MPLX - Earnings call transcript Q1 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Welcome to the MPLX First Quarter 2022 Earnings Call. My name is Elan, and I will be your operator for today's call. [Operator Instructions] Please note that this conference is being recorded. And I would now like to turn the call over to Kristina Kazarian. Kristina, you may begin.

Kristina Kazarian

to First welcome Conference XXXX and Call. morning, the Quarter MPLX Earnings Good accompany be call website slides this The that can under Investor at the found tab. mplx.com, our on

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

Mike Hennigan

joining reported billion, to year, of unitholders Thanks, cash business. returned you up thank we Earlier stability of $X.X adjusted for Kristina. We continues the from X% million which was call. and over results, our through delivered we capital afternoon, EBITDA Good distributions demonstrate unit resiliency and repurchases. $XXX quarter and of our today, which to flow and prior the first

the Our our from and business logistics storage demand higher business NGL prices. recovery and benefited consumer in benefited gathering from and processing

advanced in also growth projects. we smaller well projects. debottlenecking organic we of several and the a Permian projects quarter, Bakken crude and This expansion In number gathering as L&S, progressed as

per capital projects basin basins. a is in to expansion full plant With basins, prices, processing of take In our per feet Bakken total X.X X fifth discipline across our pipeline assess processing investing the inbounds. producers. growing day. capacity systems, are activity plant, NGL our Permian yesterday's and progressing million Permian, these construction We higher billion and day in announced is focus our pickup ramping takeaway growth demand seeing by capacity producer to in up Marcellus strict will G&P, from gas and Permian, focus which on Whistler maintain driven in cubic the In our we largely to fourth the are cubic feet natural we're commodity the capital of as will a we including we

for highlight are MPC's believe and economic in contracts stable of Let finish renew year-end finalizing of years to of renewal. several financial MPLX's both coming and scheduled which expiration. weeks, contracts Because so me for sense have pipeline are MPC, them also we'll renewal them are XX papering flows cash and entities. up with MPC systems several we operations, up process our and the with for pipeline ahead extend to these in critical agreements in the We we that both next earnings their well makes

Our with logistics purpose system. assets are integral fit marketing MPC refining and its under and for contract to

sustainable efficiency methane its products, and reduction XX% natural operations. gas emissions in also to leading MPC remain all by assets we utilization carbon intensity of an our achieved and parties. maximizing improving Shifting gathering our operations of MPLX with the logistics resources. focused business through lowering X, focused approximately energy remain energy of and our and year-end, last Slide in We natural intensity across the on third on Through conserving processing

goals to new target of we expanded our XXXX reduce result by a in progress, with methane XX%. emissions intensity a As our February,

deployment monitoring to midstream the participating also of led Energy sector. a project gas protocols further and Cheniere are reduce greenhouse to the technologies advanced emissions in We by across

diverse energy performance continue needs, ourselves meeting sustainability to positive energy in to society's improve continuously environmental while working energy results to deliver and an As the industry on evolves, focusing we're our positioning future.

to John discuss let the Now to me and our call financial results quarter. for operational the turn over

John Quaid

Mike. segment XXXX. incurred of XX% highlights performance first $X segment. by terminal volumes EBITDA were for X year-over-year. were Logistics our up were million and these The increased Thanks, up & Pipeline L&S outlines largely environmental volumes and Storage to financial quarter higher offset the operational adjusted quarter XXXX X% the quarter quarter. when Slide first in throughputs comparing first benefits costs

on to Moving to largely G&P EBITDA to higher Slide million on and NGL XXXX, adjusted $XX compared Processing prices. our due quarter Gathering X. segment first segment increased

which of gallon, than and quarter and of For the volumes quarter average quarter, compared the respectively. processing higher the to fractionation X% Overall, $X.XX prices were as gallon XXXX. averaged gathered first XXXX NGL in is were while X% per X%, up first per $X.XX volumes down

in our on fractionation as volumes we've up the new processing volumes were respectively. decreased in the processing X%, were volumes due Permian. processing the the fractionation and region, production. Marcellus, And X%, and Southwest Focusing the while in added saw capacity largest to and we X% growth changes Marcellus, the other in at volumes In of areas, gathered the timing primarily looking

Moving to Slide X.

our quarter earnings stability financial the demonstrate first of and Our cash business. resiliency flow results and

EBITDA and of was was billion up $X.X adjusted cash the up over X% distributable total of year. from $X.X the flow quarter, billion the from X% For prior prior year

timing our the expenses depending other and As quarter-to-quarter while various strive a and on maintenance we results, can growing for stable reminder, of regulatory, work. operating project-related financial fluctuate

$XX as over these XXXX, as quarters first forward quarter, year. we much could look year each remaining to the we the compared balance project-related of work as as this in higher for million the the expenses of the be complete As of

distribution unit, early low-cost March, commitment proceeds from also X.XXx debt MPLX supporting of of of at other to ratio expect of ended a of strong the MPC. loan senior discipline and XX-year first continue to business, in $XX We our a and continued given quarter. were flexibility around notes, enhancing financial repay conditions, while amounts total offering culture, used under MPLX our coverage financial distribution the with our and quarter. Looking closing, of primarily capital for In cash the with per for we first strict leverage business we generating the return and unitholders. billion invest issued $X.X highlights to ratio our grow borrowed billion intercompany this to In resulting quarter a flows, declared $X.XXXX to a adoption capital of the X.Xx. current quarter

let me Now over turn the back Kristina. call to

Kristina Kazarian

With Thanks, for John. Elan questions. we're [Operator ready Instructions] that,

Operator

[Operator Instructions] today John from from Sachs. McKay Our first question is Goldman

John Mackay

don’t you on set the takes at? bit How and fuels or maybe we're puts Can recontracting, those the about pipes, share of things just the guys Why like are to are not you the on at being an and initial makes on don't yet? the talking on IPO. -- you anniversary And of hear looking the work nice we the distribution contracts might Why I just start of Mike. so think call, of portfolio maybe some sense, start it XX-year on the we more a little kind looked whole now? what we be it's

John Quaid

it's John. John,

and Let add me additional start any then that has if comments. Mike he can on with

So the contracts, really have there initial referring remarks, what we're in of pipeline Mike's prepared IPO. to right, part would are been that the

or for were feedback say purpose assets to renew continued on we year XXXX, here really are XXXX, these are on MPC. from in maybe And were in So end going whether expire. those And to investors, to fit these. for not of this integral set were again, there based contracts we questions we've

little going this kind the have in So X-year would We're for automatic of the That discussed had parties earlier and renewing contract really a it bit two process. renewals. ahead XX.

remarks move as how contract. heard look and beneficial we handled forward. Again, we contracts that these to future economically We'll the his renewing both So you entities. prepared would contracts financially have in for think pipeline we've I think that's is Mike

So Mike, to anything want you add?

Mike Hennigan

questions that shouldn't we're often anything not should be? Or we're I our is contracts around MPC. surprise, with that be? doing we Mike. And it's doing we anything is people, John, getting Yes, kept to we there ask there some

my remarks, I for as makes both and entities. it in financial economic sense Now prepared said

MPC is a to use It's MPLX So going given. assets.

surprised that concerned about people we were were that. So

when normal it’s for it, “Okay, and business, we and both it’s in a the John have going since we’ll us integral just it’s would do to said, both people cadence, asked since about continue MPLX entities. people’s are to So come a off as question that up. our entities table.” But have win-win said, to take been mind, they question MPC

John Mackay

buybacks. I’ll ask my follow-up, ask the I'll and on I them am sure

something I'll do the So of more kind macro. maybe on

guys So have past exports for a talked in product seen it's you it's the least but pretty exports pretty portfolio. obviously -- strong for better at backdrop in we've the having quarter, MPLX And is the hard. L&S up lower actually about pick refining, second product

the the mean balance of refining a can I'm little bit for of kind of the L&S if through about you So time talking year. spend should macro what wondering of on kind just

Tim Aydt

John, is question. take this I'll that Aydt. Tim

products do remaining refined strong. very see First off, we demand for

utilization and they're going try We there that expect refiners that going rates, well out needs high to those today. to to are market as to meet are continue have

some Our noticed of past terminal I from our we the high, record pipeline kind MVCs. and And utilization strong volumes actually you've are very pretty think remains in that territory. have

structures And to say, muted lot don't of, a a refinery really So it's pretty a I'd have our solid. changes sensitivity are contract in as utilization. we result,

little on So maybe bit I the a think that's backdrop.

the about If bit. you maybe talk a exports

Galveston be swings product It large that Mount in these it it major expect several Garyville, on locations We be patterns. within based includes revenue could cetera. really the that and docs general, in Bay L&S docks, of And we et exports. have a assets, could support could Airy, portfolio be don't shifting

very in system can systems. needed. to have MVCs back the to it swing Gulf We And U.S. pipe flexible the little or several up Coast that the again, a water, can swing the as

the at I we're to would I positioned, think you crude say, well side, exports. look crude participate similarly the on if

South We those have ownership those and loop of have and we have the our both Texas interest capabilities. Gateway,

hopefully, So that's helpful.

Mike Hennigan

you the quarter took that I you MPC at and at was impacted had other Coast Mike. on outages our Texas if if Gulf City city Garyville. facility outage, weren't the were unplanned don't -- an know our it's out but looking the the X outage entire was results, One aware, just Galveston John, the business. power I first Bay

at those looking you're quarterly that wanted if out I as well. point results, just to So

Operator

question is next Our JPMorgan. from from Tonet Jeremy

Jeremy Tonet

the more I of processing see in wondering, we just could see shell the touch in and in your East there? of curious there online type the Appalachia footprint, guess, for processing needs Mariner particularly move Permian, And just opportunities a with with might wanted egress that do processing? liquids-rich Appalachia, Permian. breath And impact your with what the NGL cracker incremental similarly, MPLX? I you tightness towards how and production on coming, that to across I'm base

Mike Hennigan

that to Greg, take do you one? want

Greg Floerke

Appalachia, the anticipating with Thanks, and plant – Sure. so we’ve excited something question, to the been we Mike. Jeremy, Monaca starting about. are yes, address is

-- the fleet will in has X -- XX, opportunity the for Virginia, pipelines, our coincided building the you and We and X increase producers but to the which with ethane along ethane are of Mariner latest recover I our more of a And third XXX,XXX along expansion ongoing in in ethane production basin. West ethane up with takeaway frees online basin, for our the the quarter process early in think that the that more combine recently there that capacity of Monaca, barrels ethane, capacity in the out an completed Smithburg over de-ethanizer come prices to if Mariner increase which day. cracker, is

single-digit still of in a number our larger terms it's think mode. maintenance publicly been announced by low are that I producers overall of to activity, they growth In

process which So later the us propane to to The year. area this a year fairly plant of utilization takeaway products, and now, big our stay was for for growth in that lines production in stable. put in Permian, well service right ramp late of plant, to pretty terms are Switching expect our the Preakness, and into in up, obviously, balance. completing fourth heavier fifth we last continuing liquid

to we Hopefully, I they continued being answers question, So with that Permian. takeaway it’s – that tied downstream going on prices be they're add to growth think area, expect, that volume. would Tim, of the are, want there's crude continue, may part the in to obviously, to Jeremy. you and where going prices, gas your

Tim Aydt

the Jeremy, there that's XXXX. Yes. Bcf big look to capacity. when not would the the processing, predicting you increased to I also And are a X Permian, pull demand that out there's -- day at up of just only of takeaway a forecasts going obviously the a that by be on add but lot pipeline

that think I as So see markets to you're are it The moves. starting growing. LNG

to in think the continue I you're investments to needed going see across that regard. midstream

Jeremy Tonet

renewals there. as towards then And contract the pivoting you it. Got wait just out back

the say the or today you'd were rates you say is compares wondering those market those than worse first market how Just wondering, were first when to contracts when better Just would the if market signed? struck.

John Quaid

to again. lot rates or Remember, year-to-year. base John frankly, been that it's these them pipeline A contracts. going Jeremy, of rates have are moving, are have other

a So thinking ago. year of marine a a pipeline bit in about little than have different maybe you're had renewed our completely different contract, structure if That we which what’s contracts. would these

Jeremy Tonet

Got it.

real to size? So no that of assume change right is it way material about fair Is the think the in to it? rates

John Quaid

Well, yes, as already was have on based other every saying, rates changing I been factors. the year

the just a looking planned term so. terms already really we're on in maintain and that So lock kind to of renewing, we

Mike Hennigan

are like that of Let indexed are. most add them me pipelines just just many

indexed FERC can it as else. So mentioned, to something or be John

rate. very a So a over time, there's still it's but changing, market-related

Operator

next from Brian Our is UBS. from Reynolds question

Brian Reynolds

to the on hear good you it's Mike, call well. as And

I potential framework $XXX return left of It appears authorization. to question, And dig share distribution, year. in I on strategy. to including was my allocation or share buyback the curious, capital more if of potential a it saw similar program special last or a into MPLX's there's roughly the we For first capital, of thoughts to of the buyback some reauthorization relates capital future what wanted around XQ little you as return million could

John Quaid

can maybe John. then add that and Mike I'll some it's start comments. Brian, one, with on

then invest how distributions, be a a do to kind perhaps look capital, or assets to remains, where balance via returning that the of employees. over, business. And distribution going right? our our that look think going our at We're talked we We're look strong at secure security distribution. left So of a that we point whether capital our we the at again, unit look and growth can We're that's safety about or maintain to grow either as supplemental about get to going framework to to to We're we of sheet. base before then repurchases. going we've for

cash you we've going at this right, the said we're we're each to -- generating flow If said, quarter, look “hey, at we quarter”. look

This as said, free quarter had $XXX cash about, million we flow. Mike of

a base unit we million million repurchases. was of and Our $XXX distribution $XXX did

we were there. have where So effectively, at looked

which year to going Now year. repurchases what you one of to not quarter, I things assume the I’m look programmatic that's this unit just we want we did sure the said well, as can last last and quarter this reiterate we're at do

I we for that, certainly all how a we value us a I tool think looking of part And creating think think at we're as unitholders. about as return to right, of think capital. is supplemental distribution for

Brian Reynolds

and I the to growth of on Great. at questions just project XXXX all follow-up we appreciate the color. start some as a beyond. look as Maybe

include for talk of in finishing And that? could pipeline growth plant expansion thoughts greenfield out Maybe reannounced to as And Permian well? alluded new fifth the then potential your the year see gas will You the what in Permian natural we the participation processing Whistler you could around when up at end. expansion? about are the post your your further BANGL that pipeline projects, a

John Quaid

that Yes. Brian. one, I'll take

by for did call are by pipeline of X.X So most a end as XXXX of expansions We expansion obviously, growth and lot the that announced. the Whistler be anticipated second would beyond you're the announce right. mentioned yesterday some the I to the say earlier, Bcf. to on We there's by would XXXX. obviously, expansion natural a and forecasts that Whistler do I gas what Permian that side gas a just are the other pipeline being more -- second one required

to public for continue we’ve natural the the opportunities very facts been into there's the look we’re continue to NGL extension to there chain. at that investments, gas certainly, about value look incremental to and going So

that we for announce of that. we continue As the BANGL, in obviously, brought to January, in on monitor We did form Rattler partner another Midstream. in

so acreage, comes cetera. dedicated that And additional with et

grow. see have And I continue in course we NGL So put to place. we various of volumes can cost-effective the think over time, to you're going expansions with that, that

Operator

is our Research. from And question from Instructions] Keith [Operator Wolfe next Stanley

Keith Stanley

First, expansion. I the Whistler wanted to ask on

expect contract under on Should to the might to would similar overall? look at thoughts for give how build project terms. I approach about new just that the any you we how fully year XX and tariff here can then an expansion and compare initial So think a was how a you think

Tim Aydt

is expanding Keith, that. So not all that. we yesterday, this Tim. I'll are I start might your we But be to questions announce answer specifically. able as did again,

background of I Obviously, And important that. that that in others on I the we one have quarter things and think originally mentioned evaluating concluded with the were the system was expansion that's I of think permitted the evaluation. way maybe we in mind. few first is case potential in designed that questions. things a

it order. in any status way or capital compressors expansion So is standpoint, very require September We XXXX. does in be not is rights the service of redesign. new From It our a to going of efficient. on are anticipate

about for we As able the flows cash those and long-term and were to not characterize would take-or-pay rateable just really assistance means very terms [contracts], would talk I JV. maybe I potentially And -- they're that. some as for fee-based, provide they're with but contract which the

efficient an and being is again, So lower risk. it expansion, capital

it's it there. So just but probably strong investment, I'll leave a

Keith Stanley

one, just then on to in Great. up wanted follow second the Okay. volumes I quarter. And

especially and year bit was little? Southwest Preakness like the little volumes presumably with about in Appalachia a ramping over little the regions. also we've thinking looked And a So across your up it in balance from I But even a of you down versus are how G&P, Appalachia. quarter kind commentary of G&P consistent some today, volumes like the feel bit heard just were down fourth the others then both

Mike Hennigan

that? you to take do want Greg,

Greg Floerke

as process been that Utica on far gas yes, dry the as continued Keith, lean focus decline some continues area. as to has has the of Sure. volume with starting Appalachia, in

The in So and come lean which but that, Marcellus. some processing pads have that Permian impact. impacted the have of the go West Marcellus which online. timing and timing in by we affected Yes. focus has had that our swings yes, you growth weather quarter. the in as the related And coming either of Power do some did areas weather-related fractionation if most of most think key in continued dry gathering February to weather by is Most and on to Ice that lot of continues the up affects It's new for does freeze gathered on and of on volumes, us some generally, the example, as Delaware, that a well the Utica We Bakken, -- down. or also early also wells offs, I we the and pads. those impact impact to were have to have by in Rockies. first have the issues point But other the weather drove

that mean drilling even and thing you'll the of level and of other weather levels schedules flat production full -- maintenance tends necessarily on drilling most The loaded. of be quarter-to-quarter is construction back-end a because that for and year, a doesn't more see the that lot program to

So there more existing online pad, the wells. just against to decline new pads due ongoing just decline will natural be timing coming of some measured the of

Operator

is Fargo. from question Michael next Our from Wells Blum

Michael Blum

the commodity are now. transactions prices last really some G&P Just high in space We've over very months. the seen obviously one, few right M&A

of market? the initiatives your seeing on to Are divest assets? noncore long-term in your updates any changes any some curious, Just you

Mike Hennigan

times the portfolio not Mike. don't looking we're we I bit, change really couple basins flow. And anything it's said our report there. mentioned cash on but to that were. are currently same to a back free $X gas. Yes, a had generating while We wanted Since new market We calls, we the little our place time, was have now a that of at at Michael,

to So cash. lot meantime, strategic, some going not free of capital even future though the generating though, they're them get in because in of not are a they're the long-term

in met believe valuation right have still right now, it But anything all. the at that So regard something others assets. don't then steadfast in we is going happen. And what if for we're we could the

Operator

at I time. this And no am questions showing further

Kristina Kazarian

All thank today. right. us for joining you, Well, everyone,

have today, the time. at not free to We're to any help Operator, here questions you. you thank any feel If during answered that out out were call please reach afterwards.

Operator

conference. Thank This conclude you. does today's

may at You this disconnect time.

Kristina Kazarian	Vice President of Investor Relations
Mike Hennigan	Chairman, President & Chief Executive Officer
John Quaid	Chief Financial Officer
Greg Floerke	Executive Vice President & Chief Operating Officer
Tim Aydt	Executive Vice President & Chief Commercial Officer
John McKay	Goldman Sachs
Jeremy Tonet	JPMorgan
Brian Reynolds	UBS
Keith Stanley	Wolfe Research
Michael Blum	Wells Fargo

MPLX (MPLX) 3 May 222022 Q1 Earnings call transcript