Q4 2024 DT Midstream Inc Earnings Call
Speaker Change: Welcome to the DT Midstream fourth quarter and year end 2024 earnings call. I will now turn it over to our speaker today, Todd Lohrmann, Director of Investor Relations. Please go ahead. Good morning and welcome everyone.
Speaker Change: Before we get started, I would like to remind you to read the Safe Harbor Statement on page 2 of the presentation.
including the reference to forward-looking statements.
Speaker Change: Our presentation also includes references to non-GAAP financial measures. Please refer to the Reconciliation to GAAP contained in the appendix.
Speaker Change: Joining me this morning are David Slater, President and CEO, and Jeff Jewell, Executive Vice President and CFO.
Speaker Change: With that, I'll go ahead and turn the call over to David. Thanks, Todd, and good morning, everyone, and thank you for joining.
Speaker Change: During today's call, I'll discuss our 2024 accomplishments, provide an update on our organic growth projects, our recent Midwest pipeline acquisition, and our outlook for 2025 and beyond.
Speaker Change: I'll then close with some observations on the overall gas market before turning it over to Jeff to review our financial performance and guidance.
So with that, 2024 was another strong year for DTM.
Speaker Change: I'd like to commend our employees for their continued dedication and commitment to excellence, including their exceptional safety performance, finishing the year with zero OSHA recordable safety incidences. Very well done, everyone.
Speaker Change: I'd also like to welcome to DTM all the new employees that joined the team from One Oak following our Midwest pipeline acquisition.
Speaker Change: These professionals have strengthened our organization with their deep expertise in operating FERC assets.
David Slater, Todd Lohrmann
Speaker Change: Turning now to our financial results, we delivered adjusted EBITDA of $969 million, which exceeded our increased guidance midpoint.
Speaker Change: and was another record high year, extending our track record of 10% compounded annual growth since we spun the company in 2021.
Speaker Change: At the end of the year, we closed on the acquisition for One Oak, expanding our FERC interstate natural gas pipeline network.
Speaker Change: The transition of these pipes to DTM has been progressing well, and the team is busy integrating these assets into our network.
Speaker Change: On the construction front, we had solid execution of projects across our footprint, on schedule and on budget.
Speaker Change: Our Haynesville construction team placed several key growth projects into service, enhancing both the supply and market connectivity of the network.
We also placed our Ohio Utica system into service.
Speaker Change: with our anchor customer noting the resource there continues to meet or exceed expectations.
providing confidence in the premium quality of this resource plate.
Speaker Change: and we look forward to further expansions of the system as well as potential downstream opportunities as they increase their pace of development.
David Slater, Todd Lohrmann
Speaker Change: On the commercial front, our team advanced many opportunities from our backlog into full development.
Speaker Change: We reached FID on a LEAP Phase 4 expansion in Haynesville and added new producers to the network.
Speaker Change: expanded our stonewall and AGS systems with a new mountain valley pipeline interconnect, recontracted nearly 20 BCF of capacity at our gas storage complex with overall longer terms and attractive rates, and added our clean fuels gathering project.
Speaker Change: We continued our disciplined financial management, prioritizing a strong balance sheet with our goal of achieving an investment grade rating.
Speaker Change: and we were upgraded to investment grade by Finch in October.
Speaker Change: and I expect to be upgraded by at least one of the other two rating agencies in 2025, having positive outlooks from both S&P and Moody's.
Speaker Change: So I am very pleased with our overall performance during 2024, despite some significant macro sector headwinds, including depressed natural gas prices causing producer slowdowns, a pause in approval of new LNG export permits, and an uncertain political environment for much of the year.
David Slater, Todd Lohrmann
Speaker Change: Our team has proven time, and again, their ability to execute on commitments regardless of the broader environment.
Speaker Change: So I'm excited about the future and our team's ability to deliver on expectations.
Speaker Change: Turning to 2025 and beyond, we are very well positioned to serve growing demand across our footprint and continue our track record of premium high-quality growth.
Speaker Change: 2025 is presenting a much more constructive environment in terms of pricing and overall natural gas market sentiment.
making it an opportune time to capitalize on commercial projects.
Speaker Change: This morning I am pleased to announce two new projects that will serve utility-scale power generation.
Speaker Change: The first project is off of our newly acquired assets, where we will be constructing a lateral for Midwestern gas transmission to AES Indiana's Petersburg power plant.
which is currently being converted from coal to natural gas.
Speaker Change: The lateral capacity will be approximately 300 million cubic feet per day and construction is currently underway with an expected end service date in Q1 of 2026.
Speaker Change: The second project is off of our stonewall and AGS system.
Speaker Change: We have signed a precedent agreement with an experienced power generation developer to serve one of their new power developments.
Speaker Change: A 2060 megawatt combined cycle gas turbine power plant in West Virginia, under a 20-year firm service contract on our Stonewall and Appalachia gathering systems.
David Slater, Todd Lohrmann
Speaker Change: The project is subject to our customer reaching FID on the power plant, which we expect to occur in 2026.
Speaker Change: Our expected pipeline in service is late 2028. These are the first few projects to be commercialized out of our robust backlog of opportunities to serve power demand growth.
Speaker Change: Subsequent to the acquisition from One Oak, we have updated our overall project backlog, increasing it by approximately $1 billion to $2.3 billion over the 2025 to 2029 time period.
The $2.3 billion represents our high probability organic growth opportunities.
Speaker Change: This project backlog can be fully funded within our cash flow and supports our five to seven percent long-term organic growth rate with pipeline projects comprising approximately 70% of the total opportunity set.
Speaker Change: Finally, I'd like to take a moment to address the natural gas market fundamentals.
We are seeing strong structural demand signals across our assets.
Speaker Change: Cold weather has rebalanced the North American market, strengthening natural gas prices.
Speaker Change: This January and February, our storage complex experienced all-time-high record withdrawals, and many of our pipelines experienced peak-day conditions and are flowing at record-high utilizations.
Speaker Change: New LNG terminals are ramping up capacity and power demand growth expectations continue to remain strong.
Speaker Change: In addition, we have seen a pendulum shift in public and political sentiment around the importance of natural gas being a foundational fuel to drive the American economy and to support our allies around the world.
Speaker Change: This could be a fundamental turning point, ushering in a new era of investment in natural gas infrastructure.
Speaker Change: as a nation more clearly appreciates its role in delivering an affordable, reliable, domestic, clean fuel to serve growing power generation and industrial onshoring demand.
David Slater, Todd Lohrmann
David Slater: I believe these fundamentals will provide tailwinds across our asset portfolio. Our Haynesville system, with its leading connectivity to both supply and demand markets, is exceptionally well positioned to capitalize on these strengthening trends.
David Slater: We expect that LNG demand that can be served by our Haynesville system will grow by 12 BCF per day within the next decade and basin supply will increase by a similar level.
David Slater: strongly positioning our integrated system to serve the supply and demand for the foreseeable future.
David Slater: Industrial and commercial onshoring is another quickly developing theme that we believe our assets are well positioned to serve.
David Slater: As much of this demand is forecasted to emerge across our asset footprint in the industrial heartland of the country. We need to increase utilization and expansion opportunities for our pipelines.
David Slater, Todd Lohrmann
David Slater: Turning to power demand, our assets are strategically located to capture future growth in utility-scale, grid-connected electric generation demand.
David Slater: with our new Midwest Interstate Pipeline assets serving utility customers with ample coal-to-gas switching opportunities, and our storage complex providing these customers with balancing services.
David Slater: In addition to grid-connected power demand, we continue to advance our behind-the-meter data center projects. We are engaged with many developers whose proposed projects sit on top of or adjacent to our assets.
David Slater: While these projects are still being developed, we expect that DTM's opportunity will come in the form of pipeline laterals to serve these facilities, with the potential for mainline expansions to follow.
David Slater: So with that, I'll pass it over to Jeff to walk you through our financial results and outlook.
Jeff Jewell: Thanks, David, and good morning, everyone. As David mentioned, we delivered overall 2024 adjusted EBITDA of $969 million, an increase of 5% over the prior year.
Speaker Change: supported by our pipeline segment's 7% growth year-over-year, which was driven by new LEAP expansions and higher storage revenue.
Speaker Change: For the fourth quarter, we delivered overall adjusted EBITDA of $235 million. Our pipeline segment was in line with the prior quarter.
Speaker Change: Driven by increased seasonal demand at our storage facility and on our JV pipelines. Upset by transaction costs related to our Midwest pipeline acquisition.
Speaker Change: driven by producer deferrals of production to Q1 of 2025 and a key producer-customer unplanned outage resulting in lower Haynesville volumes.
Speaker Change: Operationally, for the quarter, total gathering volumes across the Haynesville averaged just above 1.4 BCF per day, down from the third quarter, driven by the deferrals and the key customer outage I previously mentioned.
Volumes in the Northeast were flat quarter over quarter.
Speaker Change: In 2025, volumes appear to be responding positively to the improved natural gas price environment, with Haynesville volumes averaging 1.6 BCF per day thus far in the year.
Speaker Change: Now, moving on to our financial outlook for 2025 and beyond.
Speaker Change: As we have done in the past, we are providing the current year guidance as well as an early outlook for next year.
Speaker Change: For 2025, our adjusted EBITDA guidance range is $1,095,000,000 to $1,155,000,000, representing 18% growth from our 2024 original guidance.
Speaker Change: Our 2026 Early Outlook Range for Adjusted EBITDA is $1,155,000,000 to $1,225,000,000 with the midpoint representing a 6% increase over the 2025 guidance midpoint.
Speaker Change: Our adjusted EBITDA guidance for 2025 and 2026 is supported by the incremental contribution from our growth investments.
Speaker Change: including the integration of our recently completed Midwest pipeline acquisition as well as expected activity from our major customers.
David Slater, Todd Lohrmann
Speaker Change: Longer term, we continue to target adjusted EBITDA growth of 5 to 7 percent.
Speaker Change: which is supported by our $2.3 billion organic backlog, advantaged asset positions, strong balance sheet, and our high level of take or pay contracts.
Our 2025 Growth Capital Guidance is $400 to $460 million.
Speaker Change: For 2026, we expect the level of growth investments to be in line with 2025.
Speaker Change: We currently have approximately $60 million of committed spend in 2026 and are working to advance a number of organic growth opportunities to FID.
Speaker Change: Our board has declared a quarterly dividend increase to $0.82 per share, which represents a 12% increase.
Speaker Change: This increase is supported by our higher adjusted EBITDA following the Midwest Pipeline Acquisition and its Larger Opportunity Set and Earnings Base.
Speaker Change: Our approach to the dividend has not changed as we plan to continue to grow it annually in line with adjusted EBITDA growth.
Speaker Change: and we are committed to maintaining a coverage ratio above our two times floor.
Speaker Change: From a balance sheet perspective, we are pleased with our positioning on leverage and progress for obtaining an investment grade credit rating.
David Slater: As David mentioned, we received positive reaction from the rating agencies following our recently completed Midwest Pipeline acquisition.
and are on Positive Outlook with both Moody's and S&P.
in addition to Fitch's investment grade rating.
David Slater: Our debt maturity profile has a weighted average maturity of approximately seven years.
David Slater: and we are forecasting 2025 year-end on balance sheet leverage of 3.1 times and proportional leverage of 3.9 times.
David Slater: We continue to execute our plans we have shared with the rating agencies and expect to be upgraded to an investment grade credit rating in 2025.
Our cash flows continue to remain strong.
David Slater: funding our growth investments and we continue to expect to be minimal cash taxpayer until 2028.
David Slater: And with that, I'll now pass it back over to David for closing remarks.
David Slater: Thanks, Jeff. So, in summary, we are highly confident in delivering on our full year guidance for 2025 and early outlook for 2026.
and killing a track record of strong performance.
David Slater: Looking forward, the market fundamentals supporting our pipeline business are very positive.
David Slater: It certainly feels like we are entering the golden age for energy infrastructure investment.
David Slater: Our pure plain natural gas pipeline asset portfolio is very well positioned to take advantage of this opportunity.
David Slater: for their integrated assets providing critical capacity to premium and growing demand markets.
David Slater: And with that, we can now open up the lines for questions.
David Slater, Todd Lohrmann
Speaker Change: Thank you. We will now begin the question and answer session. If you have dialed in and 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.
Speaker Change: If you are called upon to ask a question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question.
Speaker Change: Your first question comes from Michael Bloom with Wells Fargo. Please go ahead.
Thanks. Good morning everybody. Good morning, Michael.
Michael Bloom: I definitely want to ask about the two new projects, but before I do,
Speaker Change: Just wanted to level set. You have been, I think, before talking about six or more potential lateral data center related projects that you have been pursuing. I thought those were behind the meter. So, I guess the first question is,
Speaker Change: Are the two announcements today, which are front of the meter, in addition to those, or are those part of what you've been pursuing?
Michael Bloom: Now those are those are new and in addition to our behind-the-meter opportunities, Michael.
Speaker Change: So these, I would call these utility scale, you know, direct utility scale power generation opportunities.
Michael Bloom: Great. Perfect. And then on the projects, I'm just wondering, you know, on the Midwest and Appalachia projects, anything you can give us in terms of CapEx, expected returns, and then for the Midwest project, what the length of the contract would look like. Thanks.
Speaker Change: Yeah, I'd say we'll start with the one off Midwestern. We're going to build a relatively short lateral over to this facility.
Speaker Change: and the customers committing to, you know, long-term firm capacity on the mainline. We'll build this under a blanket authorization, so that will give you a sense of the capital size here. It's, you know, fairly modest from a capital perspective.
Speaker Change: but layers on a really nice long-term load onto the network.
Speaker Change: That we're really excited about and you know this transaction happened literally right out of the gate With the new assets, so no I I'd say we're really pleased you know two months into it with
Speaker Change: how we view these assets coming into the portfolio and the opportunity set that they're going to provide and that's all reflected in the increased backlog that we've disclosed to to the shareholders today. If we switch over to Appalachia
Speaker Change: That project's been in the works for a number of years with a large power developer. It's in the PJMQ. It's also been through the West Virginia PSC process.
Speaker Change: It'll hang off of the Stonewall system and have firm capacity across the entire network, our gathering network, both Stonewall and Appalachia gas gathering system. And again, it...
Speaker Change: You know, they haven't FID'd the plant yet, so they expect to do that early next year.
Speaker Change: and then we would commence construction to serve that plant and again that's a long-term contract, a 20-year contract with a brand new combined cycle power plant that sits in a really nice spot inside the PGM system.
David Slater, Todd Lohrmann
Thank you.
Speaker Change: Your next question comes from Teresa Chen with Barclays. Please go ahead.
David Slater, Todd Lohrmann David Slater, Todd Lohrmann
Teresa Chen: Morning, for the broader updated 2.3 billion dollar backlog, can you just remind us your expected returns and any sort of like economic terms on these projects as well as the projects that you're pursuing from here?
Sure, Teresa.
Speaker Change: You know, I think we've pretty consistently been sharing five to eight times multiple in terms of proxy for the returns on these projects.
Speaker Change: and nothing has changed there. So, obviously, we're trying to get the lowest multiple possible on all of our projects, but I think that band is a good calibration for
Speaker Change: for the investors in terms of how we view our capital deployment and the two projects that we announced today comfortably fall into that band.
David Slater, Todd Lohrmann
Got it.
Speaker Change: And on the macro front, on the heels of the weather tailwinds, the LNG speed gas ramping higher, the drawdowns of inventory, better pricing as a result,
Speaker Change: Based on your conversations with your producer customers, what are your views on the pace of production recovery across your footprint from here through the remainder of this year and into next?
Speaker Change: maybe just you know kind of asking what is the near-term look that's analogous to slide 28?
David Slater, Todd Lohrmann
Speaker Change: Yeah, well why don't we just talk about this year because I'm not sure that many of the public producers are even talking about next year yet.
Speaker Change: So I think the way to think about it for our guidance is
Speaker Change: We are expecting to see Ainslow-Williams ramp over the year in our portfolio And I think Jeff mentioned it in the call this in his remarks this morning that we're already seeing a ramp from Kind of the exit rate in 24 to where we are today
David Slater, Todd Lohrmann
Speaker Change: And then we're expecting Appalachia volumes to be relatively flat across the footprint. You know, it's different by system. We have four different systems in Appalachia.
Speaker Change: But generally, Appalachia looks about flat across the year, embedded in our 25 guidance.
Speaker Change: So, that's kind of the feedback we've been getting sort of at the end of last year from our producers. Now, there's been a lot of fundamental changes in the market over the last two months, and I alluded to some of those in my opening remarks.
Speaker Change: as they kind of look forward at the gas markets and the pricing for the balance of this year and next year. But I'd say just generally speaking, it's been a very positive shift in sentiment.
Speaker Change: around natural gas and their feelings around their business as a producer. But I do think, especially for the publics, they want to give a little time to make sure that
Speaker Change: But that's just my sense of the multiple conversations we've had with all of our producer customers in our gathering segment.
David Slater, Todd Lohrmann
Thank you.
Speaker Change: Your next question comes from Spiro Dounis with Citi. Please go ahead.
David Slater, Todd Lohrmann
Spiro Dounis: Good morning, everybody. I want to go back to the capital plan quickly. David, I think you referred to these projects as
are in that $2.3 billion, or would they be additive?
David Slater: Yeah, good morning, Spiro. Great question. Maybe I'll start at the highest level and I'd say...
David Slater, Todd Lohrmann
Now that we've closed the acquisition from 1-0.
This is more significant than we thought.
David Slater: when we originally announced the transaction. So there's quite a backlog of opportunities that are presenting themselves around those assets. And that's reflected in our backlog. And in particular, it's reflected in the fact that 70% of that backlog is sitting in the pipeline segment.
David Slater: which which we love because it's high quality projects. You know the one that we just talked about this morning is sort of the first of a series of projects that we're working on there.
envisioned pre-close is even more robust than we thought post-close.
David Slater: So that investment opportunity is in the backlog and is very significant Versus maybe the last time we we publicly chatted to the investors pre-close
Speaker Change: So, giving us a lot of confidence in that backlog, and you kind of said it, Spiro, this is a probability-weighted backlog, that it's not the gross number, it's the...
Speaker Change: it's the highly probable number. So there's a significant set of opportunities in addition to what we've just disclosed that I think over time as we work on them.
they could get pulled into the backlog.
Speaker Change: So I'm really optimistic about the opportunity set in front of the company right now. We've got really favorable sentiment right now in the market, both on the regulatory front and on the political front and in the general population sentiment front.
So...
Speaker Change: Again, don't want to get too far ahead of ourselves here, but everything is aligning nicely right now to create a nice runway for the company over multiple years to, I think, make some significant investments in our pipeline segment.
So we're really excited about that Sparrow.
Speaker Change: Turning to the power generation, we kind of intentionally wanted to unpack that for the investors in the slide deck.
Speaker Change: and really differentiate that opportunity set between what I'll call utility underpinned power demand growth and then behind the meter data center power demand growth.
Speaker Change: What we've been observing in the last three or four months is many utilities, especially up here in the Midwest, have directly captured some of the data center demand.
Speaker Change: and as a result of that are initiating what I call utility-scale gas fire power generation projects. We're very excited about that, obviously, because many of those utilities are customers of ours on the pipelines already.
Speaker Change: So there seems to be really two emerging trends that we're seeing in our footprint. Both the data center trend, which we've talked about at length,
Speaker Change: and that's very robust and continues to be robust and we're really just waiting on site commercialization for all the pieces to fall into place to be able to FID some of those projects.
Speaker Change: and this emerging utility scale power generation opportunity that's presenting itself sort of at the same time. So very excited about that.
Speaker Change: Great, helpful color David. Second question is pivoting here to the Utica. Sounds like that's going pretty well. I think you said exceeding expectations so I wonder if you just dial that in a little bit more and maybe just a little bit color there around the outlook and you also did mention
Speaker Change: I want to make sure I understand what that means. Are you looking to maybe get into the processing at some point or are we talking about downstream into the transmission side?
Speaker Change: Yeah, it's really, my reference was to the transmission side, SPIRO has potential downstream opportunities as these volumes ramp. I expect these producers will want to have a pathway out of the basin at some point, so that'll present opportunities for us with our transmission pathways out of the basin.
Speaker Change: And then in terms of, you know, where we see this part of our business going in 25 and 26
Speaker Change: You know, I'm highly confident and again, I can't speak on behalf of public companies here, but highly confident that there's going to be growth
Speaker Change: and a focus on these resources and continuing to develop these resources.
Speaker Change: So we're, you know, hand-in-hand with our with our anchor customer here, working to line out those expansion plans and, you know, make sure that the infrastructure is there for them as they continue to.
developed a resource base.
David Slater, Todd Lohrmann
Great. Helpful as always. I'll leave it there. Thanks, gentlemen.
Speaker Change: Your next question comes from John McKay with Goldman Sachs. Please go ahead.
John McKay: Hey, good morning. Thanks for the time. I wanted to move to the Haynesville. You guys have talked in the past about, you know, your ability to take market share down there. I guess I'd just be curious, you know,
Speaker Change: Where do you guys stand now in terms of where you think DTM can grow versus the broader basin on both gathering and then also on further LEAP expansions?
Speaker Change: Yeah, good morning, John. Great question. Nothing has really changed in that regard. We're highly confident in our ability to continue to grow that network like we have over the last three years. You know, there's lots of...
Speaker Change: Lots of infrastructure discussions being had in the public domain right now around the Haynesville and the Gulf Coast markets which
Speaker Change: As I look at that, you know, the demand is showing up.
Speaker Change: to connect incremental supply to that new demand that's showing up. So the confidence level and the demand arriving is is high right now, so
Speaker Change: You know, I expect that we will continue to win our fair share of the market share as this continues to develop over the back half of the decade, just like we have over the past three years.
Speaker Change: I'm really proud of the fact that our system is the most highly interconnected system, period, out of the basin in terms of supply connectivity and market connectivity.
Speaker Change: And I believe that's appreciated by all the market players and that's why we've been able to keep peeling off
Speaker Change: We're obviously working on the next one, and once we contract that, we'll start working on the one after that. And we've got a nice runway of capability with that asset set.
Speaker Change: Again, we can continue to expand in nice bite-sized pieces that comfortably fits into what the Markov wants, and I think that's just one of the competitive advantages in addition to the connectivity feature that we have across the footprint.
Speaker Change: That'll be the plan to keep chipping away at it going forward and just keep winning our fair share of the growing market demand.
Speaker Change: I appreciate that. Thank you. And maybe just staying down there in Louisiana. Am I just giving us an update on CCS? I think we're seeing the timeline push a little bit. I know there's a lot going on in the broader regulatory side, so maybe just an update there.
Speaker Change: That was slowing everything down last year, so that's kind of done and we're over that step. So now the application is complete, it's really sitting with the state.
Speaker Change: and we're in the waiting period now for the final class 6 permit.
Speaker Change: As soon as we have that in hand, then you should expect that we will FID the project and at that point begin to spend what I'll call material amounts of capital to construct the project.
David Slater, Todd Lohrmann
Speaker Change: We're obviously talking to the states pretty much weekly now, trying to get a sense of timing from them.
Speaker Change: And I'm not going to predict their timing anymore because I've been predicting it for the last 12 months and I They they always underwhelmed in terms of what what they say versus what they do
Speaker Change: And I'm just being transparent with you because I know everyone's wondering about this. So we're applying steady patient pressure to the state to move things along. The application is complete. We have a lot of local support for our project.
All right, that's clear. Thank you, David. Appreciate it.
Speaker Change: Your next question comes from Keith Stanley with Wolf Research. Please go ahead.
David Slater, Todd Lohrmann
Speaker Change: Hi, good morning. Just one clarifying question. For the lateral project on Midwestern and for growth projects generally on the new interstate pipeline assets,
Speaker Change: Do you expect recovery to come from FERC rate cases, or can some of these projects be done with bilateral contracts? And then related to that, just curious, your expected rate case cadence for those new assets?
Yeah, Keith, good morning. Great question.
Speaker Change: So, initially, there will be new incremental contracts that support these investments.
Speaker Change: and then when that particular asset comes into the next rate case, you know, obviously that capital and that rate base rolls into your next rate case and is part of the next rate case process.
So that's how it'll play out for the FERC assets.
Speaker Change: At some point in the future, they all will go into some type of a rate case process, whether it be, you know, like a negotiated settlement or whether it be a full rate case process through the FERC.
Speaker Change: So that's how you should think about it in terms of the capital deployments. But again, in all cases, we have certain return expectations.
Speaker Change: The rate case process, when that does play out, is part of the economic assessment.
Speaker Change: when we determine whether we're going to make that investment up front or not. So that's all folded into what I'll call the hurdle rates and the return expectations on the project when we initiate and FID the project up front.
David Slater, Todd Lohrmann
Speaker Change: Great. And any timing you're expecting just for rate case cadence or frequency on these assets?
Speaker Change: Yeah, all three of those assets are on a different rate case cadence.
Speaker Change: I don't want to I don't have that handy in front of me and I don't want to guess at it for you so I'm going to ask you to follow up with Todd offline and we can get you those details but I don't want to quote it and have it quoted wrong here
Great. Appreciate it.
You're welcome.
Speaker Change: Your next question comes from Zach Van Everen. Please go ahead.
Speaker Change: Hey guys, thanks for taking my question. This one on Midwestern's lateral, you know, it looks like you guys were able to get this in service relatively quickly due to the FERC blanket authorization. Do you have that authorization on any other assets or is it just this pipeline?
Speaker Change: No, every one of the FERC assets has a blanket authorization capability.
Speaker Change: Okay, so when we think about, because generally on the FERC side, you know, a lot of people know one to two years in permitting and one-ish year to build depending on size, will your projects relatively be a little bit faster than that due to the authorization?
Speaker Change: The Blanket, those projects can go a lot swifter than going through the full process with the FERC, as you just highlighted. So, yeah, this one was...
Speaker Change: You know, like literally a nine-iron off the main line. So it was, you know, it's a very short, easy build over to this facility, which allowed it to go super quick, like literally right after we close the transaction, this opportunity presented itself.
Speaker Change: Yeah, so we're super excited about this right, you know, right out of the chute We've got our first our deal on these new assets
Speaker Change: and as I alluded to, there are more to come that we're working on behind this, so.
David Slater, Todd Lohrmann
Speaker Change: Awesome, perfect, well thank you guys and that's all I had.
Good.
Speaker Change: Your next question comes from Robert Mosca with Mizuho Securities. Please go ahead.
Robert Mosca: Hi, morning everyone. So on the HES lateral project, I understand that hasn't been FID'd yet, but is there potential for DTM to be a part of a CCS solution there? Has that come up at all in conversations?
Robert Mosca: Yeah, good morning Rob, you know, we've been having a CCS conversations with a handful of power developers in the Appalachian, what I'll call the broader Appalachian region. So it's very
Robert Mosca: are very much in the forefront of their minds right now. That being said, with the new administration and with what we believe is a relaxing of the rules around new gas fire generation,
Robert Mosca: It may not be a requirement, perhaps as some thought a year ago.
Robert Mosca: So my sense right now is that the developers are pivoting more towards what I would call a conventional combined cycle footprint.
Robert Mosca: but have the optionality in those facilities to either, over time, introduce a hydrogen blend or build the facility in a way that, over time, if they needed to, they could capture carbon off the back end of the plant.
for sequestration, again, over time.
Robert Mosca: A lot of the developers are looking at trying to engineer in the optionality to decarbonize the facility over time.
Robert Mosca: which I think is a smart approach just given how the
Robert Mosca: the sentiment in the market and then the nation can swing back and forth.
on this particular topic.
David Slater, Todd Lohrmann
Robert Mosca: Got it. No, that's helpful. And then maybe turning to the Hainesville, I think your main producer there has noted that they want to be flexible in terms of their production plans. How does that look in terms of the conversations you have?
Robert Mosca: month-to-month or quarter-to-quarter. I'm just, should we think about it differently than this is the plan that you have kind of exiting 24 and just how dynamic that could be over the course of 25?
Sure, well, again, I...
Speaker Change: We just have to be careful here because, as you know, our largest customer is a public company. So what I'll say generically, and maybe I'll repeat what I said earlier, is that we expect volumes across our network, so the gathered volumes directly from our producer customers, which we have many.
You know how the market is shaping up right now
Speaker Change: So we'll see as the year progresses and as producers get progressively more confident with pricing
and get more confident with the demand that's showing up.
Speaker Change: Again, a lot of producers, and I think they've said this publicly, they want to see the demand. They want to see it, feel it, and experience it before they start to deploy capital to growing some of their production.
Speaker Change: So, you know, I really think we're in a little bit of a wait-and-see mode. Having said that, you know...
Speaker Change: Natural gas prices today are probably 75 cents higher than they were three months ago.
Speaker Change: which is a pretty significant upward move which certainly is supportive for their businesses. So we're just being patient, we see growth, we have growth in our plan and we'll see how that evolves as the year unfolds.
Got it. Thanks, David, and appreciate the time, everyone.
No, you're welcome.
David Slater, Todd Lohrmann
Speaker Change: There are no more questions. I will now turn the conference back over to David for closing remarks.
Speaker Change: Well, thank you again for joining us. We certainly appreciate the support that you've shown to the company and look forward to delivering another strong year. Thanks, everybody, and have a great day.
Speaker Change: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.