Q2 2025 Energy Transfer LP Earnings Call

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Thank you operator, good afternoon, everyone and welcome to the energy transfer second quarter 2025 earnings call.

I'm also joined today by Mackie Mccrea and other members of the senior management team who are here to help answer your questions. After our prepared remarks, hopefully you saw the press release, we issued earlier. This afternoon. As a reminder, our earnings release contains a thorough MD&A that goes through the segment results in detail and we encourage everyone to take a look at the release.

As well as the slides posted to our website to gain a full understanding of the quarter and our growth opportunities. As a reminder, we will be making forward looking statements within the meaning of section 20 <unk> of the Securities Exchange Act of $19 34.

These statements are based upon our current beliefs as well as certain assumptions and information currently available to us and are discussed in more detail in our Form 10-Q for the quarter ended June 32025, which we expect to file Tomorrow Thursday August 7th I'll also refer to adjusted EBITDA and distributable.

Good afternoon and welcome to the energy. Transfer second quarter 2025 earnings conference call. At this time, all participants are in listen-only mode.

Cash flow or DCF, both of which are non-GAAP financial measures you will find a reconciliation of our non-GAAP measures on our website. So let's start today by going over our financial results for the second quarter of 2025, we generated adjusted EBITDA of $3 9 billion.

Should you need assistance during the conference? Call you may signal an operator by pressing the star key followed by zero. After today's presentation there'll be an opportunity to ask questions to ask a question. You may press star then 1 on your telephone keypad to withdraw your question. Please press star then 2

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Compared to $3 8 billion for the second quarter of 2024.

Thank you, operator. Good afternoon, everyone and welcome to the energy. Transfer second quarter 2025 earnings call.

We saw several volume records during the quarter, including the midstream gathering crude transportation NGL transportation NGL and refined products terminal in NGL export volumes. We also saw strong volumes through our NGL fractionator Natura.

Natural gas inter and intrastate pipelines.

DCF attributable to the partners of energy transfer as adjusted was approximately $2 billion.

And for the first six months of 2025, we spent approximately $2 billion in organic growth capital primarily in the NGL and refined products midstream and intrastate segment segments, excluding Sun and USA compression Capex now turning to our results by segment for the second quarter and let's start with NGL.

I'm also joined today by Mackie McCree and other members of the senior management team who are here to help answer your questions after our prepared remarks. Hopefully you saw the press release. We issued earlier this afternoon. As a reminder, our earnings release contains a thorough mdna that goes through the segment results in detail and we encourage everyone to take a look at the release as well as the slides posted to our website, to gain a full understanding of the quarter and our growth opportunities. As a reminder, we will be making forward-looking statements within the meaning of section 21e of the security, exchange act 1934.

Refined products adjusted EBITDA was $1 billion compared to $1 1 billion for the second quarter of 2024, we saw higher throughput across our Mariner East and Gulf Coast pipeline operations as well as through our fractionation facilities, which were offset by lower gains from the optimization of hedged NGL.

These statements are based upon our current beliefs as well as certain assumptions and information currently available to us and our discussed in more detail and our forum 10q for the quarter ended June 30th 2025 which we expect to file tomorrow, Thursday, August, the 7th. I'll also refer to adjusted ibaa and distributable cash flow or

And refined product inventories as well as lower blending margins compared to the second quarter of 2024 for.

For midstream adjusted EBITDA was $768 million compared.

DCF both of which are non-gaap Financial measures. You'll find a Reconciliation of our non-gaap measures on our website. So let's start today by going over our financial results for the second quarter of 2025. We generated adjusted debe, do 3.9 billion dollars compared to 3.8 billion dollars for the second quarter of 2024.

Compared to $693 million for the second quarter of 2020 for.

The increase was primarily due to higher than legacy volumes in the Permian basin.

Which were up 10% as a result of processing plant upgrades and increased plant utilization as well as the addition of the <unk> assets in July of 2020 for these.

We saw several volume records during the quarter including the Midstream Gathering crew, Transportation NGL, Transportation NGL, refined products, terminal and NGL. Export volumes. We also saw strong volumes through our NGL, fractionators natural, gas inter and intrastate Pipelines.

These were partially offset by lower gathering volumes in the dry gas areas.

For our crude oil segment, adjusted EBITDA was $732 million compared to $801 million for the second quarter of 2024.

DCF attributable to the partners of energy transfer as adjusted was approximately 2 billion dollars. And for the first 6 months of 2025, we spent approximately 2 billion dollars in organic growth, Capital primarily in the NGO and refined products, Midstream and intrastate segments, excluding sun and USA Compression capex.

During the quarter, we saw growth across several of our crude pipeline systems as well as contributions related to the recently formed Permian joint venture with Sun.

These were offset by lower transportation revenues, primarily on the Bakken pipeline.

In our Interstate natural gas segment, adjusted EBITDA was $470 million compared to $392 million for the second quarter of 2024.

Now, turning to our results by segments for the second quarter and let's start with NGL and refined products, adjust de was 1 billion dollars compared to 1.1 billion dollars. For the second quarter of 2024, we saw higher throughput across our Mariner East and Gulf Coast pipeline operations as well as through our fractionation facilities, which were offset by lower gains from the optimization of hedged NGL.

This was primarily due to higher contracted volumes on several of our Interstate pipeline systems.

And for our intrastate natural gas segment, adjusted EBITDA was $284 million compared to $328 million in the second quarter of last year.

Refined product inventories, as well as lower blending margins compared to the second quarter of 2024 for Midstream adjusted, EBA was 768 million compared to 693 million for the second quarter of 2024.

During the quarter, we saw increased volumes across our Texas intrastate pipeline system due to third party volume growth. This was offset by reduced pipeline optimization as a result of shifts to more long term third party contracts and their price spreads compared to the second quarter of last year.

The increase was primarily due to higher Legacy volumes in the Permian Basin which were up 10% as a result of processing, plant, upgrades and increased plant utilization, as well as the addition of the wtg Assets in July of 2024.

Now turning to our organic growth capital guidance, we continue to expect to spend approximately $5 billion.

Volumes in the dry gas areas.

On organic growth capital projects in 2025, even with the addition of the newly announced growth projects. We expect to achieve mid teen returns on the majority of our growth projects with many also providing incremental downstream benefits.

For our crude oil segment, adjusted evadav was 732 million dollars compared to 801 million for the second quarter of 2024.

During the quarter, we saw growth across several of our crude pipeline systems as well as contributions related to the recently, formed permanent joint venture with son.

We expect the majority of the upcoming earnings growth to come from our flex Port Permian processing, NGL transportation and <unk> pipeline expansion projects, which are expected to ramp up in 2026 and 2027.

These were all set by lower Transportation revenues primarily on the Balkan pipeline.

In our Interstate natural gas segment adjusted Eva dial was 470 million compared to 392 million for the second quarter of 2024.

And our newly announced projects along with our significant backlog of opportunities are expected to provide even greater visibility into additional volumes and earnings growth through the end of the decade, taking a closer look at some of our recently approved and currently underway projects we have some.

This was primarily due to higher contracted volumes on several of our Interstate pipeline systems.

And for our intrastate natural gas segment. Adjusted deep bedaw was 284 million compared to 328 million in the second quarter of last year.

Writing updates on the natural gas side of our business, which are expected to support growing demand for gas fired power plants data centers and industrial and onshore manufacturing.

During the quarter, we saw increased volumes across our Texas Interstate pipeline system, due to third-party, volume growth.

First we were very excited this morning to announce the desert southwest pipeline project. This strategic expansion of our transwestern pipeline will enhance system reliability and provide new and existing natural gas demand markets and southern New Mexico, Arizona and across the southwest region with access to <unk>.

This was offset by reduced pipeline optimization, as a result of shifts to more long-term third-party contracts and their price spreads compared to the second quarter of last year.

Now, turning to our organic growth capital guidance, we continue to expect to spend approximately $5 billion on organic growth capital projects in 2025. Even with the addition of the newly announced growth projects,

Low cost reliable Permian basin volumes.

This project includes construction of a new 516 mile 42 inch pipeline that will provide approximately one five bcf per day of transportation capacity from the heart of the Permian basin to the Phoenix area in Arizona.

we expect to achieve mid-teen Returns on majority of our growth projects with many also providing incremental Downstream benefits.

We expect the project to cost approximately $5 3 billion, including $600 million of UTC and expect the project to be in service no later than the fourth quarter of 2029 and the.

We expect the majority of the upcoming earnings growth to come from our flexport. Peryam processing, NGL transportation and Hugh Branson pipeline expansion projects, which are expected to ramp up in 2026 and 2027.

The project is backed by significant long term commitments with investment grade Counterparties and we expect to launch an open season later this quarter.

And our newly announced projects along with our significant. Backlog of opportunities are expected to provide, even greater visibility into additional volumes and earnings growth. Through the end of the decade.

Also we expect the capacity to be completely sold out upon completion of the open season.

Depending on the final results of the open season, the project could be efficiently expanded to accommodate additional demand.

Making a closer look at some of our recently approved and currently underway projects. We have some exciting updates on the natural gas side of our business, which are expected to support growing demand for gas-fired power plants, data centers, and industrial and onshore manufacturing.

As one of our <unk> pipeline is expected to provide approximately one five bcf per day of natural gas takeaway from the Permian basin upon being placed into service, which we expect to be no later than the fourth quarter of 2026 and.

In addition, we recently reached a positive.

On phase two of the pipeline project, which will include the addition of compression.

First, we were very excited this morning to announce the desert Southwest pipeline project. This strategic expansion of our transwestern pipeline will enhance system, reliability, and provide new and existing natural gas demand markets in Southern New Mexico, Arizona and across the southwest region with access to low cost, reliable Permian, Basin volumes.

This system will be bi directional with the ability to transport approximately two two bcf per day from west to east and approximately one Bcf per day from east to West Windsor.

This project includes construction of a new 516, me, 42 inch pipeline that will provide approximately 1.5 BCF per day of Transportation capacity from the heart of the Permian, Basin to the Phoenix area in Arizona.

When this pipeline goes into service, we expect to have more than two two bcf per day contracted for.

<unk> pipeline will provide significant optionality by connecting shippers to our vast intrastate natural gas pipeline network and other downstream pipelines as well as access to the majority of the gas utilities in Texas and to ever major trading hub in Texas.

we expect the project to cost approximately 5.3 billion, including 600 million dollars of

The project is backed by significant long-term commitments, with investment-grade counterparties, and we expect to launch an Open Season layer this quarter.

We believe this project further establishes energy transfer as the premier option for customers seeking a flexible and reliable natural gas solution to support their power plant and data center growth plans.

Also, we expect the capacity to be completely sold out upon completion of the Open Season.

Depending on the final results of the Open Season, the project could be efficiently expanded to accommodate additional demand.

And in July we announced an open season on our Oasis pipeline, which offers an efficient option for shippers to sign up for future long term natural gas transportation capacity out of the Permian basin as it becomes available on the pipeline.

Phase 1 of our Hugh. Brinnon pipeline is expected to provide approximately 1.5 BCF per day of natural gas. Takeaway from the Permian Basin upon, being placed in the service, which we expect to be no later than the fourth quarter of 2026.

This open season allows potential shippers the opportunity to ramp up their volumes over the next four years to better meet their projected volume growth curves.

In addition, we recently reached a positive FID on Phase 2 of the pipeline project which will include the addition of compression.

We also recently approved the construction of a new storage cavern at our battle natural gas storage facility.

This project is expected to double our working gas storage capacity at the facility to over 12 Bcf and we hope to place the new cavern in service by late 2028.

This system will be bidirectional with the ability to transport approximately 2.2 BCF per day from west to east and approximately 1 BCF per day from east to west.

When this pipeline goes into service, we expect to have more than 2.2 BCF per day contracted.

This expansion, which is expected to cost approximately $140 million will increase our equity gas storage capabilities.

To serve growing demand in the heart of our extensive intrastate natural gas pipeline network.

This will further strengthen the reliability of our systems as well as provide the opportunity to benefit from pricing volatility.

We also recently approved an expansion on the <unk> pipeline to serve growing power generation needs and the southeastern region of the United States.

We believe this project further establishes, energy transfer as the premiere option for customers seeking a flexible and reliable natural gas solution to support their power plant and data center growth plans.

Looking at the Permian processing expansions in the second quarter of 2025 energy transfer placed the 200 million cubic foot per day Lenore II processing plant in the Midland Basin into service and the plant is currently running at full capacity.

And in July, we announced an open season on our Oasis pipeline, which offers an efficient option. For shippers to sign up for future long-term natural gas Transportation capacity. Out of the Permian Basin, as it becomes available on the pipeline.

We also recently placed the 200 million per day Badger processing plant into service.

This Open Season allows potential shippers, the opportunity to ramp up their volumes over the next 4 years to better meet their projected volume growth curves.

Which utilized a previously idled plant that was relocated to the Delaware Basin.

Williams are ramping up nicely and we expect to be at full capacity in the next few months.

We also recently approved the construction of a new storage cavern at our Bethl natural gas storage facility.

Over the last year, we've added approximately 800 million cubic feet per day of processing capacity, including 200 million cubic feet per day of optimizations that we completed at several of our other Permian processing facilities.

This project is expected to double our working, gas storage capacity at the facility to over 12 BCF and we hope to place the new Cavern in service by late 2028.

As a result, our process volumes in the Permian Basin recently reached a new record of nearly five Bcf per day, and our Y grade transportation throughput from the Permian also recently reached a new record. In addition, we continue to expect our Mustang draw plant to be in service in the second quarter of 2026.

This expansion, which is expected to cost approximately 140 million will increase our Equity, gas storage capabilities.

To serve growing demand.

In the heart of our extensive intra-state, natural gas pipeline Network.

This will further strengthen the reliability of our systems as well as provide the opportunity to benefit from pricing volatility.

At our Nederland terminal, we recently placed our <unk> port NGL export expansion project into ethane and propane service.

We also recently approved an expansion on the sesh pipeline to serve Growing. Power Generation needs in the southeastern region of the United States.

And we continue to expect to provide ethylene export services in the fourth quarter of this year.

<unk> will ramp up throughout the remainder of 2025, adding up to 250000 barrels per day of total NGL export capacity at our Nederland terminal.

Looking at the Puran processing expansions and the second quarter of 2025, Energy Transfer placed the 200 million cubic feet per day Lenora 2 processing plant in the Midland Basin into service, and the plant is currently running at full capacity.

This project is fully contracted beginning in January 2026 with capacity initially split 50 50 between the ethane and ethylene.

we also recently placed the 200 million per day, Badger processing, plant into service, which utilized a previously idled plant, that was relocated to the Delaware basin

And propane.

We also recently approved the.

The looping of an NGL pipeline upstream of our Lone Star Express pipeline, which will expand our access to Ngls from the northern Delaware Basin, where we see significant growth from our customers.

Volumes are ramping up nicely, and we expect to be at full capacity in the next few months.

<unk>. This pipe is expected to allow us to source, an incremental 150000 barrels per day of Ngls for transportation on our NGL pipeline system from this high growth region.

Or the last year, we have added approximately 800 million cubic feet per day of processing capacity, including 200 million cubic feet per day of optimizations that we completed at several or other permanent processing facilities.

The project will cost approximately $60 million and is expected to be in surface in the first half of 2027.

Now turning to Lake Charles LNG.

As a result, our process volumes in the Permian Basin. Recently reached a new record of nearly 5 BCF per day and our wide gray transportation, throughput from the Parian. Also, recently reached a new record. In addition, we continue to expect our Mustang draw plant to be in service in the second quarter of 2026.

We continue to make substantial progress towards commercialization of this project.

During the second quarter Lake Charles LNG signed an HOA with mid Ocean energy, which provides a non binding framework for the joint development of the LNG project with mid ocean entitled to receive 30% of the LNG production.

At our needle and terminal. We've recently placed our flexport NGL export Expansion Project into ethane and propane service.

And we can continue to expect to provide ethylene, export services in the fourth quarter of this year.

Approximately 5 million tonnes per annum. In addition lake Charles signed 20 year, Sba's with Kyushu Electric power company and Chevron USA.

The project will ramp up throughout the remainder of 2025, adding up to 250,000 barrels per day of total NGL export capacity at our needle and terminal.

On the marketing side, we're in advanced discussions with multiple parties for our remaining capacity and are getting close to our target of 15 million metric tons per annum.

This project is fully contracted beginning in January, 2026 with capacity, initially split 50/50 between the ethane and Ethylene.

And Propane.

We also recently approved.

Our potential uptake customers are also interested in equity in the project, which have concluded would reduce our external financing requirements.

As we have previously stated we expect to sell equity in the project to reduce energy transfers ownership to approximately 25%.

The looping of an NGL pipeline Upstream of our Lone. Star Express pipeline, which will expand our access to NGL from the northern Delaware Basin where we see significant growth from our customers.

Over the last several months, we have been working with our financial advisors to finalize marketing materials as we prepare for the launch of the equity sell down process.

Looping, this pipe is expected to allow us to source an incremental 150,000 barrels per day of NGLs for transportation on our NGL pipeline system from this high-growth region.

Now for a brief update around our new natural gas opportunities for new power plant and data Center development.

The project will cost approximately 60 million dollars and is expected to be in surface in the first half of 2027.

Now, turning to Lake Charles LNG.

We continue to see a significant level of activity from demand pull customers to supply store and transport natural gas for gas fired power plants data centers and industrial and onshore manufacturing.

We continue to make substantial progress towards commercialization of this project.

And we remain in advanced discussions with several facilities in close proximity to our footprint. We would expect these types of projects to generate revenue relatively quickly.

During the second quarter Lake, Charles LNG signed an HOA with mid ocean energy, which provides a non-binding framework for the joint development of the LNG project with mid ocean entitled to receive 30% of the LNG production.

Our team continues to do an excellent job of identifying the most likely opportunities and we will continue to provide updates as we move forward.

Approximately 5 million tons per hour in addition Lake, Charles signed 20 year. Sba's with kushu, electric power company and Chevron USA.

Lastly, construction of 810 megawatt natural gas fired electric generation facility continues the second facility, which is serving our badger processing plant was recently commissioned and we expect two more facilities to be placed into service by the end of the year with the remainder expected to be in service in 2026.

On the marketing side, we're Advanced discussions with multiple parties for our remaining capacity and are getting close to our Target of 15 million metric tons per hour.

Now turning to our guidance.

We now expect to be at or slightly below the lower end of our guidance range of $16 1 billion.

As we have previously stated, we expect to sell equity in the project to reduce energy transfers ownership to approximately 25%.

$16 5 billion.

This is a result of weakness in the Bakken slower recovery in the dry gas areas than we expected and a lack of normal volatility in our gas optimization business from spreads and storage margins. In addition, we expected stronger growth in our Permian crude business than we have seen year to date.

Over the last several months, we have been working with our financial advisors to finalize marketing materials as we prepare for the launch of the equity sale down process.

Now for a brief update around our new natural gas opportunities for new power plant and data center development.

In summary, given the substantial growth in demand for energy resources over the next several years driven by natural gas and natural gas liquids. We believe that energy transfer is the best positioned company in the industry to help meet this demand.

We continue to see a significant level of activity, from demand pool customers to supply stores, and transport natural gas for NA, gas-fired power plants, data centers, and industrial and onshore manufacturing.

And we remain in advanced discussions with several facilities and close proximity to our footprint. We would expect these types of projects to generate Revenue relatively quickly.

We own one of the largest natural gas pipeline networks in the United States with physical assets in every major U S. Producing basin, we have more than 105000 miles of natural gas pipelines.

Our team continues to do an excellent job of identifying, the most likely opportunities and we will continue to provide updates as we move forward.

That is coupled with significant gas storage and we move approximately 30% of the U S natural gas production.

We are connected to nearly 200 gas fired power plants in the country and have the ability to leverage strong relationship to develop new projects backed by higher quality counterparties on both the supply and demand side, we offer significant optionality, including bi directional pipeline flow capabilities.

Lastly, construction of eight 10-megawatt natural gas-fired electric generation facilities continues. The second facility, which is serving our Badger processing plant, was recently commissioned, and we expect two more facilities to be placed into service by the end of the year, with the remainder expected to be in service in 2026.

Now, turning to our guidance.

We now expect to be at or slightly below the lower end of our guidance, range of 16.1 billion dollars to and 16.5 billion.

And strategically located storage assets, helping secure stable uninterrupted supply.

In addition, our operations team has extensive experience managing pipelines and a long term proven track record of delivering reliable energy for our customers even during extreme weather events.

This is a result of weakness in the Balkan slower recovery in the dry gas areas than we expected and a lack of normal volatility in our gas optimization business from spreads and storage margins. In addition, we expected stronger growth. In our permanent crew business than we have seen year to day.

Building on our natural gas thing are you Branson and desert southwest pipeline projects and our Bethel storage expansion project further establish our natural gas pipeline business as the leading option for customers seeking dependable natural gas supply. In addition to numerous opportunities in natural gas.

In summary given the substantial growth in demand, for energy resources, over the next several years driven by natural gas and Natural, Gas Liquids. We believe that energy transfer is the best position company in the industry to help meet this demand.

Gas, we have one of the largest NGL businesses, the United States with more than one 4 million barrels per day of NGL export capacity and we are continuing to expand this business to meet the international demand.

We own 1 of the largest natural gas pipeline networks in the United States, with physical Assets in every major US producing basin.

We have more than 105,000 miles of natural gas pipelines.

We also continue to evaluate projects to expand our crude oil pipeline network or.

That is coupled with significant gas storage and we move approximately 30% of the US natural gas production.

Our backlog of well contracted growth projects.

<unk> is expected to generate strong returns enhance our integrated value chain and promote strong growth well into the future. We have a strong track record over organic growth, which has been enhanced by our long history of successful acquisitions.

We are connected to nearly 200 gas-fired power plants in the country and have the ability to leverage strong relationships to develop new projects backed by higher-quality counterparties on both the supply and demand side.

Each of these acquisitions have added strategic benefits and critical mass providing the incremental opportunities for continued growth of our nationwide network. This concludes our prepared remarks operator. Please open the lineup for our first question.

We offer significant optionality including bidirectional pipeline flow capabilities and strategically located storage assets, helping secure, stable uninterrupted Supply.

Thank you we will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone. If you are using a speakerphone. Please pick up your handset before pressing any keys, we ask that you. Please stick to one question and one follow up.

In addition, our operations team has extensive experience managing pipelines and a long-term proven track record of delivering reliable energy for our customers even during extreme weather events.

Building on our natural gas theme.

Anytime Youre question has been addressed and you would like to withdraw from the queue. Please press Star then two at this time, we will pause momentarily to assemble our roster.

Our Hub Branson and desert Southwest pipeline projects and our bethl storage Expansion Project further, establish our natural gas pipeline business as the leading option for customers seeking Dependable natural gas supply.

Our first question comes from Theresa Chen of Barclays. Please go ahead.

In addition to numerous opportunities and natural gas, we have 1 of the largest NGL businesses in the United States with more than 1.4 million barrels per day of NGL, export capacity. And we are continuing to expand this business to meet the international demand.

Good afternoon on the gas to power front related to data centers following up on your comments about being in advanced discussions with demand pull customers.

We also continue to evaluate projects to expand our crude oil pipeline Network.

Our backlog of well contracted growth project.

To provide more detail on the commercialization efforts to date what are the gating factors at this point what is your updated view on the size and scale of the set of opportunities and when can we expect to see more discreet announcements on this front.

Is expected to generate strong returns, enhance our integrated value chain, and promote strong growth, well, into the future.

We have a strong track record of organic growth, which has been enhanced by our long history of successful acquisitions.

Hey, Trisha this is mackie, Mike usually make a statement and I will make a quick statement and then I'll answer your question and it kind of rolls into that answer it anyway.

Each of these Acquisitions have added strategic benefits and critical mass. Providing the incremental opportunities for continued. Growth of our Nationwide Network.

This concludes our prepared remarks. Operator, please open the lineup for our first question.

Since <unk> started this over 25 years ago, a partnership we started with a 10 inch pipeline that was idle run through about eight counties in East, Texas, and we've grown to just.

Just a massive company through acquisitions and also through enormous.

Organic projects throughout the U S and <unk>.

Thank you. We will now begin the question-and-answer session. To ask a question, you may press star, then 1 on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing any keys. We ask that you please stick to 1 question and 1 follow-up.

Sit here today, we look at the folks that are running our business both in office and especially out in the field and we look at the diversity that we have unparalleled to any of our competitors by far.

Foster.

Even with this challenge quarter that we have that we're certainly going to talk about I've never been I'm sure everybody in here joins me as excited about where we sit and where the future is for our industry, but even more importantly for this call for our partnership. So we're very excited about that and a lot of that drop comes to your quest.

Our first question comes from Teresa Chen of Barclays. Please go ahead.

<unk>.

I've kind of been taken a ribbon for the last three months from our guys, saying don't say four to six weeks on something some will be a little careful there, but I will say this these data centers have come out of nowhere.

Good afternoon. On the gas-to-power front, I’d like to follow up on your comments about being in advanced discussions with demand pull customers. Can you provide more detail on the commercialization efforts to date? What are the gating factors at this point? What is your updated view on the size and scale of the set of opportunities? And when can we expect to see more discrete announcements on this front?

Huge an enormously upside for companies like us that have big inch pipe all over the U S and very well located areas for these types of projects, but there are different and they are different in a couple ways. One these arent.

Our plant that cost $1 billion of half a billion. These are 50 60 100 billion dollar type facilities that were built into so these things don't just happen overnight it takes time.

And even though the.

The announcement on the desert southwest it took two and a half years to develop that so it has taken time are we are going to be more careful about what we say, but let's say this I will I can say this several months ago, we did sign our first kind of significant.

Deal with a hyper scaler a behind the meter hyper scaler here in Texas. It was 80000 a day, we have recently as now today increase that to 380000, a day with the flex right to go to 475, maybe.

Hey Teresa, this is Mackie. Uh, let me make you make make a statement to the end. I will make a quick statement, and then I'll answer your question and it kind of rolls into that answer. Anyway, uh, since Kelsey started this over 25 years ago, our partnership, we started with a 10 inch pipeline that was idle, run through about 8 counties in East Texas. And we've grown to, uh, you know, just a massive company through Acquisitions and also through enormous uh, uh, organic projects throughout the US. And as I said here today, we look at the folks that are running our business both in office and especially out in the field. And we look at the diversity that we have unparalleled to any of our competitors by far. Uh, even with this challenge quarter that we have that, we're certainly going to talk about, I've never been, I'm sure everybody in here joined me is is excited about where we sit and where the

It may be more upside from that from this one.

Area in Texas, but it's just one of we've signed three deals now in Texas, We're very close to two more weeks on very close to signing one pretty significant one outside but I'm not saying, it's 23456 weeks. However, long it takes.

Every data center has different needs different requirements different.

<unk> sources et cetera, et cetera, so it does take a while to put these together.

This one came together fairly quickly in light of how excited we are about it. We're also excited about a lot of these other what Jason so without making promises on new <unk>.

Data Center <unk>, new power plants supporting data centers any kind of predictions on weeks just stay tuned we're pretty excited about what we anticipate announcing over these coming quarters.

Future is for our industry. But, but even more importantly for this, call for our partnership. So we're very excited about that, and a lot of that drive comes to your question. Uh, I've kind of been taking a ribbon for the last 3 months from these power guys saying, don't say 4 to 6 weeks on something. So I'm gonna be a little careful there, but I will say this, these data centers have come out of nowhere. Uh it's a huge and enormously upside for companies like us that have big inch pipes all over the US and very well-located areas for these types of projects but they're different and they're different a couple ways 1. These aren't you know a a plant that cost a billion dollars or half a billion. These are 50 60 hundred billion dollar type facilities that we're building to. So these things don't just happen overnight. It takes time. Uh, and even the the the announcement on the desert Southwest, it took 3 and a half years to develop that so it has taken time. I we are going to be

Thank you.

Turning to the transmission side of things congratulations on the Friday of Desert southwest can.

Can you provide color on the expected build multiple for this project and at this point.

Much of the one five Bcf per day is committed and pending the results of the open season to what extent can that be expanded.

So oh gosh, we havent announced something in a while is as exciting as this VAT picky and her team did an incredible job. This is just keeping your head to the grindstone for the last two and a half plus years very excited we kept hearing about other projects kind of ignore that paid attention to what we do and we're very excited.

More careful about what we say. But, but let's say this I will I can say this several months ago we did find our our first kind of significant deal with a hyperscaler. A behind. The meter hyperscaler here in Texas, it was 800,000 a day. We have recently as of now today, uh, increased that to 380,000 a day, with the, the flex right to go to 475, maybe more upside from that, from this, uh, 1, uh, area in Texas.

Yes, we havent fully sold that out we have.

ROE concerns about selling out in fact.

To expand on a little bit because of the incoming calls that we've had today because of other conversations we've had over the last three or four weeks.

Folks that arent in heavy negotiation with us yet.

Only do we have zero worries about fully filling out the one five we also kicked off an evaluation today to increase that to a 48 inch.

But it's just 1 of uh We've signed 3 deals. Now in Texas, we're very close to 2 more. We've signed very close to signing 1, pretty significant 1 outside but I'm not saying that's 2 3 4, 5 6 weeks. However, long. It takes every data center has different needs. Different requirements, different Supply sources, etc, etc. So it it does take a while to put these together. Uh, this 1 came to be together fairly quickly in light of uh, how excited we are about it but we're all so excited about a lot of these others we're chasing. So without making promises on new uh data center, Andor new power plants, supporting data centers, any kind of predictions on weeks. Just uh, stay tuned. We're pretty excited about what we anticipate announcing over these coming quarters.

Would more than double the $1 five bcf certainly not indicating that all on this call, but that's what we're going to do.

Because of the enormous demand growth along the pipeline in that.

Phoenix area, there just some upside that's probably going to make sense seriously looking at that.

If we do and get that go on we are confident that we will sell that out so yes from.

Thank you, and turning to the transmission side of things. Congratulations on the FID of desert Southwest. Um, can you provide color on the expected, build multiple for this project. And at this point, how much of the 1.5 BCF per day is committed and pending the results of the Open Season. Um, to what extent can it be expanded?

From the standpoint of return.

Some upside that I cant talk too about on this call, but it's like everything else. This size, where we're going to be in that mid teens kind of worst case on return from this project.

Our next question comes from Jeremy Tonet of Jpmorgan. Please go ahead.

Hi, good afternoon.

Good afternoon.

Just wanted to pivot to lake Charles if I could and.

Maybe I missed it but just wanted to see where we were with the EPC process and firming that up and I guess marry that against the SBA is in commercial agreements that you've established so far.

So uh, gosh, we have an announced something in a while that is exciting as this Beth hickey and her team did a incredible job. This is just keeping your head to the grindstone for the last 2 and a half plus years, very excited. We kept hearing about other projects, kind of ignore that pay attention to what we do and we're, and we're very excited. Uh, yes, we haven't fully sold that out. We have zero concerns about selling out. In fact, uh, to expand on a little bit because of the incoming calls that we've had today.

Because of other conversations we've had over the last 3 or 4 weeks with folks who aren't in heavy negotiation with us yet.

Yes. This is mackie again, and Tom's here for any follow up.

Or is he wants to add and then Raj Here's two who is working closely with the EPC contract for a while.

We have zero worries about fully filling out the 1.5. We also kicked off an evaluation today to increase that to a 48-inch.

We had our own expectations as we're waiting kind of for the numbers that have come in and they are dead on to what we expected, we certainly are including tariff, which seem to change daily, but any kind of tariff impact on that so we're we're very pleased of where the EPC contract. It looks like it's going to come out it's right, where we expected to be.

<unk> fits very well with what we've contracted and what we have remaining the contracts that were at.

As Tom said in opening statement, we've been saying this trial how many years. We're very excited about this we are pushing hard to get to the finish line and we're going to do everything we can to make that happen, but we still got some work to do but there is a lot of interest on this project and we believe we will get there over the next couple of months and then as we said kick off the <unk>.

Uh, which would more than double the 1.5 BCF certainly not indicating that all on this call that, that's what we're going to do. But because of the enormous demand growth along this Pipeline and in that Phoenix area, there's just some upside that's probably going to make sense. Seriously, looking at that. And if and if we do and get that going, we confident that we uh, will will sell that out. So yes, uh, from the standpoint of returns, there's some upside that I kind of want to talk to about on this call, but it's like everything else. This size? We're we're going to be in that mid teens kind of worst case on the Returns on this project.

Our next question comes from Jeremy tonette of JP Morgan. Please go ahead.

Financing and get it as soon as we can.

Hi, good afternoon.

Good afternoon.

Got it thanks for that and then pivoting back to desert southwest Congratulations there.

I was just wondering if you could share.

How ETE views construction cost risk sharing as well as the dealing with tribal land.

I just wanted to Pivot to Lake Charles if I could and maybe I missed it, but just wanted to see where we were with the uh, EPC quote process and Firming that up. And I guess marrying that against the spas in commercial agreements that uh, you you've established so far

Okay just match again.

As you can imagine we've looked at that very closely over the last year year and a half.

We have we expect to have zero right away across travel lands.

And we don't foresee of what we've seen so far any issues around right away, we're certainly going to be out in front of us communicating a course with park with the department of energy and Department of interior as well as will be heavily involved in discussions with the governors of both Nymex.

New Mexico, and Arizona as well as Texas.

And we will be boots on the ground with our government relations team in those counties that will be going through in all of these these three states and so where we pay a lot of attention to that we have put some contingency with some unknowns that we certainly don't know about today, but we feel very good about where the costs are.

And very confident that we will meet or come into the <unk>.

Yeah, this is mackie again, and Tom's here for a follow-up, uh, at or he wants to add and then Roger too who's working closely has been with EPC contract for a while. Uh, you know, we had our own expectations as we were waiting, kind of for the numbers that have come in and they're dead on to what we expected. Uh, we certainly are including, uh, tariff, which seemed to change daily, but any kind of tariff impact on that. So we're we're very pleased of where the EPC contracts looks like it's going to come out. It's right where we expected to be fits very well with what we've contracted, and what we're remaining to contract. So we're, as we as, uh, Tom said in opening statements, we've been saying this through. I don't know how many years, we're very excited about this. We are pushing hard to get to the finish line and we're going to do everything we can to to make that happen. But we still got some work to do but there's a lot of interest on this project and we believe we'll get there over the next couple of months and then as we said, kick off the, the financing and get it to FID as soon as we can.

Under the cost that we're estimating at this time.

Got it that's helpful. Thank you.

Our next question comes from Keith Stanley of Wolfe Research. Please go ahead.

Hi.

Got it. Thanks for that. And then pivoting back to the Desert Southwest, congratulations there. I was just wondering if you could share your thoughts on how ET views construction cost risk sharing as well as dealing with tribal lands.

Good afternoon, and sorry to beat the dead horse on desert southwest but.

I guess, starting big picture, what do you see is what your competitive advantage was in winning this project over year peer, especially since it kind of goes along the route of their existing pipeline. Just how did you win this out and basically get all the utilities to support year project.

Yes, Great question and I guess I'd go back to my opening statement. We just got some good people and we've got some good assets and we did a great job of being patient as I mentioned in kind of rebuild a little bit.

We've heard often on that several of the projects were about to go and all that stuff and we just ignore that we don't worry about what other companies are doing we worried about what we're trying to get the finish line. So with the <unk> built with our team their ability to negotiate and what we offer as far as supply sources I mean were tied to some big intrastate pipelines is.

Sources were tying to a lot of our large cryogenic facilities, so kind of tying all that together we as.

Okay. This match again uh as you can imagine, we've looked at that very closely over the last year year and a half. Uh if we have we expect to have zero right away, across tribal lands. Uh and uh we don't foresee of what we've seen so far. Any issues around right away, we're certainly going to be out in front of this communicating, of course, with Burke, with the Department of energy, the department of interior as well, as will be heavily involved in discussions, with the governors of both New Mexico and Arizona, as well as Texas, uh, and will be boots on the ground with our government relations team and those counties that will be going through and, uh, all these these 3 states. And so we're, uh, we've paid a lot of attention to that. We, we have put some contingency with some unknowns that we certainly don't know about today. But we I feel very good about where the costs are and very confident that we will meet or come in.

Under the in under the cost that we are estimating at this time.

As we've done over the years, we're pretty good at.

Got it. That's helpful. Thank you.

Using synergy synergistic.

Upside to projects that we.

Our next question comes from Keith Stanley of wolf research. Please go ahead.

No.

Get to the finish line on so combination of all that and just paying attention to customers and responding to their needs and tough negotiations on all sides, where we got a fair deal across the board I think I think our customer very pleased with where we're at and just kudos to Beth and her team and all the work on our engineering behind.

And all that and all the other support from a lot of the folks who are in this office.

Hi uh good afternoon and sorry to beat the dead horse on uh desert Southwest but I guess starting big picture. What do you see as what your competitive Advantage was in winning this project over your peer, especially since it kind of goes along the route of their existing pipeline. Just how did you win this out? And and basically get all the utilities to, to support your project.

Great. Thanks, Thanks for that and then wanted to clarify the two earlier questions. So first if you are saying mid teens returns on desert southwest I mean, given us a four and a half year.

Permitting and build period is it fair to assume that's call. It six times EBITDA multiple or better and then I wanted to follow up on Jeremy's question is there is there any cost sharing mechanism. If you do run into hiccups on this project or is it a traditional structure, where the midstream companies and the one that's in control.

All of the costs and takes that risk.

It's a it's a.

<unk>, that's just what we do we know some of our competitors will go out and do projects and low vol of the rates that say if the rates come in on cost come in higher it will go up. So now this is how we built this partnership we do a lot of work a lot of study and we've got a lot of good folks doing a runaway estimations in our pipeline and compression costs.

We feel like I said earlier, we feel real good we've got tariff cost in these we've got contingency costs in these we feel real good about it and to your first half of your question, Yes, six times with a pretty good number to look.

Look at to consider.

Thank you.

Kind of turn all that together we, uh, as we've done, you know, over the years, we're we're pretty good at uh, uh, using Center synergistic uh uh upside to projects that we uh, you know, get to the Finish Line on so combination of all that and just paying attention to the customers and and responding to their needs. And, and you know, tough negotiations on on all sides, where we got a fair deal across the board. I think, I think our customer very pleased at where we're at and just kudos to Beth and her team and, and all the work on our engineering behind all that and all the other support from a lot of the folks that are in this office,

Okay.

Our next question comes from Jean Ann Salisbury of Bank.

<unk> of America. Please go ahead.

Hi, I wanted to go back to the comment about 2025 fundamentals being a little bit weaker than you guys had forecast in the Bakken and Permian crude and gas growth is that kind of a year to date comments are more just what you are saying in the back half.

Uh great thanks, thanks for that. And then 1 of the clarify the the 2 earlier questions. So first, if if you're saying mid, teens Returns on desert Southwest I mean giving us a 4 and a half year.

Kind of uh, permitting and build period, is it fair to assume? That's you know, call it a 6 times, ebita multiple or better and then I wanted to follow up on Jeremy's. Question is there

Hey, Dan This is bill.

Good question.

A little bit of both I think we are.

They are at the beginning of the year, just being a little bit a little bit lower volume some of that was coming out of the fourth quarter. Our plan had some growth in there that we just haven't seen materialize to the next.

Is there any cost she sharing mechanism if you do run into hiccups on this project or is it a traditional structure where you know the Midstream companies the 1 that's in control of the costs and and takes that risk?

We plan we are still strong.

Strong volumes in the majority of our areas just not quite at the growth rate that we expected. So looking at the back half of the year or kind of a continuous we see some growth coming back down a little bit up a little bit of catch up to get up to where we expect it to be at this time a year or so.

You got a little bit on both parts of the year.

Yes, and if you don't mind, let me add to this.

We couldn't be more bullish about block.

Odd because it certainly was kind of a blackout looks like for us in the second quarter, but theres a lot of a lot of things happening on the St. I'll just touch on a few of them real quick we had the <unk> expansion project came on about a year ago. What that's done is taken.

It's a, it's a, a traditional deal. That's just what we do. We know some of our competitors, go out and do projects and lowball the rates, but say, if the rates come in higher, I mean, costs come in higher though. It will go up. So, no, this is how we built this partnership. We do a lot of work, a lot of studying. We've got a lot of good folks doing our right away, estimations and our uh Pipeline and compression cost, and we feel like I said earlier, we feel real good. We've got tariff cost in these, we've got contingency costs in these. We feel real good about it and to your first half of your question. Yes, 6 times with pretty good number to to to look at to consider

Thank you.

Our next question comes from Jeanne M Salsbury of Bank of America. Please go ahead.

<unk> taken crude oil to refineries and more importantly, now to exports.

Asia It pulled a lot of the Canadian barrels out that opened up some capacity on some pipelines out of Canada that now could be filled into a certain degree with one of our competitors taken Bakken out that's going to go away in the next year and a half to two years that window is going to close and the volume growth in Canada going to fill that up and so those volumes are coming.

Hi. Uh I wanted to go back to the comment about 2025 fundamentals, being a little bit weaker uh than you guys had forecast. Um in the back end uh permanent crude and and gas growth. Is that kind of a year to date comment or more. Just what you're saying in the back half.

Secondly, what happened quarter to quarter was.

We saw volumes come off that we had.

Some cold weather up there in April and May.

That slowed down completions, there were some deferments of completions there were even some curtailments and we saw about 50000 barrels a day less volume for the for the second quarter. In addition to that we're also fires that had impact on barrels moving through both Tms projects, the original and the expansion and.

Yeah, yeah, this is Dylan. Good question. Uh, it's a little, it's a little bit of both. I think that we um uh you know through through the beginning of the year, I'm just seeing a little bit, a little bit lower volume, some of that was coming out of the fourth quarter. Um, our plan had some growth in there. We just haven't seen materialized, uh, to do the extent that we we planned. We are still staying strong, uh, you know, strong volumes and the majority of our areas. Uh, just not quite at the

That's the growth rate that we expected. And so looking at the back half of the year, you know, kind of a continuance. We we see some growth coming but we've got a little bit of. We got a little bit of catch up to get up to where we expected to be uh, this time of year and so um like

if you got a little bit of both,

So what that caused was a lot of the refineries both in Canada and in the northwestern U S really paid up.

Here. Yeah, and if you don't mind, let me add to this uh,

To get oil to the refineries because they were short out of Canada and so.

Increased our business through our rail terminals, but took some volumes off of our pipelines that it's coming back. So you kind of add all that up. There's 80 9100 120000 barrels that have been kind of go in different directions or weren't being produced that are going to come back in the system and in addition to that and Theres no questions about this yet.

We couldn't be more bullish about Bach. Now, that sounds odd because it certainly was kind of a black eye, looks like for us in the second quarter. But there's a lot of, a lot of things happening behind the scene. I'll just touch on a few of them real quick. You know, we had the TMX Expansion Project came on about a year ago. Uh, what's that done is, uh, they've taken crude oil to refineries and more importantly now to export, uh,

Talk about economics that we're excited about add on his whole team is that.

We've got this open season go on with Enbridge and what energy transfer has done a good job on all these years as we look at our assets, we look at there being utilized.

<unk> knows we converted a natural gas pipeline Interstate into a crude line that helps move Bakken to the Gulf Coast.

Converted the Interstate.

Pipeline out in West Texas.

In Mexico, two in NGL, we converted another pipeline to diesel and that's kind of what we do but we also look at how do we keep our pipeline full today and more importantly for the next 10 or 15 years and what's going on in Canada.

To Asia, uh it pulled a lot of the Canadian barrels out that opened up some capacity on some pipelines out of Canada. That now could be filled into a certain degree with 1 of our competitors. Taking bokan out, uh that's going to go away in the next uh year and a half to 2 years. That window is going to close and the volume growth in Canada is going to fill that up and so those volumes are coming by. Secondly, what happened quarter to quarter was uh, you know we've we've solved volumes come off. We had some cold weather up there in April and May uh, that slowed down completions. There were some deferments of completions there were even some curtailment. And we saw about 50,000 barrels a day, less volume for the for the second quarter. Uh, in addition to that, there were also fires that had impact on barrels, moving through both TMX.

Exciting to US there is a lot more egress needs to get out and what better way than to help Canadian producers get production out to a pipeline that already exists no risk on building no risk on any kind of other issues.

So we're excited about that we think is a great opportunity to help Canadian producers, but more importantly.

We're gonna do everything we can to make sure the producers in North Dakota.

Have an outlet on our pipeline, but in addition to that we have the ability to increase by adding pumps capacity of our pipeline and so it fits very well and are working with enbridge to help get more production out of the Canadian So once again I'll start with Lora.

Okay, I'll end, where I started we're very excited about the future of <unk>.

Codexis.

That's great. Thank you for all of that detail.

As a follow up as you know theres a lot of NGL pipeline capacity coming on in the Permian This year and next can.

Can you kind of dimension I guess, how much volume loss do you think you could see on.

Lonestar and whether the north Delaware Leaping project, you announced today, what would offset most of that maybe ill.

Yeah.

Knight Fracs coming on into next year, so that kind of play.

Rolling all of this we've got to have a home for it but we're right on target as Tom mentioned the opening statements. We're bringing these crowd on over to we've got.

Badger up and ramping up quickly, we'll have Mustang draw first quarter I think of next year.

We're doing everything we can to get the barrels out of the Delaware, that's $60 million of expansion to get.

About it. I don't. And his whole team is that uh you know we've got this open season going within bridge and what inter transfer has done a good job on all these years is we look at our assets. We look at their being utilized as everybody knows. We converted a natural gas pipeline, Interstate into a crude line that now helps move back into the Gulf Coast. We converted a Interstate, uh, pipeline out in West Texas, and New Mexico to an NGL. We converted another pipeline to Diesel, and that's kind of what we do. But we also look at how do we keep our pipelines full today? And more importantly, for the next 10 or 15 years? And what's going on in Canada, is exciting to us. There there's a lot more egress need to get out. And what better way than to help Canadian? Producers get production out through a pipeline that already exists. No risk on building. No risk on any kind of other issues. Uh, and so we're excited about that. We think it's a great opportunity to help Canadian producers but more importantly, you know,

Down further stream, we've got more capacity on our existing loan star as you just mentioned.

And we feel real good about new contracts that we're signing of course, the ones that are related to our own crowd new contracts with other third party processing plants.

And then.

Deals that were that are coming up for termination where being a very aggressive overall on those other over so we're focused and we've got a whole team working on this just like I said on Dakota access to keep these pipelines full build them to the capacity we need them and then through time to fill them up and then as time goes on make decisions on.

We're going to do everything we can to make sure the producers in North Dakota, uh, have an outlet on our pipeline, but in addition to that, we have the ability to increase by adding pumps capacity or Pipeline. And so it fits very well in working with Enbridge to help get more production out of the Canadian. So, once again, I'll start with a, I mean, I'll end where I started. We're very excited about the future of uh, the Kodak access.

Further expansions, but we feel real good of where were at in kind of the timing when the barrels start showing up with that.

That's great. Um thank you for all of that that detail um as a follow-up as you know there's a lot of NGL pipeline capacity coming on in the puran this year and next um can you kind of Dimension? I guess how much volume loss you think you could see on on um, Lone Star and whether the North Delaware looping project, you announced today would would offset most of that, maybe? I'll

Completion of some of these <unk>.

Yeah. Uh,

Projects that we have going on including the Delaware extension.

Great I'll leave it there thanks for all the detail.

Our next question comes from Gabe Moreen of Mizuho. Please go ahead.

Good afternoon, everyone I just wanted to ask on it seems like a long time ago at this point I'll say an export saga.

Does that have any impact at all on your quarterly results results would be bigger picture.

As you are thinking about some of your expansions.

Other types of projects, whether it changes your plans in terms of markets you may be targeting either for ethane or ethylene exports and just how things will go in the future commercially.

Yes.

Yes, the first half of your question no impact.

Totally it didn't last long enough to have an impact, but we're concerned about it.

Only impact I'd say, we'd say that it had was what.

When you have deals with companies international companies. All these years they've relied on you do business with the U S. The U S honors. It so that put a little bit of a blackout on us on our industry on a country. When we've got contracts in billions of dollars that was spent on crackers in this case in China with one.

We I don't know ninth racks coming on the internet next year, so that kind of plays a role in all this. We've got to have a home for it but you know we're we're right on target. As Tom mentioned, the opening statements. We're bringing these crop up for on over 2. We've got a badger up and ramping up quickly. We'll have Mustang draw up first quarter. I think next year, uh, we're doing everything we can to get the barrel of va Delaware. That's the 60 million dollar expansion to get more down further stream. We've got more capacity on our existing Longstar as you just mentioned. Uh, and we feel real good about new contracts that we're signing. Of course, the ones that are related to our own crows, new contracts with other third-party, uh, processing plants. Uh, and then, uh, uh, deals that were that are coming up for termination. We're being a very aggressive of rolling those other over over. So, uh, you know, we're focused. We got a whole team working on this, just like I said on Dakota access to keep

In our case with a very good partner with satellite.

One fund, but we work our way through it Fortunately that has gone away.

These pipelines full to build them to the capacity, we need them and then through time to fill them up and then uh as time goes on make decisions on further expansions but we feel real good of where we're at and kind of timing when the barrels uh start showing up with uh the completion of some of these uh uh projects that we have going on including the Delaware extensions.

Great. I'll leave it there. Thanks for all the detail.

We think it's going to be probably a little bit more difficult to contract with Chinese crackers, good or bad we think that they're probably going be a little bit more hesitant. So to your question, yes, as we've always done we're looking at other countries of the companies in other countries and we are.

Our next question comes from Gabe moiraine of Mizzou. Please go ahead.

Beating the bushes and Theres a lot of opportunities there and we're certainly very optimistic and believe that we will have further expansions will need further expansions both at Marcus hook and at Nederland, and those will come but this whole ethane issue that popped up here over the last several months certainly slowed things down with China.

Good afternoon everyone. Um I just wanted to ask on it seems like a long time ago at this point the whole essay and Export Saga. But a whether that had any impact at all on your quarterly results results but be bigger picture.

as you're thinking about some of your expansions and um, other types of projects,

Whether it changes your plans, in terms of markets, you may be targeting either for USA or USA and exports uh, and just how things would go in the future for that.

Thanks, Matt to you and maybe if I can ask just hydraulically in terms of what's going on with <unk> and some pipeline in terms of your ability.

I think to make it bidirectional at this point are your customers just looking to wheel gas in terms of different points around or can you just maybe give us some more color in terms of what those hydraulics kind of due for the project and what sort of demand youre looking to meet their with huh.

We've talked we've been pretty excited about desert southwest but.

Uh, no no impact. Uh, uh, fortunately, it didn't last long enough to have an impact, we were concerned about it. Uh, the only impact I'd say we'd say that it had was, uh, when you have deals with companies International companies, you know, all these years they've relied on, you do business with the US, the US honors it. So that, you know, put a little bit of a black eye on us, on our, on our industry, on our country, when we've got contracts and billions of dollars.

It's hard not to be as if not more excited about <unk> couldnt have been better timing, we missed a lot of projects through the years, but we hit the rate of returns that we needed. Finally on this project. So when we got it to the <unk>.

Zone, It's got tremendous interest we had zero interest about sell it out.

We're looking at maybe the next stage, but.

We also by adding the bidirectional capability, we are able to offer other supply sources for.

Our Texas markets and so it's really added a boost especially a revenue boost potential for that project to make it a lot better rate of return than what we initially expected so.

As I mentioned earlier, which is you can look at all our assets at the country's exciting, but gosh, especially in Texas do you want to build a data center in Texas, who in the World would you want to do it better than any transfer when you look at all the 42 inch 36 inch we have all the storage support we have behind that.

That we will have further expansions will need further expansions of both that Marcus Hook and at Nederland and those will come but uh this whole ethane issue that popped up here over the last several months, certainly slowed things down with China.

Our ability.

Kind of a path to being able to deliver at critical times. So we feel real good about that and <unk> is going to be a great project for us.

Thanks, Mackie. And maybe if I can ask just hydraulically in terms of what's going on with the Hub Rensen pipeline, in terms of the ability, I think, to make it bi-directional. At this point, are your customers just looking to wheel gas in terms of different points around? Or could you just give us some more color in terms of what those hydraulics kind of do for the project and what sort of demand you're looking to meet there with that?

For many years to come in.

We're very fortunate that kicked off when we did.

Thanks Mac.

Okay.

Our next question comes from Manav Gupta of UBS. Please go ahead.

Good afternoon, congrats on all the growth projects I just wanted to quickly focus on slide eight it seems you know 50% of your broader capital it will be on that guest focused projects for 2025 Im trying to figure out given all of these new projects, which are being announced what would that number be plus 27 28 am on looking for an exact number.

But should we assume that number claims upward from here.

Yes, I think thats fair to assume that number turns out obviously.

Obviously.

We've got a lot of time between now and then a lot of projects that the team is working on a lot of great projects.

You know, we we've talked, we've been pretty excited about desert Southwest. But, uh, it's, it's hard not to be as if not more excited about Hugh. Branson couldn't have been better timing, uh, you know, we missed a lot of projects through the years, but we hit the rate of returns that we needed finally on this project. It's when we got it to the, The End Zone. It's got tremendous interest. Uh, we had zero interest about selling it out and, uh, uh, you know, we're looking at maybe you know, the next stage but, uh, we also, by adding the, uh, bidirectional capability. We are able to offer, you know, other Supply sources for, uh, our Texas markets. And so it's really added a boost, especially a revenue, boost potential for that project to make it a lot better rate of return than what we initially expected. So it, you know, as I mentioned earlier, we

Then we will look forward to the brand.

Brian Ranger announcement here over the next couple of years, but right now as we look at it yes.

That number would trend quite a bit higher once all the books right now, particularly.

With the desert southwest project.

Thanks for taking my quick follow up here is a number of people are trying to develop this LNG, but you are somewhat unique because you have all these pipelines to feed your own LNG. So can you talk about the benefits of vertical integration of moving ahead with Lake Charles given all of the infrastructure that you have in place to feed your LNG facility.

Just you look at all our assets out, the country, it's exciting, but gosh, especially in Texas if you want to build a data center in Texas, who in the world, would you want to do it better than any transfer? When you look at all the 42 inch 36 inch, we have all the storage support we have behind that in our ability and, you know, uh, kind of pass to being able to deliver it critical times. So we feel real good about that. And Hugh, Brent is going to be a great project for us, uh, for many years to come. And, uh, uh, we're, we're very fortunate to kicked off when we did.

Thanks Mackie.

Yeah. This is mackie again as we've mentioned over the years, we're very excited about LNG, but what really drives us on LNG as the <unk>.

Our next question comes from manav Gupta of UBS. Please go ahead.

<unk> transportation business that we're so good at in there what's kind of built our company. So as you mentioned we've got multiple.

Pipeline.

Routes into that area and into Lake Charles We certainly will look at an expansion of our pipeline system to bring in more volumes once we get to <unk>.

Uh, good afternoon, congrats on all the good projects. I just wanted to quickly focus on slide 8. It says, you know, 50% of your growth Capital will be on that gas focused projects for 2025 and I'm trying to figure out given all these new projects which are being announced. What would that number be for 2728? I'm not looking for an exact number. But should we assume that number Trends upwards from here?

And we're very excited about that aspect of the project I mean, LNG is going be great projects that would be a good rate of return for us, but the real upside is our pipeline transportation business upstream of electricals.

Thank you so much.

Our next question comes from Michael Blum of Wells Fargo. Please go ahead.

Yeah, I think that's safe to see that number turns up. But we, you know, obviously, um, you know, we got a lot of time between between now and then and a lot of, you know, projects that the teams working on a lot of great projects um, that we will look forward to uh, you know, to bring in to announcement here over the next couple of years. But right now, as we look at, yes, um, I think that, you know that

Thanks, Good afternoon, everybody wanted to go back to Lake Charles and really just clarify.

Trend.

The higher ones on the books right now, particularly with uh with the other desert Southwest project.

Your goal to get to 15.

<unk> million metric tons to get to RFID.

Does that need to be all firm contracts or will you proceed with a combination of <unk> and Sps.

And Tom a correct this or modified but what we plan on doing is once we have <unk> <unk>.

Perfect. Perfect. Perfect. So, can you talk about the benefits of vertical? Integration of moving ahead with Lake Charles, given all the infrastructure that you have in place to feed your LG facility?

<unk> Hoa's initially.

Im sorry, the HOA at our SBA, we will move forward on financing kicking off and that's what we have our targeted level of.

You don't want a combination of both so.

The HOA are for all practical purposes ended up being binding, even though theyre not but with all the parties were dealing with once we signed the SBA, where 99% positive we will get to neutral.

Around the same off with one for Shannon HOA more Toms area, but.

Once we found HOA, we're confident that we'll get to SBA and a fairly relatively short period of time.

Yeah, this mackie again. Yeah, that as we've mentioned over the years, we're very excited about LNG but what really drives us on LNG is the pipeline transportation business that we're so good at and that what's kind of built our company. So as you mentioned, we've got multiple out uh, pipeline routes into that area and into Lake Charles, we certainly will look at a an expansion of a pipeline system to bring in more volumes once we uh get to FID uh and we're very excited about that aspect of the project. I mean, LG is going to be a great project, it's going to be a good rate of return for us, but the real upside is our pipeline transportation business Upstream of Lake. Charles

thank you so much.

Okay, Great that helps and then just wanted to ask about how we should think now about the cadence of growth Capex beyond this year now that you've got desert southwest Lake Charles is moving towards <unk> and you've also announced here another steady rate of additional.

Our next question comes from Michael Blum of Wells. Fargo. Please go ahead.

<unk>, so and it seems like Theres a lot more behind this so just wanted to get a sense for the cadence beyond this year.

Thanks, uh, good afternoon everybody. Uh, wanted to go back to Lake Charles and really just clarify, uh, you know, your goal to get to 15 uh million metric tons to get to FID. Uh, does that need to be all firm contracts, or will you proceed with a combination of HOAs and Spas?

Okay, Michael listen this is Tom Dillon.

Bill I was walking through that.

A little bit one of the one of the previous questions, but that is fair with all these good projects. We're having right now we are seeing that seeing that grow well, we'll probably be ready.

This year to be able to give a little more guidance around that we normally wait till the year.

Year end earnings call to provide the guidance for 2026, but with all the moving pieces here right now.

On a lot of very very good projects that we're excited about.

Just give us a little bit later, but you can appreciate those are going to be coming up and that's not just the desert southwest that your breaths and the storage.

All the projects, we're talking about right now.

Blake Charles.

Lake Charles gets going that one likewise, we'll be rolling that one out so.

Either 1 a combination of both. So, uh, you know, the HOAs are, are all practical purposes or end up being binding, even though they're not, but we with all the parties we're dealing with once we sign the spa, we're 99% positive, we'll get to the nature a. I'm saying it off with once, we sign the HOA, this more times that area. But once we sign out with your a very confident that we'll get to SBA in a fairly relatively short period of time,

Just give us a little more time with all the moving pieces, but you can see that definitely going up.

Thanks, Tom.

Our next question comes from Zach then Evren of T. P. H. Please go ahead.

Thanks for taking my question, maybe going back to the AI powered project great to hear the Hyperscale contract that you spoke to.

Okay, great, that helps. And then just wanted to ask about how we should think. Now about the Cadence of growth, capex Beyond this year, now that you've got desert, Southwest the Lake Charles is moving towards FID. It seems and you've also announced here another, you know, steady rate of additional projects so and seems like there's a lot more, you know, behind this. So, just wanted to get a sense for for the Cadence Beyond this year. Thanks.

yeah, Michael listen, this is Tom and I know that Dylan was was walking through that um

It seems like a lot of these projects are on or around existing assets and I know you probably can't give an exact number but is there a range of EBITDA contribution from these projects you could point to.

Within a mile of the facility is it.

A lower contribution just trying to get an idea of what these projects might look like.

Yes. This is Mac again, it's probably a little early on to get to that kind of detail and the reason being is.

A little bit 1 of the 1 of the previous questions. But that is fair with all these good projects we're having right now. Uh, we are seeing that seeing that grow, we'll, we'll probably be ready, uh, you know, later this year to be able to give a little more guidance around that, we normally wait till the, you know, the year end earnings call to provide the guidance for 2026 but with all all the moving pieces here right now. Um, on a lot of very, very good projects. Um, that

Some of these we may have a mile or two delay some of them. We may have 25 miles away for the most part they're much closer to our systems, but we will have an added fee for that but.

We're excited about uh just give us a little bit later but you can appreciate those. Those are going to be coming up and that's not just the desert Southwest that you greten the storage uh you know all the projects we're talking about right now.

I guess I would state that.

As we get more and more of these done it will be a very impactful number.

From an EBITDA perspective, and every single project, we will have.

And if Lake Charles, uh, when Lake Charles gets going that 1, likewise, you know, will be be rolling that 1 in. So uh, just give us a little more time with all the moving pieces, but you can see that uh, definitely going up.

Thanks Sam.

Some will have much higher.

EBITDA.

Impacts than others, but I don't think on this call. We can really quantify exactly what that is but we're very bullish of where we're at where that business is going to take us.

Our next question, comes from Zach, then Evan of tph, please go ahead.

Sounds good and maybe shifting back to the NGL looping project just curious if the.

Hi all thanks for taking my question. Maybe going back to the AI power project. It's great to hear the hyperscale contract that you spoke to.

150 barrels is shifting off of another system or is this expected to be kind of incremental growth from producers in that area.

It will be incremental growth.

As Badger ramps up we're running out of capacity, where we've got more growth up in the southern Delaware and new Mexico.

It seems like a lot of these projects are on or around existing assets and I know you probably can't give an exact number, but is there a range of ibida contribution from these projects you could point to? You know, if it's within a mile of the facility, is it, you know, a a lower contribution just trying to get an idea of what these projects might look like.

So it's we.

We expect growth rolling over contracts that exist new growth on our.

<unk> plants that are coming online as well as third party processing plants that are AMG NGL team is actively negotiating with.

Perfect I appreciate the time thanks, everyone.

Got it thank you.

Our final question comes from John Mcgee of Goldman Sachs. Please go ahead.

Hello, everyone. Thank you for the time.

I think Manav asked this one way, but I'm going to ask him. Another just looking more broadly announced a ton of gas projects now do you have a sense of what percentage of the overall business.

Ross could look like as we look forward a couple of years.

Yeah, this is Mack again. It's probably a little early on to get into that kind of detail. Uh and the reason being is, you know, some of these we may have a mile or 2 delay, some of them. We may have 25 miles away for the most part, they're much closer to our systems, but we will have have a, an added fee for that. But, uh, I guess I would state that as we get more and more of these done, uh, it will be a very impactful number, uh, from an Eva doll perspective. And every single project will have, you know, some will have much higher, uh, uh, even doll impacts than others, but I don't think on this call really quantify exactly what that is. But we are very bullish of where, where all the where that business is going to take us.

Yes, John this is Mackie when you say overall, you mean kind of like a bcf.

Sorry, I guess percentage of total.

EBITDA.

Okay.

I don't think at this point.

Given an exact number on that you said theres a lot of projects in the works.

Sounds good and and maybe shifting back to the NGL looping project, just curious, if uh, 150 barrels is, you know, shifting off of another system or is this expected to be kind of incremental growth from producers in that area?

And a lot of good growth opportunities.

It it'll be incremental growth. Uh,

And all of our segments here, Okay. As you look right now when you look at the main segments there.

The expansion of our two biggest expansion projects you Brexit intrastate desert southwest of interest stake.

Obviously, the expectations for those segments to grow as a percentage of a whole probably probably the quickest of any of our segments as we look out.

And maybe taking that a little further I mean with a lot of these couple of these projects being a little later, David are you guys getting into a position where you might be able to talk about kind of a.

As Badger ramps up, we're running out of capacity where we've got more growth up in the Southern Delaware, New Mexico. Uh, so it's it's we expect growth rolling over contracts that exist new growth on our power process plants that are coming online as well as third-party processing plants that are in GTA NGL. Team is actively uh negotiating with

Perfect. Appreciate the time. Thanks everyone.

Thank you.

Go forward kind of EBITDA growth rate target from here or anything like that maybe not necessarily guidance, but at least.

Our final question comes from John mcke of Goldman Sachs. Please go ahead.

A framework or a.

General target.

Yes listen this is Tom again, it has not been something that we would probably bounced around here a lot as far as discussion.

Clearly with all of this is happening we always have a very good.

Hey everyone, thank you for the time. Uh I think manav asked US 1 way but I might ask him. Another just looking more broadly announced a ton of gas projects. Now do you have a sense of you know what percentage of the overall business gas could look like uh as we look forward to a couple of years?

Very very robust forecasting process around here so.

We're always in front of rating agencies with those et cetera.

Uh, sorry I guess percentage of total ET uh ibida.

We could consider that but I think as we sit here right now we are not necessarily discuss giving some type of.

Growth trajectory ours gets a little bit lumpy, especially when you blend it in with the M&A.

So an acquisition comes along.

Can you can probably appreciate the fact that sometimes that'll offset mega jobs and then other times, we're talking about the projects. We are right now which will have bearing years.

There's a lot of projects in the works and a lot of good growth opportunities. Um, in all of our segments here, I'd say, you know, as you look right now and you look at the main main segments there, uh, with the expansion. The 2, biggest expansion projects with the hubsan, and intrastate and desert, Southwest, and the interstate.

Sales that come with them so.

Anyway.

I don't know if you want to add a little bit more to that I'd just point back to one thing that we've said publicly before which is we have our stated growth targets for distributions of 3% to 5%.

um, obviously the expectation is for those segments to grow, uh, as a percentage of the whole probably probably the quickest if any of our segments, as we look at

The additional color of jumping around that is that.

And maybe taking that just a little farther. I mean with a lot of these a couple of these projects being a little later. Dated are you guys?

That 3% to 5% for us is to provide a baseline for where we believe itself as a floor to the long term.

getting into a position where you might be able to talk about kind of a

Sure real cash flow from here.

We're not manufacturing plan is not to manufacture distribution growth.

A go forward. Kind of ebit growth rate, Target from here or anything like that. Maybe not necessarily guidance, but at least a, a framework or a, uh, a general Target.

Eating into coverage so.

You know that that number is meant to provide a floor for the long term growth rate there.

yeah, listen this is Tom again, that's not been something that we

A bare minimum.

That makes sense appreciate the time thank you.

Thank you.

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

Alright, well listen we thank all of you for joining us as always and we look forward to the follow up calls.

Clearly, with all this this happening, we always have a very, very, very, very robust forecasting process around here. So we uh, we're always in front of, you know, rating agencies with those Etc. Uh, we we we could consider that but uh, I think as we sit here right now, we've not necessarily discussed giving some type of a

Everyone has.

Good rest of your day.

This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.

A growth projector. Ours, gets a little bit lumpy when you blend it in with the m&a. Uh, so an acquisition comes along you can you can you can probably appreciate the fact that sometimes that'll all a sudden make a jump and then other times we're talking about the projects. We are right now which all have varying years of of build that come with them. So um, anyway uh Dylan, I don't know if you want to add a little bit more to that, I just I just point back to 1 thing that we've said, probably before, which is, you know, we have our stated growth Target for distributions of 3 to 5%.

The additional color we've given around that is that, you know, that 3% to 5% for us has to provide a baseline for where we believe is a floor to the long term.

Growth in terminal, cash flow per unit. We're not, we're not manufacturing, you know, our plan is not to manufacture distribution growth.

By eating into coverage.

There in a bare minimum.

That makes sense. Appreciate the time. Thank you.

Thank you.

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

All right, well listen. We thank all of you for joining us as always and we look forward to the follow-up calls. Uh, hope everyone has a

A uh, good rest of your day.

This concludes today's conference call, you may disconnect your lines. Thank you for participating and have a pleasant day.

Good afternoon and welcome to the energy. Transfer second quarter 2025 earnings conference call. At this time, all participants are in listen-only mode.

Should you need assistance during the conference? Call you may signal and Operator by pressing the star key followed by zero. After today's presentation there'll be an opportunity to ask questions to ask a question. You may press star then 1 on your telephone keypad to withdraw your question. Please press star then 2

Please note this event is being recorded, I would now like to turn the conference over to Tom Longs, please go ahead.

Thank you, operator. Good afternoon, everyone and welcome to the energy. Transfer second quarter 2025 earnings call.

I'm also joined today by Mackie McCree and other members of the senior management team who are here to help answer your questions after our prepared remarks. Hopefully you saw the press release. We issued earlier this afternoon. As a reminder, our earnings release contains a thorough mdna that goes through the segment results in detail and we encourage everyone to take a look at the release as well as the slides posted to our website, to gain a full understanding of the quarter and our growth opportunities. As a reminder, we will be making forward-looking statements within the meaning of section. 21 of the security exchange Act of 1934.

3.9 billion compared to 3.8 billion for the second quarter of 2024.

We saw several volume records during the quarter including the Midstream Gathering crew, Transportation, NGL, Transportation NGL, refined products terminal and NGL. Export volumes. We also saw strong volumes through our NGL fractionators natural gas, enter and intrastate Pipelines.

DCF attributable to the partners of energy transfer as adjusted was approximately 2 billion dollars. And for the first 6 months of 2025, we spent approximately 2 billion dollars in organic growth, Capital primarily in the NGO and refined products, Midstream and intrastate segments, excluding sun and USA Compression capex.

Now, turning to our results by segments for the second quarter, and let's start with NGL and refined products. I just Diva dive was 1 billion dollars compared to 1.1 billion dollars. For the second quarter of 2024, we saw higher throughput across our Mariner East and Gulf Coast pipeline operations as well as through our fractionation facilities which were offset by lower gains from the optimization of hedged NGL and refined product inventories, as well as lower blending margins compared to the second quarter of 2024.

For Midstream adjusted ebaa. Was 768 million compared to 693 million for the second quarter, 20124.

The increase was primarily due to higher legacy volumes in the Permian Basin, which were up 10% as a result of processing, plant upgrades, and increased plant utilization, as well as the addition of the WTG assets in July of 2024.

These were partially offset by lower gathering volumes in the dry gas areas.

For our crude oil segment, adjusted EBITDA was $732 million compared to $801 million for the second quarter of 2024.

During the quarter, we saw growth across several of our crude pipeline systems as well as contributions related to the recently, formed permanent joint venture with son.

These were all set by lower Transportation revenues primarily on the Balkan pipeline.

In our Interstate natural gas segment adjusted Eva dial was 470 million compared to 392 million for the second quarter of 2024.

This was primarily due to higher contracted volumes on several of our Interstate pipeline systems.

And for our intrastate natural gas segment, adjusted dile was 284 million compared to 328 million in the second quarter of last year.

During the quarter, we saw increased volumes across our Texas Interstate pipeline system, due to third-party, volume growth.

This was offset by reduced pipeline optimization, as a result of shifts to more long-term third-party contracts and their price spreads compared to the second quarter of last year.

Now, turning to our organic growth, Capital guidance. We continue to expect to spend approximately 5 billion dollars on organic growth, capital projects in 2025. Even with the addition of the newly announced growth projects,

we expect to achieve mid-teen Returns on majority of our growth projects with many also providing incremental Downstream benefits.

We expect the majority of the upcoming earnings growth to come from our Flex Port, puran processing, NGL transportation and Hugh Branson pipeline expansion projects which are expected to ramp up in 2026 and 2027.

And our newly announced projects along with our significant. Backlog of opportunities are expected to provide, even greater visibility into additional volumes and earnings growth. Through the end of the decade.

Making a closer look at some of our recently approved and currently underway projects. We have some exciting updates on the natural gas side of our business, which are expected to support. Growing demand for gas fired, power plants, data centers, and Industrial and onshore Manufacturing.

First, we were very excited this morning to announce the desert Southwest pipeline project. This strategic expansion of our transwestern pipeline will enhance system, reliability, and provide new and existing natural gas demand markets in Southern New Mexico, Arizona and across the southwest region with access to low cost, reliable permanent base and volumes.

Approximately 1.5 BCF per day of Transportation capacity from the heart of the Permian, Basin to the Phoenix area in Arizona.

We expect the project to cost approximately $5.3 billion, including $600 million of AFUDC, no later than the fourth quarter of 2029.

the project is backed by significant long-term commitments with investment grade counter parties and we expect to launch an Open Season later this quarter

Also, we expect the capacity to be completely sold out upon completion of the Open Season.

Depending on the final results of the Open Season, the project could be expanded to accommodate additional demand.

Phase 1 of our Hugh. Branson pipeline is expected to provide approximately 1.5 BCF per day of natural gas. Takeaway from the Permian Basin upon, being placed into service, which we expect to be no later than the fourth quarter of 2026.

In addition, we recently reached a positive FID on Phase 2 of the pipeline project which will include the addition of compression.

This system will be bidirectional with the ability to transport approximately 2.2 BCF per day from west to east and approximately 1 BCF per day from east to west.

When this pipeline goes into service, we expect to have more than 2.2 BCF per day contracted.

To you, Branson Pipeline will provide significant optionality by connecting shippers to our vast intrastate natural gas pipeline network, other downstream pipelines, as well as access to the majority of the gas utilities in Texas and to every major trading hub in Texas.

We believe this project further establishes, energy transfer as the premiere option for customers seeking a flexible and reliable natural gas solution to support their power plant and data center growth plans.

And in July, we announced an open season on our Oasis pipeline, which offers an efficient option. For shippers to sign up for future long-term natural, gas Transportation capacity. Out of the Permian Basin, as he becomes available on the pipeline.

This Open Season allows potential Schurz, the opportunity to ramp up their volumes over the next 4 years to better meet their projected volume growth curves.

We also recently approved the construction of a new storage cavern at our Bethl natural gas storage facility.

This project is expected to double our working gas storage capacity at the facility to over 12 BCF, and we hope to place the new cavern in service by late 2028.

This expansion, which is expected to cost approximately 140 million will increase our Equity, gas storage capabilities.

To serve growing demand.

In the heart of our extensive intrastate natural gas pipeline Network.

This will further strengthen the reliability of our systems as well as provide the opportunity to benefit from pricing volatility.

We also recently approved an expansion on the sesh pipeline to serve Growing. Power Generation needs in the southeastern region of the United States.

Looking at the Permian processing expansions and the second quarter of 2025 energy. Transfer placed the 200 million cubic foot per day Lenora. 2 processing plant in the Midland Basin into service and the plan is currently running at full capacity.

we also recently placed the 200 million per day, Badger processing, plant into service, which utilized a previously idled plant, that was relocated to the Delaware basin

Volumes are ramping up nicely and we expect to be at full capacity in the next few months.

Or the last year, we have added approximately 800 million cubic feet per day of processing capacity, including 200 million cubic feet per day of optimizations that we completed at several of our other permanent processing facilities.

As a result, our process volumes in the Permian Basin. Recently reached a new record of nearly 5 BCF per day and our wide gray transportation throughput from the permanent. Also, recently reached a new record. In addition we continue to expect our Mustang draw plant to be in service in the second quarter of 2026.

At our needle and terminal. We recently placed our Flex Port NGL, export Expansion Project into ethane and propane service.

Adding up to 250,000 barrels per day of total NGL, export capacity at our needle and terminal.

This project is fully contracted beginning in January 2026, with capacity initially split 50/50 between ethane and ethylene.

And Propane.

We also recently approved.

The looping of an NGL pipeline Upstream of our Lone Star Express pipeline, which will expand our access to ngls from the northern Delaware Basin where we see significant growth from our customers.

Looping, this pipe is expected to allow us to source and incremental 150,000 barrels per day of ngls for transportation on our NGL pipeline system from this high growth region.

The project will cost approximately $60 million and is expected to be in service in the first half of 2027.

Now, turning to Lake Charles LNG.

We continue to make substantial progress towards commercialization of this project.

During the second quarter Lake, Charles LNG signed an HOA with mid ocean energy, which provides a non-binding framework for the joint development of the LNG project with mid ocean entitled to receive 30% of the LNG production.

Approximately 5 million tons per hour in addition Lake, Charles signed 20-year, sba's with Kyushu, electric power company, and Chevron USA.

On the marketing side, we're Advanced discussions with multiple parties for our remaining capacity and are getting close to our Target of 15 million metric tons per hour.

some of our potential alltake customers are also interested in equity in the project which if concluded would reduce our external financing requirements,

As we have previously stated, we expect to sell equity in the project to reduce energy transfers ownership to approximately 25%.

Over the last several months, we have been working with our financial advisors to finalize marketing materials as we prepare for the launch of the equity sale down process.

Now for a brief update around our new natural gas opportunities for new, power, plant, and data center development.

We continue to see a significant level of activity, from demand pool customers to supply store, and transport natural, gas for na, gas fired, power plants, data, centers, and Industrial, and onshore Manufacturing,

And we remain in advanced discussions with several facilities and close proximity to our footprint. We would expect these types of projects to generate Revenue relatively quickly.

Our team continues to do an excellent job of identifying, the most likely opportunities and we will continue to provide updates as we move forward.

Lastly construction of 8 10 megawatt, natural, gas fired, electric generation facility continues. The second facility which is serving. Our Badger processing plan was recently commissioned and we expect 2 more facilities to be placed into service by the end of the year with the remainder expected to be in service in 2026.

Now, turning to our guidance.

We now expect to be at or slightly below the lower end of our guidance range of 16.1 billion dollars to and 16.5 billion dollars.

This is a result of weakness in the Balkan slower recovery, in the dry gas areas than we expected and a lack of normal volatility in our gas optimization business from spreads and storage margins. In addition, we expected stronger growth in our puran. Crude business than we have seen year to day.

In summary given the substantial growth in demand, for energy resources, over the next several years driven by natural gas and Natural, Gas Liquids. We believe that energy transfer is the best position company in the industry to help meet this demand.

We own 1 of the largest natural gas pipeline networks in the United States, with physical Assets in every major US producing basin.

We have more than 105,000 miles of natural gas pipelines.

That is coupled with significant gas storage and we move approximately 30% of the US natural gas production.

We are connected to nearly 200, gas fired, power plants in the country and have the ability to leverage, strong relationships to develop new projects backed by higher quality counterparties on both the supply and demand side.

We offer significant optionality including bidirectional pipeline flow capabilities and strategically located storage assets, helping secure, stable uninterrupted Supply.

And a long-term proven track record of delivering reliable energy for our customers even during extreme weather events.

Building on our natural gas theme.

Our Hub Branson and desert Southwest pipeline projects and our bethl storage Expansion Project further, establish our natural gas pipeline business as the leading option for customers seeking Dependable natural gas supply.

In addition to numerous opportunities in natural gas, we have 1 of the largest NGL businesses. In the United States with more than 1.4 million barrels per day of NGL, export capacity. And we are continuing to expand this business to meet the international demand.

We also continue to evaluate projects to expand our crude oil pipeline Network.

Our backlog of well-contracted growth projects.

is expected to generate strong returns, enhance our integrated value chain, and promote strong growth well into the future.

We have a strong track record over organic growth, which has been enhanced by our long history of successful acquisitions.

Each of these acquisitions has added strategic benefits and critical mass, providing the incremental opportunities for continued growth of our Nationwide Network. This concludes our prepared remarks. Operator, please open the lineup for our first question.

Thank you. We will now begin the question and answer session to ask a question. You may press star then 1 on your touchtone phone, if you are using a speaker-phone please pick up your handset before pressing any Keys. We ask that you please stick to 1 question and 1 follow-up.

If at any time, your question has been addressed and you would like to withdraw from the queue. Please press star. Then 2, at this time, we will pause momentarily to assemble our roster.

Our first question comes from Teresa Chen of Barclays. Please go ahead.

Good afternoon on the guest power front, uh, related to Data Centers following up on your comments about being in advanced discussions with demand pull customers, can provide more detail on the commercialization efforts to date. What are the dating factors at this point? What is your updated view on the size and scale of the set of opportunities? And when can we expect to see more discreet announcements on this front?

Hey Teresa, this is Mackie. Uh, let me make you all make a statement at the end. I will make a quick statement, and then I'll answer your question and it kind of rolls into that answer. Anyway, uh, since Kelsey started this over 25 years ago, our partnership, we started with a 10-inch pipeline. That was idle run through about 8 counties in East Texas. And we've grown to uh, you know, just a massive company through acquisition.

And also through enormous organic projects throughout the U.S. And as I sit here today, we look at the folks that are running our business, both in-office and especially out in the field. And we look at the diversity that we have, unparalleled to any of our competitors by far. Uh, even with this challenging quarter that we have, that we're certainly going to talk about, I've never been, I'm sure everybody in here joins me in being excited about where we sit and where the future is for our industry. But even more importantly for this call, for our partnerships. So we're very excited about that, and a lot of that drive comes to your question. Uh, I've kind of been taking a ribbon for the last three months from these guys saying, 'Don't say four to six weeks on something.' So I'm going to be a little careful there, but I will say this: these data centers have come out of nowhere. Uh, it's a huge and enormous upside for companies like us that have big inch pipes all over the U.S.

And very well-located areas for these types of projects, but they're different and they're different in a couple of ways 1. These aren't, you know a a plant that cost a billion dollars or half a billion. These are 50 60 hundred billion dollar type facilities that we're building to. So these things don't just happen overnight. It takes time. Uh, and even the the the announcement on the desert Southwest, it took 3 and a half years to develop that so it has taken time. I we are going to be more careful about what we say.