Q3 2024 Enterprise Products Partners L.P Earnings Call

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Speaker Change: I would now like to hand, the call over to Liberty straight senior director of Investor Relations. Please go ahead.

Okay.

Yeah.

Speaker Change: Thank you for standing by and welcome to Enterprise products Partners L. P third quarter 'twenty 'twenty four earnings conference call.

Liberty straight: Good morning, and welcome to the Enterprise products Partners Conference call to discuss third quarter 2024 earnings our speakers today will be co chief executive officers of Enterprise's General partner, Jim Teague, and Randy Fowler other members of our senior management team are also in attendance for the call today.

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

Speaker Change: After the speaker presentation, there will be a question and answer session.

Speaker Change: Ask a question during the session you will need to press star one one on your telephone.

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

Speaker Change: We removed yourself from the queue you May press Star one again.

Speaker Change: Now I'd like to hand, the call over to Larry straight Senior director of Investor Relations. Please go ahead.

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

Larry Straight: Good morning, and welcome to the Enterprise products Partners Conference call to discuss third quarter 2024 earnings. Our speakers today will be co Chief Executive Officer of Enterprise's General partner, Jim Teague and Randy Fowler.

Liberty straight: Please refer to our latest filings with the SEC for a list of factors that may cause actual results to differ materially.

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

Liberty straight: Okay.

Liberty straight: Oh.

Speaker Change: But I'll turn it over to Jonathan.

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

Speaker Change: Okay.

Speaker Change: Okay.

Jonathan: Got it.

Jonathan: Okay.

Jonathan: Right.

Jonathan: Okay.

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

Jonathan: Yeah.

Yes.

Jonathan: Okay.

Jonathan: Coverage.

Jonathan: [noise] DCF totaled $2 3 billion year to date.

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

Jonathan: Operationally, we said Bob Volumetric records.

Jonathan: <unk>.

Speaker Change: <unk> reported adjusted EBITDA of $2 $4 billion for the third quarter.

Jonathan: Billion cubic feet per day of inlet natural gas processing volumes.

Jonathan: And 12.8 million barrels a day of crude oil equivalent pipeline volumes.

Speaker Change: Compared to $2 3 billion last year third quarter.

Speaker Change: Generated $2 billion distributable cash flow.

Jonathan: Contributions from.

Speaker Change: One seven times coverage.

Jonathan: Okay.

Jonathan: [noise] spreadsheets.

Speaker Change: In addition, we repaid $808 million of Dcp's DCF.

Jonathan: Yeah.

Speaker Change: Retained DCF totaled two 3 billion year to date.

Jonathan: Okay.

Jonathan: Gotcha.

Jonathan: Perfect.

Speaker Change: Operationally, we said.

Speaker Change: Volumetric records.

Jonathan: [noise] [noise] Morgan's point terminal flex expansion in 2020 back.

Speaker Change: Including seven one.

Speaker Change: Billion cubic feet per day of natural gas processing volumes.

Speaker Change: And $12 8 million barrels a day of crude oil equivalent pipeline volumes.

Speaker Change: Benefited from contributions from the three new natural gas processing plants.

Jonathan: And we will have one additional process plant coming online in the Delaware in 2026.

Speaker Change: And wide natural gas price spreads between <unk> and other market hubs.

Jonathan: These projects provide visibility to new sources of cash flow.

Speaker Change: We're on track.

Jonathan: For our company and enhance and expand the NGL value chain at the core.

Speaker Change: To complete construction of two additional processing plants in the Permian.

Jonathan: All of our business.

Speaker Change: But he a pipeline.

Jonathan: We also announced yesterday that we completed the acquisition of opinion midstream.

Speaker Change: 14.

Speaker Change: Phase one of our Nature's River NGL export terminal.

Jonathan: These assets are highly complementary to our Permian processing footprint.

Speaker Change: And the last phase of our Morgan's point terminal flex expansion in 2025.

Jonathan: Providing treating services to a prolific area of the basin that generally is an infrastructure limited to the lack of sour natural gas treating an acid gas injection capacity.

Speaker Change: And we will have one additional process plant coming online in the Delaware in 2026.

Speaker Change: These projects provide visibility to new sources of cash flow.

For our company and enhance and expand the NGL value chain.

Jonathan: Opinion assets are also very strategic addition to our NGL value chain.

Speaker Change: More of our business.

Jonathan: Touches everything from the wellhead to the water.

Speaker Change: We also announced yesterday that we completed the acquisition of <unk> midstream.

Jonathan: I'd be remiss.

Speaker Change: These assets are highly complementary to our Permian processing footprint.

Jonathan: We didn't recognize the tireless efforts of over 200 of our employees at Mont Belvieu.

Speaker Change: Providing treating services.

Jonathan: ROE from our most comprehensive turnaround for the P. D. H, one plant right into a turnaround prior P. D H two plan.

Speaker Change: A prolific area of the basin that generally has been.

Speaker Change: Infrastructure limited to the lack of <unk> natural gas treating an acid gas injection capacity.

Our employees completed these 24, seven turnarounds with extreme diligence and without any lost time accidents.

Speaker Change: Premium assets are also a very strategic addition to our NGL value chain.

Speaker Change: That touches everything from the wellhead to the water.

Jonathan: We believe this time in investment will result in higher utilization rates and performance for both of these facilities going forward.

Speaker Change: Yes.

Speaker Change: I'd be remiss.

Speaker Change: We didn't recognize the tireless efforts of over 200 of our employees at Mont Belvieu.

Jonathan: We look forward to their contributions in 2025.

Speaker Change: ROE from our most comprehensive turnaround.

We're excited about the number of inbounds that we're getting related to new natural gas demand in Texas from both data centers.

Speaker Change: The PVH one plant.

Right into a turnaround prior PD H two plan.

Jonathan: New gas fired power plants that would be rebuilt under the under the Texas Energy Fund.

Speaker Change: Our employees completed these $24 seven turnarounds with extreme diligence and without any lost time accidents.

Speaker Change: There are a lot of people talking about exposure data centers. It seems that it's a very sexy thing to say and everybody that was a piece of pipe in Texas was talking it up.

Speaker Change: Believe this time in investment will result in higher utilization rates and performance for both of these facilities going forward.

Speaker Change: The reality is there's a very small list of the companies with pipeline and storage assets best position.

Speaker Change: And we look forward to their contributions in 2025.

Speaker Change: We're excited about the number of inbounds that we're getting related to new natural gas demand in Texas from both data centers, new gas fired power plants that were built under the under the Texas energy funds.

Speaker Change: Benefit from this.

Speaker Change: Build out.

Speaker Change: Enterprise is one of them is.

Speaker Change: It is difficult to quantify the ultimate demand and timing at this point, not knowing which projects will go forward.

Speaker Change: There are a lot of people talking about exposure to data centers.

Speaker Change: That being said it is one of the most promising signals we've seen in natural gas in a long time and we're looking forward to serving this new influx of demand.

Speaker Change: But it's a very sexy thing to say and everybody that is a piece of pipe in Texas is talking it up.

Is there is a very small list of companies with pipeline and storage assets best position.

In enterprise, we take pride in the fact that our organization is not siloed.

Speaker Change: Everyone is important we are pulling the same direction everyday.

Speaker Change: The benefit from this.

Speaker Change: <unk> and the enterprise is one of them.

Speaker Change: A dedication commitment and creativity of all our employees has always been.

Speaker Change: It is difficult to quantify the ultimate demand and timing at this point.

Speaker Change: Key to our success.

Speaker Change: We always strive to get better.

Speaker Change: Not knowing which projects will go forward.

Speaker Change: We operate an integrated value chain, providing a wide range of services from the wellhead to the water.

Speaker Change: That being said it is one of the most promising signals we've seen in natural gas on a long time and we're looking forward to serving this new influx of demand.

Speaker Change: Our systems are highly automated and provide us with billions of data points.

Speaker Change: In enterprise, we take pride in the fact, our organization is not siloed.

Speaker Change: Each link in that chain presents an opportunity to provide a service fee and enhance profitability by enhancing our margins are reducing our costs.

Speaker Change: Everyone is important we are pulling the same direction everyday.

Speaker Change: Dedication commitment and creativity of all our employees has always been.

Speaker Change: Over the last five years, we have developed a very talented big data and data science team.

Speaker Change: Key to our success.

Speaker Change: We always strive to get better.

Speaker Change: We operate an integrated value chain, providing a wide range of services from the wellhead to the water.

Speaker Change: That works closely with all areas of our company.

Speaker Change: We're now using big data for everything from predictive maintenance market.

Speaker Change: Systems are highly automated and provide us with billions of data points.

Speaker Change: Market analytics.

Speaker Change: Asset optimization.

One of the many examples that are is our pipeline controllers now use real time profit optimizer programs.

Speaker Change: Each link in that chain presents an opportunity to provide a service.

Speaker Change: The enhanced profitability by enhancing our margins are reducing our costs.

Speaker Change: To help determine when and how they run compressors and pumps based on real time power and fuel cost.

Speaker Change: Over the last five years, we have developed a very talented big data and data science team.

Speaker Change: Data and the insights it can provide many respects is the new currency and our proprietary data will forever be an opportunity for enterprise.

Speaker Change: That works closely with all areas of our company.

Speaker Change: We're now using the big data everything from predictive maintenance market.

Speaker Change: As we sit in the final quarter of 'twenty four.

Speaker Change: Market analytics.

Speaker Change: And hit into 25, our work is not done each year presents new opportunities and new headwinds.

Speaker Change: <unk> optimization.

Speaker Change: One of the many examples in our is our pipeline controllers now use real time profit optimizer programs.

Speaker Change: We built a network of assets and a culture that delivers strong results throughout business cycles administrations and market conditions are.

Speaker Change: To help determine when and how they run compressors and pumps based on real time power and fuel costs.

Speaker Change: Our company is built for the long run as always we've never been more excited for what the future will bring for our company with that Randy.

Speaker Change: The data and the insights it can provide in many respects is the new currency and our proprietary data will forever be an opportunity for enterprise.

Randy Fowler: Thank you Jim and good morning Star.

As we sit in the final quarter of 'twenty four.

Starting with income statement items net income attributable to common unit holders was $1 4 billion or <unk> 65 per unit for the third quarter of 2024. This was an 8% increase over the third quarter of 2023.

Speaker Change: And head into 25, our work is not done each year presents new opportunities and new headwinds.

Speaker Change: We've built a network of assets and a culture that delivers strong results throughout business cycles.

Randy Fowler: Our adjusted cash flow from operations, which is cash flow from operating activities before trying to have some working capital increased 4% to $2 $1 billion for the third quarter of 2024 compared to $2 billion for the third quarter of last year.

Speaker Change: Administrations and market conditions.

Speaker Change: Our company is built for the long run.

Speaker Change: We have never been more excited for what the future will bring for our company with that Randy.

Randy Fowler: Thank you Jim and good morning Star.

Randy Fowler: Starting with income statement items net income attributable to common unitholders was $1 4 billion $4 65 per unit for the third quarter of 2024. This was an 8% increase over the third quarter of 2023.

Randy Fowler: We declared a distribution of <unk> 52, five cents per common unit.

Randy Fowler: For the third quarter of 2024, which was a 5% increase over the distribution declared for the third quarter of last year. This distribution will be paid November 14 to common unit holders of record as close of the business on October 31.

Randy Fowler: Our adjusted cash flow from operations, which is cash flow from operating activities before changes in working capital increased 4% to $2 $1 billion for the third quarter of 2024 compared to $2 billion for the third quarter of last year.

Randy Fowler: In the third quarter. The partnership purchased approximately $2 6 million common units off the open market for $76 million total repurchases for the trailing 12 months were $252 million or approximately $9 1 million enterprise common units, bringing total purchases under our buyback program.

Randy Fowler: We declared a distribution of <unk> 52, five cents per common unit.

For the third quarter of 2024, which was a 5% increase over the distribution declared for the third quarter of last year. This distribution will be paid November 14 to common unitholders of record as close of the business on October 31.

Randy Fowler: Graham to approximately $1 1 billion and.

Randy Fowler: In addition to buybacks our distribution reinvestment plan and employee unit purchase plan purchased a combined $6 5 million common units on the open market for $181 million. During the last 12 months and this includes one 6 million common units on the open market for <unk>.

In the third quarter. The partnership purchased approximately two 6 million common units off the open market for $76 million total repurchases for the trailing 12 months were $252 million or approximately $9 1 million enterprise common units, bringing total purchases under our buyback program.

Randy Fowler: $47 million during.

During the third quarter of 2024.

Randy Fowler: Of note, 48% of our employees participate in the unit.

Randy Fowler: Purchase plan at enterprise, we really do eat our own cooking for.

Randy Fowler: Graham to approximately $1 1 billion. In addition to buybacks our distribution reinvestment plan and employee unit purchase plan purchased a combined $6 5 million common units on the open market for $181 million during the last 12 months and this includes one six.

Randy Fowler: For the 12 months ending September 32024 enterprise paid out approximately $4 $5 billion in distributions to limited partners.

Randy Fowler: Combined with the $252 million of comp common unit repurchases over the same period.

Randy Fowler: Our total capital returned was $4 $8 billion, resulting in a payout ratio of adjusted cash flow from operations of 56%.

Randy Fowler: Million common units on the open market for $47 million.

Randy Fowler: During the third quarter 2024.

Of note, 48% of our employees participate in the unit.

Randy Fowler: We returned roughly $1 billion more than our gross capital expenditures were for the same period.

Randy Fowler: <unk> plan at enterprise, we really do eat our own cooking for.

Randy Fowler: For the 12 months ending September 32024 enterprise paid out approximately $4 $5 billion in distributions to limited partners combined with the $352 million.

Randy Fowler: Total capital investments in the third quarter of 2020 for $1 2 billion, which.

Randy Fowler: Which included $1 1 billion for growth capital projects and $129 million of sustaining capital expenditure.

Randy Fowler: Common unit repurchases over the same period.

Randy Fowler: Our total capital return was $4 $8 billion, resulting in a payout ratio of adjusted cash flow from operations of 56%.

Randy Fowler: We have received overwhelming interest from our producer customers. Following our recent acquisition of opinion midstream as Jim noted these assets not only in half hance, our processing footprint, but allow us to attract more acreage in the Delaware basin. Additionally.

Randy Fowler: We returned roughly $1 billion more than our gross capital expenditures were for the same period.

Randy Fowler: Total capital investments in the third quarter of 2020 for $1 2 billion, which.

Randy Fowler: Which included $1 1 billion for growth capital projects and $129 million of sustaining capital expenditure.

Randy Fowler: Additionally, yesterday, we announced a contract with oxy to potentially build a pipeline that would serve the Houston industrial corridor.

Randy Fowler: Our expected range of growth capital expenditures for 2024 remains unchanged at three five to $3 $75 billion.

Randy Fowler: We are updating our 2025 estimated growth capital.

Randy Fowler: Expenditure range.

Randy Fowler: Three $5 billion to $4 billion to encompass potential growth opportunities in connection with these announcements.

Randy Fowler: We have received overwhelming interest from our producer customers. Following our recent acquisition of opinion midstream.

Randy Fowler: Sustaining capital expenditures are expected to be approximately $640 million in 2024, which is higher than our original estimates primarily due to costs associated with the turnaround of the <unk> facilities.

Jim noted these assets not only in half hance, our processing footprint, but allow us to attract more acreage in the Delaware basin. Additionally.

Randy Fowler: Additionally, yesterday, we announced a contract with oxy to potentially build a pipeline that would serve the Houston industrial corridor.

Randy Fowler: As of September 32024, total debt principal outstanding was approximately $32 2 billion.

Randy Fowler: We are updating our 2025 estimated growth capital.

Randy Fowler: Expenditure range.

Randy Fowler: Assuming the final maturity of our hybrids the weighted average life of our portfolio was approximately 19 years, our weighted average cost a bit is four 7% and approximately 98% of our debt was fixed rate.

Three $5 billion to $4 billion to encompass potential growth opportunities in connection with these announcements.

Randy Fowler: Signing capital expenditures are expected to be approximately $640 million in 2024, which is higher than our original estimates primarily due to costs associated with the turnaround.

Randy Fowler: Consolidated liquidity was approximately $5 $6 billion at the end of the quarter. This includes availability under our credit facilities and unrestricted casual.

Randy Fowler: The <unk> facilities.

Randy Fowler: As of September 32024, total debt principal outstanding was approximately $32 2 billion.

Randy Fowler: Our adjusted EBITDA was $2 4 billion for the third quarter and $9 8 billion for the 12 months ended September 32024.

Randy Fowler: Assuming the final maturity of our hybrids the weighted average life of our portfolio was approximately 19 years, our weighted average cost a bit is four 7% and approximately 98% of our debt was fixed rate.

Randy Fowler: As of that date, our consolidated leverage ratio is 3.0 times on a net basis when adjusted for the partial equity treatment of our hybrids and reduced by the partnerships unrestricted cash on hand.

Randy Fowler: Our consolidated liquidity was approximately $5 $6 billion at the end of the quarter. This includes availability under our credit facilities and unrestricted cash alone.

Randy Fowler: Our leverage target remains.

Randy Fowler: This is not running remains $2 75 to three to five and a 3.0 times, we're in the middle of that range.

Randy Fowler: Our adjusted EBITDA was $2 4 billion for the third quarter and $9 8 billion for the 12 months ended September 32024.

Speaker Change: With that we can open it up for questions. Thank you Randy operator, we are ready to open the call for questions.

Speaker Change: Thank you as a reminder to ask a question you will need to press star one one on your telephone to remove yourself from the queue. You May press star one again.

Randy Fowler: As of that date, our consolidated leverage ratio is 3.0 times on a net basis when adjusted for the partial equity treatment of our hybrids and reduced by the partnerships unrestricted cash on hand or.

Speaker Change: Please limit yourself to one question and one follow up or two questions to allow everyone the opportunity to participate.

Randy Fowler: Our leverage target remains.

Jim.

Speaker Change: Please standby.

Jim Teague: Our range remains $2 75 to $3 35, and a 3.0 times, we're in the middle of that range.

Speaker Change: Our first question.

Randy Fowler: With that we can open it up for questions. Thank you Randy operator, we are ready to open the call for questions.

Speaker Change: Comes from the line of Theresa Chen of Barclays. Your question. Please Theresa.

Yes.

Speaker Change: Thank you as a reminder to ask a question you will need to press star one on your telephone to remove yourself from the queue. You May press star one again.

Theresa Chen: Good morning, I wanted to follow up on Jim's comments about the data center and power demand thing and just how do you see enterprise participating in this and if you have any color or details on commercial discussions to date.

Speaker Change: Please limit yourself to one question and one follow up or two questions to allow everyone the opportunity to participate.

Speaker Change: Please standby.

Speaker Change: I think that this is Natalie <unk>.

Theresa Chen: <unk>.

Speaker Change: As Jim said, we've been unabated with data center demand infrastructure players.

Speaker Change: Our first question.

Speaker Change: Question.

Speaker Change: Comes from the line of Theresa Chen of Barclays. Your question. Please Theresa.

Speaker Change: It is likely exceeded the Bcf a day of demand in the next several years.

Speaker Change: That's probably a couple of different.

Theresa Chen: Good morning.

Theresa Chen: I wanted to follow up on Jim's comments about the data center and power demand gain.

Speaker Change: A couple of different reasons some of them have shared with us that.

Speaker Change: No longer bringing power to data centers, rather data centers the power sources and as you know we've got several pipelines in the Dallas Fort worth area and San Antonio.

Theresa Chen: Just how do you see enterprise participating in this and if you have any color or details on commercial discussions to date.

Speaker Change: I thought you said this is Natalie.

Speaker Change: And just a couple of facts that I think are interesting. If you think about it Dallas area data Center was ranked fourth in power today at their second most planned power and then San Antonio is even more impressive at 17th and power button.

<unk>.

Speaker Change: As Jim said, we've been inundated with data center demand infrastructure players.

Speaker Change: That is likely exceeded the Bcf a day of demand in the next several years.

Speaker Change: Sure.

Speaker Change: If you think about it that way there are some regions that are probably losing market share that sometime here in Dallas.

Speaker Change: I think thats, probably a couple of different.

Speaker Change: A couple of different reasons.

Speaker Change: A good spot.

Speaker Change: Didn't have shared with us that.

Speaker Change: Okay.

Speaker Change: No longer bringing power to data centers that are data centers going to power sources and as you know we've got several pipelines in the Dallas Fort worth area and San Antonio.

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: Thank you.

Speaker Change: That is related to the recent opinion acquisition and can you provide some details on how you plan to integrate it across our NGL assets. The ability you have to pull out trading services beyond the immediate to get midstream acreage and just on long term value creation, you see somebody's asset. Please.

Speaker Change: And just a couple of facts that I think are interesting. If you think about it Dallas area of data centers like fourth empower today, but their second most planned power and then San Antonio is even more impressive at 17th and power button I can most planned power.

Speaker Change: Nathalie you still up.

Speaker Change: So if you think about it that way there are some regions that are probably losing market share that centennial in Dallas and we stand in a good spot.

Speaker Change:

Nathalie: I think you can think of it this way, we won't say opinion any differently than our integrated G&P assets. It won't mean minimum trading Gail.

Speaker Change: <unk>.

Speaker Change: Yeah.

Speaker Change: Thank you.

Nathalie: My opinion that don't come with processing deals to sort of the.

Speaker Change: And related to the recent opinion acquisition and can you provide some details on how you plan to integrate it across our NGL assets. The ability you have to pull out trading services beyond the immediate midstream acreage and just the long term value creation you see from these asset please.

Nathalie: Integrated value chain.

Nathalie: So it leads to more organic growth through processing.

Speaker Change: Thank you.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of Jean Ann Salisbury of Bofa.

Speaker Change: Nathalie <unk> still up.

Yes.

Speaker Change: Your question please Jim.

Speaker Change: I think you can think of it this way we won't take opinion any differently than any.

Speaker Change: Hi, good morning, and ethane storage is so there's no new demand until you and <unk> export facilities come on line next year and can you guys talk about how you see this resolving do you see a big step down in ethane recovery would that change your growth rate in the next few quarters and is there kind of a positive offset to that for enterprise in your portfolio.

Great.

Speaker Change: Assets.

Speaker Change: Meaning trading deals behind pinion that don't come with processing deals to sort of the.

Speaker Change: Integrated value chain.

Speaker Change: So it leads to more organic growth through processing, yes.

Speaker Change: Thank you.

Speaker Change: Yeah I can this is tucked family.

Speaker Change: Thank you.

Speaker Change: As far as our recoveries in rejection that'll balance the market regionally theres other other places other than the Permian basin, where the gas base that doesn't make sense to recover necessarily refer further to transport to market.

Speaker Change: Our next question comes from the line of Jean Ann Salisbury of Bofa. Your question. Please.

Speaker Change: Hi, Good morning, ethane storage is so there is no new demand until you and <unk> export facilities come online next year and can you guys talk about how you see this resolving do you see a big step down in ethane recovery would that change your growth rate in the next few quarters and is there kind of a positive offset to that for enterprise in your portfolio.

Speaker Change: As far as the opportunity set for us, it's going to lead to some positive storage opportunities.

Speaker Change: And contango.

Speaker Change: Okay that makes sense.

Speaker Change: And then my follow up is about the tw products line.

Speaker Change: Is this the final state of the Tw project system and I think you said in the release that it's 20000 barrels a day of truck loading capacity and and Utah.

Hi, Jan this is tug Hanley.

Tug Hanley: As far as recoveries in rejection that'll balance the market.

Speaker Change: And the pipe do more than that if you add truck loading capacity or should we think about that is the thing that the end state of the system.

Tug Hanley: Regionally theres other other places other than the Permian basin, where the gas base that doesn't make sense to recover necessarily refer further to transport to market.

Justin: Hey, Gena, it's Justin.

No. We have we have more capability to add truck lacks in fact.

Tug Hanley: As far as the opportunity set for us, it's going to lead to some positive storage opportunities on collecting contango.

Justin: We're doing that right now in our Permian terminal because of terminal four so.

Tug Hanley: Yeah.

Speaker Change: Okay that makes sense.

Justin: So as we identify additional demand.

Speaker Change: And then my follow up is about the tw products line.

And our demand further up system continues to ramp.

Speaker Change: Is this the final state of the Tw project system. I think you said in the release that it's 20000 barrels a day of truck loading capacity and Utah.

Justin: We will look for those debottlenecking opportunities to take advantage of it.

Speaker Change: Okay, great very clear I'll leave it there thanks.

Speaker Change: The pipe do more than that if you add truck loading capacity or should we think about this as being the end state of the system.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of Spiro <unk> of Citi. Your question. Please spiro.

Justin: Hey, Gena, it's Justin.

Speaker Change: No. We have we have more capability to add truck lacks in fact.

Spiro: Thanks, operator, good morning, everybody I want to go back opinion really quickly.

Speaker Change: We're doing that right now in our Permian terminal because of terminal four.

Spiro: Maybe you could just walk us through your decision to buy versus build there just curious if that was in any way reflective of some sort of a bottleneck on the treaty side in the basin.

So as we identify additional demand.

Speaker Change: And our demand further up system continues to ramp.

Speaker Change: We'll look for those debottlenecking opportunities to take advantage of it.

Speaker Change: I guess I'll start and let me first of all if we had to build Greenfield we're looking at three years.

Speaker Change: Okay, great very clear I'll leave it there thanks.

Speaker Change: I'm not mistaken with Miss some opportunities because we didn't have the service. So we didn't get the platform and it was easiest quickest way to get it.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of Spiro <unk> of Citi.

Speaker Change: Your question please spiro.

Speaker Change: That answers there.

Speaker Change: It does I appreciate that second question, just maybe sticking with new Mexico, I guess last week. There was some news headlines just around a new setback rule that could come into play I know this can pop up from time to time and it sounds like at least for now there's just not much to do around it but just curious maybe to get your view on how you think about the potential impact there if something like that comes into play.

Spiro: Thanks, operator, good morning, everybody wants go back opinion really quickly.

Speaker Change: Maybe just walk us through your decision to buy versus build there just curious if that was in any way reflective of some sort of a bottleneck on the treaty side in the basin.

Speaker Change: I guess I'll start and first of all with <unk>.

Speaker Change: Built Greenfield, we're looking at three years.

Speaker Change: I don't know I didn't hear the question Tony do transaction in Mexico.

Speaker Change: Not mistaken we missed some opportunity just because we didn't have the service. So we didn't get the platform and it was the easiest quickest way to get it.

Speaker Change: Back to new Mexico, I'll speak for myself and then yes.

Speaker Change: I'll speak for myself from a fundamental standpoint, namely you address it.

Speaker Change: That answers there.

Speaker Change: It does I appreciate that second question, just maybe sticking with new Mexico, I guess last week.

Speaker Change: I think the industry is very firm and as always said tell us what the rules are we'll know we'll figure out how to adjust to them.

Speaker Change: News headlines just around a new setback rule that could come into play I know this can pop up from time to time and it sounds like at least for now there's not much to do around it but just curious maybe to get your view on how you think about the potential impact there if something like that comes into play.

Speaker Change: I haven't heard and maybe you have or have not anybody say that they're doing anything other than studying niche rules that certainly from the meetings I've been in Hasnt changed People's plans at this point.

Speaker Change: I think the other thing to add to that is remember that we drill horizontally laterals that maybe three or four miles so.

Speaker Change: I don't know I didn't hear the question Toni digits, Mexico setbacks in new Mexico, I'll speak for myself.

Speaker Change: Yes, I'll speak for myself from a fundamental standpoint remember you address it.

Speaker Change: I am confident from a fundamental standpoint that the industry is going to be able to adjust once they know what the rules are you hearing anything different nothing different that's too early to speculate on what impact that will have and nothing more than commentary.

Speaker Change: I think the industry is very firm and as always said tell us what the rules are.

Speaker Change: We will figure out how to adjust to them.

Speaker Change: Natalie I haven't heard and maybe you have or have not anybody say that they're doing anything other than studying this rules that certainly from the meetings I've been in Hasnt changed People's plans at this point I.

Speaker Change: New Mexico produces.

Speaker Change: Great I appreciate the color I'll leave it there thanks Tim.

Speaker Change: Thank you.

Speaker Change: I think the other thing to add to that is remember that.

Speaker Change: Our next question.

Speaker Change: Comes from the line of Jeremy Tonet JP Morgan Your question. Please Jeremy.

Speaker Change: We drill horizontally laterals that maybe three or four miles so.

Speaker Change:

Jeremy Tonet: Hi, good morning.

Speaker Change: Im confident from a fundamental standpoint that the industry is going to be able to adjust once they know what the rules are are you hearing anything different nothing bizarre.

Jeremy Tonet: Right.

Jeremy Tonet: I just wanted to touch base with Tony here on I guess more on the macro outlook cannot.

Speaker Change: To speculate on what impact that will have nothing more than commentary.

Jeremy Tonet: Producer customer conversations as well as what the macro team sees as far as production trends at this point in time, given the volatility we've seen in commodity prices.

Speaker Change: In Mexico producers.

Speaker Change: Great I appreciate the color I'll leave it there thanks Tim.

Speaker Change: Thank you.

Jeremy Tonet: Yes.

Speaker Change: Our next question.

Speaker Change: Tony I'll start with it.

Speaker Change: Comes from the line of <unk>.

Speaker Change: Jeremy Tonet JP Morgan your question please Jeremy.

Speaker Change: I think.

Speaker Change: As long as we've been publishing forecast. This is maybe the second or third time that we've actually we published midyear.

Jeremy Tonet: Hi, good morning.

Jeremy Tonet: Good morning.

Speaker Change: And that's because what we're seeing both in traditional benches and new targets to take cashier adventures.

Jeremy Tonet: Just wanted to.

Jeremy Tonet: Let's face it Tony here on I guess more on the macro outlook and I guess producer customer conversations as well as what the macro team sees as far as production trends at this point in time, given the volatility we've seen in commodity prices.

Speaker Change:

Speaker Change: When you look at EIA numbers, all kind of go ahead and go there I understand that's a very hard thing to set your watch to that.

Speaker Change: What we use.

They're trying to get better at it but it's.

Jeremy Tonet: Yes. This is Tony I'll start with it.

Speaker Change: We're making slow progress.

Jeremy Tonet: I think.

Speaker Change: What we said in the Permian Basin, and Theres been a lot of noise also weather relative to weather.

Jeremy Tonet: As long as we've been publishing forecast. This is maybe the second or third time that we actually we published midyear.

In the Bakken and in the Gulf of Mexico relative to Alex's. So, let's go to what stable and whats large thing that moves the number and that's the Permian basin.

Jeremy Tonet: And thats, because what we're seeing both in traditional dentures.

Jeremy Tonet: And new targets Gasior benches.

Jeremy Tonet: <unk>.

Speaker Change: We said that over three year period, just looking at black oil that we would have about one 5 million barrels a day.

Jeremy Tonet: When you look at EIA numbers I'll kind of go ahead and go there I understand that's a very hard thing to set your watch too.

Speaker Change: Of growth over that three year period for 2023, we were at about 750000 barrels.

Jeremy Tonet: What we use.

They're trying to get better at it but it's.

Speaker Change: We think that that number from.

Jeremy Tonet: We're making slow progress.

Speaker Change: For 2024 will be 350 to 400000 barrels and from what we're seeing as far as turned in line from our producers it's likely that when it's all said and that number is going to be very.

Jeremy Tonet: What we said in the Permian Basin and Theres been a lot of noise also weather relative to weather in the Bakken and in the Gulf of Mexico relative to Alex's. So let's go to what stable and whats large thing that moves the number and that's the Permian basin.

Speaker Change: Very heavily weighted towards the second half of the year.

Speaker Change: So it's not a long path as a matter of fact as what we expect that we will scale. The Permian will meet that goal of call it a million and a half barrels in 2025.

Jeremy Tonet: We said that over three year period, just looking at black oil.

Would have about one 5 million barrels.

Jeremy Tonet: They have growth over that three year period for 2023, we were at about 750000 barrels.

Speaker Change: <unk> said you can look at our forecast and the one thing that is changing.

Speaker Change: Unlikely to change this commitments of producers are making the cashier basins and Natalie I'll, let you take it from there.

Jeremy Tonet: We think that that number for 2024 will be 350 to 400000 barrels.

Speaker Change: Yes.

Speaker Change: I agree I think we often.

Jeremy Tonet: And from what we're seeing as far as term in line from our producers. It is likely that when it's all said and that number is going to be very.

Speaker Change: See it in our production plans from our producers and they are either PDP isn't coming off as expected or let's just say some of the declines are holding a little bit longer.

Jeremy Tonet: Very heavily weighted towards the second half of the year.

Jeremy Tonet: So it's not a long path as a matter of fact as what we expect that we will scale. The Permian will meet that goal of call. It 1 million and a half barrels in 2025.

Speaker Change: But definitely gas here, even if they're on the order of <unk>.

Speaker Change: 10%, sometimes they miss it.

Jeremy Tonet: Said, you can look at our forecast and the one thing that is changing.

The magnitude.

Speaker Change: We see it time and time again.

Jeremy Tonet: Unlikely to change this commitments of producers are making the gassy basins and Natalie I'll, let you take it from there.

Speaker Change: Not large numbers.

Speaker Change: It's definitely something to keep up with.

Speaker Change: I agree I think we often.

Speaker Change: Got it that's helpful. There. Thank you for that.

Speaker Change: So we see it in our production plans from our producers and.

Speaker Change: And maybe shifting gears, a little bit here with Paul here it looks like the timeline shifted a little bit there. So just wondering if you could update us on project development. There and also just kind of thoughts on Permian NGL pipeline egress, how you see that shift.

Speaker Change: Either PDP isn't coming off as expected are let's just say some of the declines are holding a little bit longer.

But definitely gasior, even if they're on the order of <unk>.

Speaker Change: 10%, sometimes they miss it that order of magnitude.

Speaker Change: Yes.

Speaker Change: We see it time and time again.

Speaker Change: Hey, Jeremy its Ed just inquire.

Speaker Change: Not large numbers, but definitely something to keep up with.

So just minor delays in our expected timing on permit to construct causing the delay from first half into this in the third quarter.

Speaker Change: Got it that's helpful. There. Thank you for that.

Speaker Change: And maybe shifting gears, a little bit here with Bahia.

On the commercial developed on a commercial development thought.

Speaker Change: The timeline shifted a little bit there. So I'm just wondering if you could update us on project development. There and also just kind of thoughts on Permian NGL pipeline egress, how you see that shift.

Speaker Change: I would say is as you as you saw on our latest deck.

Speaker Change: Tony Tony's updated NGL forecasts paint a very different picture for overall industry Utilizations I think by 2028 now.

Speaker Change: Yeah.

Speaker Change: Hey, Jeremy its Ed just inquire.

Speaker Change: The updated supply numbers have us upwards of 90% utilized as an industry.

Speaker Change: So just minor delays in our expected timing on permit to construct.

Speaker Change: So we're still working the same playbook as we talked about in prior quarters around how well developed.

Speaker Change: Causing the delay from first half into this in the third quarter.

Speaker Change: Developing commercially there.

Speaker Change: But it really just comes down to how that incremental supply gets contracted whether that'd be a combination of additional GNP.

Speaker Change: On the commercial developed on the commercial development of thought.

Speaker Change: I would say is as.

As you saw on our latest deck.

<unk> assets.

Speaker Change: Check.

Speaker Change: That Natalie alluded to earlier or continuing to pursue third party NGL.

Speaker Change: Tony Tony is updated NGL forecasts paint a very different picture for overall industry Utilizations I think by 2028 now.

Speaker Change: Yeah.

Speaker Change: Got it that's helpful. Thank you.

Speaker Change: The updated supply number of Savvis upwards of 90% utilized as an industry.

Speaker Change: Thank you.

Speaker Change: Our next question.

Comes from the line of Michael Blum of Wells Fargo. Your line is open Michael.

Speaker Change: So we're still working the same playbook as we talked about in prior quarters around how we.

Speaker Change: Developing commercially there.

Michael Blum: Thanks, and good morning, everyone.

Speaker Change: But it really just comes down to how that incremental supply gets contracted whether that'd be a combination of additional <unk>.

I wanted to ask you about the announcement yesterday on the C O two pipeline project with Oxy.

Speaker Change: <unk> assets.

Michael Blum: Once you've just confirm this is new pipe youre, not repurposing and get a sense for.

Speaker Change: That Natalie alluded to earlier or continuing to pursue third party Ngls.

Michael Blum: How many miles of pipe or are we talking about and we do expect to get your kind of typical midstream contract structure and typical midstream return on a project like this.

Speaker Change: Okay.

Speaker Change: Got it that's helpful. Thank you.

Speaker Change: Thank you.

Speaker Change: Our next question.

Speaker Change: Comes from the line of Michael Blum of Wells Fargo. Your line is open Michael.

Michael Blum: Good morning, Michael This is Bob Sanders.

The contract with 1.5 is a fairly straightforward transportation agreement when $1 five goes to <unk>. They will tell us what emitters to connect to so we know what the design for.

Thanks, and good morning, everyone.

Michael Blum: I wanted to ask you about the announcement yesterday on the <unk>.

Speaker Change: Coty pipeline project with Oxy.

Michael Blum: It is new pipe because it is <unk> 905.

Speaker Change: I wanted to just confirm if there is new pipe youre, not repurposing and get a sense for.

Michael Blum: It's a high pressure pipeline system.

Michael Blum: Spect, one five sometime in the first half of 2025 and at that point, we will know what the capital is in the fee will be.

Speaker Change: How many miles of pipe or are we talking about.

Speaker Change: And we do expect to get your kind of typical midstream contract structure and typical midstream return on a project like this.

Michael Blum: Set accordingly.

Michael Blum: Okay.

Speaker Change: Good morning, Michael This is Bob Sanders.

Great great. Thanks for that.

Speaker Change: The contract with one five is a fairly straightforward transportation agreement when one five goes to <unk>. They will tell us what emitters connect to so we know what the design for.

Speaker Change: And then I just wanted to ask about.

Speaker Change: L P G export dock.

Speaker Change: Spot rate dynamics I guess the rates have increased in recent months I wanted to get a sense, how full the docs and your docs specifically from that perspective are you able to capture any of these higher spot rates or are you basically fully contracted.

Speaker Change: It is new pipe because it advancing 900 pipe.

A high pressure pipeline system.

Speaker Change: Spec one 5% sometime in the first half of 2025 and at that point, we will know what the capital is in the fee will be.

Speaker Change: Yeah. This is Todd so we've talked about it in a prior earnings call, but we did a debottlenecking project at the ship channel. It's provided as higher power capacity. So right now revenue between two to three spot cargoes per month, and we are capturing those higher values call. It mid <unk> 20 per gallon.

Speaker Change: Set accordingly.

Speaker Change: Yes.

Speaker Change: Great great. Thanks for that.

Speaker Change: And then I just wanted to ask about.

Speaker Change: LPG export dock.

Speaker Change: Spot rate dynamics I guess the rates have increased in recent months I wanted to get a sense, how full the docs and your docs specifically from that perspective are you able to capture any of these higher spot rates or are you basically fully contracted.

Speaker Change: Great. Thank you.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line.

Speaker Change: Neal Dingmann of <unk>. Please go ahead Neil.

Neal Dingmann: Good morning, Thanks for the time My first question is on your Petro Chems specifically.

Speaker Change: Yes. This is tod so we've talked about it in a prior earnings call that we did a debottlenecking project.

Neal Dingmann: Are you all continue to expand the ethylene and propylene systems and I'm. Just wondering if you guys do you continue to believe more export capacity will be needed there.

Speaker Change: The ship channel that's provided is higher higher capacity. So right now revenue between two to three spot cargoes per month, and we are capturing those higher values call. It mid <unk> 20 per gallon.

Christina: It's Christina.

Christina: We are continuing to grow, particularly our ethylene pipeline system. So if you remember that pipeline system didn't exist before before 2019.

Speaker Change: Great. Thank you.

Speaker Change: Thank you.

Christina: We built a pretty a pretty.

Speaker Change: Our next question comes from the line.

Christina: Substantial system.

Speaker Change: Neal Dingmann of <unk>. Please go ahead Neil.

Christina: And to continue to grow that.

Christina: And then in terms of our exports.

Neal Dingmann: Good morning, Thanks for the time My first question is on your Petro Chems specifically.

Christina: We have an expansion underway.

Neal Dingmann: Are you all continue to expand the ethylene and propylene systems and I'm. Just wondering if you guys do you continue to believe more export capacity will be needed there.

Christina: Its E.

Christina:

Christina: Had our Morgan's point Doc and that'll come online the first phase of that will be online at the end of this year.

Neal Dingmann: Hey, Neil it's Chris Dan.

Speaker Change: Chris perfect outright.

Chris Dan: We are continuing to grow, particularly our ethylene pipeline system. So.

Speaker Change: Talk about what Youre seeing in Europe, what do you think that creates for US yes, I think one of them what are the growth opportunities that we see for ethylene exports in particular as Europe with.

Chris Dan: Do you remember that pipeline system didn't exist before before 2019.

Chris Dan: We built a pretty a pretty.

Chris Dan: Potential system.

Speaker Change: With the economics of those crackers had one there are quite a bit smaller so they don't have the economies of scale that we have here in the U S. And then secondly, just the overall feedstock as a whole.

Chris Dan: We plan to continue to grow that.

And then in terms of our exports.

We have an expansion underway.

Chris Dan: It's <unk>.

Chris Dan:

Chris Dan: Had our Morgan's point Doc and that'll come online the first phase of that will be online at the end of this year.

Speaker Change: Same versus Knapp, there are natural gas versus crude kind of fundamentals there. So.

Speaker Change: We expect to see and we've heard from a lot of the chemical companies out there doing strategic reviews are there other European asset. So we expect to see some closures and we expect that to lead to additional ethylene exports going that way.

Chris Dan: Chris perfect outright.

Speaker Change: Talk about what Youre seeing in Europe, and what you think that creates for US yes, I think one other point on the growth opportunities that we see for ethylene exports in particular as Europe with.

With the economics that those crackers have one there are quite a bit smaller so they don't have the economies of scale that we have here in the U S. And then secondly, just the overall feedstock as a whole.

Speaker Change: Yeah.

Speaker Change: Great details. Thanks, Frank and then my second is just on marketing and specifically it seems like while it continues to be quite volatile. So I'm just wondering based on that.

Speaker Change: Can we assume the marketing business continues to remain strong for you all.

Speaker Change: Ethane versus not there are natural gas versus crude kind of fundamentals there. So.

Yeah.

Speaker Change: Yes, we are we have roughly 370 million a day open on that must be east a widespread so do you expect that to continue to contribute.

Speaker Change: We expect to see and we've heard from a lot of the chemical companies out there doing strategic reviews are there other European asset. So we expect to see some closures and we expect that to lead to additional ethylene exports going that way.

Great to hear thank you.

Speaker Change: Yes.

Thank you.

Speaker Change: Our next question.

Comes from the line of Keith Stanley.

Speaker Change: Great details thanks, Frank and my second is just on marketing and specifically it seems like while it continues to be quite volatile. So I'm just wondering based on that.

Speaker Change: Well if research your question please Keith.

Hi, Thank you good morning.

Speaker Change: Can we assume the marketing business continues to remain strong for you all.

Keith Stanley: First just curious for an update on commercial conversations on the spot project I think there was a quote a week or two ago from a conference of.

Speaker Change: Yeah.

Speaker Change: Yes, we have roughly 370 million a day open on that west to east La spreads. So do you expect that to continue to contribute.

Keith Stanley: Trying to get our first customer to sign up for that project.

Keith Stanley: Date on any momentum you're having there.

Speaker Change: Great to hear thank you.

Thank you Jay.

Speaker Change: Thank you.

Keith Stanley: Hey, Keith this is Giovanni yes, just related around commercial conversations are there they are quite extensive.

Speaker Change: Our next question.

Speaker Change: Comes from the line of Keith Stanley.

Speaker Change: With research your question please Keith.

Keith Stanley: And then various degrees of conversation anywhere ranging from you know we're working through definitive agreements changing term sheets I'd say, a large portion of our customer base are currently just evaluating.

Keith Stanley: Hi, Thank you good morning.

Keith Stanley: First just curious for an update on commercial conversations on the spot project I think there was a quote a week or two ago from a conference of.

Keith Stanley: The cost inefficiencies related to ship to ship transfers and how that affects their business. Both there are call. It net back as American producer or expenses or ultimately delivered price for international customers and so we expect to hear some some of that feedback year call at the end of this quarter early first quarter.

Trying to get our first customer to sign up for that project, just an update on any momentum you're having there.

Speaker Change: Thank you Jay.

Speaker Change: Hey, Keith this is Giovanni.

Related around commercial conversations.

Speaker Change: There are quite extensive.

Speaker Change: And then various degrees of.

Keith Stanley: <unk>.

Speaker Change: Conversation anywhere ranging from we're working through definitive agreements changing term sheets I'd say, a large portion of our customer base are currently just evaluating.

Keith Stanley: Yeah.

Speaker Change: Thanks for that.

Second question.

Speaker Change: Ideally not sure that's a great answer to this necessarily but the.

Speaker Change: The valuation gap between the C. Corp's in this space in the Mlps is at a record high above anything I can recall.

Speaker Change: The cost inefficiencies related to ship to ship transfers and how that affects their business. Both there call. It netback as American producer expenses or ultimately delivered price for international customers and so we expect to hear some some of that feedback here call. It the end of this quarter early <unk>.

Are there any potential ways the company could capitalize on that I don't know, if it's selling assets at higher valuations or other ways to respond to the market seemingly valuing C Corp is much more highly than Mlps. These days.

Speaker Change: First quarter.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: Yeah, Keith this is Randy.

Speaker Change: Thanks for that.

Randy Fowler: I don't think Theres any.

Speaker Change: The second question.

Speaker Change: Ideally not sure that's a great answer to that is necessarily but.

Randy Fowler: Quick.

Randy Fowler: Solution or answer there I think coming in and trying to play the game of selling assets at a higher valuation is somewhat shortsighted, especially when you come in and you look at the depreciation recapture that comes in it gets pushed down to all your limited partner.

Speaker Change: The valuation gap between the C Corp, and the space in the Mlps is at a record high above anything I can recall.

Speaker Change: Are there any potential ways the company could capitalize on that I don't know if its selling assets at higher valuations or other ways to respond to the market seemingly valuing C Corp is much more highly than Mlps. These days.

Randy Fowler: All of that comes as a tax event for.

Randy Fowler: For your limited partners and I don't know what actually you've accomplished.

Randy Fowler: So.

Randy Fowler: Yeah, Keith this is Randy.

We have seen.

Randy Fowler: I don't think Theres any.

Randy Fowler: Two or three years ago I think it was near these levels and then we saw the two compressed but generally when there's this big of a difference.

Randy Fowler: <unk> solution or answer there I think coming in and trying to play the game of selling assets at a higher valuation is somewhat shortsighted, especially when you come in and you look at the depreciation recapture that comes into that gets pushed down to all.

Randy Fowler: And asset classes normally the market.

Randy Fowler: Salter on where to go.

Yeah.

Speaker Change: Thank you.

Speaker Change: Thank you.

Speaker Change: Our next question.

Randy Fowler: Limited partner all it becomes as a tax event for your limited partners and I don't know what actually you've accomplished.

Speaker Change: Comes from the line of John Mackay of Goldman Sachs. Please go ahead John.

Randy Fowler: So.

John Mackay: Well thanks for the time I just wanted maybe do two quick clarifications first one is <unk>.

Randy Fowler: We have seen.

Speaker Change: Two or three years ago I think it was near these levels and then we saw the two compressed but generally when there is this big of a difference.

John Mackay: This is to you I guess just on that last comment is the up C. Ibs still out there or is there any reason that you guys are kind of you know.

Speaker Change: Asset classes normally the market.

Permanently put that to the side at this point.

Speaker Change: Salter onward.

John Mackay: Yeah.

Speaker Change: No I appreciate the thoughts there again I think that's another.

Thank you.

Speaker Change: Thank you.

Speaker Change: Yeah.

Speaker Change: What was the Devil's in the detail there number one now you've got you would have two securities outstanding.

Speaker Change: Our next question comes.

Speaker Change: From the line of John Mackay of Goldman Sachs. Please go ahead John.

Speaker Change: You need to build liquidity up in that second security and Oh by the way what do you do with use of proceeds.

John Mackay: Hey, Thanks for the time I just wanted maybe do two quick clarifications first one is.

Speaker Change: Sure.

Randy This is to you I guess just on that last comment is the up C. Ibs still out there or is there any reason you guys are kind of permanently.

Speaker Change: Uh huh.

Speaker Change: If I can come in and look over time, there has not really been when theres been examples whether it's.

John Mackay: Permanently put that to the side at this point.

Speaker Change: Cesar, whether it's been the Oh geez.

Yes.

Speaker Change: No I appreciate the thoughts there again I think thats another.

Speaker Change: The <unk> units that were done way back 20 years ago.

Speaker Change: So it was the Devil's in the detail there number one how you thought you would have two securities outstanding.

Speaker Change: And you really never saw that much differentiation, whether it was the institute the arguments the institutional class units of a partnership that was more institutional investor friendly or whether it was the hep C and the underlying MLP. So.

Speaker Change: You need to build liquidity up in that second security and Oh by the way what do you do with use of proceeds.

Speaker Change: So I think.

If I come in and look over time, there has not really been when theres been examples whether it's.

Speaker Change: That adds a lot of complexity and really you don't get that much Bang for your book.

Speaker Change: Cesar whether it's Ben.

Speaker Change: That's I appreciate that second quick follow up I appreciate the comments on all the work done on the <unk> I just want to clarify our arkose up and running fully now is this like a fourth quarter run rate going forward as I said first quarter 'twenty five and then maybe if you could just remind us maybe what those.

Speaker Change: Oh geez.

The <unk> units that were done way back 20 years ago.

Speaker Change: We really never saw that much differentiation, whether it was the institute the odd units the institutional class units.

Speaker Change: Partnership that was more institutional investor friendly or whether it was the up C and the underlying MLP. So to us that adds a lot of complexity and really you don't get that much Bang for your Buck.

Speaker Change: Two assets in aggregate could add from our ongoing cash flow basis that'd be great.

Speaker Change: They are up and running both of them running at full rates, if not higher right and Chris I'd say, it's in the neighborhood of $200 million.

Speaker Change: I appreciate that second quick follow up.

Speaker Change: Okay that's perfect.

Speaker Change: The comments on all the work done.

Speaker Change: That's something that is done.

Speaker Change: Thanks for the time.

Speaker Change: <unk> I just want to clarify are both up and running fully now is this like a fourth quarter run rate going forward.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of a J O'donnell of T. P. H your question. Please.

Speaker Change: First quarter 'twenty five and then maybe if you could just remind us maybe what those two assets in aggregate could add from our ongoing cash flow basis that'd be great.

Speaker Change: Hey, good morning, Thanks for taking my questions just a quick one on.

Matterhorn with that pipeline now running about a bcf or over a bcf a day.

Speaker Change: They are up and running both of them running at full rates if not higher.

Speaker Change: Curious if you guys have seen a jump in flush production.

Speaker Change: Chris I would say, it's in the neighborhood of $200 million.

Into your system in Q4.

Speaker Change: Thanks, Congrats again.

Speaker Change: Or if the majority of the pipeline volumes are just flow shifting around the basin are redirected guests.

Speaker Change: Thanks for the time.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of a J O'donnell of T. P. H your question. Please.

Speaker Change: I don't think we've seen a push production yet Penguin Natalie.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Hey, good morning, Thanks for taking my question just a quick one on.

Speaker Change: Maybe just going back to the capital budget then.

Speaker Change: Matterhorn with that pipeline now running about a bcf or over a bcf a day.

Just trying to understand on the increase in the 'twenty budget.

Speaker Change: Curious if you guys have seen a jump in flush production.

Speaker Change: Maybe you could provide just a little bit of a different color on the types of projects, you're seeing with Pinyon in I'm. Just curious if there's any more of that to potentially be announced in the 25 budget or does that seem a little bit further off.

Speaker Change: Into your system in Q4, or if majority of the pipeline volumes are just flow shifting around the basin are redirected guests.

Speaker Change: I don't think we've seen a push production yet headwind Netherlands.

Speaker Change: Yeah.

Speaker Change: Okay.

Okay.

Speaker Change: Maybe just going back to the capital budget.

Go ahead opinion projects next year.

Speaker Change: Just trying to understand on the increase in the 'twenty budget.

Speaker Change: Yes.

Speaker Change: Uh huh.

Speaker Change: I was hoping maybe you could provide just a little bit of a different color on the types of the projects you have.

Natalie says yes.

Speaker Change: [laughter].

Speaker Change: Seeing with Pinyon I'm, just curious if there's any more of that to potentially be announced in the 25 budget or does that seem a little bit further off.

Speaker Change: Got it.

Thanks, guys.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of Manav Gupta of UBS. Your question. Please manav.

Speaker Change: Okay.

Speaker Change: Okay.

Manav Gupta: Hi, good morning, guys.

Manav Gupta: Native acreage job of explaining some of that 20 to 25 growth projects.

Manav Gupta: Help us understand the pipeline is pretty strong.

Speaker Change: And what you're Gonna opinion projects next year.

Manav Gupta: Thats meant on west too because they look how should we think about the key growth projects for 2026 at this stage.

Speaker Change: Yes.

Speaker Change: Sure.

Natalie says yes.

Speaker Change: Yeah.

Manav Gupta: Yes.

Speaker Change: Okay. Thanks, Thanks, guys.

Speaker Change: Thanks for the question I think I think we're still at the point where.

Speaker Change: Thank you.

Speaker Change #100: Our next question comes from the line of Manav Gupta of UBS. Your question. Please manav.

Speaker Change: And we try to.

Speaker Change: Point this out in our.

Supplemental slides for earnings.

Speaker Change: When you come in and you look at the projects that have been.

Manav Gupta: Hi, good morning.

Manav Gupta: Sensitive acreage job of explaining some of the 2025 growth projects.

Speaker Change: Fr deed.

Speaker Change: I want to say that.

Help us understand the pipeline is pretty strong.

Speaker Change: The run off in 2026.

Manav Gupta: It's meant on <unk>, how should we think about the key growth projects for 2026 at this stage.

Speaker Change: What we have remaining to spend on currently you have five big projects, there's probably about 1 billion $1 $3 billion.

Manav Gupta: Yes.

Speaker Change #102: Thanks for the question I think I think we're still at the point where.

Speaker Change: If you would in 2006, we have room.

<unk>.

Speaker Change #102: And we try to.

Speaker Change: We put in there that we think will probably be in the range of two $2 billion might be upwards of $3 five but we have room for development.

Speaker Change #102: This out in our <unk>.

Speaker Change #102: Supplemental slides for earnings.

When you come in and you look at the projects that have been.

Speaker Change: Development of other grocery oriented projects between now and then and that's where we think 2024 and 2025 is is really a period of elevated capex.

Speaker Change #102: Fr deed.

Speaker Change #102: I want to say that.

Speaker Change #102: The run off in 2026, what we have remaining to spend on currently five lead projects, there's probably about $1 billion $1 2 billion.

Speaker Change: And that will come back in and more on them.

Speaker Change: Long longer term base, we'll see that come back down to around two two and a half.

Speaker Change #102: If you would in 2026, we have room.

Speaker Change: Okay perfect.

Speaker Change #102: That we put in there that we think will probably be in the range of $2 billion might be upwards of $2 five but we have room for.

Speaker Change: And you saw this and again I'll come back and I'm sure you sort of saw with saw the same thing in 2018 2019, and those years, we were about $4 billion in growth Capex and again those had some large projects and so.

Speaker Change #102: Development of other grocery oriented projects between now and then and Thats, where we think 2020 for 2025 is is really a period of elevated capex.

Speaker Change: Step changes in capacity and then use our growth capex.

Right back down and we think the same thing will happen once you get out to 2026.

Speaker Change #102: And that will come back in.

Speaker Change #102: And more on.

Speaker Change #102: Long longer term basis to see that come back down to around two two and a half.

Speaker Change: Perfect. My quick follow up is there was a little bit of a step up in buybacks in <unk> and again <unk>.

Speaker Change #102: Perfect.

Speaker Change #102: And you saw this and again I'll come back in I'm sorry.

Speaker Change: Through this build out how should we think about shareholder had done the rest of the 'twenty painful or audio and going to 'twenty five.

Speaker Change #102: You sort of solve that saw the same thing in 2018 2019, and those years, we were about $4 billion in growth Capex and again those had some large projects and so.

Speaker Change: I think so again with 2024 and 2025 capex being at elevated levels.

Speaker Change: You'll probably you'll probably continue to see buybacks and that 200 $300 million range.

Speaker Change #102: Changes in capacity.

Speaker Change #102: And then use our growth capex moderate back down and we think the same thing will happen once you get out to 2026.

Speaker Change: Once we get out to 2026, we'll need to reassess what the opportunities are at that time and we'll go from there.

Speaker Change #103: Perfect. My quick follow up is there was a little bit of a step up in buybacks in <unk> and again going through this build out how should we think about shareholder done. So the rest of the 'twenty painful or audio in 2025.

Speaker Change: Thank you for taking my questions.

Speaker Change: Thank you.

Speaker Change: I'd now like to turn the conference back to maybe straight for closing remarks Madam.

Speaker Change #104: I think again with 2024 and 2025 capex being at elevated levels.

Speaker Change: Thank you and thank you to our participants for joining us today that concludes our remarks have a good day.

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

You'll probably you'll probably continue to see buybacks in that 200 $300 million range.

Speaker Change #104: I think once we get out to 2026, we'll need to reassess what the opportunities are at that time and we'll go from there.

Speaker Change #104: Yeah.

Speaker Change #105: Thank you for taking my questions.

Speaker Change #106: Thank you I would now like to turn the conference back to maybe straight for closing remarks Madam.

Speaker Change #107: Thank you and thank you to our participants for joining us today that concludes our remarks have a good day.

Speaker Change #108: This concludes today's conference call. Thank you for participating you may now disconnect.

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Speaker Change #109: Thank you for standing by and welcome to Enterprise products Partners LP third quarter 2024 earnings Conference call.

Speaker Change #110: At this time all participants are in a listen only mode. After the speaker presentation, there will be a question and answer session.

Speaker Change #110: Ask a question during the session you will need to press star one one on your telephone.

Speaker Change #110: Remove yourself from the queue you May press Star one again.

Speaker Change #111: Now I'd like to hand, the call over to Larry straight Senior director of Investor Relations. Please go ahead.

Larry Straight: Good morning, and welcome to the Enterprise products Partners Conference call to discuss third quarter 2024 earnings. Our speakers today will be co Chief Executive Officer of Enterprise's General partner, Jim Teague, and Randy Fowler other members of our senior management team are also in attendance for the call today.

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

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

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

Jim Teague: We reported adjusted EBITDA of $2 $4 billion for the third quarter.

Jim Teague: Impaired to $2 3 billion last year third quarter.

Jim Teague: We generated $2 billion distributable cash flow provide.

Jim Teague: Providing one seven times coverage.

Jim Teague: In addition, we repaid $808 million of Dcp's DCF.

Jim Teague: <unk> DCF totaled $2 3 billion year to date.

Jim Teague: Operationally, we set five volumetric records.

<unk> seven five.

Jim Teague: Billion cubic feet per day of natural gas processing volumes.

Jim Teague: And $12 8 million barrels a day of crude oil equivalent pipeline volumes.

Jim Teague: Benefited from contributions from the three new natural gas processing plants.

Jim Teague: And wide natural gas price spreads between Wahaha and other market hubs.

Jim Teague: We're on track.

Jim Teague: To complete construction of two additional processing plants in the Permian.

Jim Teague: But he a pipeline.

Jim Teague: 14 phase one of our nature is river NGL export terminal.

Jim Teague: And the last phase of our Morgan's point terminal flex expansion in 2020.

We will have one additional process plant coming online in the Delaware in 2026.

Jim Teague: These projects provide visibility to new sources of cash flow.

For our company and enhance and expand the NGL value chain.

Jim Teague: Core of our business.

Jim Teague: We also announced yesterday that we completed the acquisition of Canyon midstream.

Jim Teague: These assets are highly complementary to our Permian processing footprint.

Providing treating services.

Jim Teague: Through a prolific area of the basin that generally.

Jim Teague: Infrastructure limited to the lack of sour natural gas trading and acid gas injection capacity.

Jim Teague: Opinion assets are also a very strategic addition to our NGL value chain.

Jim Teague: Touches everything from the wellhead to the water.

Jim Teague: Yes.

Jim Teague: I'd be remiss.

Jim Teague: We didn't recognize the tireless efforts of over 200 of our employees at Mont Belvieu.

Jim Teague: ROE from our most comprehensive turnaround for the PVH one plant.

Jim Teague: Right into a turnaround prior PD H two plan.

Our employees completed these $24 seven turnarounds with extreme diligence and without any lost time accidents.

Jim Teague: We believe this time in investment will result in higher utilization rates and performance for both of these facilities going forward.

Jim Teague: Look forward to their contributions in 2025.

Jim Teague: We're excited about the number of inbounds that we're getting related to new natural gas demand in Texas from both data centers.

Jim Teague: New gas fired power plants that were built under the under the Texas Energy Fund.

Speaker Change #112: There are a lot of people talking about exposure to data centers. It seems that it's a very sexy thing to say and everybody. There is a piece of pipe in Texas is talking it up.

Speaker Change #112: The reality is there is a very small list of companies with pipeline and storage assets best position.

Speaker Change #112: Benefit from this.

Speaker Change #112: Build out and the enterprise is one of them is.

Speaker Change #112: It is difficult to quantify the ultimate demand and timing at this point, not knowing which projects will go forward.

Speaker Change #112: That being said it is one of the most promising signals we've seen in natural gas on a long time and we're looking forward to serving this new influx of demand.

Speaker Change #113: In enterprise, we take pride in the fact that our organization is not siloed.

Speaker Change #113: Everyone is important we are pulling the same direction every day.

Speaker Change #113: Dedication commitment and creativity of all our employees has always been.

Speaker Change #113: Key to our success.

Speaker Change #113: We always strive to get better.

Speaker Change #113: We operate an integrated value chain, providing a wide range of services from the wellhead to the water.

Speaker Change #113: Our systems are highly automated and provide us with billions of data points.

Speaker Change #113: Each lease that.

Speaker Change #113: <unk> presents an opportunity to provide a service.

Speaker Change #113: The enhanced profitability by enhancing our margins are reducing our costs.

Speaker Change #113: Over the last five years, we have developed a very talented big data and data science team.

Speaker Change #113: That works closely with all areas of our company.

Speaker Change #113: We're now using the big data everything from predictive maintenance.

Speaker Change #113: Market analytics.

Speaker Change #113: Asset optimization.

Speaker Change #113: One of the many examples that are is our pipeline controllers now use real time profit optimizer programs.

Speaker Change #113: To help determine when and how they run compressors and pumps based on real time power and fuel costs.

Speaker Change #113: Data and the insights it can provide many respects is the new currency.

Speaker Change #113: Our proprietary data will forever be an opportunity for enterprise.

Speaker Change #113: We sit in the final quarter of 'twenty four.

Speaker Change #113: And head into 25, our work is not done each year presents new opportunities and new headwinds.

We've built a network of assets and a culture that delivers strong results throughout business cycles administrations and market conditions.

Speaker Change #113: Our company is built for the long run.

Speaker Change #113: Always we've never been more excited for what the future will bring for our company with that Randy.

Randy Fowler: Thank you Jim and good morning Star.

Randy Fowler: Starting with income statement items net income attributable to common unit holders was $1 4 billion $4 65 per unit for the third quarter of 2024. This was an 8% increase over the third quarter of 2023.

Our adjusted cash flow from operations, which is cash flow from operating activities before changes in working capital increased 4% to $2 $1 billion for the third quarter of 2024 compared to $2 billion for the third quarter of last year.

Randy Fowler: We declared a distribution of <unk> 52, five cents per common unit.

Randy Fowler: For the third quarter of 2024, which was a 5% increase over the distribution declared for the third quarter of last year. This distribution will be kind of a November 14 to common unit holders of record as close of the business on October 31.

Randy Fowler: In the third quarter. The partnership purchased approximately two 6 million common units on the open market for $76 million total repurchases for the trailing 12 months were $252 million or approximately $9 1 million enterprise common units, bringing total purchases under our buyback program.

Randy Fowler: <unk> to approximately $1 1 billion. In addition to buybacks our distribution reinvestment plan and employee unit purchase plan purchased a combined $6 5 million common units on the open market for $181 million. During the last 12 months and this includes $1 6 million.

Randy Fowler: <unk> common units on the open market for $47 million during the third quarter 2024.

Of note, 48% of our employees participate in the unit.

Randy Fowler: <unk> plan at enterprise, we really do eat our own cooking for.

Randy Fowler: For the 12 months ending September 32024 enterprise paid out approximately $4 $5 billion in distributions to limited partners combined with the $352 million.

Randy Fowler: Common unit repurchases over the same period.

Randy Fowler: Our total capital return was $4 $8 billion, resulting in a payout ratio of adjusted cash flow from operations of 56%.

Randy Fowler: We returned roughly $1 billion more than our gross capital expenditures were for the same period.

Randy Fowler: Total capital investments in the third quarter of 2020 for $1 2 billion.

Randy Fowler: Which included $1 1 billion for growth capital projects and $129 million of sustaining capital expenditure.

Randy Fowler: Our expected range of growth capital expenditures for 2024 remains unchanged at three 5% to $3 $75 billion.

Randy Fowler: We have received overwhelming interest from our producer customers. Following our recent acquisition of opinion midstream as Jim noted these assets not only in half hance, our processing footprint, but allow us to attract more acreage in the Delaware basin.

Randy Fowler: Additionally, yesterday, we announced a contract with oxy to potentially build a CEO to pipeline that would serve the Houston industrial corridor.

Randy Fowler: We are updating our 2025 estimated growth capital.

Randy Fowler: Expenditure range.

Three 5% to $4 billion to encompass potential growth opportunities in connection with these announcements.

Randy Fowler: Signing capital expenditures are expected to be approximately $640 million in 2024, which is higher than our original estimates primarily due to costs associated with the turnaround.

The <unk> facilities.

As of September 32024, total debt principal outstanding was approximately $32 2 billion, assuming the final maturity of our hybrids. The weighted average life of our portfolio was approximately 19 years, our weighted average cost of bid is four 7% an approximate.

98% of our debt was fixed rate.

Randy Fowler: Our consolidated liquidity was approximately $5 $6 billion at the end of the quarter. This includes availability under our credit facilities and unrestricted cash.

Our adjusted EBITDA was $2 4 billion for the third quarter and nine 8 billion for the 12 months ended September 32024.

Randy Fowler: As of that date, our consolidated leverage ratio is 3.0 times on a net basis when adjusted for the partial equity treatment of our hybrids and reduced by the partnerships unrestricted cash on hand.

Randy Fowler: Our leverage target remains.

Jim.

Our range remains $2 75 to three to five and a 3.0 times, we're in the middle of that range.

Randy Fowler: With that we can open it up for questions. Thank you Randy operator, we are ready to open the call for questions.

Randy Fowler: Yes.

Speaker Change #114: Thank you as a reminder to ask a question you will need to press star one on your telephone.

Remove yourself from the queue you May press Star one again.

Speaker Change #114: Please limit yourself to one question and one follow up or two questions to allow everyone. The opportunity to participate please Sam.

Speaker Change #114: Our.

Speaker Change #115: First question.

Comes from the line of Theresa Chen of Barclays. Your question. Please Theresa.

Theresa Chen: Good morning.

Theresa Chen: Wanted to follow up on Jim's comments about the data center and power demand and just how do you see enterprise participating in this and if you have any color or details on commercial discussions to date.

Natalie: Hi, this is Natalie.

Natalie: We.

Speaker Change #117: Jim said, we've been inundated with data center demand.

Speaker Change #117: Infrastructure players.

Speaker Change #117: It is likely exceeded the Bcf a day of demand in the next several years.

Speaker Change #117: That's probably a couple of different.

Speaker Change #117: Couple of different reasons some of them have shared with us that.

Speaker Change #117: No longer bringing power to data centers, rather data centers go into power sources and as you know we've got several pipelines in the Dallas Fort worth area and San Antonio.

Speaker Change #117: Just a couple of facts that I think are interesting. If you think about it Dallas area data Center was ranked fourth in power today that the second and the most planned power and then San Antonio is even more impressive at 17th and power button I can most manpower.

Speaker Change #117: If you think about it that way there are some regions that are probably losing market share that centennial in Dallas and respond in a.

Speaker Change #117: Good spot over to serve those centers.

Speaker Change #117: Yeah.

Speaker Change #118: Thank you and then related to the recent opinion.

Speaker Change #119: Acquisition and can you provide some details on how you plan to integrate it across your NGL asset the ability you have to pull out trading services beyond the immediate between acreage and just the long term value creation you see from these asset please.

Speaker Change #120: Nathalie you still up.

Yes.

I think you can think of it this way, we won't say opinion any differently than our integrated.

Speaker Change #120: G&P assets it won't mean, meaning trading deals behind opinion that don't come with processing deals to sort of the integrated value chain.

Speaker Change #120: So it leads to more organic growth through processing, yes.

Speaker Change #120: Yeah.

Speaker Change #121: Thank you.

Speaker Change #122: Thank you.

Speaker Change #123: Our next question comes from the line of.

Jean Ann Salisbury of Bofa Your question. Please.

Speaker Change #124: Hi, good morning, and ethane storage is so there is no new demand until you and <unk> export facilities come on line next year and can you guys talk about how you see this resolving do you see a big step down in ethane recovery would that change your growth rate in the next few quarters and is there kind of a positive offset to that for enterprise in your portfolio.

Tug Hanley: Hi, Jan this tug Hanley.

Tug Hanley: As far as recoveries in rejection that will balance the market.

Tug Hanley: Regionally theres other other places other than the Permian basin, where the gas base. It doesn't make sense to recover necessarily refer further to transport to market as far as opportunity set for us it's going to lead to some positive storage opportunities on collecting contango.

Speaker Change #125: Okay that makes sense.

Speaker Change #126: And then my follow up is about the tw product line.

Speaker Change #127: Is this the final state of the Tw product system and I think you said in the release that it's 20000 barrels a day of truck loading capacity and Utah.

Speaker Change #127: Can the pipe do more than that if you add truck loading capacity or should we think about this as being the end state of the system.

Justin: Hey, Gena, it's Justin.

Speaker Change #128: No. We have we have more capability to add truck lacks in fact.

We're doing that right now in our Permian terminal because of terminal four.

Speaker Change #128: So as we identify additional demand.

Speaker Change #128: And our demand further up system continues to ramp.

Speaker Change #128: We will look for those debottlenecking opportunities to take advantage of it.

Speaker Change #129: Okay, great very clear and I'll leave it there thanks.

Speaker Change #130: Thank you.

Our next question comes from the line of Spiro <unk> of Citi. Your question. Please spiro.

Spiro: Thanks, operator, good morning, everybody I want to come back opinion really quickly.

Spiro: Maybe you could just walk us through your decision to buy versus build there just curious if that was in any way reflective of some sort of a bottleneck on the treaty side in the basin.

Speaker Change #131: I guess I'll start first of all we've built Greenfield we're looking at three years.

Speaker Change #132: Not mistaken we missed some opportunity just because we didn't have this service. So we didn't get the platform and it was the easiest quickest way to get it.

Speaker Change #133: That answers there.

Speaker Change #134: It does I appreciate that second question, just maybe sticking with new Mexico, I guess last week. There was some news headlines just around a new setback rule that could come into play I know this can pop up from time to time and it sounds like at least for now there's not much to do around it I'm just curious maybe to get your view on how you think about the potential impact there if something like that comes into play.

Speaker Change #135: I don't know I Didnt hear the question Tony did you invest in new Mexico setbacks in new Mexico.

Speaker Change #136: Mexico I'll speak for myself.

Speaker Change #137: Yes, I'll speak for myself from a fundamental standpoint, yeah remember you address it.

Speaker Change #138: I think the industry is very firm and as always said tell us what the rules are and then we will know we will figure out how to adjust to them Natalie I haven't heard and maybe you have or have not anybody say that they're doing anything other than steadiness rules. It certainly from the meetings I've been it Hasnt change People's plans at this point.

Speaker Change #138: I think the other thing to add to that is remember that we drill horizontally laterals that maybe three or four miles so.

Speaker Change #138: I am confident from a fundamental standpoint that the industry is going to be able to adjust once they know what the rules are are you hearing anything different.

Speaker Change #139: Too early to speculate on what impact that will have and nothing more than commentary.

Speaker Change #140: And Mexico producers.

Speaker Change #141: Great I appreciate the color I'll leave it there thanks, Dave.

Speaker Change #142: Thank you.

Speaker Change #143: Our next question.

Speaker Change #144: Comes from the line of Jeremy Tonet.

Speaker Change #145: J P. Morgan your question please Jeremy.

Jeremy Tonet: Hi, good morning.

Jeremy Tonet: Good morning.

Jeremy Tonet: Just wanted to touch base with Tony here on I guess more on the macro outlook I.

Jeremy Tonet: I guess producer customer conversations as well as what the macro team sees as far as production trends at this point in time, given the volatility we've seen in commodity prices.

Jeremy Tonet: Yes. This is Tony I'll start with it.

Jeremy Tonet: I think so.

Jeremy Tonet: As long as we've been publishing forecast. This is maybe the second or third time that we've actually we published midyear.

Jeremy Tonet: And thats, because what we're seeing both in traditional benches and new targets gasior benches.

Jeremy Tonet: Yes.

Jeremy Tonet: When you look at EIA numbers I'll kind of go ahead and go there I understand that's a very hard thing to set your watch to that's not what we use.

Jeremy Tonet: They are trying to get better at it but it's okay.

Jeremy Tonet: We're making slow progress.

Jeremy Tonet: What we said in the Permian Basin Theres been a lot of noise also weather relative to weather and then in the Bakken and in the Gulf of Mexico relative to Alex's. So let's go to what stable and whats large thing that moves the number and that's the Permian basin.

We said that over three year period, just looking at black oil, what we would have about one 5 million barrels.

Jeremy Tonet: <unk> growth over that three year period.

Jeremy Tonet: For 2023, we are at about 750000 barrels.

Jeremy Tonet: We think that that number for 2024 will be 350 to 400000 barrels and from what we're seeing as far as turn in line from our producers it's likely that when it's all said and that number is going to be very.

Jeremy Tonet: Very heavily weighted towards the second half of the year.

Jeremy Tonet: So it's not a long path as a matter of fact as what we expect that we will scale. The Permian will meet that goal of call. It 1 million and a half barrels in 2025.

Jeremy Tonet: You can look at our forecast and the one thing that is changing.

Speaker Change #146: Unlikely to change this commitments of producers are making the gassy basins and Natalie I'll, let you take it from there.

Jeremy Tonet: Yes.

I agree I think we often.

We see it in our production plans from our producers and the year.

Jeremy Tonet: Either PDP isn't coming off as expected are let's just say some of the declines are holding a little bit longer.

Jeremy Tonet: But definitely gas here, even if they're on the order of <unk>.

Jeremy Tonet: 10%, sometimes I Miss it by that order of magnitude we.

Jeremy Tonet: We see it time and time again.

Not large numbers.

It's definitely something to keep up with.

Speaker Change #147: Got it Thats helpful. Bill Thank you for that.

Speaker Change #147: And maybe shifting gears, a little bit here with <unk> it.

Speaker Change #148: It looks like the timeline shifted a little bit there. So I'm just wondering if you could update us on.

Speaker Change #148: Development, there and also just kind of thoughts on Permian NGL pipeline Mcgrath, how you see that shift.

Speaker Change #148: Yes.

Speaker Change #149: Hey, Jeremy its Ed Justin slider.

Speaker Change #150: So just minor delays in our expected timing on permit to construct.

Speaker Change #150: Causing the delay from first half into this in the third quarter.

Speaker Change #150: On the commercial developed on a commercial development.

Speaker Change #150: I would say is as you as you saw on our latest deck.

Speaker Change #151: Tony Tony's updated NGL forecasts paint a very different picture for overall industry Utilizations I think by 2028 now.

Speaker Change #151: The updated supply number of Savvis upwards of 90% utilized as an industry.

Speaker Change #151: So we're still working the same playbook as we talked about in prior quarters around how we are.

Speaker Change #151: Developing commercially there.

Speaker Change #151: It really just comes down to you know that incremental supply gets contracted whether that would be a combination of additional.

Speaker Change #151: G&P assets.

Speaker Change #151: That Natalie alluded to earlier or continuing to pursue third party Ngls.

Speaker Change #151: Okay.

Speaker Change #152: Got it that's helpful. Thank you.

Speaker Change #152: Thank you.

Speaker Change #153: Our next question.

Speaker Change #154: Comes from the line of Michael Blum of Wells Fargo. Your line is open Michael.

Michael Blum: Thanks, Hey, good morning, everyone.

Michael Blum: I wanted to ask about the announcement yesterday on the <unk>.

Michael Blum: Oh, two pipeline projects with oxy.

Michael Blum: I wanted to just confirm if there's new pipe youre, not repurposing and get a sense for.

How many miles of pipe or are we talking about and we do expect to get your kind of typical midstream contract structure and typical midstream return on a project like this.

Michael Blum: Good morning, Michael This is Bob Sanders.

Michael Blum: The contract with one five is a fairly straightforward transportation agreement when $1 five goes to <unk>. They.

Michael Blum: They will tell us what emitters to connect to so we know what the design for.

Michael Blum: It is new pipe because it advancing 900 pipe.

Michael Blum: High pressure pipeline system.

Michael Blum: Expect one 5% sometime in the first half of 2025 and at that point, we will know what the capital is in the fee will be.

Michael Blum: Set accordingly.

Michael Blum: Yeah.

Speaker Change #155: Great great. Thanks for that.

Speaker Change #156: And then I just wanted to ask about.

Speaker Change #156: LPG export dock.

Speaker Change #157: Spot rate dynamics I guess the rates have increased in recent months I wanted to get a sense, how full the docs and your docs specifically from that perspective are you able to capture any of these higher spot rates or are you basically fully contracted.

Speaker Change #158: Yes. This is tod so we've talked about it in the prior earnings call that we did a debottlenecking project at the ship channel. That's provided is higher higher capacity. So right now revenue between two to three spot cargoes per month, and we are capturing those higher values call. It mid <unk> 20 per gallon.

Speaker Change #159: Great. Thank you.

Speaker Change #159: Thank you.

Speaker Change #160: Our next question comes from the line of.

Speaker Change #161: Neal Dingmann of <unk>. Please go ahead Neil.

Neal Dingmann: Good morning, Thanks for the time My first question is on your Petro Chems specifically.

Neal Dingmann: Are you all continue to expand the ethylene and propylene systems and I'm. Just wondering if you guys do you continue to believe more export capacity will be needed there.

Hey, Neil it's Christina.

Speaker Change #162: We are continuing to grow, particularly our ethylene pipeline system. So if you remember that pipeline system didn't exist before before 2019.

Speaker Change #162: And we built a pretty a pretty substantial.

Speaker Change #162: Substantial system.

Speaker Change #162: And to continue to grow that.

And then in terms of our exports.

Speaker Change #162: We have an expansion underway.

Speaker Change #162: It's <unk>.

Speaker Change #162: Had our Morgan's point Doc and that'll come online the first phase of that will be online at the end of this year.

Speaker Change #163: Chris perfect outright.

Speaker Change #164: About real quick what Youre seeing in Europe, what do you think that creates for US yes, I think one other point on the growth opportunities that we see for ethylene exports in particular as Europe with.

With the economics of those crackers have one there are quite a bit smaller so they don't have the economies of scale that we have here in the U S. And then secondly, just the overall feedstock as a whole.

Speaker Change #164: Ethane versus not there are natural gas versus crude kind of fundamentals there.

Speaker Change #164: So we expect to see and we've heard from a lot of the chemical companies out there doing strategic reviews of their European asset. So we expect to see some closures.

Speaker Change #164: And we expect that to lead to additional ethylene exports going that way.

Speaker Change #165: Great details. Thanks, Frank and then my second is just on marketing and specifically it seems like while it continues to be quite volatile. So I'm just wondering based on that.

Speaker Change #166: Can we assume the marketing business continues to remain strong for you all.

Speaker Change #167: Yes, we have.

Speaker Change #168: Roughly 370 million a day open on that.

Speaker Change #169: The east wall spreads. So do you expect that to continue to contribute.

Speaker Change #170: Great to hear thank you.

Speaker Change #169: Yes.

Speaker Change #171: Thank you.

Speaker Change #172: Our next question.

Speaker Change #173: Comes from the line of Keith Stanley.

Speaker Change #174: Helpful. If research your question please Keith.

Keith Stanley: Hi, Thank you good morning.

Keith Stanley: First just curious for an update on commercial conversations on the spot project I think there was a quote a week or two ago from a conference of.

Keith Stanley: Trying to get our first customer to sign up for that project.

Keith Stanley: Date on any momentum you're having there.

Speaker Change #175: Thank you Jay.

Speaker Change #175: Hey, Keith this is Giovanni yes, just related around commercial conversations.

They are quite extensive.

Speaker Change #175: And then various degrees of.

Speaker Change #175: Conversation anywhere ranging from we're working through definitive agreements changing term sheets I'd say, a large portion of our customer base are currently just evaluating.

Speaker Change #175: The cost inefficiencies related to ship to ship transfers and how that affects their business mode. There call. It netback as American producer expenses or ultimately delivered price for international customers and so we expect to hear some some of that feedback here call. It the end of this quarter early.

Speaker Change #175: First quarter.

Speaker Change #175: Okay.

Speaker Change #176: Alright, thanks for that.

Second question.

Speaker Change #176: Ideally not sure that's a great answer to this necessarily but.

Speaker Change #176: The valuation gap between the C Corp is in this space in the Mlps is at a record high above anything I can recall.

Speaker Change #176: Are there any potential ways the company could capitalize on that I don't know if its selling assets at higher valuations or other ways to respond to the market seemingly valuing C Corp is much more highly than Mlps. These days.

Speaker Change #176: Yeah, Keith this is Randy.

Randy Fowler: I don't think Theres any.

Randy Fowler: Quick.

Solution or answer there I think coming in and trying to play the game of selling assets at a higher valuation is somewhat shortsighted, especially when you come in and you look at the depreciation recapture that comes in it gets pushed down to all your limited partner.

Randy Fowler: All of that comes as a tax event for your limited partners and I don't know what actually you can accomplish.

So.

We have seen.

Randy Fowler: Two or three years ago I think it was near these levels and then we saw the two compressed but generally when there's this big of a difference.

Randy Fowler: Asset classes normally the market salt on where to go.

Speaker Change #177: Thank you.

Thank you.

Speaker Change #178: Our next question.

Speaker Change #179: Comes from the line of John <unk> of Goldman Sachs. Please go ahead John.

John: Well thanks for the time I just wanted maybe do two quick clarifications first one is <unk>.

John: This is to you I guess just on that last comment is the up C. Ibs still out there or is there any reason you guys are kind of.

John: Permanently put that to the side at this point.

John: Yes.

Yes.

Speaker Change #181: I appreciate the thoughts there again I think that's another.

Speaker Change #181: Certainly the Devil's in the detail there number one now you've got you would have two securities outstanding.

Speaker Change #181: Need to build liquidity up in that second security and Oh by the way what do you do with use of proceeds.

Speaker Change #181: So.

Speaker Change #181: Thanks.

Speaker Change #181: If I come in and look over time, there has not really been theres been examples whether it's.

Speaker Change #181: <unk> or whether it's Ben.

Speaker Change #181: Oh geez.

Speaker Change #181: The <unk> units that were done way back 20 years ago.

Speaker Change #181: And you really never saw that much differentiation, whether it was the institute the arguments the institutional class units.

The partnership it was more institutional investor friendly or whether it was the up C and the underlying MLP. So.

Speaker Change #181: That adds a lot of complexity and really you don't get that much Bang for your book.

Speaker Change #182: All right that's clear I appreciate that second quick follow up I. Appreciate the comments on all the work done on <unk> I just want to clarify are both up and running fully now is this like a fourth quarter run rate going forward.

First quarter of 'twenty five and then maybe if you could just remind us maybe what those two assets in aggregate could add from our ongoing cash flow basis that'd be great.

Speaker Change #183: They are up and running both of them running at full rates, if not higher and Chris I would say, it's in the neighborhood of $200 million.

Speaker Change #182: Sure.

Speaker Change #184: Thanks, Congrats again and thanks for the time.

Speaker Change #184: Thank you.

Speaker Change #185: Our next question comes from the line of a J O'donnell of C. P. H your question. Please.

Speaker Change #186: Hey, good morning, Thanks for taking my question just a quick one on.

Matterhorn with that pipeline now running about one bcf or over a Bcf a day.

Speaker Change #186: Curious if you guys have seen.

Speaker Change #186: Jump in flush production.

Speaker Change #186: Into your system in Q4, or if the majority of the pipeline volumes are just flow shifting around the basin are redirected guests.

Speaker Change #187: I don't think we've seen that flush production yet headwind Netherlands.

Speaker Change #187: Okay.

Speaker Change #188: Maybe just going back to the capital budget then.

Speaker Change #189: Im just trying to understand on the increase in the 25 budget.

Speaker Change #190: I was hoping maybe you could provide just a little bit of additional color on the types of the projects you have.

Speaker Change #190: Seeing with Canyon and I'm just curious if there is any more of that to potentially be announced in the 25 budget or does that seem a little bit further off.

Speaker Change #190: Okay.

Speaker Change #190: Okay.

Speaker Change #190: And when do you go ahead opinion projects next year.

Speaker Change #190: Yes.

Speaker Change #190: Sure.

Speaker Change #191: Natalie says yes.

Speaker Change #191: Yeah.

Speaker Change #191: Okay. Thanks.

Speaker Change #191: Thanks, guys.

Speaker Change #191: Thank you.

Speaker Change #192: Our next question comes from the line of Manav Gupta of UBS. Your question. Please manav.

Manav Gupta: Hi, good morning.

Manav Gupta: At a very good job of explaining some of the 20 to 25 growth projects.

Manav Gupta: Help us understand the pipeline is pretty strong.

Speaker Change #193: Thats meant on vest too early to say look how should we think about the key growth projects for 2026 at this stage.

Speaker Change #193: Yes.

Speaker Change #194: Thanks for the question I think we're still at the point where.

Speaker Change #194: And we try to.

Speaker Change #194: Point this out in our.

Speaker Change #194: Supplemental slides for earnings.

Speaker Change #194: When you come in and you look at the projects that have been.

Fr deed.

Speaker Change #194: I want to say that.

The run off in 2026.

Speaker Change #194: What we have remaining to spend on currently you have five lead projects Theres, probably about $1 billion $1 $3 billion.

Speaker Change #194: Good in 2016.

Speaker Change #194: <unk>.

We put in there that we think will probably be in the range of $2 billion might be it's upwards of $2 five but we have run for <unk>.

Speaker Change #194: Development of other grocery oriented projects between now and then and Thats, where we think 2024 and 2025 is is really a period of elevated capex.

Speaker Change #194: And that will come back.

And more on.

Speaker Change #194: Long longer term base, we'll see that come back down to around two two and a half.

Speaker Change #195: Okay perfect.

Speaker Change #195: And you saw this and again I'll come back in I'm, sorry, you source all of US saw the same thing in 2018 2019, and those years, we were about $4 billion in growth Capex and again those had some large projects.

Speaker Change #195: Step changes in capacity and then use our growth capex moderate back down and we think the same thing will happen once you get out to 2026.

Speaker Change #196: Perfect. My quick follow up is there was a little bit of a step up in buybacks in <unk> and again going through this build out how should we think about shareholder does it answer the rest of the 'twenty painful or audio in 2025.

Speaker Change #197: I think again with 2024 and 2025 capex being at elevated levels.

Speaker Change #198: You'll probably you'll probably continue to see buybacks in that 200 $300 million range.

Speaker Change #198: Once we get out to 2026.

Speaker Change #198: Need to reassess what the opportunities are at that time, and we'll go from there.

Speaker Change #199: Thank you for taking my questions.

Speaker Change #200: Thank you.

Speaker Change #201: I'd now like to turn the conference back to maybe straight for closing remarks Madam.

Speaker Change #202: And thank you to our participants for joining us today that concludes our remarks have a good day.

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