three E&P budgets havent been formalized.

Curious if you could just talk about Permian producer customers, what they're looking at and how they're thinking about 'twenty three just given the expected Nat gas tightness or publics and privates looking at 'twenty, three and a little bit differently.

<unk> flaring.

Coming back materially into 'twenty, three or do you think that's kind of a thing of the past and then we can just see more lumpy volumes.

While we navigate that Nat gas tightness. Thanks.

Brian I'll start out this is Tony.

I made the comment at the beginning of this call. If you look at what's happened to Permian rig counts.

It's not small.

So there is a significant amount of momentum in the Permian, we hear it from publics and privates alight.

Quoted some numbers this morning as well.

And what we think and how the numbers end up.

Good things slowed down.

Bearing on gas.

We could go to a lot of things, but it's hard to it's hard to kill this kind of momentum and Brent I'll. Let you you spent a lot of time with producers talk about five minutes and big private and public and how you see it Brian I think when you look at the bigger private they still have a fairly robust growth plan.

I heard some of the earnings calls last week from some of the larger players in the Permian and they were a little bit more tempered than.

And what we had what we had heard.

But the bigger.

Public company has some more growth.

If they were talking about.

But if you look at our system in the Midland Basin and recognize that we have.

Some of it's timing of capital projects. If you look at our growth on the natural gas side and processing side, it's probably about 23%.

Growth from 'twenty.

<unk> 23 to <unk> 22 to 'twenty three on the Delaware Basin side, it's going to be probably call it 7% to 10% that's probably.

A little bit later timing on our mento implants.

When you look at what producers are looking at.

Even at where gas prices are in 2023, I didnt check it before I came in here, but we're still around $3 type number where producers can hedge in the whole scheme of things.

If the crude is going to drive somewhere between 85% and 87%.

The economics with the gift that producers were given.

When they were able to achieve $4 or $5 type gas prices thats. What it was it was a gift, but I don't think it changes the mentality in terms of our wild horse trading that because again, it's still at a pretty healthy number for 2023.

Great I appreciate that incremental color throughout the rest of the morning, everyone.

Thank you one moment for questions.

Our next question comes from Theresa Chen with Barclays. You May proceed.

Good morning, Tony I wanted to ask you for an update on how much ethane do you think it's still currently being projected and the Permian from I think the last update plus 250000 barrels per day and how much can realistically come out.

Yes.

That number changes from day to day I'll toss it to tug of brands, but when I say it changes from day to day I mean, it changes from day to day.

I would think that that rejection number is less.

Cause.

Because of what's happened to gas, but gas.

Cash moves, it's really unbelievable what happens that cash point, there's probably some other plants out there that can't recover as much as.

While the newer type plants.

Everything that can be recovered is probably getting recovered tug.

Do you have a volumetric number of what we think will not be recovered because I probably can't.

Yes. This is Doug there is if you look at the.

Baja spread right now there is a very healthy incentive obviously for every single plant they can recover to recover but as far as the older plants in wagon its probably.

50 to 75000 barrels a day of that cannot be recovered due to older technology.

Yes.

Got it thank you.

At the spreads they have again I imagine.

Body.

Purposefully rejecting.

Yes.

Fair enough and looking to it.

Pet Chem side of things I'm curious to hear your view on your.

Your customers.

In the international markets and granted from.

U S perspective, it's capacity utilization is down here, making the feedstocks cheaper exports make a lot of sense, but as we look at the international markets. We also are hearing about.

Far eastern European facilities, curtailing production and some prolonged their maintenance because of these poor margin outlook and as we think about Europe potentially spending.

Elevated announced naphtha Q that Singapore market and asset competing feedstock what does that mean for U S. Gulf coast exports of pet Chem feedstocks internationally.

This is christina.

I guess globally the whole pet Chem segment is weak right now and so what that's meant to us over the last several months is that our ethylene export dock.

Has been full.

And now some months a product goes to Europe some months it goes to Asia.

And I think all of these.

All of the petrochemical plants over there trying to balance out and find the right optimum level to run.

But I think the short answer for us.

It means our dock is full at least for ethylene.

And for propylene, we've had imports at times, we've had export at times so.

Really creating some opportunities for us.

Thank you.

I said earlier.

That ethane is going to stay below that LPG dock state pool.

Okay.

Got it thank you.

And notwithstanding the weakness.

We've been visiting like I said in my script, we've been traveling internationally.

We've been visiting them to what country.

But we've been visiting with the companies that want to build petrochemical complexes.

Our goal is to export ethane.

Thank you one moment for questions.

Our next question comes from Chase Mulvehill with Bank of America You May proceed.

Hey, good morning, everybody.

I guess I wanted to follow up on some of the Permian growth expectations.

I think you talked about Brett I think you said 600 to 800000 barrels a day I think that was U S growth for.

For next year.

So I guess.

What would that translate into Permian growth and then what about residue gas growth if youre going to go what's the equivalent kind of residue gas growth.

From that from that 23 number.

Yes.

This is Tony Chase.

Very very weighted towards the Permian any other increases when we look at oil are relatively small.

So think Permian.

That split out in front of me, but think Permian relative to NGL growth just walking.

Yes.

Relative to residue for every million barrels think about three BS of gas from a driver standpoint.

That said go ahead Sir.

Oh No go ahead go ahead.

Yes.

The gas both on the Midland side and on and on the Delaware side I mean, the oil is getting a little gas here that doesn't mean, there's less oil. It just means there is more gas, which is the reason you see us building more plants.

It does put producers in a box for 2023 for takeaway at Wahoo.

Yes, Yes, I guess that was my follow up question is how quickly do you think that one won't be.

<unk>.

PHP at Whistler is expansions come online kind of late <unk> early <unk>.

And a follow up to that would be do you still have the 350 to 400 is a day opened for the first half of 'twenty four.

The ft.

I'll answer the second question is for Brad.

Still open in 'twenty four.

Okay, ultimately those pipelines can't come on probably fast enough.

Think in the daily market when it comes to <unk> I think we saw it last week and.

And prior to that.

When things are this tight it's going to be.

And something that goes down it's going to be incredibly challenging.

I don't think Thats, the last that we've seen negative gas prices in <unk>.

Or something goes up being the wind blows hard.

Yes, absolutely already so I will turn it back over thanks guys.

Thank you one moment for questions.

Our next question comes from Neal Dingmann with Truth you May proceed.

Good morning, guys. My first question just on your upcoming projects specifically.

All of those projects listed on page six I know talking to some of your other midstream and upstream guys are seeing there the typical supply chain issues and other variables.

Delays out there I'm just wondering could you guys. Just general comments you have a lot of fantastic projects coming on starting first half of next year and I'm. Just wondering if you could give a sense of how you.

You feel pretty good about those projects, obviously is a large large number of them coming on maybe or just overall color you could give on that.

Now this is Graham.

Line is we feel real good about these projects I mean, there are few still remaining supply chain issues are.

Primarily a lot around electrical gear I think we've mitigated almost every one of those issues on these on these projects. So going forward, we feel real good about the execution of these of the projects that we have on the list.

You want to give a little color on PD.

Just just in light of.

Randy mentioned PTH too.

Still scheduled for mechanical completion in the second quarter of next year.

We're looking at.

I think the execution is going very well looking at coming in under our forecast on that particular project. We're real excited about that our teams did a great job back in 2020 mitigating a lot of the supply chain issues that arose during the pandemic.

Even through all of that we're still on schedule and maybe a little bit ahead of budget.

Thank you one moment for questions.

Our next question comes from Keith Stanley with Wolfe Research you May proceed.

Hi, Thank you good news on PTH too.

I just wanted to clarify on the buybacks is the plan still to repurchase up to 350 million specifically in the second half of the year or is it more open ended on the timeline for completing that.

Hey, Keith.

Good morning, yes, it could spill over into next year, because again, we're looking to come in and do this opportunistically and.

Again, we'll see what the market gives us a lot of noise out there with the fed and.

But.

Yes, Paul I mean, obviously, if we can get it done by year end, if not will spillover into next year.

Got it and then just a quick one on the first day Eagle Ford crude contract.

The impact in the third quarter should we think of that as.

Kind of an ongoing impacts of just annualize that number.

Going forward.

So if you look at.

Our contracts.

<unk>.

And that's a life of lease contracts. So what we lost on that just efficiencies. So we're still going to get some fees associated with how much production.

It goes up if you look at the producer around around.

Around that contract they have pretty healthy growth plans. So as more volume comes on in 2000.

Three.

Big in 'twenty, four and they've shared their growth plans with us youre going to see some offset so I would think that this quarter is probably the worst quarter in terms of impact.

If you look at by the end of <unk>.

Sure.

Towards the end of the year, we will probably make up about 25% of what we lost and then that number will go up as we go forward.

Got it thank you.

Josh This is Randy we have time for one more question.

Thank you and our last question.

One moment please.

Our last question comes from Colton Bean with Tpa <unk> Company you May proceed.

Good morning, just one on my end the natural gas segment had a pretty significant step up in earnings this quarter, but it didnt look like that was marketing weighted can you just walk us through the changes in the interest of the business and whether that's a sustainable run rate heading into 2023.

Are you asking specifically about our Texas intrastate system.

The natural gas segment broadly, but based on the release it looks like the interest rate was.

Responsible for most of the uplift so yes, just any changes there.

So we've gotten.

Demand or increased contract from.

Volumes from power provider.

Also upgraded our transport contract.

Hi, Paul.

I think if you look across our whole natural gas segment and you could go from haynesville or anywhere around the Permian.

Youre going to see increases probably every month as we go forward Goldman.

That's a pretty healthy business right now.

Great. Thank you.

Okay John .

Josh This is Randy.

Within our call today, and we'd like to.

Thank you everyone for joining us.

Call.

Have a good day, thank you very much to biological one.

Okay.

Thank you. This concludes today's conference call. Thank you for participating you may now disconnect.

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Hello, Thank you for standing by and welcome to the third quarter 2022 Enterprise products Partners LP earnings Conference call. At this time, all participants are in a listen only mode. After the speaker presentation there'll be a question and answer session to ask a question. During this session you will need to press star one one.

On your telephone please be advised that today's conference maybe recorded I would now like to hand, the conference over to your speaker today, Randy Burkhalter, Vice President of Investor Relations. Please go ahead.

And Randy Fowler.

The members of our senior management team are also in attendance for the call today.

During this call we will make forward looking statements within the meaning of section 21 E of the Securities Exchange Act $19 34 based on the beliefs of the company as well as assumptions made by and information currently available to Enterprise's 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.

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 so with that I'll turn it over to Jim.

Thank you Randy today.

We reported exceptional results for <unk>.

Lightest quarter.

We reported adjusted EBITDA of $2 3 billion.

Okay.

For the quarter.

We also generated $1 9 billion distributable cash flow, providing one eight times coverage.

We retained $826 million in DCF.

As to $2 6 billion for the first nine months, we achieved six operating records, including transporting a record 11 3 million barrels per day of oil equivalent in the <unk>.

<unk> of Ngls crude oil natural gas and refined products petrochemicals.

Sure.

We transported a record of 17.

Trillion Btu.

Per day of natural gas.

Also set quarterly volumetric records for NGL fractionation.

Exports butane isomerization on fee based natural gas.

Yeah.

Liquids.

Yes.

We are on that.

Yes.

Just a minute I've lost my place.

And I won't tell you when.

Earnings from our Midland Basin, natural gas gathering and processing business and higher gross operating margin from our natural gas processing octane enhancement and natural gas pipeline businesses were particularly exceptional.

Quarter.

Good day uncertainties in the global economic environment are weighing on the petrochemical industry were sluggish demand is leading to reduced runs and destocking.

There is some serious concerns about recession, especially in Europe , where the question is whether they go into recession, but about the depth and length of the downturn mainly.

Meanwhile, on the other side of the Globe China's GDP has taken a nosedive.

Double digit growth over the past number of years too so.

Oh single digits at best.

Looking back on my career first with Dow and enterprise I can't count the number of downturns I've been threats.

And downturns at Dow the downturns, we're always painful.

But here in enterprise, they always bring opportunity.

In the current environment.

The uncertainties are real.

Certainly that enterprise will always deliver Israel.

Organic growth projects under construction and we look forward to bringing our PVH to grant.

12, one plant each in the Midland and Delaware basins, and RTW products system online in 2023.

We're back on the we've been we've been travelling domestically.

Oh, the end of 2020 and now we're back on the road traveling internationally and.

We are welcome in every country, we revisit.

Brent and some of these folks just spent three weeks traveling across Asia.

Pam to Korea to Singapore to Asia.

India and I joined them meetings in the last week of their trip.

In the middle of a prolonged more in Europe , and the outright weaponisation of energy by prudent our global energy and food crisis.

Inflation worldwide, our country is better positioned than any other thanks to our abundance of both the energy and agricultural products.

Notwithstanding that abundance the critically low inventories of distillate in the northeast United States were self inflicted and could've been completely avoided that.

Temporarily waiving the Jones Act.

And our travels.

Executives and other countries no longer ask about the size of the U S energy resources.

They don't ask about where we think prices are.

And if we feel U S supplies will be competitive.

Instead in most meetings, we were asked if our politicians have a clue about the realities of the world is immediate and longer longer term needs. The U S energy.

And Fortunately with the rhetoric that comes from our government.

And then action on badly needed permitting reform for pipelines transmission infrastructure.

Mining probably answers that question.

Our government needs to understand rhetoric matters.

The United Nations has stated that there is a direct correlation between energy consumption per capita.

Quality of life.

Much of India's population lives in poverty.

One of India's most senior executives reminded me and our meeting that they have access to ample supplies of coal.

And without access to U S resources, they are going to use any and all available resources raise the standard of living for their people.

Global coal consumption is predicted to hit an all time high in 2022, and that's a trend that could continue.

Russia natural gas shut in.

Meanwhile back.

We had enterprise had been emphatic that is going to take all of the above in order to meet the world's growing energy needs.

In addition to traditional midstream services, we're also focused on investments and lower carbon projects carbon capture and sequestration.

Providing move ammonia into export markets U S. Hydrocarbons remained badly needed to support countries, who live in poverty energy poverty and to support our closest friends our allies in Europe .

Energy crisis, we currently export about 60 million barrels of oil equivalent every month, it's clear that the oral once it needs much more what we have we're back on the road traveling domestically internationally, we're growing existing relationships and developing new ones for new opportunities.

Sorry, I'll ask someplace, Randy Alright, Thank you Jim good morning, everyone.

During the third quarter income statement net income attributable to common unit holders for the third quarter of 2022 was $1 $4 billion or <unk> 63 per common unit on a fully diluted basis. This compares to $1 2 billion or 56.

<unk> per unit for the third quarter of 2021.

Adjusted cash flow from operations.

Which is which is net cash flows before operating yet before operating activities before.

Okay.

Cash flow from our adjusted cash flow from operations is our cash flow from operating activities before changes in working capital for the third.

<unk> third quarter of this year. It was $2 billion. This is a 13% increase compared to $1 7 billion generated for the third quarter of last year.

During the third quarter, we repurchased approximately three 9 million common units at a cost of $95 million for the first three quarters of this year, we repurchased.

Approximately five 3 million common units for 130 million, we plan to resume our program to Opportunistically buy back up to $350 million of units in the near term.

For the 12 months ended September 30, we paid over $4 1 billion of distributions to limited partners and bought back $255 million of common units in the open market.

This period enterprises payout ratio of adjusted cash flow from operations was 56% and our payout ratio of adjusted free cash flow if.

If you exclude the $3 $2 billion Nabokov midstream acquisition was 70%.

Total capital investments in the third quarter were $474 million, which includes $397 million for organic growth capital projects and 77 million for sustaining capital expenditures cap.

Capital investments for the first nine months of 2022 were $4 4 billion, which included the $3 $2 billion acquisition of Nabokov Midstream 973 million invested for organic growth capital projects and $334 million for sustaining.

Capital expenditures.

For 2023, we currently expect growth capital investments will be approximately.

2.0 billion.

Our total debt principal outstanding.

At September 30, approximately 93% of our debt was fixed rate.

Earlier this year, we retired $1 4 billion of senior notes and redeemed 350 million of variable rate hybrid notes using a mix of cash.

Proceeds from a note issuance in September 2021, and commercial paper.

Our consolidated liquidity was approximately $3 3 billion at September 30 of them, including availability under our credit facilities and unrestricted cash on hand.

With regard to near term debt maturities, we have $1 25 billion of senior notes maturing in March of 2023.

We expect our free cash flow generation and liquidity position will provide ample flexibility regarding the refinancing of these notes.

Adjusted EBITDA was $9 billion for the 12 months ended September 32022.

Our consolidated leverage ratio was 326 times on a gross basis.

If you net net out the partial equity treatment for the hybrid notes and reduce debt by unrestricted cash on hand that number on a net basis was three one times.

Given the coordinated efforts by global Central banks to increase interest rates to temporary inflation and the likelihood of a global recession.

And just general volatility we believe that it is proven to remain at the lower end of our targeted leverage range of three and a quarter to three and three quarters times EBITDA.

With that Randy I think we can open it up for questions.

Thank you Randy Josh we're ready to take questions from our listeners I would like to remind everyone to please restrict your questions to one question and one follow up. Please go ahead Josh.

Thank you as there are.

Minder to ask a question you will need to press star one on your telephone please limit yourself to two questions or one question and one follow up please standby, while we compile the Q&A roster. Our first question comes from Michael Blum with Wells Fargo. You May proceed.

Thanks, Good morning, everyone.

Wanted to ask about.

Permian growth heading into 2023.

Some comments last week from the majors.

Obviously, you've got tight gas takeaway.

Yes.

Do you see that impacting the pace of growth.

<unk> 23 on the oil side and the gas side I guess for the Permian.

Yes, Michael this is Tony when we went into this year.

Analyst meeting, we said given the momentum we have we thought that year end 'twenty one to year end 'twenty, three hard to call, which year it would land in we'd be up to them.

Just going on with the oil Omega and five barrels of increase.

Clearly.

You referenced what the major said argue chevron as an example sort of as a poster child.

The supply chain issues in the oilfield and labor issues are not not minor.

And so if you look at what Chevron said.

They are guiding to the low end of their production target, particularly as we get to year end 2022.

That said, we've got 60 rig increase in the Permian Basin.

Year to date, and if you think about what those rigs look like compared to call. It 19, 2019 or 2020.

Some efficiency some 30% greater this is not a small number.

So if I were to guess right now okay because.

It is hard yesterday the August numbers came out from EIA for what it's worth and they showed and 100000 barrel a day increase between July and August .

So I would tell you that I think we're probably an increase and that puts us year to date increase of between 315 400000 barrels depending on which numbers you look at.

So I am comfortable saying that we'll probably been increased five to 600000 barrels in 2022 for the whole U S and in 2023 six to 800000 barrels. So when you add the two together one two to $1 4 million.

And we'll address that at the analyst meeting again next year, but we're very comfortable in that range.

Great. Thanks for that Tony I guess, a related question clearly what has been.

It's been really really weak lately.

Curious if you could just speak to how much.

<unk> gas pipeline capacity that you have to capture those spreads and basically how much of that you've already hedged.

Hey, Michael This is Brent Seacrest.

If you look at enterprises capacity as it relates to Wahaha to Gulf Coast markets.

Between 350, and 400 million a day of open capacity.

Just call it outright capacity for enterprise and as it stands right now none of that is hedged for next year.

Great. Thanks, so much sir.

Thank you one moment for questions.

Our next question comes from Jeremy Tonet with.

JP Morgan you May proceed.

Hi, good morning.

Good morning.

Just wanted to kind of pivot to the pet Chem business, if we could and we've seen a lot of commentary on the pet Chem is talking about lower operating rates.

And it looks like we're headed for a bit of a down cycle here.

And you touched on the opening remarks, but just wanted to get a bit more color on what that could mean for IPD specifically here.

Chris ill take a shot and then give it to you.

Yes.

We don't have the we don't have the spreads between <unk> and PGP that we had last year.

Saying that.

Spreads we have today are more like what we have traditionally seen.

Our our octane enhancement business has done well, we've got that hedged 75% next year. Good numbers and then don't forget we're bringing on PTH two next year.

Our ethylene and propylene.

Distribution and export and storage facilities are going strong and growing do you want to.

First of all I think it's kind of based propylene is going to be softer.

But I still think we're going to do pretty good.

Yes, if you look at how we how we built our split our business over the years.

Its midstream services, where we have a <unk>.

50% of our of our margin is fee based.

95% of our margin is fee based with the exposure to the spread when it blows out and certainly that's what you've seen over the last year and a half.

And then the last 25% is market exposed so and I think over the next six to nine months, we continue to see weakness and Destocking.

We're going to see kind of reversion to what our historical but our splitter.

Profits have been.

Would you bring it up.

PVH too will add to that.

Got it that's helpful. Thanks, and just wanted to see I guess within this context of how you think about.

Capital allocation here it seems like.

We have a bit of choppiness in the credit markets and then investors still looking for greater return of capital on the equity side and.

Just wondering how you think that all shakes out within this background.

Yes, Jeremy this is Randy good morning.

Jeremy.

I think youll continue to see us sort of followed all of the above and try to do a combination of distribution growth.

And.

Buybacks.

Where it makes sense again opportunistically.

And.

And then I think we're in good shape.

Managed our debt maturities very well.

We really came in an issue longer term debt. So our maturity ladder, we don't have big big maturities in any of the years coming up. So I think we're in good shape going into 2023 to handle that maturity when it comes due.

Got it and as far as the.

Return of capital to investors buyback versus dividend distributions any change in thought.

Kevin.

No no change on fall 2022 marks our 24th year in a row for distribution growth and we think next year will be 25 years in distribution growth.

But still will come in and do all the above.

Jeremy This is Chris <unk>.

I would add there is that and talking to a lot of investors given the inflationary environment. They are in it really appreciate the five 6% distribution growth year over year.

That's helpful to a lot of our individual unit holders.

Yeah.

Got it thank you very much.

Thank you one moment for questions.

Our next question comes from Jean Ann Salisbury with Bernstein, You May proceed.

Hi, Good morning, just building on Jeremy's question, again about saying that they're going to cut polyethylene production by 10% to 15% here and can you kind of just higher level give us your thoughts on what that means for U S ethane production and NGL prices and if it could kind of touch than other parts of your business like LPT.

Export discretionary ethane that maybe people necessarily expect to be so pet chem related.

I'll start and then Brent and Chris.

Jean Ann.

I'm going to go to LPG exports.

Along with Brent Triple.

So.

Every month on ethane exports.

I've seen us go no less than 5 million barrels a month, I am thinking and up $2 7 million barrels of months.

I think were ethylene and propylene inventory concern to the extent they go lower I think it opens up export opportunities more for ethylene and propylene. So I think those export docks grow with value as prices go down.

Great that's helpful.

Jean Ann on ethane in terms of recoveries domestics.

Demand goes down it's still pretty strong Tony is around $1 nine barrels a day, so still it's still hanging in there but.

<unk>.

Ultimately, there's going to be a lot of ethane recovery out of the Permian basin, that's going to help our Permian.

Basin NGL lines on.

On the discretionary ethane so when you look at Rockies and some other more challenged basins in terms of distance.

That's that's the barrel thats going to be on margin.

Probably for next year.

If you look at enterprise on the ethane business on the downstream side I would say there is probably about 90% of our business, that's let's take or pay type contracts. So think of the ethane dark and aegis and <unk> and those type of businesses, all thats fairly well.

From a revenue standpoint on solid ground.

And then ultimately on the LPG.

What we've always said is LP.

LPG is youre going to have to price and to get to go clear across the water.

So we're heavily contracted we do probably have some open spots when we look into next year that will be.

We will probably.

<unk>.

Some.

We'll wait and see what happens but.

We'll have some opportunity across across our facilities.

Great. Thank you and then just following up on one of your comments there.

Is that showing up.

Absolutely.

And one more thing one more thing I'm, absolutely convinced that some of what we export has been burned.

Especially in Asia in fact that no one company that is when you can land ethane cheaper than LNG.

Absolutely.

Great. Thank you for all the color.

Yes.

Thank you in a moment for our questions.

Our next question comes from Michael <unk> with Goldman.

Goldman Sachs you May proceed.

Hey, guys. Thank you for taking my question just curious.

World's changed a ton on line six or nine months or is it just the cycle.

Credit markets, starting to get a little choppy out there, especially for some of the smaller entities public or private just curious.

Is the M&A landscape has that yet become more attractive I know you just did not have a task, but that was kind of before the credit markets got choppy.

Just curious how youre thinking about the opportunity to utilize the balance sheet to gobble up assets.

I'm thinking that we are building two.

More plants in the Midland Basin, and two more plants in the Delaware Basin and Thats at <unk>.

More efficient use of capital and gardens.

A lot of money, we like the <unk> deal.

It's done real well, but it was it wasn't only the deal it was a strategic fit.

And what bothers some of it at least made.

I've been through a number of second request and I don't see anything we could buy that doesn't require a second request.

Got it in other words.

Sellers haven't gotten to a point either due to leverage or anything else.

Our pricing has come down a lot in the market.

Yes, Michael I think it's more.

Again expanding.

Yes.

Jim was saying is really we just see a lot of organic growth opportunity right now and.

We when we came in and leading up to the <unk> transaction, we did a pretty deep dive of all the.

At least in the G&P world.

As far as what the opportunities were and.

Thus far <unk> checked all the boxes for us and as Jim said, it's the transition has gone well the fit has been great. We didn't have anything in the Midland and we've been very pleased with it.

We continue to look at opportunities, but right now we're just seeing.

Better returns on capital.

On the organic growth.

Got it. Thank you guys much appreciate it.

Thank you one moment for our questions.

Our next question comes from Brian Reynolds with UBS you May proceed.

Hi, Good morning, everyone, maybe to start a start on the moving pieces in 'twenty three capex. It seems like Shin Oak has gotten pushed to the first half of 'twenty five 'twenty four.

Kind of curious if you can talk about just the moving pieces in capex whats potentially still under development.

And what ultimately.

Provide some upside or downside to that.

It can be Capex number is roughly $2 billion.

Yes.

Brian This is Randy I think where we are at with the 2023 $2 billion.

Really it's hard to see that moving materially higher.

As far as on.

The only.

Large project that's out there that we're looking for more clarity is our offshore crude oil export facility and we're still waiting on permits there.

But even even with that.

Hard to see as we sit here today hard to see that number move materially.

Great and just a quick follow up is there any fundamental change of view with version of expansion being pushed back a year.

Yes. This is Justin quieter.

No I don't think it Ed.

Changes our fundamental view I think we got a little bit more time to pull the trigger on our expansion and we still have the scope expansion ready to go.

We're just spending a little bit more time trying to understand what's appropriate for what the market needs and when it needs. It.

Great.

Super Helpful. And then maybe just as a broader question, while 23 E&P budgets havent been formalized.

Curious if you could just talk about Permian producer customers, what they are looking at and how they're thinking about 'twenty three just given the expected Nat gas tightness or publics and privates looking at 'twenty, three and a little bit differently DC flaring.

Coming back materially into 'twenty, three or do you think that's kind of a thing of the past and then we can just see more lumpy volumes.

While we navigate that Nat gas tightness. Thanks.

Brian I'll start out this is Tony Hunt I made the comment at the beginning of this call. If you look at what's happened to Permian rig counts.

It's not small.

So there is a significant amount of momentum in the Permian, we hear it from publics and privates alight.

Quoted some numbers this morning.

What we think how the numbers end up.

Good things slowed down.

Layering on gas.

We could go to a lot of things, but it's hard to it's hard to kill this kind of momentum and Brent I'll. Let you spent a lot of time with producers talk about five minutes and big private and public and how you see it Brian I think when you look at the bigger private they still have a fairly robust growth plan.

I heard some of the earnings calls last week from some of the larger players in the Permian and they were a little bit more tempered than.

And what we had what we had heard but the bigger.

Public company has some more growth.

If they were talking about.

But if you look at our system in the Midland Basin and recognize that we have.

Some of it's timing of capital projects. If you look at our growth on the natural gas side and processing side, it's probably about 23%.

Growth from 'twenty.

'twenty three to 'twenty to 'twenty three on the Delaware Basin side, it's going to be probably call it 7% to 10% that's probably.

A little bit later timing on our mento implants.

When you look at what producers are looking at.

Even at where gas prices are in 2023, I didnt check it before I came in here, but we're still around $3 type number where producers can hedge in the whole scheme of things.

If the crude is going to drive somewhere between 85% and 87%.

The economics with the gift that producers were given.

When they were able to achieve $4 or $5 type gas prices Thats. What it was it was a gift I don't think it changes the mentality in terms of where wild horse trading that because again, it's still at a pretty healthy number for 2023.

Great I appreciate all that incremental color throughout the rest of the morning, everyone.

Thank you one moment for questions.

Our next question comes from Theresa Chen with Barclays. You May proceed.

Yeah that number changes from day to day.

Doug or brands, but when I say it changes from day to day I mean, it changes from day to day.

I would think that that rejection number is less.

Because.

Because of what's happened to gas but.

Gas moves, it's really unbelievable what happens at <unk>.

Probably some older plants out there that can't recover as much as well.

While the newer type plants.

I think everything that can be recovered is probably getting recovered.

Do you have a volumetric number of what we think is not being recovered because I probably can't.

Yes. This is Doug there is if you look at the.

Bahar spread right now is at very healthy incentive obviously for every single plant they can recover to recover but as far as the older plants in wagon its probably.

50 to 75000 barrels a day of that cannot be recovered due to older technology.

Yes.

Got it thank you.

The spreads they have a gain of imagine.

Body.

Purposefully rejecting.

Yes.

Okay.

Fair enough.

And looking to it.

Pet Chem side of things I'm curious to hear your view on your.

Your customers.

In the international markets and granted from a U S perspective as capacity utilization is down here, making the feedstocks cheaper exports make a lot of sense, but as we look at the international markets. We also are hearing about.

Far eastern European facilities, curtailing production and some prolonged their maintenance because of these poor margin outlook and as we think about Europe potentially spending.

Elevated announced Q that Singapore market and asset competing feedstock what does that mean for U S. Gulf coast exports of pet Chem feedstocks internationally.

This is christina.

I guess globally the whole pet Chem segment is weak right now and so what that's meant to us over the last several months is that our ethylene export dock has been full.

Some months that product goes to Europe , some months it goes to Asia.

Yes, I think all of these.

All of the petrochemical plants over there trying to balance out and find the right optimum level to run.

But I think so.

Short answer for us as it means our dock is full at least for ethylene.

And for propylene, we've had imports at times, we've had export at time so.

Really creating some opportunities for us.

Thank you.

I said earlier.

That ethane is going to stay below the net LPG dock state pool.

Okay.

Got it thank you.

And notwithstanding the weakness.

We've been visiting like I said in my script, we've been traveling internationally.

We've been visiting them on what country.

But we've been visiting with the companies that want to build petrochemical complexes.

Our goal is to export ethane.

Thank you one moment for questions.

Our next question comes from Chase Mulvehill with Bank of America You May proceed.

Hey, good morning, everybody.

I guess I wanted to follow up on some of the Permian growth expectations.

I think you talked about Brett I think you said 600 to 800000 barrels a day I think that was U S growth for.

For next year.

So I guess.

What would that translate into Permian growth and then what about residue gas growth youre going to go what's the equivalent kind of residue gas growth.

From that from that 23 number.

Yes.

This is Tony Chase.

Very very weighted towards the Permian any other increases when we look at oil are relatively small.

So think Permian.

That split out in front of me, but think Permian relative to NGL growth just a walking.

Yes.

Relative to residue for every million barrels think about three BS of gas from a driver standpoint.

That said go ahead Sir.

Oh No go ahead Greg.

Yes.

The gas both on the Midland side and on and on the Delaware side I mean, the oil is getting a little gas here that doesn't mean, there's less oil. It just means there's more gas which is the reason you see us building more plants.

It does put producers in a box for 2023 for takeaway at Wahoo.

Yes, Yes, I guess that was my follow up question is how quickly do you think that one won't be.

<unk>.

PHP at Whistler is expansions come online kind of late <unk> early <unk>.

And a follow up to that would be do you still have the 350 to 400 is a day opened for the first half of 'twenty four.

Ft.

I will answer the second question is for Brent.

Still open in 'twenty four.

Okay, ultimately those pipelines can't come on probably fast enough.

Think in the daily market when it comes to <unk> I think we saw it last week and and prior to that.

When things are this tight it's going to be.

And something goes down it's going to be incredibly challenging.

I don't think Thats, the last we've seen negative gas prices and whatnot.

Or something goes up being the wind blows hard.

Yes, absolutely already so I will turn it back over thanks guys.

Thank you one moment for questions.

Our next question comes from Neal Dingmann with Truest you May proceed.

Good morning, guys. My first question just on your upcoming projects specifically.

When looking at all of those projects listed on page six I know talking to some of your other midstream and upstream guys are seeing there the typical supply chain issues and other vegetation.

Lays out there I'm just wondering could you guys give.

General comments, you have a lot of fantastic projects coming on here, starting first half of next year and I'm. Just wondering if you could give a sense of.

You feel pretty good about those projects and obviously seems a large large number of them coming on maybe or just overall color you could give on that.

Now this is Graham.

Line is we feel real good about these projects I mean, there are few still remaining supply chain issues are.

You want to give a little color on that.

Just.

In light of.

Randy mentioned PTH too.

Still scheduled for mechanical completion in the second quarter of next year.

We're looking at.

I think the execution is going very well looking at coming in under our forecast on that particular project. We're real excited about that our teams did a great job back in 2020, and mitigating a lot of the supply chain issues that arose during the pandemic.

Even through all of that we're still on schedule and maybe a little bit ahead of budget.

Thank you one moment for questions.

Our next question comes from Keith Stanley with Wolfe Research you May proceed.

Hi, Thank you good news on th two.

I just wanted to clarify on the buybacks is the plan still to repurchase the up to 350 million specifically in the second half of the year or is it more open ended on the timeline for completing that.

Hey.

Good morning, yes, it could spill over into next year, because again, we're looking to come in and do this opportunistically and.

Again, we will see what the market gives us.

A lot of noise out there with the fed.

But.

Yes, so I mean.

See if we can get it done by year end, if not will spill over into next year.

Got it and then just a quick one on the FSD Eagle Ford crude contract.

The impact in the third quarter should we think of that is.

Kind of an ongoing impacts of just annualize that number.

Going forward.

So if you look at that.

<unk> contracts.

<unk>.

And that's a life of lease contracts. So what we lost on that just efficiencies. So we're still going to get some fees associated with how much production.

It goes up if you look at the producer around.

Around that contract they have pretty healthy growth plans. So as more volume comes on in 2003.

See in 'twenty, four and they've shared their growth plans with us youre going to see some offset so.

I would think that this quarter is probably the worst quarter in terms of impact.

If you look at by the end of <unk>.

Towards the end of the year, we will probably make up about 25% of what we lost and then that number will go up as we go forward.

Got it thank you.

Josh This is Randy we have time for one more question.

Thank you and our last question.

One moment please.

Our last question comes from Colton Bean with Tpa <unk> Company you May proceed.

Are you asking specifically about our Texas intrastate system.

The natural gas segment broadly, but based on the release it looks like the interest rate was.

Was responsible for most of the uplift so yes, just any changes there.

So we've gotten.

<unk> demand or increased contract.

So volumes from power provider.

Also upgraded our transport contract while high as well.

I think if you look across our whole natural gas segment and you could go from haynesville or anywhere around the Permian.

Youre going to see increases.

Every month as we go forward.

That's a pretty healthy business right now.

Great. Thank you.

Okay. Josh that this is Randy that that would end our call today and we'd like to.

Thanks, everyone for joining us.

Paul.

Have a good day, thank you very much <unk>.

Okay.

Thank you. This concludes today's conference call. Thank you for participating you may now disconnect.

Q3 2022 Enterprise Products Partners LP Earnings Call

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