ET - Earnings call transcript Q3 2021

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Operator

Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to the Energy Transfer Third Quarter Earnings Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, Tom Long, Co-Chief Executive Officer for Energy Transfer. Thank you.

begin. may You

Tom Long

Mackie Good Transfer operator. you and to today welcome joining the members remarks. who issued prepared earlier Thank Quarter afternoon, slides as as you management this after team XXXX answer posted Energy questions by joined press the also website. Third here afternoon today. are senior saw to thank and help Earnings the to your the other us of you, I'm everyone, McCrea our Call, for Hopefully, we our release and well

we EBITDA information within current in These our X. detail reminder, the XX, available are September filed which and currently more statements Section a XX-Q Form Securities quarterly will meaning of also and which or on are on I'll quarter based financial beliefs refer distributable As to tomorrow, our for be measures. us to as making non-GAAP ended the adjusted statements DCF, all XXE we and be in XXXX. are discussed November the well forward-looking cash Exchange of as of expect flow, Act assumptions XXXX, of report certain to

$X.X of the to partners a highlights. of Energy at to our on find as I'd adjusted measures billion. EBITDA of like generated We reconciliation You'll of our website. and billion start attributable DCF our looking by quarter today non-GAAP some third of adjusted, $X.X Transfer,

during in quarter, volumes fractionation Nederland our of and Belvieu flow had volumes, largely $XXX million fractionators cash reached transportation of driven approximately NGL after approximately new refined after million. we NGL $XXX capital our growth excess and excess Our approximately basis, was and $XXX growth products million Operationally, an Terminal. of Mont and $XXX On beating by distributions terminals DCF the incurred records distributions million.

of Enable update to and well connectivity and acquisition in Midstream improved increasing Mid-Continent natural scale regions margins. higher will provide for continues to As gears an are NGL the we which recover, on our benefit increased Switching customers. market positioned from the to Ark-La-Tex transportation the and demand and Partners, gas

combination our commercial Enable’s complementary to to and we Transfer’s the assets pursue customers service provide expect to utilizing us as and increased flexible of our improved competitive additional We allow opportunities footprint. connectivity and Energy

As a than generate before synergies. combined cost synergies, annual million this rate expect we reminder, is the company more to run $XXX potential and of commercial

of the South starting transportation you Nederland developments We now oil continue June, service believe barrels pipeline. end providing transaction Cushing we Basin provide I'll to terminal an recent barrels commenced terminal to with per And Nederland utilized. call, will White forward connection barrels as with we which is be This we XXXX service are being the and day. last already in our in X increase Cliffs to quarter X, to underpinned expected on before day terminal, for to Cushing with Phase capacity moving fully our Powder River commitments. early our and XXX,XXX second crude the early the through will our third-party pipeline. our In being DJ upstream pipe for that our projects, approximately growth our is walk to the access mentioned XX,XXX year. by per Phase close of on is from of

for As phase. spend this required is a minimal reminder, capital

markets and Coast. out a Bakken and load Houston Gulf along late Bakken and construction give fully now us first showcasing is link Transfer's in Next, export barrels WTI of low-gravity to the Energy market, Ted net Collins Collins quarter of the the provide Ted to unique ability unblended progressing the in XXXX. service expected on be to to will ability barrel The link is the

system. to Mariner our turning East Now

on Mariner pipeline and Marcus the East the barrels system the We significant system commissioned pipeline approximately per East up same current day. Hook to of the are in through NGL capacity Mariner Year-to-date, Mariner next which volumes XXXX. East our Terminal phase have XX% project, period XXX,XXX the brings over

a final cut, issuance which the directional segment the the conversion modification awaiting an permit XXXX. the us of open the of East to of into of drill for will place quarter to Mariner first service are in We final allow

winter. Our Northeast, from York in Pennsylvania supply to will allow products Pennsylvania, refined flow begin markets Midwest into New Access moving project, the other products which will and the refined regions this

a for terminal. brief Now Nederland our update on

continued strong. XXX,XXX our from pipeline, of capable per which well this in of other And the which reminder, than our facilities company our through million when a terminal, the for the was country more the including capabilities of of our XXXX. our our total, earlier of volumes facility. completion over percentage we third exports doubled increase our over per quarter exporting the of to NGL have Mariner at which expanded with LPG as more last Year-to-date of loaded XX to now from day, remaining day under Marcus is export ethane combined remained X.X At has export NGL months exports NGLs of As quarter, barrels nearly expansions year, West are Terminal has we or export Canada, than to And as capacity barrels our worldwide ethane our terminal. among the volumes million ethane barrels is more venture, with world. the Nederland, Nederland joint total out in September, export NGL this Orbit Hook during XX than largest third which Nederland XX%, any

total NGL Looking ahead, increase our to year. export throughout to continue next we Nederland volumes from expect

assets in storage storage being to refineries significantly we supply Midland the NGL providing barrels. allows processing and is into Belvieu, Mcf and our X Mont XXX,XXX at Nederland takeaway already project, rich At to to of is remain contracted. more XX approximately options. project capabilities October to existing This to million-barrel efficiently million Permian Mont access also our additional addition, capacity for Bridge in Midland And in fully operate our brought move storage utilized. demand connects a well, crude strong, our on Delaware takes Basin In recently which oil gathering Belvieu Basin our at assets which the the with us and gas was of day while and out G&P Basin per placed service high-rate

can to In when Mcf XXX,XXX be addition, it easily needed. expanded per day

are jointly and LPG we Panama supply Gateway proposed announced in of of project understanding presents. July, Pipeline. a hub feasibility of it liquid the Trans-Panama and about We in opportunity the the developing with would Republic believe Lastly, attractive the study a memorandum signing to of most the this the excited create world

XX-year agreements purchase update solar activities, to solar the participating we agreement of these energy of from fronts. SB power an alternative basis. Eiffel fixed we Energy megawatt we in our a This megawatts Texas. into generated have power price number on its and for second XXX project Now a project a on hour per entered September, continued where is are make a for with progress good solar in provide Northeast on In

other continuing Transfer utility in on we're we renewable to the a track carbon wind to to large with particular, existing power Appalachian several in Kentucky discussions So solar, our we for large jointly Energy delivered only for and energy continuing solar are In region. wind developers. opportunities and generated us. explore with forestry the acreage projects on credit We're company, pursue also development pay and in actually and

for assets, applications including and On customers Hook financially enhanced oil is industries. delivering upon design of used also carbon and in COX the involving studies. food estimates to projects capture the carbon several pursuing involve recovery sequestration. plants COX from use industrial based processing gas related and This beverage attractive our our preliminary flue capture front, or for and We're projects in to it would Marcus looks the capturing feasibility cost project project from

other We that our innovative to involving a reduce continue we carbon of allow to participate continue capture franchise our will uses carbon us as variety projects believe footprint. to in or

Lastly, we publish expect report our annual our shortly. corporate website for responsibility to

quarter the take for adjusted of partners $X.X billion billion let's of $X.X for third closer compared the the $X.XX billion was as $X.XX quarter XXXX. third XXXX. third look DCF was our compared EBITDA Consolidated Now adjusted third to results. to attributable quarter to a billion the for at quarter

majority significant gain volumes the do to these and higher our in our offset NGL groups refined segment, $XXX various volumes While the Midstream optimization optimization benefits gains record million XXXX of segment. as the well related the quarter in onetime saw we segments, not including products of as in across third the our

on business related we November Uri unit X. of quarter other In Storm higher quarterly XX, as announced of XX on cash October utilities close This the per paid record common distribution unitholders addition, distribution will expenses. Winter the basis. of XXXX annualized be an or On third of $X.XX of $X.XXXX included on to and a November

Adjusted compared last of to reached quarter and of EBITDA increased fractionators to increase systems. period start in our services XXXX, are and improves. on XXX,XXX for margins new our Higher from our our the with segment, additional compared related results system higher last due and Ford positioned by Nederland from same and XXXX. add on our optimization per primarily throughput terminal capture initiation the products. year. per have the at on increased as the period Mont wholly export Belvieu our And new million third offset demand was were volumes volumes well the export barrels and by on transportation fractionated our with increased volumes same OpEx East million we'll day Eagle $XXX third quarter Nederland as record and $XXX projects, joint pipelines transportation feeding service X.X X.X a businesses barrels volumes into as and we compared to in to terminal Northeast West Mariner on region an to per million East NGL the the volumes quarter to the Turning decrease record opportunities and XXXX was XXX,XXX NGL also of Throughout owned a ethane barrels year. per the Mariner million This and average day a to million for capitalize pipeline for Mariner continued barrels increased as pipelines well $XX day in our G&A. volumes our of and to to propane to well the and day venture volumes increased as for refined

compared items quarter a of million period adjusted same in For did of volumes to not $XXX result in year. $XXX on our was $XXX our Bridge third quarter pipelines EBITDA segment, of the approximately the the onetime performance third and Bayou last million XXXX oil for The Bakken XXXX. of million improved recovering crude as offset

optimization expense approximately as OpEx increased million year-over-year. we addition, G&A as reductions well other In had in $XX and

million $XXX million NGL increase related was growth of million was restructuring the to Gathered contracts XXXX. compared EBITDA assignment $XXX MMBtus XX the and a in to of record million $XXX of the prices adjusted This in of year due last in $XXX to gas at for region strong quarter per the the volumes continue Midland near XXXX. well remained the assets and gas highs. which midstream, a Ark-La-Tex day favorable largely Northeast, natural regions. to of the volumes For third or South compared Texas period Permian XX.X as and and result due decrease as in were in offset volumes be and to certain Inlet same higher volumes million volume to Basin were the the Permian, of Permian the ramp-up MMBtus day by recently third quarter partially Ark-La-Tex per for completed million

customers quarter adjusted enhance compared and result, and Delaware for efficiency Basin which of Tiger was processing from our segment, by last we EBITDA operating already a at increase was area bankruptcy and processing to due adjusted was FEP Rover EBITDA third storage over some as volumes long-term the lower conditions. the of Permian project on plants. out $XXX lower on quarter Coast volumes offset primarily and shipper more to for segment, well to year. result by revenues a $XXX market to an favorable third-party Tiger million of the an the XXXX volumes million million our as increase the utilizing transported as optimization the In end on third As Panhandle expenses, demand transportation $XXX XXXX in And intrastate This expirations contract and offset Permian Trunkline primarily to Bridge compared partially a Permian $XXX of the and in volumes to due due in the in to of of are an Interstate to shifting retained largely by million as increase on our our as spreads moving Gulf to contracts in increased well were lower margin. fuel our

While our from period, To benefit additional the third-party forward tightened Katy Gulf us differential long-term volatility basis us the Permian the it the we of going falling over contracting to strategically to in XXXX third of like to reduce basis differentials. Waha within XXXX, saw is contracts, from third we long-term has volumes comparison earnings impacted to from expected quarter the which current Coast fee-based customers quarter under differentials lock as significantly. and taken steps protect us to have of are the exceeding the additional

guidance. Now turning to EBITDA our XXXX adjusted

XXXX year $XX.X to billion. billion EBITDA $XX.X full adjusted remains Our

NGL on As months the And growth capital USA a compression any moving ended products to acquisition. a for Transfer excluding $X.XX and primarily XX, announced Energy billion excludes projects, Enable reminder, contributions September XXXX, refined in range SUN this the X the CapEx. segment, from organic growth update, spent

to to refined million oil be XXXX, $X.X primarily expenditures we NGL year $XXX product, full million crude XXXX, spend to year. capital billion, For and growth XXXX per to we the continue midstream segment. and After expect approximately to $XXX approximately expect in continue

liquidity position. looking at briefly Now our

facility. available and our XXXX, $X.X was credit liquidity leverage ratio was revolving XX, September of for credit total our facilities As X.XXx billion, under approximately the

we the from debt During third by And approximately debt million. our operations we reduce billion. have to by outstanding year-to-date, quarter, $X utilized approximately long-term $XXX cash reduced our

value position debt of our our We to few best unitholders. return over we improve done last accelerate to work years the have as to lot ourselves and a lifting heavy leverage our reduction,

We generate continues priority. cash in debt a paying of amount to XXXX, to down be flow our expect significant top and

performance to in in for and/or Additionally, unitholders our the begin door the of distribution strong XXXX beginning the our opens next potential increases value returning form buybacks to year.

quarter, our well to third systems volumes the see as across continue several improve recover fundamentals. During we as of

and throughout Nederland record assets In Mariner our generate our to continue East and allowed emphasis strong of NGL to debt in grade to continued which and refined and volumes a improving on growth XXXX. drove total amount products to financial our We and rating committed in exports flexibility. projects projects remain our and addition, grow to expect fund our further deleveraging capital segment, expansion third place investment NGL internally reduce we significant flow, cash quarter. maintaining Overall, the maintaining and discipline, us

of which up our we on about a continue excited able new effectively be number of Enable, pursue We and improve energy energy opportunities. and we enhance believe enhanced efficiencies can we estimates Operator, alternative focus, to first energy will to our the footprint continue please cost participate progress to question. the with for favorable. How key commercial preliminary and be acquisition the we projects, looking evolving we a to use in is open line franchise make and our grow our world

Operator

from Shneur UBS. Instructions] first [Operator Our is question Gershuni with

Shneur Gershuni

saw unchanged quarterly Tom, maybe should with guidance. respect results saw can the with We to but we we also the some and them margins. about higher some lower off think start we how volumes

costs transportation you but this in up were of costs are the earlier sort intimated be For up, going NGL had that to year. segment, example,

that I'm margin about you quarter, and about occurring? just given color thought specific was seasonality we sort Just the that's the restructuring how as play wondering give we've Is guidance can seen. of whether us midpoint out that the was that compression how should thinking we kind if this of originally some contract the should it all constructed just end. some with we be some towards going be or was shape about this thinking be results towards wondering thinking of there should and if lower quarter's you to the

Mackie McCrea

Shneur. afternoon, Good Yes.

had we very a we guidance obviously, As we started very, then first initial the and had, gave we year, strong quarter. obviously the

year, of in optimization segments, expecting, products. and So of we activities look refined part probably much as it were pretty NGL there your one. I in out is we some say that question about oil I Crude it’s anticipating line. higher the bit over be the probably little another think the was will we were would first that a this what

anticipating, little bit I we in. of anticipate the we that question And So what this still part the would really guidance we were think a than softer good your feel provided. about as to where coming maybe out playing is we but last

do be with in optimization probably we the in positive opportunities, fairness, now. Is range. we think that the of moving feel I have of where end very, it’d see good coming at lot probably a and the about it right once through, again, very volumes lower good continued year. we But

Shneur Gershuni

year XXXX, the for to on a as maintained capital and unchanged. Great. you growth question, X, to And that be maybe follow-up both million in million a seems $XXX $XXX Slide and XXXX

the You’ve debt and made during progress quarter paying down so forth.

the leverage can about of capital get it You thoughts thinking a below distribution of Is be need so of of wondering kind are to sort we return talked new increases, some Is what and on latest there that a we forth. to target Just lines pivot? before X.X side. your along buybacks that about? still

Mackie McCrea

our We range. stated X.X like target past, do that we X would I the -- at forecast. But to the is Shneur, always look in still out

We're specific leverage not at going. see decisions, So in make at where looking these time. we looking projections when our any the we're one and we just point

an something that's outlook. it's more of So

not line, there's you if So bright a will.

CapEx. comfortable add year. felt form that's the So be at in Yes, I distributions returning said to that next want I capital to some returning even the answer. unitholders the unit -- I to we that into saying we reason beginning of look our our or sure

Operator

Chase with from of is America. question next Bank Our Mulvehill

Chase Mulvehill

got we've that's a of question next first so. capacity XXX,XXX over about specifically, cracker -- of years day set kind online X.X And demand, the to the ethane come for ethane around got markets. guess or I we've barrels

in sizable U.S. ethane volumes a be here on to going pull the that's So

Or if to kind or -- more those think maybe of come volumes, you come do where it's NGL online? think you kind rejection? Or it's ethane do you kind actually guess I of ethane you could there's crackers think think less these how of volumes So export less that do volumes growth? those ethane you any underlying risk more talk so you as from,

Mackie McCrea

tell really We only Mackie. types positioned great questions what love not NGLs. in to Energy has a all Transfer Chase, itself leader these is but because question. Yes, this be ethane the I’ll of you

ethane out into first grown in Hook know, we of of Nederland. business export and then we’ve you Marcus As and were Canada, our ethane the export

we that unique of also at of that receive majority our control the in We are vast the the tailgate ethane frac. we

So unlike an actually for. enormous ethane companies all world. with conversations of we that, And RB world continuous is some control the of our -- peers, we we searching have team, indeed, over and his amount with have the

South America, China. Asia, Europe,

expect that business grow. to We

As and they’ll frac a brought you next this satellite know, year, be their we bringing on year. second on

for approval ramping up. be we’ll to with a and XXX,XXX at on those have looking We So and we’re Hook, FID Marcus those projects. XX,XXX barrel a to customers volumes just day already negotiating expansion get and

and participate So such have be we futures, those in are situated where and to very we to are ethane propane pleased bright markets.

Chase Mulvehill

to Okay. on plan. Perfect. think How build Unrelated this going back over kind you medium follow-up, of strategy kind ask better ET’s but have is to influence to term? of the I longer do Biden’s

Mackie McCrea

comes Mackie. of heads legislation, out out once we’ll we’re want those really out to Gosh, all comes when budgeted and deal on. start. -- that. I’ll whatever of I gets plans don’t I and our down. it follow with that up. had that to that keeping this But answer We is

transporting, future the we the exporting are amounts integral We the in energy domestic world. We’re in this and such make living fossil about life. -- gas our them and a have and play markets industry. are that excited propane to ethane, and in and big significantly a especially standards industry. here long propylene see around fuel selling we for business. producing, also And an the critical as everyday enormous of the a very demand We fracking play part and ethylene We see role products and growing in other that natural for for

of course, really don’t try politics. attention we we -- to we -- pay So

our tax out. to in any that. worried Of impacts it caught but meantime, partnership may it don’t course, it comes we’re We’ll we have on when just all pay But we generate the trying really our get unitholders. up revenues in for deal attention and to with

Operator

Our is next Bernstein. question with Jean Salisbury from

Jean Salisbury

lagged near kind that could mainly minimum your talk And like that a you are there Could of about is we why be? estimates? And has optimization here? optimization

Mackie McCrea

like those. This we is Mackie predict was to, you referring saw optimization Tom opportunities, again. XXXX, in as ones Yes, especially can't material

You can't pandemic. predict a

can't You small it period to negative the a of zero going relatively predict in can't a back up barrel. oil or you time bouncing mid-XXs to and a $XX predict

our our assets amount both So the NGL crude our fortunate assets, a our natural and assets gas we assets, tremendous thing have of about is storage.

winter ability give than does hedge much for to are really to any say, we benefit them And volatility winter. the put type pricing type us at from products or So higher events, out then margins example, this into any we we and out, events expected. able have pulling it storage products our of if of

hard it's certainly in we advantage of budget predict. years. to February, into position ourselves don't to any our of project market. the outlook volatility saw in certainly past or that take we the coming but We into this our that like So

Jean Salisbury

fair say, there the been had the it kind has market since to Okay. of projected kind is in at than year? of I the guess, that less mean, I beginning you volatility of

Mackie McCrea

type to but people we significant benefit and Uri. I and the revenues of -- not up we’re Yes. in But didn’t sorry, also the don’t also this of of I’m only the cold pricing. -- were I situated there’s or falls set Yes, but follow we well volatility any question, year. as If types any our mentioned, totally customers Texas

provide throughout the to and necessary this will for to be positioned able well in be country. customers what We’re state

Jean Salisbury

-- shipments of when getting sometime mentioned then sense. makes start? on And next year next And when have the basically will year. Do cracker you start? a satellite paid do get you comes those That start sense -- that -- in you that and do Okay. next you the

Mackie McCrea

third of heard. absolute Yes, last on latest the question, the heard we check heard I this I with can’t believe say to That’s I the call, second meant and have year. an was before next certainty. I that the that quarter thing not update. we

it. believe that’s I So

Operator

is with Stanley Our Keith Research. next question from Wolfe

Keith Stanley

one, on small a One just quarter. the follow-up

headwinds. unfavorable side So valuation crude also driver crude I adjustments. the crude of a optimization fully for you’ve segment talked the inventory Was to, pipeline a There’s I Bakken And guess, for big results that also driver segment? guess QX? was expansion in the the

Mackie McCrea

with inventory gains. Let's start the

This quarter, you saw about $XX million.

And also where some gains, of that quarter is kind because of you balance the that's in that's quarter, the year, keeping those the there. of can the that spread absolute the last is lower -- we're both million really but $XX inventory versus being where see

I the think of yes. pipeline part as far was in The Bakken it, as second there.

Keith Stanley

Okay.

Mackie McCrea

ramping just there that to that, -- were might make up. in you your Is I add that question, And sure about Keith, on the was still talking expansion?

Keith Stanley

right. That’s Yes.

Okay.

So that’s into QX, I ramping guess. still

Mackie McCrea

to the that brought little Mackie. we in August. We in the that is project increase the And when optimization Yes. clarity. brought kicked that. on a capacity, I'll This on on give charges demand

and portion the So volumes line will see capacity created grow. the a are pick charges bottom be, But the really in we drilling it. to incremental of receiving up for the those to be significant is the the Bakken volumes volumes needs demand will for we've what

Keith Stanley

just question capital Separate it. Got allocation. on

I what we of consistent that that's with looking -- debt distribution is next maturities of you it the view on then coming for you I'm is And up cash put year the last pay first priority you So you billion Tom, curious free increases you with company. kind plus distribution, the you've have been not distribution the the because quarter. would to cut still I well? when Should as it. $X talk sheet assume flow cash your do said that at just couldn't you repay in -- year, a doing it basically XXXX in repayment about guess about balance you to mean

get kind you the you where the look Is goal to into how you with sense get at Do of it when get next Just distribution So look comfortable you to yield year? where is. back you're of the where would to the you factor at once is? would were? how sheet balance a in trying

Tom Long

Keith, off first right. your the the part on start All let's of question debt. with

$X.X $XXX December saw off million. probably we had billion of $X X, other billion pay And we already. have November that. You on on we'll the X, And

as we're as pay continue maturities you going come -- to to we maturities them So to If term forward, along opportunity want these these continue that down. some will maybe comes some as off some we I'm out, not and maturities table. pay right to But take now, to down continuing come even are that these going completely the call early they up.

center other I look second the first distributions I priority. think as tell definitely at make But definitive and that those question, your say that Board. flexibility this than both financial the very are your statement the of that's have part to that discussions there's wouldn't -- and them. part any is are front we time of want much with continue the to I the sure a top buybacks we more I maintaining can you at

Operator

JPMorgan. is with Tonet Our from next Jeremy question

Jeremy Tonet

off, kind after into start Or as expect how if continue? level, to public a producer value and activity. disciplined. the see you I trends base? much And this there? being you could provide as you wanted to changing far bifurcation seen those with across does do you're the at private Do more of getting anything 'XX any as color Especially on higher we've seeing Just year guess, you're what ahead, heading

Mackie McCrea

Jeremy, this is Mackie.

cautious. of we much watching It’s lot than a more that’s of and are They’re capital well, seeing year. this independents. what it majors what much said are year. You we kind just saw going more closer The in next the

around are smaller more smaller seeing lot least coming activity on we independents. So assets, and companies, with more at production the of a the our

Permian of in out in, However, in the Northern are seeing these some the knows. come even rigs area Marcellus and Basin Utica, we the in majors, especially Louisiana back as everybody

of similar think type North little -- ago the a a they are year year DUCs in into ago, over XX% in those them as up growth not seeing Permian. have from where we of rigs we a about a that a a and number XXXX. are being I still A completed Louisiana were been completed. now go in the have Permian lot lot of but been There’s out out we’re seeing

gas it, growth we in is hard growth think Ford of in just see volume in South rigs in not least do faster gradual both or our just consistent leaner Texas the growth in down the a growth the similar around growth but Louisiana. and we in first expect at on down the kind describe second throughout I the ramp system, more out Permian. consistent there. on our So We just year, Northern assets And quarter would Eagle

Jeremy Tonet

everything mean want focused including certainly, just guys? to I things ways And like the of talk are are transmission? on living D.C. And carbon of about higher know of here. And just looking if you XX your mud. is global in could using you income, we renewables, opportunities here. at before. guys And you some important to group X, of pick want Slide comments But improving to hydrocarbons out as standard electric which Qs see specific on kind alternative qualified the of up right or or But I for opportunities coming you right this now? Do black what for clear get see energy

Mackie McCrea

around of in tax XXQ other the comes his Mason and today looking out we're course, renewables. are following that for with Tom benefits what Yes. Congress and group, of

we've before, partner treating capture to missions focus allow in words on or capture carbon, facilities. said really up our We're plants, somebody to assets, processing other our else around do looking it, our whether we As with that. our to the somebody is

up of looking some Northeast. our facilities at catching the some are in off We carbon -- also some

We in look an very Marcus looking project. carbon preliminary return at to some studies. capture We've either Texas And we're some continue at Hook will also pursue done sense, sequestered capture rates that ERR actually South facility. have of They makes or so of will down be gas. our that We're to promising we some looking those. some and part

we're that taking it's his it's it it's natural are or So and renewable system, converting certainly all a our capital in have or looking at commitment gas and carbon to as on that where we that but a invested basis. inexpensive continue team board, we'll our to whether doing we what that investing business, pipeline see Tom solar across transporting we diesel proceeding. of at black purchase and We're whether are in through whether all perspective diesel to the are in the deals and a that, very gasoline we we're daily looking around from participate not as power.

sequestration. up to or or tremendous we'll of are those in way million to the those pursue around that necessarily several capital manner. amount $XX not may of do see and expect renewables some COX but we of involve we make future supporting So that sense, that to distant a we consummate in projects continue that But $XX capital, do million

So going of remain go ours that focus beyond. is to and a as into 'XX we

Operator

Our Holt. next with Pickering, Bean question is Tudor, from Colton

Colton Bean

quite fell a the first So circling the back the per comments unit basis margin looks year. segment. like maybe on to of interstate relative just on the to a half bit transportation the It

I to was sorry. shorter clarify, sounded like just term. attributable So primarily to I’m that it wanted

Mackie McCrea

Intrastate?

Colton Bean

I Texas to transportation to there. Texas, attributable looks in And but what wanted the changed that higher saw half. like decent was fell first Intra, a that this, on the It margin to like primarily per to basis might have you Yes. spoken It maybe contracts we short-term rate Whistler relative pipes. clarify. unit think, a sounded Tom, the dynamic just bit

year kind between Just QX? understand and the what on wanted of going to half of was first

Mackie McCrea

This is again. You Mackie bet.

last the saw $X. We of those, X, of to And on of butter. kind across $X.XX, have our spreads state. the XX in. gas couple bread we come that and -- the started of that was course, It’s come moving to prior -- in years, So inches last

about strategy a couple look a started doing. to we $X, what that’s at not commitment So a but secure and of ago spreads we began healthy years longer-term spread, good $X.XX to

the this be There spreads back Look gas the $X.XX much we Permian in could Basin in we the are than It’s X or Where the meantime, third to. made higher to longer-term will did But strategy quarter, year for the see our secure So of will average at -- we prior believe did blow us natural be we impacted $X.XX look need. I will and to growth when $X.XX lower the at on contracts. year incredible. quarter were during the last as in short-lived. out. than where the just as that healthy of is think some up at mean, to least at short much that sorry, secure want quarter. capacity basis We the you term, at this margins coming that third for I’m $X.XX sense spreads a in In spreads more that years, but or today. X

Colton Bean

And it. is the your where kind here? at ahead greenfields of with kind from the run the goes even looking look just of of rate this last this Got basis of a at to safe point,

Mackie McCrea

Yes. $X.XX years the answer to start believe, we've of seen industry believes We it moving that, fall I $X.XX, here $X.XX, We next X.X $X.XX -- do the $X. this, years back recent. see may spreads that I'll or like as over and to will believe X $X.XX that out. that

We XX-inch. of there commit have in capacity. to another some have they shippers marketplace tell producers talking about competitors and we're the trying maybe we'll out another What before and building the project, our

from X pay now. We what on lock X on coming it to And we'd build projects. they to similar in have or would new greenfield for available years capacity prices in love

completed have our the spreads kind system. here on inches them we'll full, all begins So they we to capture become all been on the the to gas these capacity fill of have grow positioned are XX well storm And very very once to gas up. well bigger -- weather we're and as positioned as

Colton Bean

do we’re exposure hikes a look divest in is niche seller’s a now? just maybe what bit assets, of here. coal on And it. in alternatively, there some any still PBR of little right terms legacy more price where this market seeing attractive The a all those topic assets? you to more might you legacy market have of Got Or the

Tom Long

opportunity say wouldn’t any would I spike there. be for there that No,

small you As that up royalty know, that’s very a piece very a sits there. business. small -- It’s very,

anything I wouldn’t So you guide toward there.

no there’s divestiture, front. that as no far plans, going on dialogue on, As

Operator

is Blum question with next Michael Wells Fargo. Our from

Michael Blum

Rover. ask wanted about I to

$XX million increase a revenue. in highlighted You

on to the hear that ability takeaway, basin of Just is sign right much that And are wanted producers tight now. the contracted? to given dynamics rates? How more on higher up at Rover is an is there I what guess pretty

Mackie McCrea

of increase to least Michael, interstate for X, Yes. well couple we this that turned even project. at the it so we is pipeline saw X, with saw in years, out saw more will of term, over hiccup for Mackie. a of be What X see -- another and get Petco’s We difficulty the out pipeline us. approved we the difficult That’s the near here that example, area. next months a on -- X, the ago, a that value great pipeline how really

Xa. We we’re do we’re over a approximately going depending So it XX% on down probably going so contracts well Zone the on south they’re under have on Many positioned. tariff depending or to basis. month-to-month at whether selling capacity to times, month, long-term rates of

asset. strategically an it’s So excellently located such

as supplies for all the facilities the to Marcellus on know, sense at up Utica, into north it markets can it’s LNG see Coast unique volumes we to down Canada. you move that other the As And the the Gulf barrels grow of way can barrels provide Gulf to Coast. kind it well as move in

we’re -- we I X.XX, as as is. move believe X.X. it much X.X consistently move So to about We can

see that the the future kind tariff rates filling up future. -- max And and also to of so into the in we go at as as we’ll to grow max continue both

Michael Blum

it. And just quick me. follow-up then a Got for

per So does I’m and not assuming include have $XXX on potential ‘XX any your range, on going to you initiatives ‘XX that CapEx that $XXX of million for year million spending these Panama. in

project becomes that this FID change how if those numbers? is question does the guess MOU Panama, an in I So

Mackie McCrea

those that probably to project add talking would at down but road. getting getting least FID. XX the It that to of it's to months numbers, We're FID, certainly

So we probably 'XX. wouldn't see any material spending until

Operator

question Hammond is Pearce next from with Our Piper Sandler.

Pearce Hammond

few one the a supply demand, more need look Mackie, fractionation for just had years Belvieu? do when out you at question NGL as see over Mont next you capacity I at today.

Mackie McCrea

when and question, great positioned capitalize the a answer are we we what question. that that to to Well, find on

completed we’re our that so have disciplined, committed volumes not certainly are capital our very X and watching but to both frac, committed we for plants. third-party being also volumes plants very it We’re closely, to

are expect commodity stay frac. at months, at to X eyes, volumes looks we expect like sure prices begin And we’ll So one that just intra they the completing do to from serious growing evaluate eyes long that the -- to X for do XXXX, take now. but looking quarterly in point a some X we least We don’t our next at as continue have need from will. It on for as see transfer a basis. where to look they the we

Operator

Our next question is Cho Barclays. from Christine with

Christine Cho

reflected on -- that And tracks to think the have the do costs wanted it just them? something trackers to And extent should in put would we we the about or up then I how that to CPI rates a O&M the of going side? ‘XX G&A some inflation and any actually in -- caps your we that -- think increase like will should you that through? would pressures should be increase entire limit next assume PPI, year? competitive Or

Mackie McCrea

all index. Yes, of It's in of second and most of believe index. I which that, that I certainly, But in July, of our can I this fractionation transportation contracts believe was typically our a to July half the around contracts, around it maybe liquid start example, you an and FERC have in to goes next index on and crude contracts, July give it. FERC most started the an our our the negative. year, we

of from that actually have inflation. uptick while -- see kind we any we didn't in So this

if our as We've our contracts well that to X% for up expect not July of do significantly. have most, as many, sets of those we and that next or X%, we in is majority move what contracts. in vast heard gas rig However, much as the as up increases

the So CPI contract or inflationary our least gas those, have in benefit we index or by and the FERC do not contracts, the we costs. growth that the in index of majority at from be we'll harmed -- and have, our it's do in liquid whether

Christine Cho

competitive the just through? of put that pressures preclude would a Like entire should wouldn't you it? you increase part expect doing And the from we

Mackie McCrea

we have it. systems our It may contracts. the on already to to have language I’m in today But all referring to future move that when products contracts existing

Christine Cho

peers thing of headwinds. if on your curious, you about the then guys And optimization the or Curious all talked in incentive NGL just was same rates did really doing had the one just the segment Permian. segment, if

Mackie McCrea

can I'm Yes. will not will what the shippers is, possibly get rate allow. -- we sure we do is an rate the rate what from what our highest market the incentive from

Christine Cho

they lower say you would trended quarter-over-quarter? guess, I Well,

Mackie McCrea

sorry. I’m

So just if has of been like crude, for NGL you’re saying -- short -- time, like The where cross the all overbuilt. for period marketplace natural gas lease yes. a is, just

the our there facilities future to a prices basis, were third-party years try we to very out Fortunately, on monthly much get of to go our that will that barrels competitive. The already system barrels and they to T&F it’s lower tailgate where that ago. and -- are system that are are that out come But come are dedicated. of the in those gotten than significantly

Operator

from Sachs. from Michael question Goldman Our next is Lapides

Michael Lapides

fixed storage, the you're Look, entering the whether little we're contracts gas maybe of a new already in storage that in for you're and X around insight Texas, bit a fee event? kind how Can market moving or but little what of the for margin overall also is after and more taking seeing the upside just you Winter especially X of from margin significant downside months of of but give the a -- kind market gas payment contracting on Storm removed move spreads Uri. getting

Mackie McCrea

rights it' swing desperate, we We rates certainly did favorable storage. at bet, or lot a Yes, more much some say, secure You that. storage again. variety. lot Mackie We to year this and a more is come more of effected a have sold than also to more last kind demand I'd demand

of winter. companies that with to about what as done well had number some this -- as service are service positioned seem parties of some or a we we're or We would panicked in still the deals not at they already But as we've worried for new once negotiations to winter. or this for it plants provide positioned thought they it don't happened whether and service as after swing we're be have able again, But Uri. power haven't we storage need and

Operator

we session. end gentlemen, reached the and of Ladies question-and-answer the have

Now to back to Long Tom remarks. for turn call like the I would closing

Tom Long

look and near you for today support, your joining to Thank you us we talking again to the future. for and forward in once all

Operator

today's Energy conference. for thanks participation. concludes you This Transfer, your

You may disconnect your lines time. at this

Energy Transfer (ET) 4 Nov 212021 Q3 Earnings call transcript