Q1 2023 Enterprise Products Partners LP Earnings Call
Speaker 1: Good day and thank you for standing by. Welcome to the Q1 2023 Enterprise Products Partners LP Earnings 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.
Speaker 1: To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today.
Speaker 1: Randi Burkhalter, VP of Investor Relations. Please go ahead.
Speaker 2: Thank you, Gigi, and welcome everyone. Good morning and welcome to the Enterprise Products Partners conference call to discuss first quarter earnings. Our speakers today will be co-chief executive officers of Enterprise's general partner, Jim Teague and Randy Fowler.
Speaker 2: Other members of our senior management team were also in attendance for the call today.
Speaker 2: During this call, we will make forward-looking statements within the meaning of Section 21 E 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 to the enterprises management team.
Speaker 2: 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.
Speaker 2: So with that I'll turn the call over to Jim.
Speaker 2: Today, we announced enterprise off to another good start for the year. We reported a justity but of 2.3 billion for the first quarter 23.
Speaker 2: We generated 1.9 billion of distributable cash flow, providing 1.8 times coverage.
Speaker 2: We retained $863 million of DCF for the first quarter. We reported seven operating records and one financial record in the quarter.
Speaker 2: mostly related to our pipeline activities and export volumes across multiple commodities.
Speaker 2: We have record pipeline and fee-based natural gas processing volumes, record NGL marine terminal volumes, and near record total
Speaker 3: Marine terminal volumes.
Speaker 3: In March alone, our marine terminals loaded over 70 million barrels of NGLs, crude oil, refined products, and petrochemicals for export. Our NGL and natural gas pipeline businesses, as well as our natural gas marketing and octane enhancement activities, also reported strong increases.
Speaker 3: gross operating margin compared to the first quarter last year. We also saw strong margins in a refined products business.
Speaker 3: offset by lower volumes in our propylene business, where PDH was PDH1 was down for 24 days during the first quarter for plan maintenance.
Speaker 3: We remain on schedule to put approximately $3.8 billion of major projects in service this year.
Speaker 3: In the second quarter, we will commission PDH2 and the expansion of the Acadian Gas Pipeline System.
Speaker 3: In the second half of the year, we will complete our 19th NGL Fractionator, two natural gas processing plants, and the Permian, and put the first phase of the Texas Western Products Pipeline in service.
Speaker 3: We are running essentially full across all our assets with the exception of the Rockies. We have significant expansions in our ethane, ethylene, propylene, and LPG systems.
Speaker 3: We are upgrading export capacity and adding geographic diversity to our ethane export assets with positions at Morgan's Point and now Beaumont, and expanding our LPG and propylene capacity at our Houston Ship Channel facility.
Speaker 3: Our ethylene export facility has been full since day one and we're expanding that about 50%.
Speaker 3: S.A. and exports have moved from being only consumed by a handful of niche players
Speaker 3: and point-to-point movements to significant growth and demand by several petrochemicals in Asia, Europe , and the Americas.
Speaker 3: We recently completed new ethane export contracts that add 240,000 barrels a day with multiple counter parties. On spot, we received our recorded decision this past November and expect to get other permits and our license in the second half of the year.
Speaker 3: and two pipelines that provide the ability to load multiple grades of crude oil and also able to evacuate those lines during hurricanes.
Speaker 3: This is on, time is on our side as we commercialize this project. We don't think it's needed until 2027.
Speaker 3: While the second quarter can be our weakest seasonally, we remain constructive on global market fundamentals, even though the forward curve doesn't reflect that.
Speaker 3: In addition to low global inventories, we also note that OPEC-plus seems to be intent on managing global balances. On the demand side, expectations for most consultants range from 1.4 to 2 million barrels a day for global demand growth in 2023.
Speaker 3: OPEC plus economists say they are standing by their forecast of 2.3 million barrels a day demand growth.
Speaker 3: by the end of 2023. From our perspective, that sounds rich, although the last five weeks, U.S. crude inventories have drawn 20 million barrels.
Speaker 3: Canning these bullish fundamentals are concerns about the global economies.
Speaker 3: with central banks continuing to signal additional rate increases to tame inflation. Meanwhile, while the Chinese continue to ramp up travel in a huge way, their industrial manufacturing surprised to the downside.
Speaker 3: when the PMI turned negative yesterday.
Speaker 3: Regardless of the near-term mixed signals, which continued to signal a range-bound nut market,
Speaker 3: year term. For us, it's very hard to make a bearish call for oil in the medium to long term.
Speaker 3: And it's hard for us to be too constructive on natural gas.
Speaker 3: The wide gas to creed spread gives US petrochemicals a structural feedstock advantage that in our view is permanent. Case in point is the current operating environment where the US-Ephylene industry is the only region that has been consistently profitable, although restable people were more than that.
Speaker 3: have been very selective in what they crack and how they operate.
Speaker 3: Single-use plastics are doing good. They're profitable, while durables have their challenges and their headwinds.
Speaker 3: Meanwhile, the U.S. refining industry is one of the most competitive and technologically capable in the world.
Speaker 3: In short, we expect U.S. production to continue to grow. We expect demand at our docks will likewise continue to grow.
Speaker 3: If you want to know where we're going, look at what we're doing. We continue to expand our ability to export hydrocarbons out of the U.S. to points all over the world where it's needed.
Speaker 4: With that, I'll turn it over to Randy. Thank you, Jim, and good morning, everyone. Starting with income statement items, net income attributable to common unit holders for the first quarter of 2023 increased 7.3% to $1.4 billion, or 63 cents.
Speaker 4: per common unit on a fully diluted basis. This compares to $1.3 billion or $0.59 per common unit for the first quarter of 2022.
Speaker 4: adjusted cash flow from operations,
Speaker 4: or adjusted CFFO, which is cash flow from operating activities before changes in working capital, was $2 billion for both the first quarters of 2023 and 2022.
Speaker 4: We declared a distribution of 49 cents per common unit for the first quarter of 2023, which is 5.4% higher than the distribution declared for the first quarter of the prior year. This distribution will be paid May 12th to common unit holders of record as of close of business on April 28th.
Speaker 4: As we mentioned on our February earnings call, we will evaluate another increase mid-year.
Speaker 4: In March, we repurchased approximately 683,000 common units at an average price of $24.89 per unit for a total cost of approximately $17 million. In addition, on a combined basis, our drip
Speaker 4: and employee unit purchase program purchased another 1.7 million common units on the open market during the quarter.
Speaker 4: For the 12 months ending March 31, 2023, Enterprise paid out approximately $4.2 billion of distributions to limited partners.
Speaker 4: In addition, we also repurchased $267 million of common units off the open market. As a result, our payout ratio of adjusted cash flow from operations was 55% for this period and our payout ratio of adjusted free cash flow was 75%.
Speaker 4: for this 12 month period.
Speaker 4: Total capital investments in the first quarter of 2023 were $654 million, which included $570 million for organic growth capital projects and $84 million of sustaining capital expenditures.
Speaker 4: Our major growth projects that are sanctioned and under construction remains unchanged at $6.1 billion. We currently expect our 2023 growth capital expenditures will be in the range of $2.4 billion to $2.8 billion.
Speaker 4: which includes possible expenditures associated with projects under development and not yet sanctioned. Frankly, I have a hard time seeing us get to the upper end of this range.
Speaker 4: The changes to our CapEx ranges...
Speaker 4: for 2023 and 2024 since our recent analyst day, are projects under development, which are substantially comprised of potential expansions of our Permian gathering and processing systems.
Speaker 4: and our NGL distribution system, including exports.
Speaker 4: None of this creep is associated with cost overruns or delays.
Speaker 4: We expect 2023 sustaining capital expenditures will be approximately $400 million.
Speaker 4: Our total debt principal outstanding was approximately $28.9 billion at the end of the quarter. Assuming the final maturity of our hybrids, the weighted average life of our debt portfolio was approximately 20 years. Our weighted average cost of debt is 4.6%.
Speaker 4: and 76 million of unrestricted cash on hand.
Speaker 4: In March 2023, we entered into a new $1.5 billion 364-day revolving credit agreement and a new $2.7 billion revolving multi-year agreement that matures in March 2028. These agreements replaced our prior credit facilities.
Speaker 4: For the 12 months ended March 31, 2023, our adjusted EBITDA increased 11.7% to $9.4 billion compared to our trailing 12 months as of March 31, 2022. We ended the quarter with a consolidated leverage ratio of 3.0 on a net basis after adjusting debt for the partial exit.
Speaker 4: five times.
Speaker 4: This change in financial policy, our lower leverage, along with an established track record of growing stable fee-based cash flows and strong credit metrics, resulted in Standard & Poor's upgrading our senior unsecured credit rating to A- with a stable outlook. We are appreciative of this recognition.
Speaker 4: as the only A-minus rated mainstream energy company.
Speaker 2: With that, Randy, we can open it up for questions. Okay. Excuse me. Thank you, Randy. Gigi would like to remind our listeners that when asked questions, to limit their questions to one question and one follow-up, please. We can go ahead and start our Q&A.
Speaker 1: Thank you. As a reminder, to ask a question, please press star 1 1 on your telephone and wait for your name to be announced.
Speaker 1: To withdraw your question, please press star 1 1 again. We ask that you please limit yourselves to two questions or to one question and one follow-up question. Please stand by while we compile the Q&A roster.
Speaker 1: Our first question comes from the line of Spear O. Dunis from Citi.
Speaker 5: Hi, operator. Morning, guys. First question on Petchem was particularly strong this quarter, at least relative to what we had expected. And I know in the past, you'd all talked about maybe a six to nine month period or a lag on inventory getting worked down globally before that really started to tighten. And so I'm just curious.
Speaker 5: You know, Jim, I know you mentioned the weaker than expected PMI, but is something happening maybe sooner than you all had expected, or are we still sort of waiting to see that de-stocking effect take place later this year?
Speaker 6: I'm going to let Chris Deanna answer you. Yes, I think what really happened in this first quarter is that it was more of a supply shortage than stronger demand. We had decent demand just coming off of the fourth quarter, which was really weak.
Speaker 6: But ultimately it was reduced supply from
Speaker 6: But ultimately, it was reduced supply from a couple of PDHs being offline.
Speaker 3: I probably don't want to tell you what the alternatives are, but I will tell you, you know, we're trying to be capital disciplined, and of course we're trying to do that. I guess we've kind of confused people, but we will loop Shen Oak. If we can find some options that defer that capital, then we'll probably do that, but make no mistake, our intent is we are going to loop Shen Oak. And we've got a deadline, and there's a deadline on the permit that we're going to have to be aware of. Got it, got it, understood.
Speaker 1: Does that clear it up? It does, I would appreciate your color. Just a clear, thank you guys. Thank you. One moment for our next question. Our next question comes from the line of Gene Ann Saliberry from Bernstein. Gene Ann Saliberry.
Speaker 4: lower commodity prices, but where is TUG? I think if you look at what we did last quarter in 2022, the first quarter of 2022, I think we had some very good opportunities in that quarter with our storage program that we didn't have in the market this quarter. Commodity prices probably have a little bit to do with it, but there was just probably some opportunities last year that we didn't see this year.
Speaker 7: Okay, that makes sense. And then kind of a broader question, once the Houston ship channel is expanded, does Enterprise think forecast Houston crude prices trading at least at parity to corpus or maybe even a premium? Do you do this monthly, in the EU.
Speaker 7: Okay, that makes sense. And then kind of a broader question, once the Houston ship channel is expanded, does Enterprise think forecast Houston crude prices trading at least a parity to corpus or maybe even a premium? Most to take that Europe .
Speaker 3: Tony or So there's a couple things we're doing Jean Anne and Talk about the time Jean Anne mentions it in her write-up. Talk about the Jean Anne says that the pipeline's corpus are full.
Speaker 4: There's probably a couple folks out there that we're trying to do a little bit too much aggressive blending, and we've effectively eliminated them and done a lot more routine testing in terms of maintaining the quality that we can offer these customers downstream.
Speaker 5: Thank you. Thank you. One moment for our next question. Our next question comes from the line of Brian Reynolds from UBS. Hi, good morning, everyone. Maybe just to talk on distribution outlook and expectations. We've seen enterprise raise kind of in that 1 to 5% range since 2018. Moving forward with leverage below 3 times and free cash flow, still hovering around a billion dollars after dividends the next few years. Kind of curious if we could see that DPU growth rate go above 5% or perhaps a little more capex kind of temper that distribution.
Speaker 4: measured on what we did in distribution growth to be able to grow into that internally funded model. Since that point in time, you know, I would really say since over the last couple of years, two years, we've...
Speaker 4: have grown more in the range of, call it, 4 to 6 percent.
Speaker 4: You know and and like I said, we'll come in as I mentioned in the prepared remarks We'll come in and discuss with the board here middle of this year As far as what we want to do for the rest of this year on distribution growth and You know again. We're we've
Speaker 4: We've demonstrated good EBITDA growth. Jim mentioned $3.8 billion worth of projects going into service for the remainder of the year. That gives us good cash flow growth that will support distribution growth down the road. And I really hate to come in and get more granular than that because I don't want to usurp our board or front-runner our board. But I think we'll look to continue to come in and provide distribution growth and buybacks for that matter as far as getting capital back to investors.
Speaker 5: inflation or perhaps pull forward of CapEx into 23 and 24 that we should be thinking about. Thanks.
Speaker 4: Yeah, I'll take the first part of the question. There was not any cost or any overruns or delays on projects. In fact, Graham and his engineering team have done a great job of delivering projects on time and more often than not slightly under budget.
Speaker 4: And really the change that we've had since analyst day are more projects that we've, I guess we've got a good bit of confidence in and we included them in the range, but they're still subject to being completely underwritten through commercial contracts and rather.
Speaker 4: It is also in our NGL distribution system including export facilities. So just seeing a lot of demand on that front.
Speaker 5: Great, I'll leave it there. Enjoy the rest of your morning everyone. Thank you. One moment for our next question.
Speaker 1: Our next question comes from the line of Michael Bloom from Wells Fargo.
Speaker 6: Thanks, good morning everyone. I wanted to ask about the Marine X-4, particularly the LPG and SA, and it came in really strong.ully
Speaker 8: this quarter. Just want to get your color on the market, what demand looks like, and do you think these levels are sustainable from here? Thanks.
Speaker 6: Doug, do you want to take that? Would you? Yeah, no, this is Doug. Yeah, we did definitely see strong demand this last quarter, and we're going to expect to continue to see that demand. Really, it comes down to productions continue to grow. It's still a supply push.
Speaker 3: able to do 240,000 barrels a day.
Speaker 3: of new contracts with more to come. Very good. That's all I have for today. Thank you.
Speaker 1: Thank you. One moment for our next question. Our next question comes in the line of Tristan Richardson from Scotiabank.
Speaker 9: Hi, good morning guys. Could you talk a little bit about PDH2 and overall in the Petchem segment? How should we think maybe about that fee-based mix pro forma once that asset comes online relative to the sort of 70-ish percent fee-based?
Speaker 9: we typically see in that segment.
Speaker 3: I think this one's 100% fee based, isn't it Chris? That's correct. So it's 100% fee based with all credit worthy customers and we always, Graham is sitting to my left, they always...
Speaker 3: Come in we can do more than whatever the nine plate is so we'll probably have some extra pounds to play with
Speaker 3: So we'll probably have some extra pounds to play with.
Speaker 9: Great. And then maybe just on EHT export expansion, could you talk a little bit about the mix of products you're seeing? I mean, you talked a lot about refrigeration at analyst's day, and I think you highlighted that that expansion could be 120 a day. Should we think of it as pretty fungible across products or primarily focused on LPG? And then could the scope change?
Speaker 9: for that project just given sort of the strength you're seeing across the dock.
Speaker 9: just given sort of the strength you're seeing across the dock indicated by the first quarter.
Speaker 6: Is there another project there? But it's all under evaluation. But right now, it's slated to come on the second half of 25. And I just want to correct the number. You said 120,000 barrels a day. Our LPG export expands to north of 170,000 barrels a day. Got it. Helpful. And we're talking about the ship channel. The ship channel widening is what you might explain that. Bob, can you explain what you get out of the ship channel one?
Speaker 2: For Tristan. Yes, sir. So when project 11 is complete on the widening, which we expect to be by the end of 24, first quarter of 25, it'll add 4 to 5 hours of daylight. And most of the products we deal with are daylight restricted. So that's easily an incremental 15 to 20% additional cargos that can come in if needs be.
Speaker 3: while the contract. Thank you. One moment for our next question. Our next question comes from the line of Chase Mulvihill from Bank of America. Hey, good morning everybody. Hi, I guess a lot of grabs been covered but can I ask on processing margins in the Permian and you know kind of relative to your fee floors. You know obviously Waha has seen a lot of pressure so you know we kind of at those those fee floors for Waha at this point.
Speaker 10: we did hit more fee floors than I guess the end of 22.
Speaker 10: But less volume is being subject to the fee floor, so I'd call it 75% of the volume. And it's not very far under the fee floor. So long story short, there's a—
Speaker 10: less volume is being subject to the fee floor, so I'd call it 75% of the volume, and it's not very far under the fee floor. So long story short, there's a seat probably upside the rest of the year.
Speaker 6: I was just talking about the pipeline capacity question. We still have open pipeline capacity. We are utilizing every day as marketing, but just like every decision here at Enterprise, there's an opportunity to work with Natalie for a long-term contract opportunity. We'll evaluate that or we'll evaluate to continue to hold it open for spot opportunity.
Speaker 11: When we feel like it's the right time, we will contract that capacity.
Speaker 3: Okay, great. Makes sense. An unrelated follow up on octane enhancement, you're still generating some nice gross operating margin there and really some nice non-feet gross operating margin as RBOB and butane spreads are still wide.
Speaker 6: So I'd be curious kind of your thoughts on how you see these spreads playing out the rest of 23 and how much you Have hedged at this point. So we have right now I think that octane enhancements about 75% hedged.
Speaker 6: We feel pretty good about where those margins are going to be. There was an earlier question about LPG pricing. And I think as you see this production come on, you look at the ability for propane and butane to go find markets, I could see that being somewhat challenged. And that's to the benefit of our octane enhancement program.
So one moment for our next question.
Our next question comes from the line of Jeremy Tonette from JP Morgan Securities LLC.
Our next question comes from the line of Jeremy Tonette from JP Morgan Securities LLC Hi, good morning.
Just wanted to kind of pick up a bit, I guess, on the Permian and natural gas. There's been some conversation out there with ratios increasing and just wondering if you could talk about what your, your experience or thoughts are there and how you see that, I guess, kind of impacting base and production as well.
Yeah, Jeremy is just telling me. Okay, go ahead. Go ahead.
Yes, GORs when we looked at the basin holistically are absolutely going up. It's largely driven by the preponderance of drilling in the more gassy areas in Delaware Basin compared to say the Midland Basin. So there's no question that the GORs are going up.
you know that's how midstreams are contracting and that's what producers are doing. Producers look at their portfolio, they look at what they plan to drill.
That's how midstreams are contracting and that's what producers are doing. Producers look at their portfolio, they look at what they plan to drill.
Gas, gas GORs, the decline over time, oil declines faster than natural gas does. So that impacts the long-term outlook in this regard.
Jim wanted to know does that mean you have less crude? Yeah and I think there's a misconception, thanks for that Jim, that we don't have the amount of crude that we had before because GORs and that absolutely is not the fact and you can look at our forecast which we stand by.
You have a lot of both. That's the bottom line. You have a lot of crude. There's been no change in those curves as we forecast. You have a lot of very rich gas. So the answer is it doesn't mean less crude.
And ultimately, this is not a bad story. It's not a bad story for enterprise. It's a great story.
Got it. That's very helpful there. And then just want to kind of come back to the LPG and pet chem side. And you've touched on this a few different times across the call, but just wanted to see, I guess, what patterns you're seeing over the over the balance of the LPG exports. Is that kind of one time in nature and surprise to see this strength continuing people are concerned about a recession. How do you see?
LPG exports in pet chem I guess kind of being impacted by these trends looking forward. I think and I'll hand it to Brent but you know you LPG's got a price to export. Period.
And price creates demand.
And price creates demand. And
which is our storage footprint. And if he can play this out, because there's another question about LPG exports.
And why we're expanding our export capacity is because the market needs it. And if you look at infrastructure bottlenecks...
our export capacity is because the market needs it. And if you look at infrastructure bottlenecks
Our belief is that as the production comes online, it'll price the export, but at some point the export capacities are going to be there. And that's an opportunity for folks like Enterprise to participate in that market. And if you go out even further and you look at the overall demand, especially what's coming out of China with PDHs.
There's going to be a period of time in there in 25, 26, 27 timeframe where the U.S. producer has to catch up to the overall capacity and the overall demand. But all this is going to be healthy for the system. Great. Thank you very much.
Thank you. One moment for our next question.
Our next question comes from the line of Colton Bean from Tudor Pickering Holton Company.
items you view as a balancing mechanism, whether that be distribution growth, buybacks, capex, or would you let leverage drift below the range in any given year?
Colton, the range that we have out there, I think is...
a sufficient range for us, you know, for the foreseeable future that really comes in and gives us a lot of flexibility to come in and fund organic growth. You know, if we see a surge in organic growth projects, I think it gives us the flexibility to handle.
flexibility to do that as well as come in and and continue to provide distribution growth and buyback. So I know I'm not probably answering the question the way you wanted it to but that range of 2.75 to three and a quarter gives us a lot of flexibility.
And when we get all these new growth capital projects coming online, and again, we've got a lot under construction now. And I think we'll see more of that EBITDA, certainly full year of that EBITDA show up in 2024, 2025. And then I think at that point in time, we'll reassess.
So it sounds like for the near term, expecting to stay within that range, and the question was more angled toward it seems like you guys are more likely to break the bottom end than the top end. And so just if we'd see a ramp in distribution growth or buybacks, if it looks like you all were drifting into, call it mid-2s or even low-2s. I think it is.
Colton, I'd just hate to get the cart ahead of the horse. Let us get there first and then let us see what the situation looks like when that prevails and I think we're going to do the responsible thing once we get to that point. That's perfect. And then maybe shifting over to gathering. So I think there's a $25 million step up in the Rocky Mountain region.
period of time, I think especially January , we really saw strong natural gas prices more driven by California, both up in the Rockies and in the San Juan. Tony, I don't know if you want to... I completely agree. Phenomenal prices. Definitely an outlier. And that's because utilities just want to prepare and say we have to have the gas.
Thank you.
Thank you. One moment for our next question.
I wanted to touch on the near-term demand outlook for US LPG exports a bit more. Going back to your comments about the Chinese PDH unit, what are you seeing in terms of the pace and ramp of them? And do you think there could be an incremental bid for US cargos later on this year due to lower LPG exports?
this year. You'll see some next year and then obviously the year after. I don't know if the run rates are going to be sustainable in terms of what they're doing right now. I think they're doing probably around 70%. There'll be some opportunities for LPG exports.
I think the overall propane consumption is only going to increase. I just don't know if those run rates over there in China are going to be able to be maintained. If you look at our opportunities, we have the availability of some spots.
Those will probably get filled up, but it's not a ton. It's probably two or three spots a month, TUG, that we have available. Right? We, uh...
It still goes back to the gas to crude spread as to how much those PDHs run. And as we said in our script, we can't make a bearish case medium to long term.
to the gas to crude spread as to how much those PDH is right. And as we said in our script, we're still we can't make a bearish case, medium to long term on.
crude prices and we're not constructive on natural gas. So inherent net gas to crude spread ought to be more LPG and ethylene plants and PDH plants in Asia. Thank you. And the second part of the question related to US potential, US
for now, incremental barrels, whether they're up or down, will affect internal consumption. So they're just another balancing item in the market where barrels are pricing to get consumed. Got it. It's just not, we don't see it as a big factor.
Understood. And Brent, going back to your comments about infrastructure bottlenecks on the LPG export fund down the line eventually, where do you think the export constraint will come about? Is it dock space? Is it reef bridge capacity? Is it tonnage? What does that look like?
I mean, I think it's refridged capacity. That's where it starts to begin with. And I don't, if you look at what the industry is doing right now, we're running at pretty high rates. Think about your time.
The dock piece is easier to solve, but on the front end I would probably say it's going to be refrigid capacity. Thank you.
Thank you. One moment for our next question. Our next question comes from the line of Keith Stanley from Wolf Research.
Hi, good morning. I wanted to start with a follow-up on CapEx. So you're at about $2.5 billion this year. I think potential spend for next year, $2 to $2.5 billion. A couple of years ago, I think the company talked to $1.5 to $2 billion as somewhat of a run rate for CapEx.
Should we think of 23 and 24 as elevated Cath-X years or is the run rate now higher just as the company continues to grow? The opportunities are there.
when we get closer to that point. But right now we just see a lot of good opportunities, both on the upstream side and the downstream side. You know, we're bringing on $3.8 billion worth of major projects this year. You take our PDH2 plan, our Praxionator, and our advocating expansion. Those will all be full on day one.
Thanks for that. Second question just.
You rolled out the project 9.3 last quarter. Any, at a high level, any areas of the business that are going better than plan, any lighter than plan, just any high level comments on progress towards that internal target?
We probably, we have probably, petrochemicals, we're over planned.
I can't think of anything other than the Rockies and I guess our Eagleford crude pipeline as we're hustling that.
I've been met Zach you got anything going on? No, I don't know segments all called on you, but felt the need to call on I think segment by segment. We're pretty close to where we
anything going on? No, I don't. I haven't called on you so I felt the need to call on you. Segment by segment we're pretty close to where we planned.
Okay, thank you.
Thank you. One moment for our next question. Our next question comes from the line of Neil Dingman from Truist.
Morning gentlemen, thanks for taking my questions. My first is on shareholder return. I'm just wondering, given how strong your financial position continues to be with over $4 billion in liquidity, I'm just wondering what factors go into the decision on the unit repurchase and how that goes forward. Yeah, Neil, good morning. Neil, I guess we had talked at the buyback program, and I'm
volatility in the market and the units were under pressure and we saw good value and we came in and executed then our just our window wasn't long enough we would like to have bought more but you know the units rallied pretty quickly on the heels of that.
Now, that's great to hear and then my 2nd question on petrochem specifically. Looks like the properly inside was slightly down just largely, I think more, mostly just on the plan maintenance. I'm just wondering, can you remind me of any major plan maintenance for the remainder of the year specifically for that properly in production facilities. We've currently got a couple of splitters.
I'll hold them that. Thanks, Brian .
Thank you. At this time, there are no further questions. I would now like to turn the conference back over to Randy Burkhalter for closing remarks. Thank you, Gigi. That concludes our call today, everyone. We'd like to thank our listeners for joining us today. Have a great rest of your day and goodbye.
Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.
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