MPLX - Earnings call transcript Q4 2020

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Operator

Welcome to the MPLX Fourth Quarter 2020 Earnings Call. My name is Amber, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later we will conduct a question and answer session. [Operator Instructions] Please note that this conference is being recorded. the to turn Kazarian. now will call Kristina over I Kristina, begin. you may

Kristina Kazarian

be MPLX welcome that XXXX can website and tab. morning, the fourth mplx.com, accompany on under at to call slides Good The the quarter Investors our call. earnings this found conference

Joining be team. question-and-answer filings making are Hennigan, are differ we It's We cause harbor to results the with materially the forward-looking and during call statements invite could during Chairman, other members the statements today CFO; our to what we will session that may safe disclaimer included reminder X. SEC. Pam call and you a Beall, there from expect the and that results Actual the today. on and of as Factors that me President on Mike well CEO; the Slide follows. non-GAAP executive actual in differ as read

over with the Mike. that, to call turn I'll Now

Mike Hennigan

Despite and proud of industry the compared XXXX adjusted today, $X.X throughout billion the highlighted way year our morning, we resiliency able macro the of difficult joining our our total faced underlying performance $X.X the adjusted reported of and for BcF Good everyone. challenges for unprecedented quarter Considering environment, XXXX fourth of EBITDA we’ve you Kristina. we're XXXX Thanks, Thank of XXXX, call. business. were EBITDA the billion. grow stability to full our to Earlier for XXXX.

Corpus executing our of portfolio, on sale year. laid to announcing priorities Texas. our in demonstrate made Christi, Javelina for results optimizing We commitment facility the our on Additionally, the the out strides we the

million effort strategic is the the focus capital target. the this We value assets in reduced over in continued that large not an to example $XXX long-term by size, on XXXX of spend company. from our to have making While we're the

enduring offset to earnings reductions our also operating structure to steps in the L&S These were reduce headwinds, $XXX we million. expense our believe term. necessary target to long-term over We achieving will key segment, took and long by be forecasted address cost particularly expenses they

Our not the to cost operate. and operating the meaningful in our are support and you which when commitment protect our our health we we assets, have efforts employees safely communities particularly safety reduction consider of compromised

As growth the the concerted able for expected climate opportunity is focusing our combined irrespective grade to inflection the of This discussed We to highlighting generating scenarios. market quarter, Last we climate and $XXX capital perspectives publication time, leadership. of XXXX earlier quarter company investments million, cash expense growing X, after on our spend units XXXX and our of in on represents incremental in the around fourth portfolio in efforts, these Shifting our a This report, highest XXXX program. result generate reduction cash capital investments, provide planning engaged on outlook and financial to of corporate the goal projects that self-funding than in XXXX. capital a of discipline, related responsibilities Slide EBITDA discipline, like strategic outlook comments our of of begin to excess to were our we the continuing providing with supports year I'd we that excess work distribution unitholders. our to of environment. and sustainability some over opportunities the strict repurchasing flexibility announced to a we gave remain and achieve capital robust original for full work returns, capital us to continued and flow return committed and to as for target also focused our XXXX XXXX occurred projects Today, to deliver returns. high

that that goal discussed G&P we our drive the improvement important in continuous methane the It's business. organization intensity our emission ESG. on for to reduce also set We objectives

focus recognized our our this proactive believe engaged of while to to in carbon all and where space These that Our EPA sustainable team's the in lowering improving intensity all efforts products the from leading our have us in API's the results transparent resources of to privilege do Energy communities achieve at conserving are team positions operations natural as for using those I'm disclosures goals setting as X we it. we Star strong innovative in operate energy us deliver the and ensuring energy plan the proud our to the and safety see how on efficiency Distinguished business, the some We on efficiency. them, and for protecting levels Pipeline with we and Challenge are well of we arena in to technologies well environment to accomplishments our future. ESG the members highlight in Award of Safety awards XXXX energy share. position

Now let to results. me turn our the to call financial operational over discuss and Pam

Pam Beall

Thanks, Mike, good morning. and

quarter adjusted of times, of $X.X times. of billion flow EBITDA coverage X.X fourth fourth and billion. X.XX cash delivered year full MPLX for Distributable $X.X of we year ended billion the provided of $X.X earlier, leverage mentioned distribution strong EBITDA Mike and the As quarter with

and the with in volumes segment, Our basins. our flow expenses, operating to of benefited demand million underlying our contracts the activities. environment excess pleased the that our of that The curtailment both expense report million certain partially by operating the represent reductions to strength offset the the us EBITDA lower MPLX allowed results challenging processing these has than capital gathering to after to I'm $XXX lower cash our from of for system. funded the response segment In in full $XXX offsetting the and year XXXX unitholders and of production first impact year. quick impact investments increase distributions more L&S our also total

Board-authorized outstanding the $X to our units. traded we unit During of to the repurchase common of quarter, program implement fourth billion began publicly up

to to Looking expect flow. forward, we continue our cash strong assets provide

our investment-grade profile maintaining returning and funding on capital to to cash fully excess focus needs distributions our from while generated Our cash capital and credit allocation an unitholders. with will operations, continue

cash expect to alternative available, of maintain distribution unit the the opportunities and including: We and depend conditions. factors, investment pace the will market excess on repurchases and business several

During across in segment XXXX, capital refineries. million maintenance million $XXX fourth utilization driven outlines and fourth X primarily our storage at Volumes with the we quarter highlights. approximately to pipeline and logistics capital. Slide lower in growth invest systems of the and expect by lower XXXX, quarter compared $XXX MPC's terminal were

lower execute to throughput. reductions operating continue to we However, offset our on expense

continued an During crude we of progress Gulf the strategy gas the to and our Permian natural the integrated quarter, from oil logistics Coast. systems to creating

equity which XXX% assets in place the throughout continue return minimum an MPLX to our We to the crude XXXX. committed interest contractable Webster Wink to projects pipeline expect oil its line capacity volume pipeline on with has of service with minimal In commitments. risk, system with in has focus

half a in As we project work the NGL second we solution. for progress of in for year gas natural takeaway construction of the expect start-up the XXXX. finally, activities the in-service to we pipeline, the second continue And half the of Whistler date an towards

day of Lake capital BANGL As successful Salt this be reminder, of originally ran a the utilizing Permian, largely Outside this approach core as with the optimized pipeline, XX,XXX a infrastructure an later expansion expected existing contemplated, completed compared City the we for with expansion year. by the to minimal MPLX. investment project project open season barrel the was per it is to

I MPC the storage January logistics to for topic While the the we're between was additional marine take a on our boats the term to in and of barges. same This an MPLX. segment, five-year renewal for discuss contract moment of wanted contract and of and capacity renewed

to a reset million levels. marine As be EBITDA, mentioned on XXXX include it reduction the changes than Based of rates, EBITDA. less current terms estimating renewal services will rates we're less the prior to in a equipment year full contracted of call, than our the market X% $XXX or on our market

renew to duplicate fully investor that expect the We fit-for-purpose assets exist. are with our mature as renewals MPC take incremental continue MPC We to MPC's to to we'd expect these this to highlight MPC, logistics exposure of and cases, most to contract commit has its MPLX's for systems sponsor, MPLX the that with over hear optimal many community MPLX to that to regarding already operates needs. concerns business like not in and solution opportunity from contracts MPC do capital We time. they

highlights. moving our gathering to on segment processing Now and quarter business. X provides fourth Slide

volumes of to in fourth volumes other due the quarter in and in where Utica, curtailments last than period lower For gathered and lower the dry production regions. processed volumes X% fractionated footprint Marcellus XXXX, planned than a same the except period volumes increased volumes for last outage the also the were across our were the XX%. gas year, year same Processed increased and Marcellus, fractionated lower

day X processing our units setting Marcellus, quarter, at the in fourth utilization region. record to the in per rates, a high During the continued run Bcf

Hopedale achieved $X.XX third also to provided of our move the record volumes We day of we an an of facility at NGL fractionation following a in barrels day earnings the prices. the In estimate quarter impact barrel XXX,XXX expansion. per XX,XXX past, completion of per

the Javelina exposure. planned gas off commodity reduction processing the we in Christi, Corpus price refinery direct do a With sale of our in facility expect

in For $X.XX to $XX EBITDA. approximate a expect an NGL weighted annual change would to million the have XXXX, average impact we basket

for gas an While infrastructure prices producers to fractionation will an earnings, areas where our shift and providing can rising highly utilized. will to a NGL rich indirect impact of direct MPLX have less have higher incentive prices more drilling to NGL benefit, be processing

optimize XXXX, to while producers to as have Northeast, we production in pursue to we our modest the opportunities cash growth expect forward maintaining flow. free utilization Looking plant

facility recovery to EBITDA. fourth highlights. in Slide and to to EBITDA $XXX X moving expect was the improving online and L&S X, and On gathering economics. see bring the of also We million processing contributed we adjusted ethane $XXX incremental million around middle financial year, segment quarter Smithburg Total expect our the adjusted with segment the

returned For billion unitholders generated distributable cash our $XXX flow million and through of the to quarter, approximately distributions. we $X.X

and on million lower operating million, operating terminal primarily year-over-year, benefiting pipeline partially The from of XXXX. storage fourth $X logistics quarter higher processed with and decreased of in We with held ratio summary to increased ended from the volumes year to lower gathering quarter $XX available to balance due financial X of approximately million a decline expenses and offset volumes time, be XXXX and time facility We $XX also repurchased EBITDA. adjusted with units approximately and profile, growth of XXXX the by bridge the over quarter. maintain intercompany intend segment in our processing times credit $X.X expect and and our on and we during The in information. segment and fourth provides MPC. XX $X.X utilization in driven available revolver EBITDA investment-grade our of to billion our highlights MPC shows increased Marcellus. on and key expenses lower leverage X.X publicly sheet select We change bank to X Slide the The refineries. at modest fractionated the a leverage by Slide billion

I the and distributions cash investments the and XXXX. company's As the history, for mentioned time first in year investments after we capital generated capital excess -- earlier, for full of

With back for to XXXX, providing capital to to EBITDA, expense the turn And in for me expect unit including XXXX, growth excess opportunities let progress continued the continue financial and now and call flexibility value-creating in flow we our generating pursue our made Kristina. unitholders, repurchases. discipline cash

Kristina Kazarian

Instructions]. Pam. [Operator Thanks,

questions reprompt to questions. You as will for With additional the now line we time Operator? open permits. that, may

Operator

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

ahead. go Please open. is line Your

Shneur Gershuni

share flow say, start the assuming was I in in split off, order it to distributions in sorry, that way that's at this you before XXXX. X.X buybacks or looks in excess times. plan free XXXX cash with Leverage the distribution if currently Maybe wondering is and excess and XXXX generated XXXX, can between, us after increases. priorities of you leverage -- cash

priorities that you as go-forward rank about cash on a excess Just sort of wondering generation if the order basis. think can you

Mike Hennigan

Shneur, it's you some that. give I'll color Mike. on

and it's to We're then would I make continue not. look than stand off, everybody try decisions where let the it of going rather more forever. remind to on dynamically at on each a set just that not First parameters we to go it and

we've we've time. been, with around and And Shneur, some consistent do have comfortable is running amount of lot for you been how been leverage pretty So that. of times a feel people asked X where us, we've our about

love at we over the we trading But we change, we that you're it we're above. leverage to fourth distribution a just going and and at look if and use. -- market do So right to is short-term things to But We'd going all And of we're back not think as right to best now, a dynamically But the buy conditions now at is look going to have the that's be a Love equity highest trading, that have trading. we there right think way is probably the around you we a priority the at XX%. of et able of moment towards at where because change level at around to end XX%. what program the is I we're is the obviously started We it where rewarding our kind have the units. more is at got And able the DPU mentioned, this of yield of kind in priority the some the of DCF can cetera. And now, priority trade yield right decide look at go of and quarter. But as on to prioritize time. be to to time. quarter-to-quarter have right moment. hits equity DCF, be the or good these would things then the XX% highest growth in the comfortable spot,

questions the flow which the I hoping consistent that we the position. shown our that and was expecting, cash lot got think at market earlier realizing pretty the consistency is of XXXX than good. to us, were a have goal day, was there and to of And get There's stability we I'm that this key been market the little hoping for in to We a earnings. put I'm ourselves the the of earnings. has end the around free

used and year, played as the everybody itself continues. has the hopefully, So unprecedented, word out

see but earnings. over the to said to we're pandemic, As a once where to everyone we've knows, we're establish we're not we through grow think post going be going yet, I with pandemic mode times we'll distribution. cost-cutting the return use healthy stated a best is look report we still one that we is, think and return and the Like time question of very think are in what we've of time, hoping it's capital to our that each solid. many we're out is at a as last continue be to earnings that major then year to would and grow of that comment the pretty your that our this and is, we going And going use as you. We has grow that best give shown We then distribution capital. I support past effort to made that, I'm year. think we continue this to and DCF continue what is. dynamic helps

Shneur Gershuni

No, appreciate the answer, direct actually. does, really and do that

I unprecedented, question, -- terms in the want capital, maintenance as but to Just XXXX responses million. you've $XXX follow-up I overuse certainly, got to don't And to word your when about of a it, think was.

in thinking that for sort think as of about I is think, about Is you you're new this an run sort number, profile? about as apples-to-apples assets you XXXX, of stand lower in rate today? talk of I think there it's $XXX of didn't that kind about catch-up forecast can the asset 'XX, and that sort should makeup do that any assuming there the we of of the be When million. that wondering Just that year. sort the if

Pam Beall

that one. Shneur, Yes, take I'll Pam. it's

last significantly actually So dropped year. was it and about in million, our XXXX, capital $XXX maintenance

the So of what and space of a a One logistics number just is utilization assets of and factors, our refineries. assets was lower certainly, terms MPC's refining influencing at happening that. refining across in

the that costs having driving a sense. made lot significant uncertainties pressure. lower, a with downward was certainly, of some on that And So those of influence

million. maintenance. out nice MPC both of keep A to a couple increase in XXXX MPLX of is and you lot see of mind, expense things a in there $XXX that So

of So example, that when you API maintenance expense would for look XXX at our lot tank we, activities, A work. capitalize work. companies

And so to assets allow continue integrity. a in fashion we maintaining and will are reliability our that have to us

maintenance to contracts look inherited there some that ANDX assets reimbursed capital just of we're else then don't where how the part as from ANDV, would mind, draw -- keep activity. And with of about in for the just metric we be a alone. provision our the was conclusions maintaining it's So at well and maintenance something

the that lower. work tank over time, is as capital And also that that certainly maintenance little to -- capital would activity roll contracts causing be bit so is number those And off maintenance a complete, the those to related and increase.

the that The in the in business, of the mentioned other tremendous we've thing fact processing and spent assets of the really and those time are particularly new. segment to a amount time Utica. We've Marcellus is capital, gathering from

been maintenance quite for assets the those expected low. have And so

it It that by as be its the So MPC will portfolio, in optimization. influenced part also as portfolio of assets evaluate our over are to time. change its obviously will continues

is I And that can't run fixed rate, a Shneur. so this say

going I we you think as give have we're to to just some guidance move forward.

Operator

Tonet comes Jeremy Our JPMorgan. question from next with

Your line Please open. ahead. is go

Jeremy Tonet

could expect to kind G&P regards producer-customer to and volumes like to And of if continue? for them year. you want guess, update kind off declines start declines see with there's Or grow, seems do Marcellus side it here. of conversations, with And continuing Just other activity abating? G&P to footprint you what wondering us but your of the are you across processing business just the I basins. expectations been we those Should this have across

Mike Hennigan

it's that Thanks Jeremy, Mike. for question.

that One big I'll have our of G&P to talked is about of we've over We grow going good what it's -- constantly you business. questioned the the lot think we give about really the overall. space and people time. still feel And expectation is a is things because picture earnings

although and in to look but -- the been to willing belong someone eight offer other hasn't been some Marcellus that areas have our to out, We've seen grow, declines -- right open today, in basins are give else's other areas. in us Our of that we're for think -- pretty assets we to about as some at optimize Permian going you we're the we some maybe point, that the pointed and continuing market those portfolio.

be keep cetera. gas, and in So gas, going times that good, growth, that, back we're lot opinion, by proceed well. double towards takeaway at going been pandemic the said dynamic. and cash the out our to But calling think gas robust being time, in we I not people positive natural of not generating We're digit. were But as were of cetera, mode on et is we've had happy There's going view et the there. it's move to think We've a a into expecting overall that discussion as big has earnings I we little been same that to there growth us and kind The forward. them before. started of natural is believers associated keep an but dynamic in. our expecting, which was expectation think a many a bit is gas the the about where been to in in was lot important overwhelmed will be not the played We

So and at cash their producers et flow, oil manage portfolios to balance in cetera. their sheets looking and are trying space, their that the similar space, to

more past. a starting in the growth I obvious, more is I to think think, a little So to this or than play was itself investors becoming little slow model out

been continue that the we've same conversations seeing. activity our So along

of in still a to to as a seeing core times enterprise. the of Some decline long To bit off areas, players. our contribution your areas. and we're the areas, get We've is those areas core the we some of of seeing little areas. lot are in the Marcellus Other it's mentioned a capital still going many bigger kind We're that Permian. point, believe the growth not those other to areas kicking we're cash as But in deployment.

Jeremy Tonet

when remarks $XXX in it. was contract just wanted that back that million kind contract there? should in the of three over next go guess, -- thinking renewed? be any that to Got changes renewals. And so about XXXX, could we then to other they're And just have -- was the or are opening regards years to, impact I that barge Was the there renewals with rates the the

Pam Beall

Yes. It's Pam, and I'll take Jeremy. that,

than contracts the in the we which came yes, EBITDA less most it's that The $XXX said XXXX of MPLX. a lot about million, So of MPC between less related than annual MPLX have is XXXX. X% and to largest EBITDA. have And we contracts

that those So rates. a all mind, And they distribution. we are keep have contracts refining were life. logistics And long fuels in and the have pipeline FERC-based

way there that for automatic yes, come contracts just are contracts aware baked this just I'm place of automatic was market the -- then is rate agreement. about other a the of kind actually It an an was five- six-year up no to have was period be that that it we structured. renewal. rates. in So it will update of It's on it that reset provision into time There and

And going that's at to to sometimes, MPC. so be a benefit

as will There that change in well. agreements escalation a to MPLX escalation time. be conditions as over those fee do Sometimes are or market benefit provisions rate

So in egress is in prepared just and that we that these with said other In expect cases, no renew MPC to its many ingress of remarks, MPLX. to mind. as it fully keep kind facility. -- But going the has or contracts thing I

going be a lot a from to interest majority of of fully owns we MPLX. are contracts cash expect and MPC renewed, and these gets back So MPLX

in positive relationship mutual we the MPLX interest So the think of that continue have to we MPC it's and enjoyed.

Operator

Mackay Our Goldman Sachs. comes with John next question from

ahead. go Your Please line is open.

John Mackay

maybe talk circle bit. to recontracting, what little I what Can And maybe then being a flat on to the maybe XXXX other the and bit to with get comfortable marine a take want just about you Just the of if add on little you about impact getting the a up EBITDA would how asset little kind bit Javelina takes of was puts in that just be? back it into. some And Jeremy you talk of impact, sale? EBITDA

Pam Beall

good take The assets, Yes. John. Javelina a Happy to it's that asset. one,

the It in facility of on side -- smaller the fractionation really It's long-term our really here quarter of a it didn't off contribution. first the fit We that fourth refinery EBITDA just It's XXXX. plan. terms gas. processes expect to on close in in

So which it's for expectations one if going back that's go make and analyze XXXX. for terms just outlook And was quarter this the analyze quarter, you're we're something a to reductions. in second XXXX, was not quarter, impact quarter come our $X.X and $X.X is, think to strongest billion I you with think kind which of third pursue billion of in of on the the then cost then our our significant range to way maybe up And going going to to to something our of EBITDA, okay? weakest about continue

about marine of the rate some associated offsetting think the headwinds reductions in XXXX resetting. with So some contract cost

I is to their large volumes. recovery, out that's of to volumes depend shakes going for mind. where the recovery helpful really with production system producers then for the recovery hope and the in as keep And in the as So well XXXX part MPC

John Mackay

at just in $XXX what and Maybe really we and follow-up. Webster like about CapEx one still growth side left just it kind there's CapEx the we you then on to room looks look to think of on spend the G&P is helpful. I Whistler. what Wink there on That's if need and million a if mean some guidance,

move could talk about roll projects can once Just off? larger kind where of you those curious that if to

Pam Beall

Yes.

for in be on opportunity premature of to in something it's where the community, both going tied really again, think to as about well to the gathering talk the producer the lower. it's be business. it that move to that's come think CapEx could side there what I to. crude And we're I as side might seeing gas Certainly,

the and think how to prudent us see I be unfolds throughout for So wait it'd that year.

yes, at the move be about to a all side going G&P wrap of business. is But and with have as look you CapEx roughly half some XXXX side spend opportunities on roughly don't outlook pipeline year. side, the we of the up to would more of capital of continue there. L&S is business bits. some dependent G&P where half to those and expansions. to going -- what have do in going producers So going the say little on the to on be as Whistler the the the do we we'll And through it's maybe drill on the I we capital mentioned completion expected project's but much take macroeconomic as the bit we largely to be Certainly,

John Mackay

great. That's

Mike Hennigan

Mike, of throughout the goes thing capital and add the want deployment can just year. as of asked other of is the beginning as go our kind be, dynamic and question whole to to be Shneur we I to we capital as is, try going in return the

trigger our So to have. compare strategy in the to as at a in the as said, look progress, choices use. any not But customer long-term it been we on capital we'll deploy these more the in capital But we what's something where continue best you. before we're that that where on big going through I deployment towards we'll that's still that equity picture, year we giving base guidelines we're choice, pull say are as out the spend, about go it already the we have the because like undervalued. the And in is, for opinion, we our trades well versus it's we supporting have capital the

So in bit And as going term. and use more bit be just really as word that and we to mantra have part our past. our part trying That's mantra. on cost some make of more things that discipline we're discipline and emphasize, a thoughtful strict long the to it and capital far of will that try I strict dynamic a more little and that we're hopefully, little emphasis than to of want the make put little a

Operator

from comes question with Michael next Our Wells Fargo. Blum

is ahead. go Please open. Your line

Michael Blum

of to I duration right by guess Whistler. Can Webster capacity needed market. maybe pipelines reason I'm first remind probably are contracts just what that on now to that seem the was and would asking this Wink question it the you those those the And isn't is the ask adding I at are? us wanted point

are flows protected? just want So those to I understand long cash how

Mike Hennigan

Michael, Mike. it's

on So recall, big referencing. that Wink vary question. opportunities the you Webster, us Webster, got big give that answer We direct your and and MVC the had we projects: year to XX-plus was I'll put significant stated of couple we contracts three picture, them if question, the we those Wink in and then in your Whistler of in I'll issue those had years capital to deployment projects, protection. ago you're you And that to a a then had And environment. Whistler then And front is third but two BANGL.

number But the XX use commitments. a long-term at day, end We'll of for guidepost the rounded as the have of long-term. very So we you.

a long-term protection winner MVC not and MVC we it. get on were of we Whistler forward like something could those was why to from not solution was of much put understand result long-term been would kind commercial pipe to, able to although we not cetera, and of It went have mantra. deploy as customers' where backed part the our We in were with players, quite the have some at a the the wasn't why original it we and And needs the without it capital existing the to we the put to like. capital and of satisfy partnering or a the that we et that to projects. bit as deployment and a with and although MVC, risk lower long-term what's team win mind, something That's intent, ourselves without our strongly way that and for us. down it best like Wink we to On that at that, Webster and some do not rethought project, that's a our changed became in and capital looked commit We But that way they base. customer using reasoning. it on did two capital would at BANGL, risk commitment but as protection that became willing other

the projects. your to protected, to think Wink MVC long-term of think original Whistler going the it just It's be So very to or be, to we terrific did and they're contract. point. Does the portion wanted where ended We smaller up BANGL Webster intent question, not to sense because we the that project modified what that We not is good. and contracts get make you? of was MVC-protected long-term also

Michael Blum

much. Absolutely. I the very answer appreciate

The prepared made the second to is question comment just had to wanted a during back remarks. I go

processing talked comment meant plants? Northeast. want is capacity you to better Or you exactly in considering you that understand in potentially about just processing what to else something Would understand? think idling I the optimizing that. are you I there -- by

Pam Beall

Pam. It's No.

that Let me one. take

for the have there plants utilization So us the some of have are to opportunities that Northeast. of higher we in clearly

over undertaken we've years that going work pipeline shift past couple the of is us allow the some of to to volumes. And

balance And assets. volumes to are investments where the different there the optimize So place to can opportunity, there plants, need a an to any filling made. capital not that we is made But the to consider at being was we'd high some additions. capital system to have perhaps we just able we looking location. the our -- some but that's plants on opportunities new to opportunity to volumes with up have we get already the it, what best it and that we're across we actually in that allocating return might the but then It's to that we've without shift not the mean really necessarily utilization, we're certainly about extent looking sense, shuttering

the there. that's thought So

Operator

Christine go to with Barclays. Cho we'll Next,

Please line Your open. go is ahead.

Christine Cho

was up you I ethane to is I is I think the start on Shell increased said you? I start that Is And Pam, a than just wanted being off think remarks And with later change year is about would be it your flow? that prepared in to this that rejected maybe was getting through going curious, comment to recovery. supposed rather get fractionated Or already MVC? ethane collected fractionation incremental to the cash in for facilities? more side going cracker anything through

Mike Hennigan

the I comment Mike. it's bullish Greg I'm the I general that. Northeast to going let to But Christine, We earlier, I'll mentioned Marcellus. is in in growth the a very it are continuing, of like on still say, one area. make things before him, turn in just

trying the little bit of utilization there's question, Northeast. Utica to was Michael's answer the Pam As a side lower in

term, X think already going. bullish to do still the for we can still we important longer we're the where in deployed. that the that business in We optimize is natural we're natural areas Overall, think When are that's trying be capital core that to been you look area. in to think ways we pretty are that the gas So areas overall. gas

believers So shell those over because the change and up grow we'll there. natural But a are on the because some that's from on situation. add that economic. to Shell always But associated still will it's do whether for we that let in production out gas, a very I Obviously, still these comments find perspective, other different will want cost-effective the it. you think in on-purpose a question? good feel view, for And we're anything a some pipelines to opportunities that we work area. as I'll Greg give happening, and Greg, or still doesn't things develop, is long-term things themselves area it's of dynamics real beat our good say to we're earnings about there, time, gas. you it Shell The area continue

Gregory Floerke

Christine, Yes. the here. in recover majority ethane basin. Thanks, large Mike. of Greg We the the Floerke currently

line all that mentioned, have ethane a plants purity think, the We connects plants. centralize have our a and I at at that previously processing we recover of We not actually processing ethane fractionator.

currently takeaway own flexibility transport the Coast Coast, So pipelines. to Canada our the points and Gulf East to and then lot all we have the a various of on line recover the on to

sell of post producer stream believe rejected of continues likely Shell those ethane these require gas customers recovery that to at other start-up then markets continue being currently commitments would of ethane our all we cracker, incremental on plant which markets have Monaca into As the a into those locations. that's pipelines, residue into and and processing

So expect We we incremental see on a place ethane adding on the to the -- in recover is there's without we we'd to capacity have fee in do at points. do terms plants. But delivery incremental. behalf that's of to pipeline plenty being our to basis recoverable. recover and that -- of And expect processing the our of in rejected, It's to producer customers. see and recovery therefore, would still still requirement incremental

Christine Cho

helpful. over L&S. guess I then a to on Very And follow-up, moving it. Got maybe

placing plans Laurel into to pipes local recovers short product MPC's Given Manor an at I following I shutdowns somehow via to product PADD once or expand for demand MPC's further? East movement MPLX west participate the multiple to terms if east becomes PADD Coast eastward in of in increasingly refineries. Is opportunity there

Mike Hennigan

lot don't capital that. there's opportunity. tankage going MPC's opportunities that a there to MPLX. now, There's any things I of, other that see us things I capital aware for that you're from in some to opportunity I they for and that because competitive are to would regard or of a dynamic market are need. fill of need into us see be support But as the the Mike. capital around think to I But know it's There's couple I don't Christine, assets if you that change tell don't We'll see changes. supply putting large would going for you're expenditure demand existing. right if like know assets, existing us a out and that

Pam Beall

be to around we wants that it Yes. we were, get the probably of to volume If debottlenecking that systems the some sure have pipelines already eastward. move MPC make into it those would

Operator

next question comes Keith Research. with from Our Wolfe Stanley

Your line is open. Please go ahead.

Keith Stanley

revisit to earlier. recontracting I from question wanted the

contract you you new the adjust rates from the already oil automatically there? Are would by -- MPC next negotiated for set those recontract? is are a there IPO the the oil pipelines? with specifically expires say Or the pipelines with rates the So in year. Can negotiation where when the which mechanism

Pam Beall

are Pam. products, The whether FERC-based It's of or overwhelming talking pipelines, majority Yes. crude our we're rates.

we'll and And that with pipelines. fluctuates So that's PPI. those really the over what index changes that on dictates the FERC receive time fees

Keith Stanley

Okay.

So, you have don't

Pam Beall

-- don't I yes. No.

it's So rates are in the and be FERC market going place really by today. that driven to rates

Keith Stanley

Okay.

the time index changing period already? So been with rates the have over this

Pam Beall

They Yes, do. they each fluctuate year.

Keith Stanley

Got it.

Okay.

Second question.

because to because Just company's thinking in offset MPC's never L&S in volumes, really material we Is EBITDA recovery back up? how it an driver contract XXXX volumes? it throughput cuts. think for can I'm to is you your much cost Or thinking modest on recovery can just of about think with in leverage pretty way structures? we declined leverage But a the the how as about eventual MPLX? about volumes it

Pam Beall

think way mitigate the some as as were you the able Well, down. we you look I to of highlighted, -- impact on

some see way will the improvements on up. We back

when. be might to just it's predict and think I really difficult much how that

depend the robust most sees going areas I think which recovery. the to it's MPC on of geography

wait -- just just how to for we out. we're a cautious it again, XXXX, to and have So have see optimism we'll plays

Operator

from Richardson Securities. comes Tristan Truist question next Our with

Tristan Richardson

they to is optimism see levels. But of and to the just refined maybe Appreciate Curious recovering question. that -- I guys there the on XXXX. your comments demand XXXX peers on to see all the made out cautious the would back returning product and XXXX just appreciate parent's the -- year? outlook this XXXX going I comment you mean, XQ. could do one overall prior for comments

Mike Hennigan

Mike. it's Tristan,

I've spend of And to to to where market trying banks lot time I tried that people call One of things think is. river. more the exactly of tell the time don't a trying of is, I spend the the

people And a and doesn't longer if relative the the What and river post far get bear pandemic a things say their there that's of year bull recovery pandemic past I'd pandemic? lingers wide. the it So of upside quite be because expect still is, to if positive it out much. what to like more So out a working that be the you're and quick. little be we pandemic a recovery take recover through an turns to banks then to turn So Do result the anticipate robust, as referencing? case as could vaccines than the are pretty as me, getting is and we the poor robust does recovery? a way the earlier activity as case

first that is the So part. it I'm hopeful

I know, thing of optimism. going see this see case At and prepare as pandemic recover. December, Pam we as That's hitting way. time the actual can is more and That's some parameters cetera? we the start the why takes case. have earlier second As longer. out hope do we same exactly spiking to people of word up, later. was saw when has of those obviously, a people model, are first that But as longer, And off. wave playing and the as kind admit arms uses let's worst hopefully, time, this going it's don't a just it to know feeling know is be come our And what cautiously thinking the the that Pam our case I'm were the We we're though, And cases is, to harder we into optimistic. out be to the it some hope not So quickly the case probably, the said, people's restrictions. into administration I how is turns spend for in robust mean, the end more et saying hope. the if would that to I to in obviously and facts, prepared it's the priority that's our of get possible. of vaccination back than to new I got than cautious

actually positive cases occur. will I in be and momentum but coming down will and -- think the it there's momentum that coming hopefully be it's restrictions but to there's to as off, side, to seem hard So tell when

and cases so That's for the play it. think we both. scenarios, both out the that we and would at scenario, And I just the you? approach look kind what scenario going bull we're see hope to helps bear prepare in our way of

Pam Beall

virus. think Mike's is impact We well that's going what variant don't of at to I just the wildcard as the have. this one new on really kind hinting know that

And that's starting is country wildcard this is this a the turn of presented. a on new we while so corner that been kind whole think situation, to the just

how plays we'll out. that So to have see

Tristan Richardson

there Northeast. with pushing be I Is the in this one number plants? efforts appreciate then follow-up segment to productive the No. savings that year? associated it. in meaningful cost G&P volumes And Can on a just optimization the the most

Pam Beall

there I suggest related meaningful to that upside is that. some No, wouldn't

Mike Hennigan

and capital that the has about spent. It's capital already can been deployment optimize more we

is the where where look at So have opportunity. areas some if our some you areas we there's very utilization data, high in

advantage at, looking idea. was way an Pam to to our commercial capacity what a the So That's there operating capacity? not area occurs where there teams referring of is excess in that is and take growth as is unused are

Operator

from comes Pradhan. Ujjwal question last Our

ahead. Your go is Please open. line

Ujjwal Pradhan

one, around the First allocation that Very framework. helpful. just you have commentary around capital provided

You the yield cash discussed on attractive the flow units.

or about return expansions, So you're compared to you that, projects internally? when capital frame think the new would how you that threshold using

Mike Hennigan

with two One is this. have that for we past reasons. capital That's thing permitting time as is is capital second And discipline. no we're a the as What project, on capital execute cetera. the it's to that no things have there's et you length a of into it's no How of that trading. the is, to moved So you DCF, project? no factors is that's Depending lot is quickly lot the very lag, term we down a deals Ujjwal, do you when far play. question, driving aside one the tell the bar of on in equity come there's than lag get And yield higher trading set long we've tough what where want to trying been a MVC protection? people have? that a into project, one risk, et something a that Yes, but which the Overall, to good come from place. Like you're the answer. just Michael at return that mentioning, cetera, XX-ish risk, can execution earlier, asked we've

of term to So even that than kind that be a yield dynamic and us. you were we strategic the I But looking makes in of higher cash look valued maybe some and know capital, years the whether cetera. you we at may what flows, term, in projects it invest different. money it. want better then is to for compare that's we for while anybody. you a out we much of et little short And word disciplined more be that et But that longer yields, you use at the the our take about couple process these invest If of before cetera, a more continue go at at not. really the least or trade capital that equity get this and putting When on you're us to as kind bit it mind, you for as trading well that at would

So all to that in in you weigh compared the we're that environment now.

we I'm can first okay, that The flow discussion I important ourselves most to deploying the we though, very it's do or have asked or projects? cash have or this this was is growth and was that think we've position think move in position -- leverage debate. into takeaway, then, the growth the trying the begin. So excess XXXX of I this buybacks question the distribution move been what's what value. create a And think way stability going of that therefore, into most point right capital and opportunity feel we thing what's the about that we'll from to this, have with excess do short-term to about good as and meetings hoping look where it And that's we're this cash we're best earnings. feel And all opportunities. to shows as then well. we at we it's to it's if where kind we're it's at that buy continuing And a to the units, a decide And about good about are good if to having we if decision, will talk dynamic possible time, that And those the feel you it. year. we project, a that's about discussion want and as so that multiyear throughout you occur good make you that that. trying the a make it obviously, back get and going perspective And internally, to we so do.

So threshold, the know other of not of return, a well. as most always very there's into one return the being of but it. important, dynamic parameters it important, lot discuss. what's process. other that return that that everybody there's the if asks go A we Obviously, I word goes lot but into thought the factors most also

Ujjwal Pradhan

you you mentioned Javelina earlier to every plant versus sale Pam. And helpful, $XX it. Mike. sensitivity Got in price the impact the my the clarify $X.XX out NGL that change next is million Could for after the you have That's pointed past? question

Pam Beall

you thumb metric When say past rule sensitivity the in had we In a given of clarify. the of or yes, $XX million -- past.

are of we factors contracts has to to And a a our of Javelina not that as proceeds tweak. of product it's that have a one. lot material It's but related small sales a part influence tweak. number of is it with volumes of are which percent that, So there that do

we've So it's related not you past. that provided just it a to specifically tweak. the Javelina, but guidance updated is it to just provide small as wanted in But

Operator

I'd closing to call remarks. back over to the for turn Kazarian Kristina like

Kristina Kazarian

Sounds of joining clarification MPLX. members interest Should for the great. you. and or take discussed today, on calls. for to you Thank additional you like your topics of in any would be team morning, have this questions you our available us Thank will thank you your

Operator

concludes That you Thank Thank participating. for you. today's conference.

disconnect. You now may

MPLX (MPLX) 2 Feb 212020 Q4 Earnings call transcript