Q3 2024 DT Midstream Inc Earnings Call
Operator: Thank you for standing by and welcome to the DT Midstream third quarter 2020 4 earnings conference call. All lines have been placed on mute to prevent any background noise.
Thank you for standing by and welcome to the D. T Midstream third quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise.
Operator: After the speaker's remarks there will be a question and answer session. If you would like to ask a question during this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question again press the star one. Thank you.
After the Speakers' remarks, there will be a question and answer session.
I'd like to ask a question. During this time simply press star followed by the number one on your telephone keypad. If he would like to withdraw your question again prestige star one.
Todd Lohrmann: I'd now like to turn the call over to Todd Lohrmann, Director of Investor Relations. You may begin.
Speaker Change: I'd now like to turn the call over to Todd Lohrmann Director of Investor Relations you may begin.
Todd Lohrmann: Good morning, and welcome, everyone. Before we get started, I would like to remind you to read the Safe Harbor Statement on page two of the presentation. including the reference to forward-looking states. Our presentation also includes references to non-GAAP financial measures.
Todd Lohrmann: Good morning, and welcome everyone.
Before we get started I would like to remind you to read the safe Harbor statement on page two of the presentation.
Todd Lohrmann: Including the reference to forward looking statements.
Todd Lohrmann: Our presentation also includes references to non-GAAP financial measures.
Todd Lohrmann: please refer to the Reconciliations to GAP contained in the appendix.
Please refer to the reconciliations to GAAP contained in the appendix.
Todd Lohrmann: Joining me this morning are David Slater, President and CEO, and Jeff Jewell, Executive Vice President and CFO. I'll now turn it over to David to start the call.
Todd Lohrmann: Joining me this morning are David Slater, President and CEO, and Jeff Jewel Executive Vice President and CFO.
Speaker Change: I'll now turn it over to David to start the call.
David Slater: Thanks, Todd, and good morning, everyone, and thank you for joining. During today's call, I'll touch on our financial results, provide an update on the latest commercial development activity and progress on our growth initiatives. I'll then close with some observations on the overall gas market before turning it over to Jeff to review our financial performance and outlook. So starting off, we had another strong quarter operationally, and the team continues to commercialize new organic projects that support our future growth. Our strong year-to-date performance is enabling us to increase our 2024 adjusted EBITDA guidance range to $950 to $980 million.
Thanks, Todd and good morning, everyone and thank you for joining.
David Slater: During today's call I'll touch on our financial results.
David Slater: Provide an update on the latest commercial development activity and progress on our growth initiatives.
David Slater: We are also reaffirming our 2025 adjusted EBITDA early outlook range. By continuing to advance projects from our organic project backlog and leveraging the scale from our existing integrated asset platforms, we are well positioned for continued growth in 2025 and beyond.
David Slater: Our track record of strong performance was also recognized earlier this month by Finch Ratings, who upgraded us to investment grade, a strategic goal that we have had since we spun the company in 2021. This morning, we are excited to announce that we have reached a final investment decision on a LEAP Phase 4 expansion, which will increase capacity by 200,000 cubic feet per day and further expand our integrated wellhead water system. to the LMG Corridor. Our premier Haynesville system has established itself as the leader in both overall capacity and interconnectivity. This expansion, which we expect will be completed in the first half of 2026, increases total lead capacity from 1.9 to 2.1 BCF per day via incremental compression and looping, and is underpinned by long-term demand-based contracts with two new customers.
David Slater: Total leap capacity from 1.9 to 2.1 Bcf per day via incremental compression and looping and.
And is underpinned by long term demand based contracts with two new customers.
David Slater: This project highlights our Haynesville system's ability to quickly serve our customers' growing needs with right-sized, capital-efficient, and timely expansion. and also signals the demand for takeaway capacity out of the Haynesville to surf, Gulf Coast and LNG markets as the basin shifts back into growth mode. This morning, we're also pleased to announce that we are upsizing our previously disclosed project connecting to the Mountain Valley pipeline on our stonewall system. which will increase the capacity of the strategic Appalachian Basin interconnect and provide our customers with additional access to the growing mid-Atlantic markets. This project, which is anchored by a long term agreement with a large privately held producer, increases outlet capacity on Stonewall by 100 million cubic feet per day, is underpinned by a demand based contract that protects project economics, and we expect to have this project in service in the first half of 2026.
This project highlights our haynesville system's ability to quickly serve our customers growing needs with right sized capital efficient and timely expansions.
David Slater: It also signals that the demand for takeaway capacity out of the Haynesville to serve Gulf coast in LNG markets as the basin shifts back into growth mode.
David Slater: This morning, we were also pleased to announce that we are upsizing, our previously disclosed project connecting to the mountain Valley pipeline on our Stonewall system.
Which will increase the capacity of this strategic Appalachian basin interconnect and provide our customers with additional access to the growing mid Atlantic markets.
David Slater: This project, which is anchored by a long term agreement with a large privately held producer increases I'll, let capacity on Stonewall by a 100 million.
David Slater: Million cubic feet per day is underpinned by a demand based contracted protects project economics, and we expect to have this project in service in the first half of 2026.
David Slater: In addition to the projects that have reached FID, we remain in a number of active discussions to commercialize new power and data center opportunities across our network. and we will keep you updated as these opportunities advance. Turning to our carbon capture and sequestration projects in Louisiana, as we mentioned on our second quarter call, we have validated the storage formation structure and are confident in the geological suitability of the site. The team continues our pre-FID detailed engineering design of the storage well, CO2 pipeline, and related facilities. We are still waiting regulatory clarification and guidance from the Louisiana DENRR for our Class 6 permit application.
David Slater: In addition to the projects that have reached F. D. We remain in a number of active discussions to commercialize new power and data center opportunities across your network.
David Slater: And we will keep you updated as these opportunities that advance.
David Slater: Turning to our carbon capture and sequestration projects in Louisiana.
David Slater: As we mentioned on our second quarter call. We have validated the storage formation structure and are confident in the geological suitability of the site.
David Slater: The team continues our pre F E detailed engineering design of the storage well C O two pipeline and related facilities.
David Slater: We are still waiting regulatory clarification and guidance from the Louisiana D E N R for class six permit application.
David Slater: which we expect will be received prior to the end of the year. We continue to be disciplined in our execution of this project, minimizing capital deployment until we reach a final investment decision, a milestone that we now expect will come in the first half of 2025.
David Slater: Which we expect will be received prior to the end of the year.
David Slater: We continue to be disciplined in our execution of this project.
David Slater: <unk> capital deployment until we reach a final investment decision.
David Slater: A milestone that we now expect will come in the first half of 2025.
David Slater: Finally, I'd like to take a moment to address the natural gas market fundamentals. We've continued to see choppiness in the short-term market. But our portfolio has remained very durable. We are seeing supportive signals recently, with the storage surplus beginning to work off and inventories moving towards the five-year average. And we expect that growing energy demand beginning in 2025 will provide a more constructive environment for gas producers. In the long term, we expect natural gas demand to continue to grow, driven by the expanding LNG export market. increased power and data center demand, and from industrial and commercial onshoring.
David Slater: Finally, I'd like to take a moment to address the natural gas market fundamentals.
David Slater: We've continued to see Choppiness in the short term market.
David Slater: But our portfolio has remained very durable.
David Slater: Seeing supportive signals recently, what the short surplus beginning to work off and inventory is moving towards the five year average.
David Slater: And we expect that growing LNG demand beginning in 2025, we will provide a more constructive environment for gas producers.
David Slater: In the long term, we expect natural gas demand to continue to grow driven.
David Slater: Driven by the expanding LNG export market <unk>.
David Slater: Increased power and data center demand and from industrial and commercial onshoring.
David Slater: all of which will support high utilization and further development of natural gas infrastructure. With DTM's strategically located asset footprint being well positioned to serve this growing demand. So, in summary, I'm very pleased with the continued performance from our team as we continue to commercialize growth opportunities from our project backlog and prepare for the demand ramp in 2025 and beyond.
David Slater: All of which will support high utilization and further development of natural gas infrastructure.
David Slater: With DCM strategically located asset footprint being well positioned to serve this growing demand.
David Slater: So in summary, I'm very pleased with the continued performance from our team as we continue to commercialize growth opportunities from our project backlog and prepare for the demand ramp in 2025 and beyond.
Jeff Jewell: I'll now pass it over to Jeff to walk you through our quarterly financials and outbooks. Thanks, David.
Speaker Change: I will now pass it over to Jeff to walk you through our quarterly financials and outlook.
Jeff Jewell: And good morning, everyone. In the third quarter, we delivered overall adjusted EBITDA of $241 million, representing a $7 million decrease from the prior quarter. Our pipeline segment results were 3 million greater than the second quarter, reflecting a full quarter contribution from our LEAP Phase 3 expansion, which was placed in service in June.
Jeff Jewell: Gathering segment results decreased by 10 million compared to the second quarter. A result in line with the second quarter when adjusted for favorable one-time items of approximately $10 million that did not repeat in the third quarter. Operationally, total gathering volumes across both the Haynesville and the Northeast averaged approximately 2.9 billion cubic feet a day in the third quarter. with volumes up slightly in the Haynesville compared to the prior quarter, while lower in the Northeast primarily due to the lower volumes on our Appalachia gathering system.
Jeff Jewell: In the fourth quarter, we expect a ramp in gathering volumes compared to the third quarter, as well as incremental maintenance expense.
Jeff Jewell: As David mentioned in his opening remarks, Following our strong year-to-date performance and considering our expectations for the fourth quarter, we are raising our 2024 adjusted EBITDA guidance range to $950 to $980 million. In addition, we are reaffirming our 2025 Adjusted EBITDA Early Outlook and plan to provide our formal 2025 guidance on our year-end call. We are also raising our Distributable Cash Flow Guidance Range to $670 to $700 million. due to lower interest and cash taxes. Our 2024 committed growth capital remains unchanged. with approximately $330 million committed. And we are increasing our 2025 committed capital to reflect new projects reaching FID.
Yeah.
Speaker Change: Due to lower interest and cash taxes.
Speaker Change: Our 2020 for committed growth capital remains unchanged.
Speaker Change: With approximately 330 million committed.
Speaker Change: And we are increasing our 2025 committed capital to reflect new projects, reaching FID.
Jeff Jewell: with approximately $310 million committed. This increase in 2025 committed growth capital is driven by new projects reaching FID. including our new LeapFace 4 expansion. upsize of our Stonewall MVP Interconnect, and buildout of our Clean Fuels Gathering Facility.
Speaker Change: With approximately 310 million committed.
Speaker Change: This increase in 2025 committed growth capital is driven by new projects, reaching FID.
Including our new lead phase four expansion.
Speaker Change: Upsize of our Stonewall MVP interconnect.
Speaker Change: And build out of our clean fuels gathering facilities.
Jeff Jewell: We are reducing our full year 2024 growth capital guidance range to $330 million to $350 million. which represents a $25 million reduction in the high end of our rate. This reduction is driven by timing of growth project.
Speaker Change: We are reducing our full year 2020 for growth capital guidance range to 330 million to $350 million.
Speaker Change: Which represents a $25 million reduction in the high end of our range.
Speaker Change: This reduction is driven by timing of growth projects.
Jeff Jewell: And we continue to expect to spend within free cash flow in 2024 and 2025.
Speaker Change: And we continue to expect to spend within free cash flow in 2024 and 2025.
Jeff Jewell: We are committed to preserving the strength of our balance sheet, and we are very pleased to be upgraded to an investment-grade credit rating by Fitch Ratings earlier this month. In addition to the upgrade from Fitch, we also remain on positive outlook with Moody's. Within the quarter, we further optimized our balance sheet through the issuance of $800 million in new project-level debt at Millennium Pipeline. And we use the proceeds to pay off the full $400 million balance on our term loan. At the end of the quarter, our on-balance sheet leverage was 2.8 times. with our proportional leverage at 3.7 times.
Speaker Change: We are committed to preserving the strength of our balance sheet.
Speaker Change: And we are very pleased to be upgraded to an investment grade credit rating by Fitch ratings earlier this month.
Speaker Change: In addition to the upgrade from Fitch, We also remain on positive outlook with Moody's.
Speaker Change: Within the quarter, we further optimized our balance sheet through the issuance of $800 million in new project level debt at millennium pipeline.
And we used the proceeds to pay off the full 400 million balance on our term loan.
Speaker Change: At the end of the quarter, our on balance sheet leverage was two eight times.
Speaker Change: With our proportional leverage at three seven times.
Jeff Jewell: And we now have no debt maturities for five years.
Speaker Change: And we now have no debt maturities for five years.
Jeff Jewell: Finally, today we also announce the declaration of our third quarter dividend of 73.5 cents per share, unchanged from the prior quarter. We remain committed to growing the dividend at 5-7% per year in line with our long-term adjusted EBITDA growth.
Speaker Change: Finally today, we also announced the declaration of our third quarter dividend of <unk>, 73, and a half cent per share.
Speaker Change: Unchanged from the prior quarter.
Speaker Change: We remain committed to growing the dividend at 5% to 7% per year in line with our long term adjusted EBITDA growth.
David Slater: I'll now pass it back over to David for closing remarks. Thanks, Jeff. So in summary, we are very pleased with how the year is continuing to progress and are feeling confident in our increased guidance for 2024 and early ELEC range for 2025. Our short cycle growth investments continue to track on budget and on schedule, which will contribute meaningful growth over the next two years. Our approach to capital allocation remains thoughtful and disciplined, with our focus on spending within cash flow over the balance of our five-year plan and growing our dividend in line with our EBITDA.
Speaker Change: I'll now pass it back over to David for closing remarks.
David Slater: Thanks, Jeff. So in summary, we are very pleased with how the year is continuing to progress and are feeling confident in our increased guidance for 2020 for an early outlook range for 2020 fives are short cycle growth investments continue to track on budget and on schedule, which will contribute meaningful growth.
Speaker Change: Over the next two years.
Speaker Change: Our approach to capital allocation will remain thoughtful and disciplined with our focus on spending within cash flow over the balance of our five year plan and growing our dividend in line with our EBITDA.
David Slater: As we look across the portfolio, we continue to see significant growth opportunities enabled by the scale of our strategically located and integrated asset footprint and through the emergence of our energy transition platform.
Speaker Change: As we look across our portfolio, we continue to see significant growth opportunities enabled by the scale of our strategically located and integrated asset footprint and through the emergence of our energy transition platform.
Operator: We can now open up the line for questions. Thank you. We will now begin the question and answer session.
Speaker Change: We can now open up the line for questions.
Speaker Change: Thank you we will now begin the question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad to raise your hand and joined the queue if you'd like to withdraw your question simply press Star. One again. Your first question comes from the line of Jeremy Tonet from Jpmorgan. Your line is open.
Operator: If you would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again.
Jeremy Tonet: Your first question comes from a line of Jeremy Tonet from J.P. Morgan.
Jeremy Tonet: Your line is open. Hi, good morning.
Jeremy Tonet: Hi, good morning.
David Slater: Morning, Jeremy. I just want to kind of follow up on the guidance increase for this year. And I know you're not going to update 25 at this juncture, but just any high level thoughts on, you know, forward read throughs on that.
Speaker Change: Good morning, Jeremy.
Jeremy Tonet: I just wanted to kind of follow up on the guidance increase for this year and I know you're not going to update 25 at this juncture, but just any high level thoughts on.
Jeremy Tonet: Forward read throughs on that and its focus starts to shift to 2026 early look can you talk about operating leverage across the asset base as the macro improves.
David Slater: And as focus starts to shift to 2026 early, can you talk about operating leverage across the asset base as the macro improves?
David Slater: Sure, Jeremy. So I'd say first off, I just say the portfolio has been incredibly durable this year as we've kind of gone through the commodity cycle. So we're very happy with how the years played out and it's allowed us to increase the guidance as we are navigating into Q4.
Speaker Change: Sure Jeremy.
Speaker Change: So I would say first off I'd, just say the portfolio has been incredibly durable this year as we've kind of gone through the commodity cycle. So we're very happy with how how the year has played out.
Speaker Change: Allowed us to.
Speaker Change: Increase the guidance as we were navigating into Q4.
David Slater: As you kind of alluded to, we'll sit tight on making any adjustments to 2025 until we get to the end of the year and get better information from our core customers in terms of their activity level. But I'd say some of some of the items we announced today feel encouraging in terms of signaling 2025, at least in the Haynesville, a renewed interest in growing volumes again, as I think the market clearly is seeing incremental demand coming. And I think our leap phase four announcement is somewhat of a derivative of that sentiment in the market. And again, if you look at how we filled in our 2025 growth capital, that's a very encouraging position.
Speaker Change: As you kind of alluded to.
Speaker Change: It will sit tight on making any adjustments to 2025 until we get to the end of the year and get better information from from our core customers in terms of their activity levels.
Speaker Change: But I'd say somewhat some of the items that we announced today.
Speaker Change: Feel are encouraging in terms of signaling.
Speaker Change: 25 at least in the Haynesville a renewed interest in growing volumes again as I think the market clearly is seeing incremental demand coming and.
Speaker Change: I think our lead phase four announcement as somewhat of a derivative of that sentiment in the market.
Speaker Change: And again, if you look at how we filled in our 2025.
Speaker Change: Growth capital.
Speaker Change: That's a very encouraging position.
David Slater: It really is. cementing in our growth trajectory for the next couple of years, as we've FID'd projects and have, you know, a full slate of opportunity that we're going to execute on next year that's already contracted and sort of kind of in hand, if I can say it that way. So that's giving me some optimism as I look forward and reflect on our growth aspirations and you know, what I'll call incremental commercial opportunity that's coming to us across the portfolio.
Speaker Change: It really is cementing in our growth trajectory for the next couple of years.
Speaker Change: As we have projects in half.
Speaker Change: A full slate of opportunity that we're going to execute on next year, that's already contracted and sort of.
Speaker Change: Kind of in hand, if I can say it that way.
Speaker Change: So that's giving me some optimism as I as I look forward and reflect on our growth aspirations and.
Speaker Change: What I'll call incremental commercial opportunity, that's coming to us across the portfolio.
Speaker Change: Got it that's helpful. There, thanks, and speaking about incremental opportunities I think.
Jeremy Tonet: Got it. That's helpful there. Thanks.
Jeremy Tonet: And speaking about incremental opportunities, I think, you know, Louisiana connectivity specifically into Henry Hub is an item of concern, I think, for maybe some on the customer side and the producers looking to get there. It seems like there might not be enough connectivity into Hub, and that could lead to wider bases. Just wondering if you subscribe to this view and what opportunities this could present.
Speaker Change: Louisiana connectivity, specifically into Henry hub is an item of concern I think for for maybe some on the customer side and the producers are looking to get there.
Speaker Change: Seems like that might not be enough connectivity into hub and that can lead to wider basis. Just wondering if you subscribe to this view and what opportunities this could present for TTM.
Yeah.
David Slater: Great question, Jeremy. I think that's why we've been so adamant with our Hainesville network. And it's really our premier network now in terms of its interconnectivity, both on the supply side and on the demand side. And I can say with confidence today that we're the most interconnected wellhead to water system in the Hainesville period. And we've been hearing what you've said very clearly from all of our customers. and having that robust downstream connectivity so that those customers can take advantage of market opportunities, whether it's industrial opportunities along the Gulf Coast or directly to the LNG markets along the Gulf.
Speaker Change: Great question Jeremy.
Speaker Change: I think I think that's why we've been so adamant with our Haynesville network and it's really our Premier network now in terms of its inter connectivity both on the supply side and on the demand side.
Speaker Change: I can say with confidence today that we're the most interconnected kind of wellhead to water system.
Speaker Change: In the Haynesville period.
Speaker Change: <unk>.
Speaker Change: And we've been hearing what you said very clearly from all of our customers.
Speaker Change: And having that robust downstream connectivity, so that those customers can take advantage of market opportunities, whether it's industrial opportunities along the Gulf coast or directly to the LNG markets along the Gulf Coast.
David Slater: That's been kind of foundational to our build out over the last three years of the of the entire system. So it's clearly something that Our anchor customers are watching closely and they want to have infrastructure that can take advantage of those market opportunities.
That's been kind of foundational to our build out over the last three years of the of the entire system. So it's clearly something that.
Our anchor customers are watching closely and they want to have infrastructure that can take advantage of those market opportunities and be a first mover.
David Slater: and Bea First.
Speaker Change: Okay.
Jeremy Tonet: Got it.
Jeremy Tonet: Thank you for that.
Speaker Change: Got it thank you for that I'll leave it there.
Michael Blum: I'll leave it there. Your next question comes from a line of Michael Blum from Wells Fargo. Your line is open.
Speaker Change: Your next question comes from the line of Michael Bluhm from Wells Fargo. Your line is open.
Michael Blum: Thanks.
Michael Bluhm: Thanks, Joe Good morning, everyone you've been.
Michael Blum: Good morning, everyone.
David Slater: You've been, you know, talking about these six potential data center projects. I wonder if you can give us a sense of timing and how these are opportunities are developing. I believe they're all behind the meter solutions. I'm just wondering, does that make the regulatory process faster or more onerous? Just trying to get a little more color on what's going on.
Michael Bluhm: Talking about the six potential data center projects.
Michael Bluhm: Wonder if you can give us a sense of timing on how these are opportunities are developing I believe are all behind the meter.
Michael Bluhm: Solutions I'm, just wondering does that make the regulatory process faster and more one more onerous just trying to get a little more color on what's going on.
David Slater: Sharon, good morning, Michael. Yeah, so those opportunities that we previously discussed continue to advance this quarter and they continue to move forward. We're in very detailed, active discussions with a number of those. So it's moving in the right direction. It's not advanced enough to say we have a commercial agreement yet, but it's definitely moving in the right direction. You know, the underpinning of these power opportunities. As I think we've talked about on previous calls. Speed is a critical consideration in the site development plan. So, to the extent that you can put infrastructure in the ground under more favorable regulatory treatment, I think that's a key consideration in site viability.
Speaker Change: Sure and good morning, Michael.
Yeah. So those opportunities that we previously discussed continued to advance this quarter and.
Speaker Change: They continue to move forward.
Speaker Change: And very detailed active discussions with a number of those.
Speaker Change: So it's moving in the right direction, it's not advanced enough to say, we have a commercial agreement yet but.
Speaker Change: It's definitely moving in the right direction.
Speaker Change: <unk>.
Speaker Change: The underpinning of these power opportunities.
Speaker Change: As I think we've talked about on previous calls speed is a critical consideration in these site development plans. So to the extent that you can put infrastructure in the ground under more favorable regulatory treatment I think that's a key consideration in <unk>.
Speaker Change: Viability and.
David Slater: You know, so that's that that detail has not been lost on us as a developer and looking for opportunity to do what I'll call intrastate development. when those are feasible and are aligned with the regulatory construct. So yes, I think that's part of the equation as these developers are trolling for different site locations and ultimately will be part of the decision-making. Commercialize.
Speaker Change: So that's that detail has not been lost on us as a developer and looking for opportunity to do what I'll call intra state development opportunities.
Speaker Change: When windows are feasible and are aligned with the regulatory construct.
Speaker Change: So, yes, I think thats part of.
Speaker Change: The equation as these developers are.
Speaker Change: Trolling for different site locations and ultimately will be part of the decision, making when they commercialize site.
David Slater: Got it. Thanks for that. And then I just wanted to ask about Northeast Volumes. They've been trending slightly lower the last few quarters. Can you speak to what you're seeing there? And then your comment that Q4, you're expecting a ramp in volumes. Can you just clarify, is that referring to Haynesville or also Appalachia or both?
Speaker Change: Got it thanks for that and then just.
Speaker Change: Wanted to ask about northeast volumes, they've been trending slightly lower the last few quarters.
Speaker Change: Can you speak to what Youre seeing there and then your comment that Q4, you're expecting a ramp in volumes.
Speaker Change: Can you just clarify is that referring to haynesville are also appalachia or both or.
David Slater: Yeah, you know, I think we've been saying saying this all year that we're kind of expecting sort of a saucer, a tea saucer profile for the year and our volumes. You know, we've definitely seen those volumes dipping in both basins. Q2 and Q3. Haynesville has been remarkably resilient for us, which has been very encouraging. And yes, I do expect to see some modest recovery in Q4 in both the north and the south. And I think our attention is more focused on that exit rate coming out of this year and going into next year. Again, with a general thesis that we're hearing, you know, from a lot of our customers, that there'll be a much more constructive market shaping up for 25 for our producer customers.
Speaker Change: Yeah.
Speaker Change: I think we've been saying, saying this all year that we're kind of expecting sort of a.
Speaker Change: Saucer tea saucer profile for the year and our volumes.
Speaker Change: We've definitely seen those volumes dipping in both basins in Q2, and Q3 Haynesville has been remarkably resilient for us which has been very encouraging and yes, I do expect to see some.
Speaker Change: Some modest recovery in Q4 in both.
Speaker Change: The north and the south.
Speaker Change: And I think our attention is more focused on that exit rate.
Speaker Change: Coming out of this year and going into next year.
Speaker Change: Again with a general investor thesis that we're hearing.
Speaker Change: From a lot of our customers that there'll be a much more constructive market.
Speaker Change: Shaping up for 25 for our producer customers.
Theresa Chen: Thank you. Our next question comes from the line of Theresa Chen from Barclays.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of Theresa Chen from Barclays. Your line is open.
Theresa Chen: Your line is open.
Theresa Chen: Hi, thank you for taking my questions. On the data center power demand fund, you know, putting the competitive profits aside, can you just remind us, you know, how should we bookend the size and scope of these projects? And how much can this move the needle relative to your base asset? Sure.
Theresa Chen: Hi, Thank you for taking my questions.
Theresa Chen: The data center power demand funds.
Speaker Change: Putting the competitive process aside can you just remind us how.
Speaker Change: How should we book and the size and scope at these projects.
Speaker Change: How much can this move the needle relative to your base.
David Slater: Great question, Theresa. I think as we've discussed in the past, we're looking at these primarily as lateral opportunities into these site locations. And, you know, the analogy that I've used in the past is our Birds of Pro project where we built a lateral off Texas Eastern to a power plant. So call it, you know, between 50 and a hundred billion dollar CapEx investment range, depending on the distance of the lateral. And again, for us, given our size, that's very right-sized for us in terms of an investment opportunity driving growth in our plan. So that's kind of how we're thinking about it, and, you know, again, it'll also put additional load on the, what I'll call the interstate backbone system.
Speaker Change: Sure.
Speaker Change: Great question Teresa.
Speaker Change: I think as we've discussed.
Speaker Change: In the past. These we're looking at these primarily as lateral opportunities into these site locations.
Speaker Change: And the analogy that I've used in the past is our <unk> project, where we built a lateral off Texas eastern to a power plant.
Speaker Change: So call it between 50 and $100 billion Capex investment range, depending on the distance of the lateral.
Speaker Change: And again for us given our size.
Speaker Change: Thats very right sized for us in terms of an investment opportunity driving growth.
Speaker Change: In our plan.
Speaker Change: So that's kind of how we're thinking about it and.
Speaker Change: It will also put additional load on the what I'll call the Interstate backbone system.
David Slater: And as we're thinking about it, we're really just thinking about that lateral opportunity right now, but it also puts resilience and durability into the pipeline assets as well as these become long-term markers. served off that infrastructure, so it's got a knock-on effect across the entire portfolio.
Speaker Change: And as we're thinking about it we're really just thinking about that lateral opportunity right now, but it also puts the resilience and durability into the into the pipeline assets as well as these become long term markets there'll be served off that infrastructure.
Speaker Change: So it's got a knock on effect across the entire portfolio.
Speaker Change: <unk>.
David Slater: So I'll stop there.
Speaker Change: So I'll stop there hopefully that was helpful Teresa.
David Slater: Hopefully that was helpful, Theresa. Thank you.
Theresa Chen: Thank you and then on the heels of the <unk>.
David Slater: And then on the heels of the Fitch upgrade, can you just provide additional color on your credit outlook in general and next steps with Moody's? Yeah, so where we are, like you mentioned, Fitch has upgraded us, Moody's is on positive outlook, and S&P is on neutral. So what we're seeing is, again, the positive momentum with both of them, and they're reviewing the merger that just, of course, happened with SWIN and Chesapeake. So we're still on the same path of probably before the end of the year or into the first quarter that they sort of make their determinations on what they're going to do related to us.
Speaker Change: <unk> upgrade.
Speaker Change: Can you just provide additional color on your outlook in general and next steps with Moody's.
Speaker Change: Yes.
Speaker Change: Yes, so where we are like you mentioned Fitch has upgraded us Moody's is on positive outlook and S&P is on neutral. So what we're seeing is again the positive momentum with both of them and they are reviewing the merger.
Speaker Change: Just of course happened was swing in Chesapeake. So we're still on the same path.
Speaker Change: Probably before the end of the year or into the first quarter.
Speaker Change: They sort of make their determinations on what theyre going to do related to us, but we're we're thinking that probably two of the three well.
Theresa Chen: So we're thinking that probably two of the three before the end of the year. Perfect, thank you.
Before the end of the year.
Speaker Change: Perfect. Thank you.
John Mackay: Your next question comes from a line of John Mackay from Goldman Sachs. Your line is open.
Speaker Change: Your next question comes from the line of John Mackey from Goldman Sachs. Your line is open.
John Mackay: Hey, good morning. Thanks for the time. I wanted to go back to the gas macro and the production ramp a little bit. I appreciate the comments on kind of towards the year-end recovery. I guess I'd just be curious if we could flesh that out a little bit and talk a little bit about when you think we might get back to, you know, the production peaks that we saw, you know, almost a year ago, and then maybe when we can start to break through that. Really kind of a view on when we'll really need production to ramp, you know, above those year-end 23 levels.
John Mackey: Hey, good morning, Thanks for the time.
John Mackey: I wanted to go back to the gas macro and the production ramp a little bit I. Appreciate the comments on kind of towards the year end recovery I guess I'd just be curious if you could flush that out a little bit and talk a little bit about when you think we might get back to.
John Mackey: Production peaks that we saw.
John Mackey: Almost a year ago, and then maybe when we can start to break through that really kind of a view on when we'll really need production to ramp above those year end 'twenty three levels.
David Slater: Yeah, that's the million dollar question, John, that you're asking, and I wish I had a more insightful answer to that question. I think we're somewhat... patiently waiting as well with our key customers as they get into their year-end planning cycle for 2025. You know, I think a lot of this is a function of how the weather plays out across North America this winter. Again, the forecast we're looking at, you know, kind of a 10-year average is what we're seeing. If that plays out, I think that in combination with demand showing up in 2025, incremental demand showing up in 2025 will be a constructive backdrop for producers generally across North America, specifically as it relates to the Hainesville.
Speaker Change: Yeah, that's the million dollar question, John that you're asking.
Speaker Change: I wish I had a more insightful answer to that question I think we're somewhat.
Speaker Change: Patiently waiting as well with our key customers as they get into their year end planning cycle for 2025.
Speaker Change: I think a lot of this is a function of how the weather plays out across North America. This winter.
Speaker Change: Again, the forecast we're looking at.
Speaker Change: Kind of a 10 year average.
Speaker Change: What we're seeing.
Speaker Change: If that plays out I think that in combination with.
Speaker Change: Demand showing up in 2025 incremental demand showing up in 25 will be a constructive backdrop for producers generally across North America.
Speaker Change: Specifically as it relates to the Haynesville, we're down about two Bcf a day from the peak.
David Slater: You know, we're down about 2 bcf a day from the peak. My personal view is that some of that just has to come back for a number of reasons. You've got a couple L&G facilities coming online next year that are truly incremental demand. really does need to be served out of the Hainesville Bay. And you've got two other companies building. Significant Pipeline Infrastructure.
Speaker Change: My personal view is that some of that just has to come back for a number of reasons one is.
Speaker Change: <unk> got a couple of LNG facilities coming online next year that are truly incremental demand that really does need to be served out of the Haynesville basin, you've got two other companies building.
Speaker Change: Significant pipeline infrastructure Thats.
Speaker Change: Expected to be in service towards the end of next year, perhaps early 'twenty six and again those anchor shippers are going to want to be drilling into that capacity when it arrives so.
Speaker Change: All of that leads me to believe that 25 is it going to be a more constructive year for producers in the Haynesville and we should be seeing volume ramps.
Speaker Change: The timing and trajectory I think is TBD.
David Slater: We're as curious as you are as we get to the end of the year and get better information.
Speaker Change: I think we're just curious as you are as we get to the end of the year and get better information.
John Mackay: I definitely appreciate the thoughts.
Speaker Change: Definitely appreciate the thoughts maybe just a quick follow up.
John Mackay: Maybe just a quick follow-up. Do you just remind us where Nexus sits in terms of potential expansion capacity, what, you know, opportunities there could look like from a cost or timing perspective?
Speaker Change: Could you just remind us where nexus sits in terms of potential expansion capacity right now.
Speaker Change: Opportunities there to look like from a cost or timing perspective.
David Slater: Probably goes back to some of the conversations we've had earlier in this call, but kind of specific update on Nexus would be great.
Speaker Change: Probably goes back to some of the conversations we've had earlier on this call, but kind of a specific update on nexus would be great.
David Slater: Yeah, I'll summarize Nexus kind of into two categories. About two years ago we did an open season there looking to expand. We had a very favorable response. What we elected to do is to what I'll call optimize the system hydraulically and you've probably seen a couple different regulatory filings at the FERC where we've upsized the physical capacity of this system. Without really doing any any capital investment, and that was really just Having four or five years of experience under our belt since we built it, really reassessing the engineering design based on how it's actually being used.
Speaker Change: Yeah.
Speaker Change: I'll summarize nexis.
Speaker Change: Kind of into two categories is about two years ago, we didn't open season, they're looking to expand.
Speaker Change: Had very favorable response, what we elected to do is to.
Speaker Change: What I'll call optimize a system hydraulically and you've probably seen a couple of different regulatory filings at FERC, where we've upsized.
Speaker Change: The the physical capacity of the system.
Speaker Change: Without really doing any any capital investment and that was really just.
Having four or five years of experience under our belt since we built it really reassessing the engineering design based on how it's actually being used we're able to increase capacity.
David Slater: We're able to increase capacity. And I'm going to just round the numbers to make it simple, about a hundred million a day.
Speaker Change: Just round the numbers to make it simple about 100 million a day. So that was kind of step number one and that's kind of behind US now step number two.
David Slater: So that was kind of step number one, and that's kind of behind us now.
David Slater: Step number two will be to really look at a capital-driven expansion. and that would be next up for Nexus and it's likely a compression expansion and that's likely in the one to 200 million a day. So more to come on that, John, as we advance that further, but that's the update.
Speaker Change: We will be to really look at a capital driven expansion and.
Speaker Change: That that would be next up for Nexus and its likelihood compression expansion and that's likely in the one to 200 million a day range. So more to come on that is.
Speaker Change: John as we advance that further but that's the update on Nexus.
John Mackay: All right. Thanks very much.
Speaker Change: Alright, thanks, very much appreciate it youre welcome.
John Mackay: Appreciate it.
Operator: You're welcome.
Keith Stanley: Then if you'd like to ask a question it's star one in your telephone keypad. Your next question comes from the line of Keith Stanley from Wolf Research.
Speaker Change: Then if you'd like to ask a question Thats Star one on your telephone keypad. Your next question comes from the line of Keith Stanley from Wolfe Research. Your line is open.
Keith Stanley: Your line is open. Hi, good morning.
Keith Stanley: Hi, good morning.
Keith Stanley: So last time with Q4 earnings, you gave new details on the project backlog and the medium-term growth target of five to seven percent.
So last time with Q4 earnings you gave new details on the project backlog in the medium term growth target of 5% to 7% I want to confirm is that something you would plan to update again with Q4 earnings and any any color you'd give on puts and takes to the backlog and five year outlook since.
David Slater: I want to confirm, is that something you plan to update again with Q4 earnings and any color you'd give on puts and takes to the backlog and five-year outlook since you provided it earlier this year? Sure. And Keith, yeah, that's kind of our play, is that on the year-end call, we'll kind of do a refresh. We won't be changing. I'll just tell you right now, we won't be changing the long-term outlook. We're highly confident in that long-term outlook, and nothing, as we sit here today, is changing. But yes, we'll provide more granularity around the backlog and more of the details around, you know, a bunch of things that were in the backlog last year, we've just been meticulously, you know, commercializing.
Keith Stanley: <unk> you provided earlier this year.
Keith Stanley: Sure.
Speaker Change: And Keith Yeah that.
Speaker Change: Thats kind of our play is that on the year end call, we'll kind of do a refresh we won't be changing.
Speaker Change: Tell you right now we won't be changing our long term outlook that we're highly confident that long term outlook and nothing as we sit here today is changing that but yes, we will provide more granularity around the backlog.
Speaker Change: And more of the details around a bunch of things that were in the backlog last year, we've just been meticulously.
Speaker Change: Commercializing.
David Slater: So yes, you should expect a refreshed backlog, likely some new things get dropped into that backlog. And again, we'll just continue to run the disciplined execution play that we've been doing since we spun the company. It's just working our way through that backlog, commercializing those opportunities. driving that organic growth rate. and, you know, moving the company forward. So that's what you should expect on the year.
Speaker Change: So yes, you should expect a refresh backlog likely some new things get dropped into that backlog.
Speaker Change: And again, we'll just continue to run the disciplined execution play that we've been doing since we spun the company. It's just working our way through that backlog commercializing those opportunities.
Speaker Change: <unk> that organic growth rate.
Speaker Change: And.
Speaker Change: Moving the company forward. So that's what you should expect on the year end call.
Speaker Change: Yeah.
Keith Stanley: Great, thanks for that clarification.
Speaker Change: Great. Thanks for that clarification.
Speaker Change: Clarification.
Keith Stanley: The second question, just going back to the data centers, and I know this is pretty fresh still, but how has the Supreme Court We made the decision to not stay the EPA 111D that sets a utilization cap on new gas plants. impacted your discussions, if at all, with data center customers? Is that something customers want clarity on for that rule? Or are they comfortable, you know, knowing they might need a carbon capture solution at some point? Yeah, I think, I think most. Most of the counterparties are looking at that and saying, that's gotta be dealt with in the lower court.
Speaker Change: The second question, just going back to the data centers and I know this is pretty fresh still but how is the Supreme Court's decision to not stay the EPA 111 D that that sets a utilization cab on new gas plants.
Speaker Change: Impacted your discussions if at all with data center customers.
That is something customers want clarity on for that rule or are they comfortable.
Speaker Change: Knowing they might need a carbon capture solution at some point.
Yeah, I think I think most most of the Counterparties.
Speaker Change: We are looking at that and saying that's gotta be dealt within the lower court.
David Slater: And I think that's kind of what the Supreme Court said, is we're not gonna touch it yet, cause it's still being. Ajudicated in the lower court and depending on how that plays out, they may be back at it again or not. Right now, we're not seeing that as driving behavior at the moment. I think everybody's watching it and paying attention to it. But we're not seeing a change, the nature or the velocity of the conversations that we're having regarding these opportunities.
Speaker Change: And I think that's kind of what the Supreme Court said is we're not going to touch it yet because it's still being adjudicated in the lower court and depending on how that plays out they may be back at it again or not.
Speaker Change: Right now, we're not seeing that is driving behavior at the moment.
Speaker Change: I think everybody is watching it and paying attention to it.
Speaker Change: But we're not seeing it change then.
Speaker Change: The nature or the velocity of the conversations that we're having regarding these opportunities.
Spiro Dounis: Thank you. Your next question comes from the line of Spiro Dounis from Citi, your line is open.
Thank you.
Speaker Change: Our next question comes from the line of Spiro <unk> from Citi. Your line is open.
Spiro Dounis: Thanks, Operator, morning team. First question, maybe just start with the CapEx outlook.
Speaker Change: Thanks, operator, good morning team first question, maybe just start with the Capex outlook. It looks like 2025 is kind of filling up nicely year, but Jeff you talked about staying free cash flow positive in 'twenty four 'twenty five so just curious how youre thinking about the headroom from here to add more projects next year and maybe if you could provide a sense of what types of.
Spiro Dounis: Looks like 2025 is kind of filling up nicely here. But Jeff, you talked about staying free cash flow positive in 2024 and 2025. So just curious how you're thinking about the headroom from here to add more projects next year.
David Slater: And maybe if you could provide a sense of what types of projects you're looking to get over the line in the next quarter or two.
Speaker Change: Projects Youre looking to get over the line in the next quarter or two.
David Slater: Hey, Spiro. Good morning.
Speaker Change: Hey, Spiro.
David Slater: And let me take a crack at that. And Jeff, you can jump in. fill in the blanks. So number one, we've been really clear with operating inside our free cash flow over the five-year plan. I mean, that's just sort of one of those financial boundaries. put in place. In terms of, you know, 2025. Getting a good chunk of that CapEx deployment executed and contracted really puts high confidence in our growth rate over the next couple of years. So that's a real positive sign. The commercial team's been doing just a wonderful job over the last six months getting after that backlog and commercializing those outcomes.
Speaker Change: Good morning, and let me take a crack at that and Jeff you can jump in.
Speaker Change: If you need to fill in the blanks.
Speaker Change: So number one we've been really clear with operating inside our free cash flow over the five year plan I mean, thats just sort of one of those financial boundaries that we've put in place.
Speaker Change: <unk>.
Speaker Change: In terms of.
Speaker Change: 2025.
Speaker Change: Getting a good chunk of that Capex deployment.
Speaker Change: Executed and contracted.
Speaker Change: Really puds.
Speaker Change: My confidence in our growth rate.
Speaker Change: In the over the next couple of years, so that's a real positive sign.
Speaker Change: The commercial team has been doing just a wonderful job.
Speaker Change: Over the last six months getting after that backlog and commercializing those opportunities.
David Slater: Again, I'm going to kind of. move back to the answer that I gave Keith, which is we'll refresh that backlog for you on the year-end call, so we're not going to do that on this call. But suffice it to say that we continue to see significant. So you'll see that refreshed on the year-end call. And again, we are long organic opportunities, not short organic opportunities. And I think that's a great place to be in in this current market.
Again I'm going to.
Speaker Change: Kind of.
Speaker Change: Move back to the answer that I gave Keith which is we'll refresh that backlog for you on the yearend call. So we're not going to do that on this call.
Speaker Change: But suffice it to say that we continue to see significant.
Organic opportunities presenting themselves across our footprint.
Speaker Change: And.
Speaker Change: So youll see that refreshed on the yearend call and again.
Speaker Change: We are we are a long organic opportunities not short organic opportunities and I think thats, a great place to be and in this current market environment.
Jeff Jewell: Jeff, I don't know if you wanted to add anything to that. No. No, David, no. I think that's spot on.
Speaker Change: Jeff I don't know if you want to add anything to that no no David I think thats spot on spare alright, our financial policies are not not changing.
David Slater: Spiro, our financial policies are not changing. I think that's the bottom line.
Speaker Change: I think thats the bottom line.
Spiro Dounis: Got it, that's great. Second question, kind of on this topic still. David, you just mentioned a sort of long, organic sort of growth backlog there.
Got it that's great.
Speaker Change: Question kind of on this topic still David just mentioned the sort of long.
Speaker Change: Organic sort of growth backlog, there just curious how you're thinking about the relative attractiveness here on the M&A side, you have that strong backlog of course organically, but hard to ignore the equity currency here. So just curious are there any asset candidates out there that maybe you didn't make sense a year ago that suddenly look a little more attractive now.
David Slater: I'm just curious how you're thinking about the relative attractiveness here on the M&A side. You have that strong backlog, of course, organically, but hard to ignore the equity currency here. So just curious, you know, are there any asset candidates out there that maybe didn't make sense a year ago that suddenly look a little more attractive now?
David Slater: Yeah, good question.
Speaker Change: Yes, good question.
David Slater: You know, I think, you know, maybe I'll just kind of refresh what we've said publicly in the past about M&A is, you know, number one, we're focused on very disciplined strategy And our investment thesis has been really clear and consistent since we spawned the company, which is we're a pure play. Gas Only Midstream Company. With no commodity exposure in the portfolio. Highly durable cash flows, highly contracted portfolio with significant demand-based contracts that underpin the entire economy. So that strategy. Is it the guiding light or the North Star on any opportunities that would come our way and present themselves?
I think maybe I'll just kind of refresh what we've said publicly in the past about M&A is.
Speaker Change: Number one we.
Speaker Change: We're focused on very disciplined strategy execution and our investment thesis has been really clear.
Speaker Change: Consistent since we spun the company, which is we're a pure play <unk>.
Speaker Change: Gas only midstream company with no commodity exposure in the portfolio.
Speaker Change: Hi, highly durable cash flows.
Speaker Change: Highly contracted portfolio with significant demand based contracts that underpin the entire company.
So that strategy.
Speaker Change: Is it the guiding is a guiding light or that northstar on any opportunities that would come our way and present themselves.
David Slater: So, that's how we think about it in terms of M&A, and I'd say on the flip side, You know, our job and our goal for you and all of our investors is to run a high-quality midstream business. And that gets obviously reflected in stock price, and that also gets reflected in any interest that anybody would have. So, I mean, those are our guiding principles, and... I don't see any of that changing. We're going to be very consistent in our execution and We won't surprise anybody with any moves that would be inconsistent with that strategy.
Speaker Change: So that's how we think about it in terms of in terms of M&A and I would say on the flip side.
Speaker Change: <unk>.
Speaker Change: Our job and our goal for you and all of our investors is to run a a high quality.
Speaker Change: Midstream company.
Speaker Change: And that's obviously reflected in stock price and that also gets reflected in any interest that anybody would have in the company. So I mean, those are our guiding principles and.
Speaker Change: I don't see any of that changing we're going to be very consistent in our execution.
Speaker Change: We won't surprise anybody.
Speaker Change: With any any moves that would be inconsistent with that strategy.
Spiro Dounis: That's a great color.
Speaker Change: That's great color I'll leave it there thank you gentlemen.
Spiro Dounis: I'll leave it there. Thank you, gentlemen.
Robert Mosca: Thanks, Spiro. Our next question comes from a line of Robert Mosca from Mizuho Securities. Your line is open.
Speaker Change: Thanks Darryl.
Speaker Change: Our next question comes from the line of Robert Moskow from Mizuho Securities. Your line is open.
Robert Mosca: Hi, good morning, everyone. So now that Chesapeake and Swin is closed, just wondering if there's any updated outlook on commercial puts and takes with Xpand and whether you're expecting any shifts in production that could potentially benefit your acreage.
Robert Moskow: Hi, good morning, everyone.
Robert Moskow: So now the Chesapeake and Swan is closed just wondering if there's any updated outlook on commercial puts and takes with expand in.
Robert Moskow: Whether you're expecting any shifts in production that could potentially benefit your acreage.
David Slater: And on LEAP Phase 4, were those customers you mentioned, was that related to the Blue Union expansion announced last quarter?
Robert Moskow: And on lead phase four but those customers you mentioned was that related to the Blue Union expansion announced last quarter.
David Slater: Hey, good morning, Rob. Yeah, you got a couple questions in there. I'll try to, I'll try to unpack that.
Speaker Change: Hey, good morning, Rob.
Speaker Change: Yeah, you've got a couple of questions in there I'll try to I'll try to unpack that.
David Slater: So first off, let's start with Xpand. Firstly, I'd like to publicly congratulate them for closing the merger. And we're really excited about working with them going forward. They're going through what I'll call post-close integration activity right now. you know, just to give a little color and I'm sure they'll provide an update tomorrow on their call. But, you know, we plan to be sitting down with them here in the near term to go through all those questions that you asked, Rob. So again, we're patiently waiting for them to get through what I'll call the post-close activity so we can sit down and have those conversations.
Speaker Change: So first off let's start with expand.
Speaker Change: Firstly I'd like to publicly congratulate them for closing the merger.
Speaker Change: And.
Speaker Change: We're really excited about working with them going forward. They are going through what I'll call post close integration activity right now.
Speaker Change: Just to give a little color and I'm sure. They will provide an update tomorrow on their call, but we plan to be sitting down with them here in the near term too.
Speaker Change: To go through all of those questions that you asked Rob. So again, we're patiently waiting for them to get through what I'll call. The post close activities. So we can sit down and have those conversations that being said I'm highly confident that the acreage that we gather for them is.
David Slater: That being said, I'm highly confident that the acreage that we gather is premium acreage in their portfolio in Haynesville and what I mean by that it's it's literally the most economic rock in the So that's the gravity that I think guides their capital allocation. and ultimately it's their decision. But that's a gravity that I look at in terms of our investments around that acreage is that it's really good. And they have just a wonderful acreage position in the base. And we're a big part of that in terms of the infrastructure to move that to Mark.
Speaker Change: Premium acreage in their portfolio in the Haynesville and what I mean by that it's it's literally the most economic rock in the basin. So that's the gravity that.
Speaker Change: I think guides their capital allocation decisions and ultimately it's their decisions, but thats a gravity that I look at in terms of our investments around that acreage is that it's really good acreage.
Speaker Change: They have just a wonderful acreage position in the basin and.
Speaker Change: We're a big part of that.
Speaker Change: In terms of the infrastructure to move that to market. So look forward to working with them just like we have for over a decade.
David Slater: look forward to working with them, just like we have for over a decade. We have a very close relationship with them and are. People that we've worked with will also be the key people we will continue to work with going forward. So feel real positive about that.
Speaker Change: We have a very close relationship with them and our key people that we've worked with will also be the key people. We will continue to work with going forward in the new entity.
Speaker Change: So feel real positive about that I'll say no more we'll let them talk about it publicly tomorrow.
David Slater: I'll say no more. We'll let them talk about it publicly tomorrow and I'm sure we'll be able to give you a better update on the other side of their public disclosures.
Speaker Change: I'm sure, we'll be able to give you a better update on the other side of their public disclosures.
Speaker Change: So that's that one im sorry, Robyn I'm trying to remember you had another question related to the leap I believe and our customers on Lee Yeah, Yes, sorry, David just wondering if that's in any way related to the Blue Union expansion that you announced last quarter.
David Slater: So that's that one.
David Slater: I'm sorry, Rob, I'm trying to remember you had another question related to LEAP, I believe, and our customers on LEAP. Yeah, yeah. Sorry, David.
David Slater: Just wondering if that's in any way related to the Blue Union expansion that you announced last quarter. That's probably a good, you said it, I didn't say it, so that's probably a safe assumption. We have been cognizant with our customers, and as you would expect, all the customers on the network are competing for the same markets at the end of the network. We've been very respectful, and when those customers don't want to be publicly disclosed, we don't. But yes, the what I'll call wellhead to water network and the interconnectivity of the network and the ability of the network to grow in what I call timely, bite-sized, uh...
Speaker Change: That's probably a good you said it I didnt say it so that's probably a safer.
Speaker Change: Yes.
Speaker Change: Cognizant with our customers and it's as you would expect all of the customers on the network are competing for the same markets at the end of the network. So we've been very respectful and when those customers don't want to be publicly disclose we don't.
Speaker Change: But yes, the what I'll call wellhead to water network and the Interconnectivity of the network and the ability of the network too.
Speaker Change: Grow in what I call timely bite sized.
David Slater: increments that can get really customized to our customer's needs. That's been a very attractive feature of our network. And I think we're harvesting that. as we continue to enact.
Speaker Change: Increments that can get really customized to our customers' needs that's been a very attractive feature of our network.
Speaker Change: And.
Speaker Change: I think we're harvesting that.
As we continue to announce these expansions even coming through a very what I would call challenged.
David Slater: expansions, even coming through a very, what I would call, challenged year. We continue to... So, very encouraged by that. You know, we'll task our commercial team to start working on leap phase five. and get after the next tranche of capacity. Got it.
Speaker Change: Here in the Haynesville, we continue to see growth.
Speaker Change: So very encouraged by that.
Speaker Change: We will ask our commercial team to start working on leap phase five.
Speaker Change: And get after the next tranche of capacity that we can compete for.
Speaker Change: Got it.
Robert Mosca: That's very helpful.
Speaker Change: Helpful.
David Slater: And maybe last one for me is, it seems like the CCS project, maybe the expectation for FID was pushed out a couple quarters. Just anything to call out there? Um, no, I think the only thing I'll call out is we continue to be really meticulous in our execution and control the controllables that we are accountable for. We're obviously working collaboratively with the Louisiana DENR and, you know, encouraging them to move along, if I can use those words. But yeah, we're in a what I'll call regulatory holding pattern, waiting on them to complete their application requirements.
Speaker Change: And maybe last one for me is it seems like the Ccs project, maybe the expectation for FY <unk> was pushed out a couple of quarters, just anything to call out there.
No I think the only thing I'll call out is we continue to be really meticulous in our execution and control the controllable that we.
Speaker Change: Our accountable for.
Speaker Change: We're obviously working.
Speaker Change: Collaboratively with the Louisiana DNR.
Speaker Change: And.
Speaker Change: Encouraging them to move along if I can use those words.
Speaker Change: But yes, we're in a we're in a what I'll call regulatory holding pattern waiting on them to complete their application requirements.
David Slater: My sense is that they're trying to be very judicious and create highly durable regulatory orders. So that these projects can move forward with what I'll call clear sailing once you kind of move through the regular. So we're obviously in close contact with them. It hasn't changed our end service date, but. You know, we are in, you know, patiently waiting for Louisiana. No, understood.
Speaker Change: My sense is that they are trying to be very judicious and creates.
Speaker Change: Highly durable.
Speaker Change: Regulatory orders.
Speaker Change: So that these projects can move forward.
Speaker Change: With what I'll call clear sailing once you kind of move through the regulatory process.
Speaker Change: So we're obviously in close contact with them it Hasnt changed our in service state but.
Speaker Change: We are in patiently waiting for Louisiana to move things along.
Speaker Change: No understood. Thanks.
Robert Mosca: Thanks for the time, everyone. Thank you, Rob.
Speaker Change: Thanks for the time everyone.
Speaker Change: Thank you Rob.
Yeah.
Operator: That concludes our question and answer session.
Speaker Change: That concludes our question and answer session I will now turn the call back over to David Slater for closing remarks.
David Slater: I will now turn the call back over to David Slater for closing remarks. Well, thank you again everybody for your participation in the call and for joining us. We certainly appreciate your interest and support of DT Midstream and have a great day.
David Slater: Well. Thank you again, everybody for your participation in the call and for joining US. We certainly appreciate your interest and support of <unk> midstream and have a great day.
Operator: This concludes today's conference call. Thank you for your participation. You may now disconnect.
Speaker Change: This concludes today's conference call. Thank you for your participation you may now disconnect.
Operator: Please wait. The conference will begin shortly.
Speaker Change: Please wait the conference will begin shortly.
Yes.
[music].
Speaker Change: Okay.
Speaker Change: [music].