Q1 2024 Energy Transfer LP Earnings Call

Operator: Good day, and welcome to the Energy Transfer LP First Quarter 2024 Earnings Conference Call. All participants will be in listen-only mode.

Good day and welcome to the energy transfer L. P first quarter 2024 earnings conference call.

Operator: All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.

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Operator: What it is.

Operator: To withdraw your question, please press star, then two. We ask that you limit yourself to asking one question and one follow-up question. Please note, this event is being recorded. I would now like to turn the conference over to Tom Long, CEO of Energy Transfer. Please go ahead.

Operator: I'd now like to turn the conference over to Tom Long CEO of energy transfer. Please go ahead.

Thomas E. Long: Thank you, operator. Good afternoon, everyone, and welcome to the Energy Transfer First Quarter 2024 earnings call. I'm also joined today by Mackay McCrea and other members of the senior management team, who are here to help answer your questions after our prepared remarks. Hopefully, you saw the press release we issued earlier this afternoon, as well as the slides posted to our website. As a reminder, we will be making forward-looking statements within the meaning of Section 21E of the Security Exchange Act of 1934.

Thomas E. Long: Thank you operator, good afternoon, everyone and welcome to the energy transfer first quarter 2024 earnings call.

Thomas E. Long: I'm also joined today by Mackie Mccrea and other members of the senior management team who are here to help answer your questions. After our prepared remarks, hopefully you saw the press release, we issued earlier this afternoon as well as the slides posted to our website. As a reminder, we will be making forward looking statements within the meaning.

Thomas E. Long: Of section 20, <unk> of the Securities Exchange Act of $19 34.

Thomas E. Long: These statements are based upon our current beliefs, as well as certain assumptions and information currently available to us, and are discussed in more detail in our Form 10-Q for the quarter ended March 31st, 2024, which we expect to file tomorrow, May 9th. I'll also refer to Adjusted EBITDA and Distributable Cash Flow, or DCF, both of which are non-GAAP financial measures.

Thomas E. Long: These statements are based upon our current beliefs as well as certain assumptions and information currently available to US and are discussed in more details in our Form 10-Q for the quarter ended March 31, 2024, which we expect to file Tomorrow may nine.

Thomas E. Long: I'll also refer to adjusted EBITDA, and distributable cash flow or DCF, both of which are non-GAAP financial measures you will find a reconciliation of our non-GAAP measures on our website.

Thomas E. Long: You'll find a reconciliation for non-GAAP measures on our website. I'll start today by going over our financial results for the first quarter of 2024. We generated adjusted EBITDA of $3.9 billion compared to $3.4 billion for the first quarter of 2023. We had record volumes through our crude pipelines and also saw strong performance across the rest of our operation. DCF to the partners of energy transfer as adjusted was $2.4 billion compared to $2 billion for the first quarter of last year. This resulted in excess cash flow after distributions of approximately $1.3 billion.

Thomas E. Long: I'll start today by going over our financial results for the first quarter of 2024, we generated adjusted EBITDA of $3 9 billion compared.

Thomas E. Long: Compared to $3 4 billion for the first quarter of 2023.

Thomas E. Long: We had record volumes through our crude pipelines and also saw strong performance across the rest of our operations DCF attributable to the partners of energy transfer as adjusted was $2 4 billion compared to $2 billion for the first quarter of last year. This resulted in <unk>.

Thomas E. Long: Cash flow after distributions of approximately $1 3 billion.

Thomas E. Long: On April 24th, we announced a quarterly cash distribution of $0.3175 per common unit, or $1.27 on an annualized basis. This distribution represents an increase of 3.3% from the $0.3075 paid in the first quarter of 2023. In February, Fitch upgraded Energy Transfer's senior unsecured credit rating to BBB with a stable outlook, which followed an upgrade by S&P to BBB in 2023. At the end of the first quarter, we had no outstanding borrowings under our revolving credit facility.

Thomas E. Long: On April 24th we announced a quarterly cash distribution of 31, and three quarter cents per common unit or $1, 27% on an annualized basis. This distribution represents an increase of three 3% from the 30 and three quarter cents paid in the first quarter of 2023.

Thomas E. Long: In February Fitch upgraded energy Transfer's senior unsecured credit rating to Triple B with a stable outlook, which followed an upgrade by S&P to triple B in 2023.

Thomas E. Long: At the end of the first quarter, we had no outstanding borrowings under our revolving credit facility.

Thomas E. Long: Following the redemption of all of our outstanding Series C and Series D Preferred Units in February of 2024, in March, we issued a notice to redeem all of Energy Transfer's outstanding Series E Preferred Units on May 15, 2024. In April of 2024, we redeemed $1.7 billion of senior notes using cash on hand and proceeds from our revolving credit facility. And for the first quarter of 2024, we spent approximately $460 million on organic growth capital, primarily in the midstream and NGL and refined product segments, excluding Sun and USA Compression CapEx. Now, turning to our results by segment for the first quarter. And we'll start with NGL and refined products. Adjusted EBITDA was $989 million compared to $939 million for the first quarter of 2023.

Thomas E. Long: Following the redemption of all of our outstanding series six and series D preferred units in February of 2024 in March we issued a notice to redeem all of the energy transfer is outstanding series C preferred units on May 15 2024.

Thomas E. Long: In April of 2024, we redeemed $1 7 billion of senior notes using cash on hand, and proceeds from our revolving credit facility.

Thomas E. Long: And for the first quarter of 2024, we spent approximately $460 million on organic growth capital, primarily in the midstream and NGL and refined product segments, excluding sun and USA compression capex.

Thomas E. Long: Now turning to our results by segment for the first quarter, and we will start with NGL and refined products adjusted EBITDA was $989 million compared to $939 million for the first quarter 2023.

Thomas E. Long: This was primarily due to growth across our transportation, fractionation, and terminal operations, which was partially offset by lower gains from hedged NGL inventory. As a reminder, the first quarter of 2023 included gains that were carried over from the prior year. NGL transportation volumes increased 5% to 2.1 million barrels per day. This increase was primarily due to higher volumes from the Permian region on the Mariner East pipeline system and on the Gulf Coast Export Pipeline. NGL fractionation volumes increased 11% to 1.1 million barrels per day.

Thomas E. Long: This was primarily due to growth across our transportation.

Thomas E. Long: Fractionation and terminal operations, which was partially offset by lower gains from hedged NGL inventory as a reminder, the first.

Thomas E. Long: <unk> 2023 included gains that were carried over from the prior year.

Thomas E. Long: NGL transportation volumes increased 5% to 2 million barrels per day. This increase was primarily due to higher volumes from the Permian region on the Mariner East pipeline system and on the Gulf Coast export pipelines.

Thomas E. Long: NGL fractionation volumes increased 11% to $1 1 million barrels per day.

Thomas E. Long: Total NGL export volumes grew 6% over the first quarter of 2023. We continue to see strong international demand for natural gas liquids and saw record LPG exports out of our Needlin terminal for the month of March. During the first quarter of 2024, we loaded approximately 14 million barrels of ethane out of Nederland and nearly 7 million barrels of ethane out of Marcus Hook. During the first quarter, we continued to export approximately 20% of worldwide NGL exports. For midstream, Adjusted EBITDA was $696 million compared to $641 million for the first quarter of 2023.

Thomas E. Long: Total NGL export volumes grew 6% over the first quarter of 2023, we continue to see strong international demand for natural gas liquids and saw record LPG exports out of our Nederland terminal for the month of March.

Thomas E. Long: During the first quarter of 2024, we loaded approximately 14 million barrels of ethane out of Nederland, and nearly 7 million barrels of ethane out of Marcus hook during.

Thomas E. Long: During the first quarter continued to export approximately 20% of worldwide NGL exports.

Thomas E. Long: For midstream adjusted EBITDA was $696 million compared to $641 million for the first quarter of 2023. This was primarily due to the addition of the Crestwood assets as well as higher volumes in the Permian Basin. As a reminder results in the first quarter of 2023.

Thomas E. Long: This was primarily due to the addition of the Crestwood assets as well as higher volumes in the Permian Basin. As a reminder, results in the first quarter of 2023 included a one-time positive adjustment of approximately $40 million. Gathered gas volumes increased to 19.9 million MMBTUs per day compared to 19.8 million MMBTUs per day for the same period last year.

Thomas E. Long: <unk> included a one time positive adjustment of approximately $40 million.

Thomas E. Long: Gathered gas volumes increased to $19 9 million <unk> per day compared to $19 8 million in Btu's.

Thomas E. Long: Btu per day for the same period last year.

Thomas E. Long: Now for our crude oil segment, adjusted EBITDA was $848 million compared to $526 million for the first quarter of 2023. This was primarily due to significantly stronger pipeline volumes, increased terminal throughput, as well as favorable timing on gains associated with hedged inventory. We also benefited from the acquisition of the Lotus and Crestwood assets in May and November of 2023, respectively. Results for the first quarter of 2024 included a $40 million benefit related to favorable timing on gains associated with hedged inventory, a portion of which we expect to reverse in the second quarter.

Thomas E. Long: Now for our crude oil segment, adjusted EBITDA was $848 million compared to $526 million for the first quarter of 2023. This was primarily due to significantly stronger pipeline volumes increased terminal throughput as well as favorable timing on gains associated with <unk>.

Thomas E. Long: Hedged inventory, we also benefited from the acquisition of the Lotus and Crestwood assets in May and November of 2023, respectively.

Thomas E. Long: Results for the first quarter of 2024 included a $40 million benefit related to favorable timing on gains associated with hedged inventory a portion of which we expect to reverse in the second quarter.

Thomas E. Long: And as a reminder, the first quarter of 2023 did include one-time negative adjustments of approximately $35 million. Crude oil transportation volumes increased 44%, a trade record 6.1 million barrels per day, compared to 4.2 million barrels per day for the same period last year. Excluding the additions of Crestwood and Lotus, adjusted EBITDA and crude oil transportation volumes on our base business increased 47% and 14%, respectively, compared to In our interstate segment, Adjusted EBITDA was $483 million compared to $536 million for the first quarter of 2023.

Thomas E. Long: And as a reminder, the first quarter of 2023 did include one time negative adjustments of approximately $35 million.

Thomas E. Long: Crude oil transportation volumes increased 44% to a record $6 1 million barrels per day compared to $4 2 million barrels per day for the same period last year.

Thomas E. Long: Excluding the additions of Crestwood and lowest adjusted EBITDA and crude oil transportation volumes on our base business increased 47% and 14% respectively compared to the first quarter of 2023.

Thomas E. Long: In our Interstate segment, adjusted EBITDA was $483 million compared.

Thomas E. Long: Compared to $536 million for the first quarter of 2023.

Thomas E. Long: During the quarter, we saw margin growth related to higher contracted volumes at increased rates on several of our pipelines. However, this growth was more than offset by lower operational sales resulting from lower prices and unplanned maintenance projects.

Thomas E. Long: During the quarter, we saw margin growth related to higher contracted volumes at increased rates on several of our pipelines. This growth was more than offset by lower operational sales, resulting from lower prices and unplanned maintenance projects. In addition, the first quarter of 2023 included a.

Thomas E. Long: In addition, the first quarter of 2023 included a one-time benefit from the realization of certain amounts related to a shipper bankruptcy. Total system volumes increased 5% over the same period last year due to increased demand and higher utilization on the Transwestern, Tiger, Trunkline, and Gulfrun pipeline systems. We continue to fully utilize Zone 1 capacity on Gulf Run, and with the completion of the trunk line backhaul project, we are fully utilizing deliveries into our trunk line pipeline from Zone 2.

Thomas E. Long: One time benefit from the realization of certain amounts related to a shipper bankruptcy.

Thomas E. Long: Total system volumes increased 5% over the same period last year due to increased demand and higher utilization on the transwestern Tiger trunk line and Gulf run pipeline systems, we continue to fully utilize zone, one capacity on Gulf run and with the completion of the trunk line backhaul projects.

Thomas E. Long: <unk>, we are fully utilizing deliveries into our trunkline pipeline from zone to our team continues to work on the next phase of our potential capacity expansion to facilitate the transportation of natural gas from northern Louisiana to the Gulf Coast based upon customer demand.

Thomas E. Long: Our team continues to work on the next phase of a potential capacity expansion to facilitate the transportation of natural gas from northern Louisiana to the Gulf Coast based upon customer demand. And for our intrastate segment, adjusted EBITDA was $438 million compared to $409 million for the first quarter of last year.

Thomas E. Long: And for our intrastate segment, adjusted EBITDA was $438 million compared.

Thomas E. Long: Compared to $409 million for the first quarter of last year during.

Thomas E. Long: During the first quarter of 2024, we recorded gains of approximately $250 million related to pipeline optimization opportunities that were not expected to repeat throughout the remainder of the year. In addition, we saw volume ramp-ups and new contracts on several of our Texas pipelines. All of this was partially offset by lower storage optimization opportunities.

Thomas E. Long: During the first quarter of 2024, we recorded gains of approximately $250 million related to pipeline optimization opportunities that were not expected to repeat throughout the remainder of the year. In addition, we saw volume ramp ups and new contracts in several of our Texas pipelines. All of this was partially.

Thomas E. Long: We offset by lower storage optimization opportunities.

Thomas E. Long: Turning to our growth projects, we'll start with Nederland and Markesuk Export Terminal. Our NGL terminals continue to benefit from increased demand, both in the United States as well as from international customers. Construction of the expansion to our NGL export capacity at Nederland continues to progress. This expansion is expected to give us the flexibility to load various products based upon customer demand. We have completed the installation of all pilings for the facility, and the construction remains on schedule, for an anticipated in-service in mid-2025 for the initial phases of the project.

Thomas E. Long: Turning to our growth projects, and we will start with Nederland and Marcus Hook export terminals, our NGL terminals continue to benefit from increased demand both in United States as well as from international customers construction of the expansion to our NGL export capacity at Nederland continues.

Thomas E. Long: Progress.

Thomas E. Long: This expansion is expected to give us the flexibility to load various products based upon customer demand.

Thomas E. Long: We have completed the installation of all pilings for the facility and the construction remains on schedule.

Thomas E. Long: For an anticipated in service in mid 2025 for the initial phases of the project.

Thomas E. Long: And, as mentioned on our last call, we are also building new refrigerated storage at Nederland, which is expected to increase our butane storage capacity by 33% and double our propane storage capacity. This will further increase our ability to keep customers' ships loaded on time and give us the ability to more than fully optimize our export capability. We expect the total combined cost of these two projects to be approximately $1.5 billion.

Thomas E. Long: And as mentioned on our last call. We are also building new refrigerated storage at Nederland, which is expected to increase our butane storage capacity by 33% and double our propane storage capacity. This will further increase our ability to keep customers ships loaded one time and gives us the ability.

Thomas E. Long: <unk> more than fully optimize our export capabilities. We expect the total combined cost of these two projects to be approximately $1 5 billion.

Thomas E. Long: At our Marcus Hook terminal, construction continues on the first phase of an optimization project that would add incremental ethane, refrigeration, and storage capacity. On our Lone Star NGL pipelines, we recently FID'd two projects that will de-bottleneck our West Texas Gateway and Lone Star Express pipelines. On the Gateway Pipeline, a de-bottlenecking project is underway that will allow us to fully utilize our interest in the EPIC pipeline and optimize our deliveries from the Delaware Basin into the Gateway Pipeline for deliveries into Montbellevue.

Thomas E. Long: At our Marcus Hook terminal construction continues on the first phase of an optimization project that would add incremental ethane refrigeration and storage capacity.

Thomas E. Long: On our Lone Star NGL pipelines, we recently to projects that will Debottleneck, our west, Texas Gateway and Lone Star Express pipelines.

Thomas E. Long: On the Gateway pipeline, a debottlenecking project is underway that will allow us to fully utilize our interest on the epic pipeline and optimize our deliveries from the Delaware basin into the gateway pipeline for deliveries into Mont Belvieu. These upgrades are expected to be completed in 2025.

Thomas E. Long: These upgrades are expected to be completed in 2025. As a reminder, this undivided interest was acquired as part of the Crestwood acquisition, and it's just one of the several synergy projects. And on the Lone Star Express, we are completing upgrades that are expected to provide more than 90,000 barrels per day of incremental Permian NGL takeaway capacity upon its anticipated in-service in 2026. The combined project costs are expected to be approximately $125 million.

Thomas E. Long: As a reminder, this undivided interest was acquired as part of the Crestwood acquisition and is just one of the several synergy projects we are working on.

Thomas E. Long: And on the Lone Star Express we are completing upgrades that are expected to provide more than 90000 barrels per day of incremental Permian NGL takeaway capacity opponents anticipated in service in 2026.

Thomas E. Long: The combined project costs are expected to be approximately $125 million. Upon completion of these two projects. Our total deliverability in the Mont Belvieu is expected to increase to more than one 3 million barrels per day.

Thomas E. Long: Upon completion of these two projects, our total deliverability in Mont Belvue is expected to increase to more than 1.3 million barrels per day. As we mentioned on our last call, in early 2024, we closed on the acquisition of two pipelines, the Sabina 1 pipeline from Montbellevue to the Houston Ship Channel and the Sabina 2 pipeline from Montbellevue to our Needlin Terminal. We recently commenced the conversion of the Sabena II pipeline to provide additional natural gasoline service between our Mont Belvue NGL complex and our Nederland storage and export terminals.

Thomas E. Long: As we mentioned on our last call in early 2024, we closed on the acquisition of two pipelines is Sabina one pipeline from Mont Belvieu to the Houston ship channel.

Thomas E. Long: And the Sabine of two pipeline from Mont Belvieu to our Nederland terminal.

Thomas E. Long: We recently commenced the conversion of the Sabena two pipeline to provide additional natural gasoline service between our Mont Belvieu NGL complex and our needle in storage and export terminal.

Thomas E. Long: This project, which we anticipate will be in service in 2025, is expected to increase the capacity from 25,000 barrels per day to approximately 70,000 barrels per day. In addition, discussions are ongoing to provide transportation for potentially multiple products on the Sabina One pipeline that extends from Mont Belvieu to the Houston shipyard. As a reminder, in addition to the incremental processing capacity acquired through the Crestwood acquisition, we are expanding our processing capacity at several of our existing processing plants.

Thomas E. Long: This project, which we anticipate will be in service in 2025 is expected to increase the capacity from 25000 barrels per day to approximately 70000 barrels per day.

Thomas E. Long: In addition discussions are ongoing to provide transportation for potentially multiple products on the <unk> pipeline that extends from Mont Belvieu to the Houston ship channel as.

Thomas E. Long: As a reminder, in addition to the incremental processing capacity acquired through the Crestwood acquisition, we are expanding our processing capacity at several of our existing processing plants. In total we are moving forward with upgrades to add approximately 200 million cubic feet per day of processing capacity.

Thomas E. Long: In total, we are moving forward with upgrades to add approximately 200 million cubic feet of processing capacity in West Texas. In addition, we recently completed upgrades in South Texas that added approximately 60 million cubic feet of daily. These upgrades can be completed at more favorable capital costs when compared to building a new processing plant.

Thomas E. Long: D in West Texas. In addition, we recently completed upgrades in South, Texas that added approximately 60 million cubic feet per day.

Thomas E. Long: Upgrades can be completed at more favorable capital cost when compared to building a new processing plant.

Thomas E. Long: Also, we continue to increase optionality and improve reliability along our pipelines. At the end of 2023, we completed a backhaul project on our trunk line pipe. The project added an incremental 400,000 MCF per day Southern Flow Capacity on the pipeline system at very efficient capital costs.

Thomas E. Long: Also we continue to increase Optionality and improve reliability, along our pipeline systems at the end of 2023, we completed a backhaul project on our trunkline pipeline. The project added an incremental 400000 Mcf per day of southern flow capacity on the pipeline system at.

Thomas E. Long: Very efficient capital cost.

Thomas E. Long: Looking at our crude oil assets, we are adding a direct connection from Midland to our pipeline that flows from the Permian Basin to Cushing. The construction of this approximately 30-mile pipeline continues, and upon its anticipated completion in the fourth quarter of this year, it is expected to be able to transport approximately 100,000 barrels of crude per day from our terminals in Midland, Texas, to our terminal in Cushing, Oklahoma. We also continue to develop our proposed Blue Marlin offshore project, and we are hoping to receive the draft EIS this quarter.

Thomas E. Long: Looking at our crude oil assets, we are adding a direct connection for Midland to our pipeline that flows from the Permian basin discussion. The construction of this approximately 30 mile pipeline continues and upon its anticipated completion in the fourth quarter of this year. It is expected to be able to transport approximately 100.

Thomas E. Long: <unk> barrels per day of crude from our terminals in Midland, Texas to our terminal in Cushing, Oklahoma.

Thomas E. Long: We also continue to develop our proposed blue Marlin offshore project and we are hoping to receive the draft EIS. This quarter. As a reminder, in November of 2023, we announced a heads of agreement or HOA with total energies for crude offtake.

Thomas E. Long: As a reminder, in November of 2023, we announced a heads of agreement, or HOA, with Total Energies for crude offtake. Additionally, additional customers remain very engaged and interested in our project, recognizing the value of fully loading VLCCs and the reduced execution risk that comes with repurposing existing underutilized assets. Now for an update on the Lake Charles LNG project. As we discussed on our last earnings call in January of this year, the Biden administration imposed a moratorium on the approval of LNG exports while the Department of Energy conducts studies to determine whether LNG exports are in the public interest. The Biden administration stated that these studies would focus on the cumulative impact of LNG exports on climate change.

Thomas E. Long: And additional customers remain very engaged and interested in our project recognizing the value of fully loading vlccs and the reduced execution risk that comes with repurposing existing underutilized assets.

Thomas E. Long: Now for an update on Lake Charles LNG project as we discussed on our last earnings call in January of this year. The Biden administration imposed a moratorium on the approval of LNG exports, while the department of energy conduct studies to determine whether LNG exports are in the public interest the bad news.

Thomas E. Long: Ministration stated that these studies would focus on the cumulative impact of LNG exports on climate change U S natural gas prices and the impact of LNG facilities on local communities. We remain optimistic that the studies will continue to support export authorizations, particularly for LNG.

Thomas E. Long: U.S. natural gas prices and the impact of LNG facilities on local communities. However, we remain optimistic that the DOE studies will continue to support DOE export authorizations, particularly for LNG projects that have lower Scope 1 and Scope 2 emissions profiles, like Lake Charles. And so we continue to believe that Lake Charles LNG will receive a DOE export authorization in due course. As such, Lake Charles LNG continues to pursue the development of the project.

Thomas E. Long: <unk> that have lower scope, one and scope two emissions profiles like Lake Charles and so we continue to believe that Lake Charles LNG will receive a deal export authorization in due course as such Lake Charles LNG continues to pursue the development of the project.

Thomas E. Long: In this regard, Lake Charles LNG is in discussions with LNG offtake customers for the remaining unsold offtake volumes necessary to take FID. Lake Charles LNG remains extremely thankful for the continued support of its existing LNG customers. And for a brief update on other projects, Energy Transfer has approved eight 10-megawatt natural gas-fired electric generation facilities to support the partnership's operations in Texas.

Thomas E. Long: In this regard Lake Charles LNG is in discussions with LNG Allstate customers for the remaining unsold offtake volumes necessary to take <unk>.

Thomas E. Long: Lake Charles LNG remains extremely thankful for the continued support of its existing LNG customers.

Thomas E. Long: And for a brief update on other projects.

Thomas E. Long: Energy transfer has approved 810 megawatt natural gas fired electric generation facilities to support the partnership's operations in Texas. We expect these facilities to go into service throughout 2025 and 2026.

Thomas E. Long: We expect these facilities to go into service throughout 2025 and 2026. On the Blue Ammonia front, we continue to develop an ammonia hub concept at Lake Charles, Louisiana, and Nederland, Texas, where we have deep water access at our existing facility. This hub concept would allow us to provide critical infrastructure services to several blue ammonia facilities, including natural gas supply, CO2 transportation to third-party sequestration sites, ammonia storage, and deepwater marine loading facilities.

Thomas E. Long: On the Blue ammonia front, we continue to develop an ammonia hub concept at Lake Charles Louisiana, and NATO in Texas, where we have deep water access at our existing facilities. This hub concept would allow us to provide critical infrastructure services to several blue ammonia facilities, including <unk>.

Thomas E. Long: Natural gas supply.

Thomas E. Long: <unk> transportation to third party sequestration sites ammonia storage and deepwater marine loading facilities.

Thomas E. Long: This hub concept is expected to promote economies of scale and efficiencies as compared to individual standalone blue ammonia projects, and the market response to this approach has been favorable. Yesterday, we entered into an agreement with Capture Point that commits CO2 from our treating facilities in northern Louisiana to the capture and sequestration project being jointly developed by CapturePoint and Energy Transfer. Now looking ahead at our 2024 Organic Growth Capital Guidance. With the addition of several new growth projects, we now expect 2024 growth capital expenditures to be approximately $2.9 billion, which will be spent primarily in the NGL and refined products, and midstream segments.

Thomas E. Long: This hub concept is expected to promote economies of scale and efficiencies as compared to individual stand alone Blu ammonia projects and the market response to this approach has been favorable.

Thomas E. Long: Yesterday, we entered into an agreement with capture point that commits.

Thomas E. Long: Two from our treating facilities in northern Louisiana to the capture and sequestration project being jointly develop a capture point and energy transfer.

Thomas E. Long: Now looking ahead at our 2020 for organic growth capital guidance with the addition of several new growth projects. We now expect 2020 for growth capital expenditures to be approximately $2 9 billion.

Thomas E. Long: Which will be spent primarily in the NGL and refined products and midstream segments.

Thomas E. Long: This has been revised from our previous guidance for approximately $2.5 billion to include newly approved de-bottlenecking projects on our Lone Star Express and Gateway NGL pipelines, as well as the Sabina II Pipe Conversion, Optimization Work at Montbellevue, backhaul, looping, and compression projects on FGT, new power generation facilities, as well as additional processing plant optimization in the Permian, and gathering system buildouts and compression

Thomas E. Long: This has been revised from our previous guidance of approximately $2 $5 billion to include newly approved Debottlenecking projects on our Lone Star Express and Gateway NGL pipelines. The sabena two pipe conversion optimization work at Mont Belvieu backhaul.

Thomas E. Long: Backhaul looping and compression projects on FGT, new power generation facilities as well as additional processing plant optimization in the Permian and gathering system build outs and compression projects in the midstream segment.

Thomas E. Long: We continue to expect our long-term annual growth capital run rate to be approximately two to three billion dollars. Now turning to our Adjusted EBITDA guidance. We are raising our 2024 adjusted EBITDA guidance to be between $15 billion and $15.3 billion, compared to our prior guidance range of $14.5 to $14.8 billion. Our 2024 guidance has been updated to include earnings related to Sunoco's acquisition of the New Star assets, closed on May 3.

Thomas E. Long: We continue to expect our long term annual growth capital run rate to be approximately $2 billion to $3 billion.

Thomas E. Long: Now turning to our adjusted EBITDA guidance.

Thomas E. Long: We are raising our 2024 adjusted EBITDA guidance to be between 15 billion to $15 3 billion.

Thomas E. Long: Compared to our prior guidance range of 14, five to $14 8 billion.

Thomas E. Long: Our 2024 guidance has been updated to include earnings related to Sunoco acquisition.

Thomas E. Long: The new store assets, which closed may three.

Thomas E. Long: As we look at our first quarter performance and bring the new star assets into the family, we continue to be excited about 2024 and are comfortable that we can deliver on our plan despite various market headwinds like lower gas prices and production curtailments that have impacted midstream volume. Overall, worldwide demand for crude oil, natural gas, natural gas liquids, and refined products remains strong, as does demand for our products and services. We will continue to position ourselves to meet this demand by strategically targeting optimization and expansion projects that enhance our existing asset base and generate attractive returns.

Thomas E. Long: As we look at our first quarter performance and bring the new star assets into the family. We continue to be excited about 2024 and are comfortable that we can deliver on our plan. Despite various market headwinds like lower gas prices and production curtailments that have impacted midstream volumes overall.

Thomas E. Long: Worldwide demand for crude oil natural gas natural gas liquids and refined products remains strong as does demand for our products and services. We will continue to position ourselves to meet this demand by strategically targeting optimization and expansion projects that enhance our existing asset base and generate.

Thomas E. Long: Attractive returns.

Thomas E. Long: We also continue to pursue synergies opportunities around recently acquired assets with several projects underway, including the optimization of processing capacity in West Texas and NGL pipeline takeaway capacity from the Delaware Basin. Our financial position continues to be stronger than any time in energy transfer's history, which we believe will provide us with the continued flexibility to pursue new growth opportunities, further leverage reduction, maintaining our targeted distribution growth rate, and increasing equity returns to our unit holders.

Thomas E. Long: We also continue to pursue synergy opportunities around recently acquired assets with several projects underway, including the optimization of processing capacity in West, Texas, and NGL pipeline takeaway capacity from the Delaware Basin.

Thomas E. Long: Our financial position continues to be stronger than anytime in energy Transfer's history, which we believe will provide us with the continued flexibility to balance pursuing new growth opportunities further leverage reduction maintaining our targeted distribution growth rate and increasing equity returns to our unitholders.

Thomas E. Long: That concludes our prepared remarks, operator. Please open the line for the first question. We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys.

Speaker Change: That concludes our prepared remarks operator, please open the lineup for the first question.

Operator: If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. As a reminder, please limit yourself to asking only one question and one follow-up question. At this time, we will pause momentarily to assemble our roster. The first question comes from Jeremy Tonet with JP Morgan. Please go ahead. Hi, good afternoon.

Jeremy Bryan Tonet: We will now begin the question and answer session.

Operator: Ask a question you May press Star then one on your telephone keypad.

Jeremy Bryan Tonet: We are using a speakerphone please pick up your handset before pressing the keys.

Speaker Change: Is that any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.

Jeremy Bryan Tonet: As a reminder, please limit to asking only one question and one follow up question.

Jeremy Bryan Tonet: At this time, we will pause momentarily to assemble our roster.

Operator: The first question comes from Jeremy Tonet with J P. Morgan. Please go ahead.

Jeremy Bryan Tonet: Hi, good afternoon.

Jeremy Bryan Tonet: Jeremy, good afternoon. I just wanted to start off with regard to Crestwood. Now that the acquisition has been under your belt for a little bit, I'm wondering if you could update us a little bit more. You talked about synergy capture a bit before, but just what you see now as far as the impact and what you see, I guess, for potential synergies across commercial, cost savings, what have you. Just curious about your latest thoughts there. Yeah, Jeremy, I'll go ahead and start.

Jeremy Bryan Tonet: Hey, Jamie good afternoon.

Speaker Change: Just wanted to start off with regards to Crestwood.

Jeremy: The acquisition has been under your belt for a little bit here I'm wondering if you could update us a little bit more you talked about the synergy capture a bit before but just what you see now as far as the impact.

Speaker Change: And what you see I guess for potential synergies across commercial cost savings what have you just curious your latest thoughts there.

Thomas E. Long: We still feel very good about the $80 million on the cost synergy side that we said we would be able to achieve, and that's going well. And then I'm looking over at Mackay, who will comment on the commercial side of it. Yeah, Jeremy, as every time that we go to inquire about somebody, we always have anticipated synergies, and then we just dig stuff up and find things, and once again, we're doing that with Crest. Some of it we can talk about, for example. Permian Basin, they've got some Iowa capacity that we'll be able to utilize sooner than later. Delay.

Jeremy Bryan Tonet: Yes, Jeremy I'll go ahead and start we still feel very good about the $80 million on the cost synergies that we said, we would be able to achieve and that's going well and then I'll look looking over at Mac comment.

Mackay: Comment on the commercial side of it Jeremy.

Mackay: Every time that we go and acquire somebody we always have anticipated synergies and then we just dig stuff up and find things and once again, we're doing that with Crestwood.

Mackay: We can talk about for example.

Mackay: Permian basin, they've got some idle capacity that we'll be able to utilize.

Mackay: Sooner than later will delay any kind of expansion you might need out there.

Marshall S. McCrea: Any kind of expansions we may need out there. There's also some things going on up in the Bakken that we can't really elaborate on, but very significant opportunities up there to help not only fill up some of their available fire now, but available processing capacity, but also bring in fairly significant more barrels than Dakota Access. And there are others; we can go out of the river, other areas. But we're very excited about what we've seen so far and look forward to really benefiting from some of these synergies we've already recognized. Great. Thank you for that.

Marshall S. McCrea: There's also some things going on up in the Bakken that we can't really elaborate on but very significant opportunities up there help not only fill up some of their available now.

Marshall S. McCrea: <unk>.

Marshall S. McCrea: Processing capacity, but also bring in Sterling.

Marshall S. McCrea: Fairly significant more barrels and Dakota access and there is others. We can go out of river other areas, but we're very excited about what we've seen early and.

Marshall S. McCrea: We look forward to really benefit from the synergies we've already recognized.

Jeremy Bryan Tonet: And I appreciate the guidance update reflects the Sun acquisition of NuStar there. But if I just want to kind of parse through that a little bit more and see how the base business for ET is proceeding versus guidance provided before, how would you describe, I guess, the outlook at this point versus before, if it's similar or if anything has changed? Similar is going to be the short answer, you know; we had $14.5 to $14.8 billion.

Speaker Change: Great. Thank you for that and I appreciate the guidance update reflects.

Jeremy Bryan Tonet: The Sun acquisition of Neustar, there, but if I just wanted to kind of parse through that a little bit more and see how the base business for ETS preceding versus guidance provided before how would you describe I guess the outlook at this point versus before is it similar or if anything has changed.

Jeremy Bryan Tonet: Similar is going to be the short answer.

Jeremy Bryan Tonet: We had the 14, 5% to 14 eight to $14 8 billion.

Thomas E. Long: We're including an incremental $500 million just for that portion of the year for Sunoco. So that's what you're seeing at this time with where we are in the process. The Sunoco team has done a great job, and they'll probably be updating that number a little bit more as we go forward. But right now, $500 million is the number that we're using, so. Got it.

Jeremy Bryan Tonet: Work.

Jeremy Bryan Tonet: Including in the <unk>.

Thomas E. Long: Incremental $500 million just for that portion of the year for sonoco.

Thomas E. Long: So thats what youre seeing at this at this time.

Thomas E. Long: With where we are in the process Sunoco team has done a great job.

Thomas E. Long: There'll be probably updating that number a little bit more as we go forward.

Thomas E. Long: Right now $500 million is the number that.

Thomas E. Long: That we're using so.

Jeremy Bryan Tonet: That's helpful. Just the last one, if I could, I think you talked about the potential for increasing equity returns, and I was wondering if you could comment a bit more on what you meant there. You know, there are obviously two, as far as just the overall equity.

Speaker Change: Got it that's helpful and just a last one if I could I think you had talked about the potential for increasing equity returns and just wondering if you could comment a bit more on what you meant there.

Jeremy Bryan Tonet: There's obviously too.

Speaker Change: As far as just the overall equity.

Thomas E. Long: Jeremy, if I understand you correctly, equity returns, meaning that we continue to bump the distributions, but, Don't ever want to say that we're not focused on unit buybacks when we get to the right place from a leverage standpoint. And what I mean is, when we're kind of looking at it, the forecast will be opportunistic there. Very helpful. I'll leave it there. Thanks. Our next question comes from Spiro Dounis with Citi. Please go ahead. Thanks, Operator. Afternoon, everybody.

Speaker Change: Jeremy if I understand you correctly equity equity returns, meaning that we continue to bump the distributions but.

Spiro Michael Dounis: Don't ever want to say that we're not focused on unit buybacks when we when we get to the right.

Spiro Michael Dounis: Right place from a leverage standpoint, and what I mean is one we're kind of looking at it in the forecast will be opportunistic there.

Spiro Michael Dounis: Very helpful I'll leave it there thanks.

Spiro Michael Dounis: Our next question comes from Barry Jonas with Citi. Please go ahead.

Spiro Michael Dounis: Maybe to start with some of the new projects and the CapEx update, Mackay, your team has clearly been busy over the last quarter with all those additions. Curious now, just given you're sort of higher into the range of $3 billion at this point in the year, anything that could sort of tip us over that that's in the hopper? Are you contemplating that in that new range?

Spiro Michael Dounis: Thanks, operator afternoon everybody.

Spiro Michael Dounis: Maybe to start with some of the new projects.

Spiro Michael Dounis: The Capex update Mackie your team has clearly been busy over the last quarter with all those additions.

Spiro Michael Dounis: Curious now just just given your sort of higher end of the range of $3 billion at this point in the year anything that could sort of tipped us over that that's in the hopper are you contemplating that in that new range thinking about projects like Blue Marlin Warrior Gulf on expansion and you're going to kind of point to that you can get us over that.

Marshall S. McCrea: Thinking about projects like Blue Marlin, Warrior, Gulffront Expansion, anything to kind of point you to that can get us over that? Yeah, this is Mackay, everything that we have right now is what we're going to do. Next 30, 60, 90 days, we may make significant progress on some of the things we're working on, but the things that we announced recently, the additional $400 million, are things that we have approved here recently that we've kicked off.

Spiro Michael Dounis: Yes.

Spiro Michael Dounis: Mackie.

Marshall S. McCrea: No.

Mackay: We think that we have in right now.

Mackay: Is what we're going to do.

Marshall S. McCrea: The next 30 60 90 days, we may make significant progress in some of the things we are working floor, but the things that we announced recently the additional $400 million of things that we are approved here recently that we've kicked off.

Marshall S. McCrea: Several of those will actually come online later this year. All of them will come online kind of within two years or earlier, so yeah, we're adding more capital, but we're also gonna see revenues much quicker than, of course, a lot. Got it. It's helpful. I just want to go to the slides.

Mackay: Several of those will actually come online later this year all of them will come online.

Marshall S. McCrea: In two years earlier, so yes.

Marshall S. McCrea: But we're also going to see revenues much quicker then of course, a lot of our projects.

Spiro Michael Dounis: One sort of pointed to new opportunities you're evaluating on the power plant side to connect them to new and existing power plants. Curious if you could expand on that and what that could mean in terms of scope. Is that sort of interstate pipeline expansions? And then are we also talking about brownfield or even greenfield storage expansions? Yeah, I tell you what, this is kind of the first small step for us, but as everybody is aware, certainly in Texas and throughout many states, the grids are in jeopardy due to very cold or hot weather.

Speaker Change: Got it it's helpful.

Speaker Change: Just wanted to.

Spiro Michael Dounis: Go to the slide when you sort of pointed to new opportunities you're evaluating on the power plant side to connect into new and existing power plants curious if you could expand on that and what that could mean in terms of scope is that sort of interstate pipeline expansions and are we also talking about brownfield and greenfield storage expansions.

Spiro Michael Dounis: Yes.

Speaker Change: It's kind of a first small step for us.

Spiro Michael Dounis: As everybody is aware certainly in Texas and throughout many states.

Spiro Michael Dounis: Grades are in jeopardy, very cold or hot weather so.

Spiro Michael Dounis: We're doing what we can to help support that. But really, the driver behind what we're doing with adding these 10-megawatt-at-a-time facilities is, number one, reliability, to make sure that when we have glitches off the grid, especially out in West Texas, where those are not uncommon, that we can keep our facilities running. In addition to that, it will also help grid security, for example.

Speaker Change: We're doing what we can to help support that but really the driver behind what we're doing will add in these 10 megawatt.

Spiro Michael Dounis: Facilities is number one reliability is to make sure that when we have glitches.

Spiro Michael Dounis: Grid, especially out West, Texas were those not uncommon that we can keep our facilities running in addition to that it also will help grid security for example will.

Marshall S. McCrea: We'll be able to, in the kind of eerie type or cold weather type circumstances, and Ircott asked us to get off the grid. We'll be able to get off the grid, keep our plants running reliably, and allow that excess that we're not pulling off to be able to benefit producers, for example, upstream that might have issues with losing electricity. So we think what we're doing are kind of small steps that we'll grow into to help make our system, our assets, much more reliable, and the grid more stable.

Spiro Michael Dounis: We will be able to kind of a year type of cold weather type circumstances when asked.

Marshall S. McCrea: Asked us to get off the grid will be able to get off the grid keep our plants running reliably and allow that excess.

Marshall S. McCrea: Energy that were not integrated benefit producers for example, upstream that might have issues, but lose electricity. So we think we're done.

Marshall S. McCrea: Or kind of small steps that will grow into.

Marshall S. McCrea: Mike our system.

Marshall S. McCrea: Yes, it's much more aligned with the grid more stable. In addition to that go into this in great detail, but theres also a lot of revenue.

Marshall S. McCrea: In addition to that, I won't go into this in great detail, but there's also a lot of revenue here, benefits from LAR, and ancillary services that we'll be able to provide with this added generation. So we're pretty excited about it. You know, kind of small stuff right now, but it makes a lot of sense for us. Great. I'll leave it there for today.

Marshall S. McCrea: Right.

Marshall S. McCrea: Benefits from lower and ancillary services that we'll be able to provide it with this added generation. So we're pretty excited about it as kind of small stuff right now but.

Marshall S. McCrea: It makes a lot of sense for our partnership.

Speaker Change: Great I'll leave it there for today, Thank you gentlemen.

Spiro Michael Dounis: Thank you, gentlemen. Our next question comes from Keith Stanley with Wolf Research. Please go ahead. Hi, good afternoon.

Marshall S. McCrea: Our next question comes from Keith Stanley with Wolfe Research. Please go ahead.

Keith T. Stanley: Hi, good afternoon.

Keith T. Stanley: I wanted to go back to the interstate gas sales and the strong results there. Is there any more detail you can give on the optimization opportunities you saw that drove the $250 million? And then, relatedly, just any updates on how much capacity you have available to benefit from Permian differentials this year and anything on the Warrior project as well. Okay.

Keith T. Stanley: Wanted to go back to the Interstate gas sales and the strong results. There is there any more detail you can give on the optimization opportunities you saw that drove that $250 million gain.

Keith T. Stanley: And then Relatedly just any updates on how much capacity you have available for to benefit from Permian differentials This year and anything on the warrior project as well thanks.

Keith T. Stanley: Okay.

Marshall S. McCrea: Let me start with the end of that. So on Warrior, we continue, our team continues to work. One thing we are doing, we're going to be very disciplined and prudent. We're not going to run out and announce a project unless we feel good about all of our. [inaudible] Late 2026.

Speaker Change: Let me start with <unk>.

Keith T. Stanley: And of that so on warrior, we continue our team continues to work.

Marshall S. McCrea: One thing we are doing.

Marshall S. McCrea: Very disciplined and prudent we're not going to run out and announce a project unless we feel good about all of our capacity.

Marshall S. McCrea: Long term, so we're not going to run out.

Marshall S. McCrea: The warrior when we have capacity on our existing system that we're still terminal. So we're working hard.

Marshall S. McCrea: Paul <unk> has impacted a little bit with some of the bigger customers that were working with however, there remains as everybody on this call probably knows a strong interest in another pipeline probably about mid.

Marshall S. McCrea: Late 2026.

Marshall S. McCrea: We are very optimistic that we will be the next pipeline to come out of West Texas who will continue to work hard, get that finish line. Would it make a difference? As far as the spread across Texas, it kind of varies from month to month, but it's certainly north of 300,000 a day. We sure hate to see prices do what they're doing at WAHA, but that's what happens when you have Capacity Constraints, which we have right now out of the Permian.

Marshall S. McCrea: Very optimistic that we will be the next pipeline to come out of West, Texas, and we will continue to work hard.

Marshall S. McCrea: Yes that is fine when it makes sense.

Marshall S. McCrea: As far as the spread across.

Marshall S. McCrea: Texas.

Marshall S. McCrea: Kind of vary from month to month, but it's certainly north of 300000 a day.

Marshall S. McCrea: Mcf a day that we have available that are benefiting from these widespread we sure hate to see prices what they are doing it but that's what happens when you have.

Marshall S. McCrea: Capacity constraints, which we have right now out of the Permian.

Marshall S. McCrea: There is a pipeline coming on later in the year that will alleviate a lot of that, but certainly the way we're positioned to take advantage of that type of spread for our customer benefit as well as for us. As far as the intrastate revenue, it's what we've built. We feel extremely fortunate with the assets we have throughout the U.S., but especially in Texas.

Marshall S. McCrea: There is a pipeline coming on later in the year that will alleviate a lot of that but certainly the way we're positioned.

Marshall S. McCrea: He is very well to take advantage of that spread for our customers' benefit as well as our own.

Marshall S. McCrea: As far as the intrastate revenue.

Marshall S. McCrea: It's what we feel we feel extremely fortunate with the assets we have throughout the U S, but especially in Texas and in the team. We have this operating those assets were really cold weather times really volatile times, even really hot weather, we have the ability to create a lot of revenue by.

Marshall S. McCrea: The team we have that's operating those assets, in really cold weather times or really fall-filled times, even in really hot weather, we have the ability to create a lot of revenue by peak hourly sales or putting some storage positions on, moving gas from west to east, even back home. There's just a lot of things we can do with our massive intrastate pipeline network in a tech. So, you know, we see this every year. We see it most winters, in May time, and summer.

Marshall S. McCrea: Or are putting some storage positions on moving gas west to east and backhaul Theres just a lot of things we can do with our massive intrastate pipeline network.

Marshall S. McCrea: Texas and so we see this every year most lenders may time in summer.

Keith T. Stanley: We're able to capture kind of some unexpected revenue that will always be there at very volatile times. Appreciate the detailed answer, second question on just M&A and how you're thinking about things and so, and thinking about it from the lens of energy transfer, and then, obviously, you have Sun as well, which I know is an independent company, but There's a fair amount of overlap now in some of the assets and business mix between ET and Sun.

Marshall S. McCrea: After kind of unexpected revenue that will always be there.

Keith T. Stanley: Very volatile times at some level.

Keith T. Stanley: Okay.

Speaker Change: I appreciate the detailed answer.

Keith T. Stanley: Second question on.

Keith T. Stanley: Just on M&A, and how you're thinking about things and so.

Keith T. Stanley: And thinking about it from the lens of energy transfer and then obviously you have sun as well, which I know is an independent company, but.

Keith T. Stanley: There's a fair amount of overlap now and some of the assets and business mix between ETP and Sun. So how do you think about M&A going forward and kind of what types of acquisitions, our assets make more sense at the ETE level versus the some level and any differentiation there.

Keith T. Stanley: So how do you think about M&A going forward and kind of what types of acquisitions or assets make more sense at the ET level versus the Sun level and any differentiation? Yeah, listen. That's obviously a very, very, very good question.

Speaker Change: Yes listen Thats.

Keith T. Stanley: Obviously.

Keith T. Stanley: But very very very good question, we spent a lot of time within energy transfer.

Thomas E. Long: We spend a lot of time in energy transfer. Strategizing here. I will.

Thomas E. Long: Strategizing here I will.

Thomas E. Long: You know, I think I will start off saying that we still feel like consolidation makes sense in the midstream space. So, just at the 50,000-foot answer to your question, still fully in tandem, evaluating various opportunities as we look out. So, we're not going to slow down on that front. Now, as far as what we look at, it's going to be always trying to look at those things that feed all the way downstream.

Thomas E. Long: I think I will start off saying that we still feel like consolidation makes sense in the midstream space. So just at the 50000 foot answer.

Thomas E. Long: To your question, we still fully intend.

Thomas E. Long: Evaluating various opportunities.

Thomas E. Long: We look out so we're not.

Thomas E. Long: We're not going to slow down on that front now as far as.

Thomas E. Long: What we look at it it's going to be always trying to look at those things that debt.

Thomas E. Long: We always like to talk about how we go from wellhead to water, and we do it across all the commodities. So, you can see our strategy as we look at this stuff and what assets we look at as to how it feeds all the way through the value chain when we make these acquisitions. And it gives us great opportunities for commercial synergies when we do that, as well as the cost. Now as to the last part of your question about the energy transfer versus Sunoco, clearly, the Sunoco team has done a fantastic job on this new star.

Thomas E. Long: Feed all the way downstream, we always like to talk about how we go from wellhead to water.

Thomas E. Long: And we do it across all the commodities. So you can see our.

Thomas E. Long: Our strategy as we look at this stuff and what assets, we look at as to how it feeds all the way through the value chain.

Thomas E. Long: We make these acquisitions and it gives us great opportunities for commercial synergies when we do that.

Thomas E. Long: As well as the cost synergies now as to that I guess has to the.

Thomas E. Long: Last part of your question about the.

Thomas E. Long: Energy transfer versus Sonoco clearly the Sunoco team has done a fantastic job on this new start couldn't be more excited about that asset base coming in coming into the family here. So what youll see is.

Thomas E. Long: I couldn't be more excited about that asset base coming into the family here. So, what you'll see is that, you know, they're in kind of the wholesale fuel distribution, terminal business, et cetera. And you're right, there's going to be some overlap.

Thomas E. Long: You'll see that they are in the kind of the wholesale fuel distribution terminal business et cetera, and youre right theres going to be some overlap and in those instances, we will look at ways on a combined basis of what of what we can do but sunoco is going to continue to.

Thomas E. Long: And in those instances, we'll look at ways on a combined basis of what we can do. But Sunoco's going to continue to make those kinds of acquisitions. This is really their first big public company transaction, although they've made a lot of other asset acquisitions. But it's, you know, clearly something that's very, very attractive to them, and it's, you know, very, very good for the family.

Thomas E. Long: You don't make those kind of acquisition. This is really their first big.

Thomas E. Long: A big public company transaction, they've made a lot of other.

Thomas E. Long: Asset acquisitions.

Thomas E. Long: It's.

Thomas E. Long: Clearly something that's very very accretive to them and it's very good for the family.

Marshall S. McCrea: And I'm going to look across the table to Mackay and give him a chance to add in a little bit more on the latest New Star acquisition and some of the optimizations we might be looking at here. You bet, yeah, and I want to elaborate much more on what Sun said or anybody that follows them. They kind of explained that I, you know, we're excited for them. They are kind of stepping up, kind of growing up a little bit, in one regard as far as different types of assets. There are some assets that overlap.

Thomas E. Long: From that standpoint.

Mackay: And I'm going to look across the table.

Marshall S. McCrea: Mackie and give him a chance to add in a little bit more even on the.

Mackay: On the latest new star acquisition and some of that.

Mackay: Yes, optimizations, we might be looking at here. So you bet yes.

Mackay: Much more on what sunset or anybody that follows them they kind of explained.

Mackay: We're excited.

Mackay: Art kind of stepping up.

Mackay: And a growing up a little bit.

Mackay: In one regard as far as different type of assets and there are some net assets an overlap we think theres, a real benefit and potentially partner up with them. So we are in discussions of possibly doing that.

Marshall S. McCrea: We think there's a real benefit. We actually partner up with them, so we are... Discussions are possibly doing that, and the level of benefits and accretive continues to rise that are very beneficial and accretive. Our partnerships, as we do with other JVs, we look forward to catching those opportunities. Thank you. Did that answer all your questions there? It sure did.

Marshall S. McCrea: Opportunities arise that are very beneficial and accretive to both our partnerships as we do with other jbs, we look forward to catching those opportunities.

Marshall S. McCrea: As time goes forward.

Marshall S. McCrea: Did that answer all your question there.

Speaker Change: Sure Dan Thanks, Okay.

Keith T. Stanley: Thanks. Our next question comes from Manav Gupta with UBS. Please go ahead.

Marshall S. McCrea: Our next question comes from Manav Gupta with UBS. Please go ahead.

Manav Gupta: Hi, a quick question as it relates to your slide 6. When we look at 2024 CAPEX, 80% of that is between NGL, refined products, and midstream, and I know it's still early, but with your crystal ball, if you look at 2025, do you believe this mix could change significantly in the next year, where other segments could get more CAPEX? Like any view over there would be very helpful.

Manav Gupta: Hi quick question as it relates to your slide six when you look at 2020 for Capex.

Manav Gupta: 80% of that is between NGL and refined products and midstream and I know, it's still early but video Crystal ball. If you look at 2025.

Manav Gupta: Do you believe this mix could change significantly in the next year or are there other segments could get more capex like any view over there would be helpful. Thank you.

Marshall S. McCrea: Thank you. Yeah, I can start with that. I guess looking at it right now, nothing jumps out that would change it significantly. However, you walk through some hypotheticals, let's just think, say everything, the pause gets lifted, for example, on LNG, you know, we intend to own, maybe 20-25% of that, that could start earlier. That's probably not likely, but it just kind of depends on the warrior.

Speaker Change: Yes, I can start with that.

Marshall S. McCrea: I guess looking at it right now nothing jumps out that would change it significantly. However, you walked through some hypothetical lets just say everything the pause gets lifted for example on LNG.

Marshall S. McCrea: And tender.

Marshall S. McCrea: <unk>.

Marshall S. McCrea: Maybe 25% of that that could start earlier, that's probably not likely but just kind of depends on.

Manav Gupta: Does it pick up later in the year, sooner or later? So there's a lot of different variables and negotiations going on and even permitting issues with them and the government. So I think the high-level answer to that, that kind of a spin rate wrong right now, at least through 25, that's pretty consistent. But we've got a number of projects that I just alluded to in different segments that might begin quicker than others. And that would, of course, skew the results.

Marshall S. McCrea: Warrior does it pick up later in the year sooner or later, so theres a lot of different.

Manav Gupta: Variables and negotiations going on with it even permitting issues with.

Manav Gupta: With with the government so I think the how.

Manav Gupta: Level answer to that.

Manav Gupta: The spin right wrong right now at least through two five that's pretty consistent.

Manav Gupta: Got a number of projects that just alluded to in different segments did not begin quicker than others and that would of course skew it one way or the other.

Marshall S. McCrea: Thank you. A quick follow-up. At Marcus Hook, I think on the last quarterly call, you spoke about the construction of the first phase of the Optimization Project that could add ethane refrigeration and storage capacity. Is there any update on that one?

Speaker Change: Thank you a quick follow up at Marcus Hook I think on the last quarter call you spoke about construction over firstly optimizing spacing projects that could add ethane that cogeneration installation capacity is that any update on that one. Thank you.

Manav Gupta: Thank you. There is no update. We're excited about that phase, and we're diligently moving through that phase. We will be adding ethane storage, and we are excited about the future of our export facility. Capabilities and revenues out of Marcus Hook for many years. Thank you for taking the time to answer my question. Our next question comes from Michael Blum with Wells Fargo. Please go ahead. Thanks, good afternoon everyone. I wanted to ask you to go back and look at the 8, 10-megawatt gas-fired power plants he announced for Texas. Just to clarify, are these basically peaker plants?

Marshall S. McCrea: No update where we are.

Speaker Change: Cited about.

Michael Jacob Blum: That phase and where.

Michael Jacob Blum: Diligently moving through that we will be adding ethane storage.

Michael Jacob Blum: We are excited about the future of our export facilities and capabilities and revenues out of Marcus hook for many years ago.

Michael Jacob Blum: Thank you for taking my questions.

Manav Gupta: Okay.

Manav Gupta: Our next question comes from Michael Blum with Wells Fargo. Please go ahead.

Michael Jacob Blum: Hi, Thanks, Good afternoon, everyone I wanted to ask go back to.

Manav Gupta: Yes.

Michael Jacob Blum: A 10 megawatt gas fired power plants, you announced for Texas.

Michael Jacob Blum: Just to clarify are these are these basically peak your plants are you going to supply them with your own gas and.

Michael Jacob Blum: Are you going to supply them with your own gas? How do we think about return on investor capital? Hey, uh, hey, Mike.

Michael Jacob Blum: How do we think about return on invested capital for an investment like this.

Michael Jacob Blum: Okay.

Michael Jacob Blum: Hey, Mackie.

Marshall S. McCrea: Mackay. Yeah, we will. We provide the natural gas for these with our own facilities. As I mentioned, the two main drivers here are reliability, number one, for our assets, keep our plants running, keep the gas flowing, and number two, to benefit the grid. In our economics, we don't necessarily expect to run these a lot. You know, almost 9,000 hours in a year.

Mackie: Mackie, Yes, we will.

Marshall S. McCrea: Provide the natural gas for these with our own facilities.

Marshall S. McCrea: Mentioned, the two main drivers here, our reliability number one for our assets keep our plants running keep the gas flowing and number two it has been a benefit the grid.

Marshall S. McCrea: And our economics, we don't expect necessarily Randy.

Marshall S. McCrea: Almost 9000 hours in a year when we run the economics running about 3500, we think will be significantly lower than what they will run and that meets our rates of return hurdles.

Marshall S. McCrea: We have run economics, and we're running about 1,300, which we think will be significantly lower than what they will run. And that meets our rates of return hurdle that has no bar, and things like that.

Marshall S. McCrea: No anomaly.

Marshall S. McCrea: Anomalies in regards to like a <unk> type situation or any kind of cold weather and a huge run up in power prices or any benefits from ancillary services.

Marshall S. McCrea: So, like I said, we're not putting these in to try to create significant returns but, very likely, could create a lot better returns than what we're projecting, but we're really building these for reliability. Got it. Thank you for that. And then, on the Warrior potential project, just to clarify, if you wanted to have this in service by 2026, when do you need to get FID on that? Pretty quick.

Marshall S. McCrea: And things like that so.

Marshall S. McCrea: Like I say, it's not we're not putting these and try to create significant returns but.

Marshall S. McCrea: Very likely could.

Marshall S. McCrea: Create a lot better returns of what we're projecting but we're really building these for reliability of our assets in the grid.

Speaker Change: Okay got it. Thank you for that and then just a follow up on the.

Marshall S. McCrea: The warrior.

Speaker Change: Potential project just to clarify.

Speaker Change: You want if you wanted to have this in service by 2026, when do you need to.

Marshall S. McCrea: Beyond that.

Marshall S. McCrea: Pretty quick.

Marshall S. McCrea: No.

Michael Jacob Blum: No, oh, probably by, yeah, typically. I'll say typically a lot of changes over the last three or four years, but if we're able to get FID, hypothetically, by late third quarter or early fourth quarter, we believe we'll have it in by the end of. Great. Thank you. Our next question comes from Theresa Chen with Barclays. Please go ahead. Good afternoon.

Speaker Change: Probably but we.

Marshall S. McCrea: We typically.

Theresa Chen: I'll say typically a lot of changes over the last three or four years, but if we were able to get.

Theresa Chen: Hypothetically for example.

Theresa Chen: Late third quarter early fourth quarter, we believe we'll have it in by the end of 'twenty six.

Theresa Chen: At the latest.

Theresa Chen: Great. Thank you.

Michael Jacob Blum: Our next question comes from Theresa Chen with Barclays. Please go ahead.

Theresa Chen: Good afternoon follow up question related to the.

Theresa Chen: A follow-up question related to the M&A topic. Related to your comment about wanting that wellhead-to-water strategy, so with Proforma, the new star asset in the family, you now have an expansive crude oil system, Permian to Cushing, Permian to Nederland, and a sizable Corpus Christi export facility. So the long-haul movement between Permian and Corpus Christi, is that a natural area where you might want to fill your portfolio? Oh, sure.

Theresa Chen: M&A topic.

Theresa Chen: But later Q your comment about wanting that wellhead to water strategy. So pro forma the neustar assets in the family you know how the expansive crude oil system Permian to Cushing Permian to Nederland, and insightful Corpus Christi export facility.

Theresa Chen: The long haul movement between Permian and Corpus Christi is that a natural area, where you might want to fill in your portfolio.

Marshall S. McCrea: I mean, anywhere we can... Connect the dots from where producers want to go to the best markets we want to be in. We certainly, over the years, have been focused on bringing as many barrels as possible from Bakken, from Midland, from Cushing, to our Needle and Houston assets to benefit those as well as Downstream Pipelines with Bayou Bridge and our VLCC project, but certainly, if there are any assets for sale, move more crude, for example, from Midland down to Corpus. We'll always look at those. But remember, those are new star assets.

Speaker Change: Oh sure.

Marshall S. McCrea: Where we could.

Marshall S. McCrea: Connect the dots from where producers want to go to the best markets, we want to be in that market.

Marshall S. McCrea: Certainly over the years have been focused on.

Marshall S. McCrea: Bring as many barrels as possible from Bakken Midland Cushing to our Nederland Houston assets to benefit those as well as.

Marshall S. McCrea: Our downstream pipes with <unk>.

Marshall S. McCrea: Bayou Bridge, and our VLCC project, but certainly if there are any assets for sale.

Marshall S. McCrea: That could move more crude for example from Midland down to Corpus, we will always look at those.

Marshall S. McCrea: Remember those are new start assets and so they are the ones that will be chasing those opportunities wherever we might fit.

Theresa Chen: And so they're the ones that will be chasing those opportunities wherever we might fit in, where it might make sense. They want to talk to us about it. We're certainly open. That's probably a better new start question related to it. Got it.

Theresa Chen: Since they talk to us that we're certainly open to that but thats.

Theresa Chen: A better new store question related to corpus.

Marshall S. McCrea: And looking at the Dakota Access Recontracting Outlook and all the way through Bayou Bridge, just taking into account TMX now being online, shipping not just WCS West but also FinCrude, which seemingly has, you know, indirectly compressed BOC and DIPS, given the connection to mainline. What is your outlook for DAPL recontracting coming up in a couple of years and balanced with the incremental barrels that you're getting from Crest? Yeah, we, uh, we. We love Bakken.

Theresa Chen: Got it.

Theresa Chen: Looking at the Dakota access re contracting outlook, all the way through Bayou Bridge.

Marshall S. McCrea: Taking into account <unk> now being online shipping not just WCS west, but also syncrude, which seemingly has indirectly compressed Bakken.

Marshall S. McCrea: Connections mainline what is your outlook for <unk> will be contracting coming up in a couple of years and balanced with the incremental barrel that you are getting from Crestwood.

Marshall S. McCrea: Yes.

Marshall S. McCrea: We love what we've done out of there. We're proud of the role we've played to get barrels out of such a great base. Refineries in the Midwest and the Gulf Coast. So it's been a great asset for us. It's funny, over the years, there are times we have recontracting concerns on different assets, and that's just not one.

Marshall S. McCrea: <unk>.

Marshall S. McCrea: We love the Bakken, we love, what we've done out of there.

Marshall S. McCrea: Out of the role we play to get barrels out of such a great basin to refineries in the Midwest and the Gulf Coast has been a great asset for US it's funded through the year. If there's time, we have re contracting concerns on different assets, that's just not one of them.

Marshall S. McCrea: We think long-term. You know, there's blips from time to time. But we think long-term, it is the premier optimum outlet for producers. That's the way to get your production to, as I mentioned, Patoka and into many of the mid-continent refineries, as well as the refineries around Port Arthur and Houston, and then, of course, into Bayou Bridge all the way over into Lake Charles and the St. James refineries, and then you add in our VLCC project.

Marshall S. McCrea: Think long term we.

Marshall S. McCrea: We think long term it is the premier optimum outlet for producers the best way to get to your production too as I mentioned, the toga and into many of the mid continent refineries as well as refineries around port Arthur in Houston, and then of course into Bayou Bridge, all way over into Lake Charles and St. James refineries.

Marshall S. McCrea: And then you add on our VLCC project. So it just it.

Marshall S. McCrea: So it's just an asset that we're not really concerned if, uh, there are companies that aren't willing to roll it over for a long period of time or a period of time that makes sense to us. We may go year to year.

Marshall S. McCrea: It's an asset we're not really concerned.

Marshall S. McCrea: Yes.

Marshall S. McCrea: There is.

Marshall S. McCrea: Companies aren't willing to roll it over for a long period of time a period of time, if it makes sense to us we may go year at a time.

Theresa Chen: We don't have a lot of concerns. We think that the basin is going to be very stable for the next five to ten years. We don't see massive growth, but as long as oil prices remain fairly strong, we do see a stable, kind of consistent flow out of there. I do believe we're the best option for producers, and so we'll engage with anybody that wants to roll over. Of course, we're already talking to some of them, but it's certainly not something we would do. Thank you so much. Our next question comes from John Mackay with Goldman Sachs. Please go ahead.

Marshall S. McCrea: We don't have a lot of concern we think that based on is it going to be very stable for the next five to 10 years, we don't see massive growth growth, but as long as oil prices may early strong we do see.

John Ross Mackay: I mentioned stable kind of consistent flows out of there.

John Ross Mackay: I believe we're the best option for producers and so we will engage with anybody that wants to rollover of course already talking to some of them, but it's certainly not something we usually book.

John Ross Mackay: Thank you so much.

John Ross Mackay: Our next question comes from John Mccain with Goldman Sachs. Please go ahead.

John Ross Mackay: Hey, thanks for the time this afternoon. Maybe just to take one more on the power plant side, yeah, I guess curious, are you guys operating any small plants now, or have you in the past? And then if I think about this potential capacity you're adding, it's, you know, relatively small versus what ET probably consumes overall. So do you think there's room for you guys to expand this number over time?

John Ross Mackay: Hey, Thanks for the time this afternoon, maybe just to take one more.

John Ross Mackay: Our plant side I guess curious are you guys operating any small plants now or have you in the past and then if I think about this.

John Ross Mackay: This potential capacity, you're adding it.

John Ross Mackay: Yes, I guess relatively small versus what <unk>, probably consumes overall. So do you think there's room for you guys to expand this number over time and should we think of this as maybe kind of a first look on on a kind of a set of projects from here.

John Ross Mackay: And should we think of this as maybe kind of a first look at a kind of set of projects from here? Yeah, John, in fact, I thought I said it earlier; I probably didn't make it clear enough. Yes, these are the first steps.

Speaker Change: Yes, John.

John: I thought I said earlier, Paul I did make it clear enough yet.

John: First steps.

Marshall S. McCrea: There are grid problems all over the country, and Texas is no exception. A lot of people are moving to Texas, a lot of data centers, a lot of AI data centers, crypto miners are still coming in, industrial growth. I mean, it's just.

John Ross Mackay: Theres grid problems all over the country and Texas is no exception a lot of people are moving to Texas, a lot of data centers a lot of AI data centers crypto miners are still coming in industrial growth I mean, it's just where.

Marshall S. McCrea: We're so optimistic about, for natural gas fire generation, is something that we will continue to look at, and it will be highly unlikely that we don't announce more of these as each quarter goes on. But we will be the operator of these. As I mentioned earlier, these aren't peaking units. They are units that have a very good heat rate.

Marshall S. McCrea: So optimistic on.

Marshall S. McCrea: For natural gas fired generation so.

Marshall S. McCrea: It's something that we will continue to look at and we will it will be highly unlikely that we don't announce more of these as each quarter goes on.

Marshall S. McCrea: But we are we will be.

Marshall S. McCrea: The operator of these as I mentioned earlier these arent, peaking units. They are units that are very good heat rates.

Marshall S. McCrea: They're very efficient and very, by very well-priced per megawatt when we run. So this is just kind of the first step, and we're excited about where this may take us, especially in some areas, for example, maybe at Mount Bellevue, where we think there's a real opportunity there and it's part of our bigger cryo-complexes route. Narrated at a, will continue

Marshall S. McCrea: So they're very efficient and very.

Marshall S. McCrea: Provide very well priced.

Marshall S. McCrea: Megawatt cost when we run.

Marshall S. McCrea: This is just kind of a first step.

Marshall S. McCrea: It's about where this may take us, especially in some areas for example, maybe at Mont Belvieu.

Marshall S. McCrea: We think theres, a real opportunity there and it's Marty.

Marshall S. McCrea: Bigger cryo complex as Ralph around the state.

Marshall S. McCrea: It's an area that.

Marshall S. McCrea: We will continue to grow.

John Ross Mackay: I appreciate that detail. Maybe you could spend a minute maybe just talking about the Blue Ammonia Hub, maybe kind of what your role in that could look like, what kind of pieces of that value chain you'd want to own versus maybe having a partner come in and kind of run it with you? talking about how excited we are for all of our fossil fuel business, especially natural gas. Incremental, and so many things, and certainly with ammonia production.

Speaker Change: I appreciate that detail.

Marshall S. McCrea: Maybe just.

John Ross Mackay: Sumit out or moving over a little bit.

John Ross Mackay: Can you spend a minute maybe just talking about the blue ammonia hub, maybe kind of what your role in that to look like what kind of pieces of that value chain, you would want to own versus maybe having a partner come in and kind of run it with you.

John Ross Mackay: Yes.

John Ross Mackay: We keep talking about.

John Ross Mackay: We are all of our fossil fuel business, especially natural gas.

John Ross Mackay: Mental and so many things and certainly with ammonia production. So right now probably a little bit higher priority a little bit more focus is in the lake Charles area. We've got a lot of momentum with some very significant players that really know what they're doing we're approaching this very similar to our LNG project and our potential headcount.

Marshall S. McCrea: So right now, probably a little bit higher priority, a little bit more focus is in the Lake Charles area. We've got a lot of momentum with some very significant players that really know what they're doing. We're approaching this very similarly to our LNG project and our potential Pet Chem in that we don't want to be big owners of ammonia.

Marshall S. McCrea: We don't want to be a big owners.

Marshall S. McCrea: Do we want to operate? Yes, we'll retain the ownership of some level, very likely or possible. But what really drives us is, to give an example, will deliver approximately 120,000 to 130,000 MCF a day. At Lake Charles, we're looking at anywhere from maybe five to seven over a certain period of time.

Marshall S. McCrea: Do we want to operate yes will retain the ownership of some level very likely or possible, but what really drives US is given example of one of these ammonia plants will deliver approximately 120 to 130.

Marshall S. McCrea: Mcf a day.

Marshall S. McCrea: Charles we're looking at anywhere from maybe five to seven over a certain period of time. So it's not insignificant natural gas transportation revenue. In addition to that we will have storage revenue will have terminal revenue will be loaded their lake Charles we see enormous growth.

Marshall S. McCrea: So it's not insignificant natural gas transportation revenue. In addition to that, we'll have storage revenue. We'll have terminal revenue. We'll be able to load it there at Lake Charles.

Marshall S. McCrea: We see enormous growth for ammonia. Everybody probably knows that fertilizers to feed the people of the world are gonna do nothing but grow, depending on the experts, two to 4% over the next 10 or 15 years. And now you've got this power side of it.

Marshall S. McCrea: For ammonia everybody play knows that fertilizers to feed the people the world is going to be nothing but grow I think on the experts to two 4% over the next 10 or 15 years and now you've got this power side of it.

Marshall S. McCrea: The fuel side of it, where ships were being... a big future ammonia, and it's interesting, said. It really helps facilitate our natural gas transportation business. Very excited where that's headed, will do the same thing, we hope, as well. Appreciate all the detail.

Marshall S. McCrea: <unk> side of it where ships are being.

Marshall S. McCrea: Sure.

Marshall S. McCrea: Built to burn ammonia as their fuel you've got a bunker bunkering for ammonia and then you've got in South Korea, and Japan, and other places where ammonia is going to be blended with coal for fuel. So there is a big.

Marshall S. McCrea: Another big plus for new Star in the ammonia pipeline they bought we see.

Marshall S. McCrea: Big future ammonia, it's interesting CP stand.

Marshall S. McCrea: Standpoint, just said it really helps facilitate our natural gas transportation business as well so.

Marshall S. McCrea: We're very excited about where that's headed.

Marshall S. McCrea: We'll do the same thing we hope as well.

Speaker Change: Okay. Appreciate all the detail thank you.

John Ross Mackay: Thank you. Our next question comes from Elvira Scoto with RBC Capital Markets. Please go ahead. Hey, good afternoon, everyone. Can you talk a little bit about what you're seeing in producer activity in Hainesville? Looks like there was some decline in your system.

Speaker Change: Our next question comes from.

Elvira Scoto: Scott <unk> with RBC capital markets. Please go ahead.

Elvira Scoto: Good afternoon, everyone can you talk a little bit about what youre seeing producer activity in the Haynesville. It looks like there was some decline on your system also what youre seeing relative to what's embedded in your original expectations or your guidance and then how you see that activity trending the rest of the year.

Elvira Scoto: Also, what you're seeing relative to what's embedded in your original expectations or your guidance, and then how you see that activity trending the rest of the year. Yeah, this is Mackay again. Certainly, lean plays throughout the U.S. Marcel, Utica, in the Northeast, parts of Oklahoma and the Panhandle, Texas and East Texas, and certainly Haynesville. We've seen a slowdown, It's just there's no ifs and or buts when prices fall to about $50, or $60. Henry Hugg, it puts a lot of pressure on producers.

Elvira Scoto: Yes.

Elvira Scoto: Yes. This is mackie again.

Elvira Scoto: Certainly lean plays throughout the U S Marcellus Utica and the northeast parts of Oklahoma and Texas.

Elvira Scoto: Texas, and East, Texas, and certainly Haynesville, we've seen a slowdown it just there's no bust when prices fall to about $50 60.

Elvira Scoto: At Henry hub.

Elvira Scoto: A lot of pressure on producers so yes, we've seen it fall off fairly.

Elvira Scoto: Significantly in the.

Elvira Scoto: Northern Haynesville for our Interstate group, though I got it.

Marshall S. McCrea: So yes, we've seen it fall off fairly significantly in northern Haynesville. For our interstate group, though, I got a shout out in that our volumes grew. And so, yes, we've got to be more aggressive. Our margins tightened, but we did a good job on our interstate and intrastates in North Louisiana. But yeah, as far as our GMP business, we have seen it fall off.

Marshall S. McCrea: Give it a shot out in our volumes grew and so yes, we've got to be more aggressive or margins tightened, but we did a good job on our inter and intra states, Louisiana, but yes as far as our G&P business.

Marshall S. McCrea: We have seen it fall off however, if you look at kind of what's happening.

Marshall S. McCrea: However, if you look at kind of what's happening. We saw a peak about six months ago with LNG exports of almost 15 billion. That's now down around 12.

Marshall S. McCrea: We saw peak about six months ago with LNG exports almost 15 Bcf.

Marshall S. McCrea: Now down around 12 Bcf Theres another LNG facility coming on I believe in June or July. So we see growth we start seeing demand like we believe we will overseas in Europe and elsewhere.

Marshall S. McCrea: There's another LNG facility coming on, I believe in June or July. So we can see growth. We start seeing demand like we believe we will overseas in Europe and elsewhere when the heat picks up this summer. We can see demand jump up five or six BCF overnight. And so you see these declines and hangs in other areas; you're not going to be able to ramp up those that quickly.

Marshall S. McCrea: The heat picks up this summer.

Marshall S. McCrea: Demand.

Marshall S. McCrea: We could see demand jump up.

Marshall S. McCrea: Five or six Bcf overnight.

Marshall S. McCrea: You see this decline in Haynesville and other areas youre not ramp.

Marshall S. McCrea: Ramp up those that quickly so we.

Marshall S. McCrea: So we see pricing out for the rest of this year, I think getting as high as 350 or 360 by the end of the year. We think that possibly could be moved up. You could see higher prices mid to the latter part of summer with a hot summer and if the LNG demand really picks up like that. Yes, not out of the back binner, top reporter on some of the lean areas and hang.

Marshall S. McCrea: We see pricing out the rest of this year I think getting as high as $3 50, or 360 by the end of the year, we think that possibly could be moved up that we could see higher processor mid to latter part of summer with a hot summer.

Marshall S. McCrea: <unk> demand really picks up like we think it will but yes no doubt.

Marshall S. McCrea: A tougher quarter on some of the main areas in Haynesville as one.

Elvira Scoto: Okay, great. That's super helpful. And then just going back to your slide eight, and you know, the comments that you made about, you know, the, the, the, the 8, 10 megawatt gas fired electric generation facilities. You also then talked about some kind of data centers. So I'm curious, you know, are you having any conversations with some of these data centers or maybe some of the utilities regarding, you know, incremental capacity or potential expansion opportunities? Or how do you think about that part of the equation longer term? Yes, we are. We are all Viva. We're in conversations with anybody that wants to gas up our systems. A quick little story here.

Speaker Change: Okay, Great. That's Super helpful. And then just going back to your slide eight and the comments that you made about.

Elvira Scoto: The.

Elvira Scoto: A 10 megawatt gas fired.

Elvira Scoto: Electric generation facilities.

Elvira Scoto: You also then talked about kind of data centers. So I'm curious.

Elvira Scoto: Are you are you having any conversations with some of these data centers or maybe some of the utilities regarding.

Elvira Scoto: Yeah.

Elvira Scoto: Incremental capacity or potential expansion opportunities or how do you think about that part of the equation on the account.

Elvira Scoto: Yes.

Elvira Scoto: Yes, we are we are all veeva.

Elvira Scoto: We're in conversations with anybody but yes.

Elvira Scoto: Our system that are quick little story here, so two or three years ago, we started our strategy.

Marshall S. McCrea: So, two or three years ago, we started a strategy and an agenda for anything within 10 miles of any of our intra or interstate pipelines we need to go, and a lot of that was focused on power plants. So we've been doing that for a while. Our team, Pat Hickey and her team have done an excellent job of connecting to plants, Indraneel Mitra, John Mackay, Gabriel Moreen, John Mackay, Indraneel Mitra, centers, and especially around AI. It's going to happen. Whether that means over the next five or eight years, it's going to grow by three BCF demand. Gas Generated Electricity, or 8-BCF.

Marshall S. McCrea: An agenda that anything within 10 miles of any of our intra our interstate pipelines waiting to go connect.

Marshall S. McCrea: A lot of that was focused on power plant. So we've been doing that for a while our team that hickey and her team had done an excellent job of connecting two plants.

Marshall S. McCrea: Extending agreements, we have to power plants, but that also rolls over into.

Marshall S. McCrea: A lot of other opportunities and so we're looking at late in a pipeline to a large chip manufacturer.

Marshall S. McCrea: In Texas and as well is that we will we are believers like everybody else.

Marshall S. McCrea: The data.

Marshall S. McCrea: Centres, and especially around AI is going to happen whether that means over the next five or eight years. It is going to go about drove about three bcf demand.

Marshall S. McCrea: Gas generated electricity or eight Bcf, we don't know we just know it's going up so in combination with population growth as I mentioned earlier.

Elvira Scoto: We don't know. We just know it's going up. So in combination with population growth, as I mentioned earlier, industry growth, ammonia growth, all the AI data centers, et cetera, power plant growth. We're talking to probably seven or eight different power plants on fairly significant natural gas fire generation expansions in Texas, a handful in Oklahoma as well. So it's just that common theme that Tom and I keep talking about during this call.

Elvira Scoto: Industry growth ammonia growth.

Elvira Scoto: Ill.

Elvira Scoto: Data centers et cetera power plant growth.

Elvira Scoto: Probably.

Elvira Scoto: Seven or eight different power plants at least fairly significant natural gas fired generation expansions in Texas handful in Oklahoma as well. So it's just that common theme that I keep talking about in this call is that the demand for natural gas did nothing but go up for many years to come and we're excited that we have.

Elvira Scoto: Demand for natural gas is going to do nothing but go up for many years to come, and we're excited that we have the assets that we believe will benefit the most. That's great to hear. Thank you very much. Our next question comes from Zach Van Everen with Tudor Pickering and Holt & Co. Please go ahead.

Speaker Change: The assets that we believe will benefit the most from those opportunities.

Speaker Change: That's great to hear thank you very much.

Speaker Change: Our next question comes from Zach Van Osborn.

Speaker Change: Tudor Pickering Holt.

Speaker Change: <unk> and <unk>.

Speaker Change: Please go ahead.

Zach Van Everen: Perfect, thanks for taking my question, guys. Maybe just circling back on that last one on the data center side, I know you guys have probably one of the larger intrastate footprints between the Permian and call it Dallas. We've seen a lot of development and talk of development for the data centers in that area. Just curious about your ability to expand some of those intrastate pipes to maybe feed more of that power demand, whether it's in Dallas or Houston or other states? Well, that kind of coincides a little bit with what I just said.

Speaker Change: Perfect. Thanks for taking my question guys, maybe just circling back on that last one on the datacenter side I know you guys have probably one of the larger interest footprints between the Permian and call. It Dallas, we've seen a lot of development in talks of development from the data centers in that area. Just curious on what is your.

Zach Van Everen: Our ability to expand some of those intrastate pipes to maybe see more of that power demand, whether it's in Dallas or Houston or other states.

Zach Van Everen: Well that kind of coincides a little bit what I just said, we really have made it.

Marshall S. McCrea: We really have made it our job to connect to every possible gas-generating power plant in every state that we operate. We certainly have done that, and we have the tremendous capability of doing more of that in tech. We're already connected to approximately 55% to 60% of the power plants in Texas. Directly or indirectly, we have various... The AI has strategically located storage facilities both in North Texas, near Dallas, and also near Bama because a lot of these AIs, unlike the crypto miners who a lot of times are making a lot of money off selling electricity and not running their computers, can't do that. I think everybody knows that it's got to have reliability, so it can't rely on renewables.

Zach Van Everen: Our job is to go to connect to every possible gas generating power plant in every state that we operate in and we certainly have done that and have tremendous capability of doing more of that in Texas.

Marshall S. McCrea: Already connected to approximately 55% to 60% of the power plants in Texas.

Marshall S. McCrea: Either directly or indirectly we have various two strategically located storage facilities, both in north, Texas near Dallas and also in their bandwidth because a lot of these.

Marshall S. McCrea: Unlike the crypto miners, who a lot of temperature makes a lot of money off selling electricity and not run their computers, Hey, I can't do that I think everybody knows it's got to have reliable. So you can't rely on renewables. So yes, if we needed to add additional power plants that electricity.

Zach Van Everen: So yes, we need to tie additional power plants to provide that electricity to help meet all the demands in the Dallas area. AI expansion, will certainly be a part of it. Look at our ads. There's nobody, as you just mentioned, that's even close to being able to provide the services we can, especially for those types.

Zach Van Everen: Help me at all of the demand.

Zach Van Everen: Dallas Fort worth area, including AI expansion, we will certainly be a part of that looking at our assets I mean theres. Nobody is you just mentioned that's even close to build services we can.

Zach Van Everen: Especially for those type of market.

Marshall S. McCrea: Perfect, that makes sense. And then maybe switching to Blue Marlin, you know, if you guys were able to get the favorable EIS study as well as the permit, do you have a time frame for when that would be commercially in operation? I guess.

Speaker Change: Perfect that makes sense and then maybe switching to blue Marlin. If you guys were able to get the favorable study as well as the permit you have a timeframe for when that would be commercially in operation.

Marshall S. McCrea: I guess.

Marshall S. McCrea: Yes.

Zach Van Everen: I would say it like this: we believe that once we receive the Draft EIS, we are hopeful and confident that within a year we'll get our permit and our license. We're making certain assumptions about things that might happen in November.

Speaker Change: I would say it like this is that we believe that once we receive.

Zach Van Everen: The draft EIS.

Zach Van Everen: Hopefully confident that within a year.

Zach Van Everen: We will get a permit and our license.

Zach Van Everen: Making certain assumptions or things that might happen in November.

Marshall S. McCrea: Certainly, we are. The great thing about our project is, unlike our competitors, it's a brownfield project. We have the pipe, a lot of it, already in the ground or in the sea. So we have a huge advantage there. We have a pretty good deal on cost with some of our competitors, and I think we're significantly less than that. We have the kind of unique ability to move barrels from different basins that some of our competitors can't do that project.

Zach Van Everen: But certainly we are.

Zach Van Everen: The great thing about our project is unlike our competitors.

Marshall S. McCrea: Brownfield project I mean, we have a pipe hardy lot of it already in the ground or in the C and so we have a huge advantage there.

Marshall S. McCrea: Have a pretty good deal for cost of some of our competitors. We think were significantly less than that we had kind of a unique ability to move barrels from different basins at some of our competitors cant.

Zach Van Everen: So we're very optimistic. But anyway, to finish and answer your question, just to say hypothetically, by the second or third quarter of next year, we're ready to go. I believe we're looking at two and a half, about two and a half to three years before it would actually start.

Marshall S. McCrea: That project. So we're very optimistic but anyway to finished answered your question, let's say hypothetically buy.

Zach Van Everen: Second third quarter of next year, we are ready to go I believe we're looking at two and a half three years, yes.

Zach Van Everen: Yes.

Zach Van Everen: And a half to three years before it would actually go on strike.

Operator: Perfect. Thank you so much. This concludes our question and answer session. I would like to turn the conference back over to Tom Long for any closing remarks. Once again, we appreciate all of you joining us today. Thank you for your support, and we really look forward to any follow-up questions that you all have in addressing those. Thank you all. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Speaker Change: Perfect. Thank you so much.

Operator: This concludes our question and answer session I would like to turn the conference back over to Tom long for any closing remarks.

Thomas E. Long: Once again, we appreciate all of you joining us today. Thank you for your support and we really look forward.

Thomas E. Long: Any follow up questions that you all have in addressing and dressing those thank you all.

Operator: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Operator: [music].

Operator: [music].

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Operator: [music].