Jean Ann Salisbury

Jean Ann Salisbury first asked about the impact of E&P consolidation on midstream contract negotiating power, questioning if larger E&Ps would negatively affect midstream companies. She then followed up by asking about the rollover schedule for Midland to Echo crude pipeline contracts, specifically if most expire in 2028-2029 and if blending and extending efforts have altered this timeline.

Answer

Co-CEO Jim Teague stated that Enterprise's team is adept at creating win-win deals, so E&P size doesn't significantly impact negotiating power. Company Representative J. Bany clarified that approximately 20% of Midland to Echo crude pipeline contracts roll off in 2028, with efforts already underway through new contracts and blend-and-extend agreements to manage these expirations.

Jean Ann Salisbury asked about the potential impact of E&P consolidation on midstream negotiating power and whether it poses a negative for the sector. She also followed up on the Midland to Echo crude pipeline contracts, asking if blend-and-extend discussions have pushed back the 2028/2029 roll-off dates.

Answer

Co-CEO Jim Teague asserted that E&P consolidation does not significantly impact Enterprise's negotiating power, as their team excels at win-win deals with both large majors and independents. Jay Bany, SVP of Crude Oil Pipelines and Terminals, confirmed that while 20% of contracts roll off in 2028, new contracts and blend-and-extend agreements have been ongoing to address this.

Jean Ann Salisbury of Bank of America asked how Enterprise will balance defending its market share with maintaining high returns amid falling LPG export fees, and also inquired about the outlook for the Permian's gas-to-oil ratio if oil growth slows.

Answer

SVP Tug Hanley and Co-CEO A.J. Teague stated that with 85-90% of LPG capacity contracted long-term and competitive brownfield economics, they can defend their position. EVP Anthony C. Chovanec and SVP Natalie Reagan asserted that the Permian will continue to get gassier regardless of oil growth due to geology and decline curves, and they remain confident in producer activity.

Jean Ann Salisbury of Bank of America asked about the evolution of the LPG export market given falling fees and how Enterprise will balance defending market share with maintaining returns. She also inquired about the Permian Basin's gas-to-oil ratio if oil growth slows.

Answer

SVP of Pipelines & Marketing Tug Hanley emphasized that Enterprise is 85-90% contracted through the decade and uses competitive brownfield economics. Co-CEO A.J. Teague added that export facilities act as a 'magnet' for their integrated system. EVP Anthony C. Chovanec and SVP Natalie Reagan provided a detailed outlook, stating the Permian will continue to get gassier and that producer economics remain strong, supporting their growth forecasts.

Jean Ann Salisbury inquired about the real-time impact of Chinese tariffs on U.S. LPG trade flows and the competitive landscape for LPG exports given significant new capacity builds.

Answer

An executive, Tug Hanley, explained that while trade flows are rebalancing, Enterprise has not seen a disruption in its ethane or LPG exports. He noted the company has limited direct contractual exposure to China, though its customers do export there. Hanley emphasized that Enterprise's brownfield expansion is the most capital-efficient project, which should translate into the most competitive terminal fees for customers.

Jean Ann Salisbury questioned the long-term strategy for handling sour gas in the Permian and asked about the expected ramp-up of NGL exports, particularly the mix between ethane and propane service.

Answer

Executive Natalie Reagan explained that the company is expanding its sour gas capabilities with new and expanded AGI wells and processing trains to grow its integrated value chain. Executive Tug Hanley detailed the NGL export ramp, stating that base ethane capacity is fully contracted and will ramp at the Natus River terminal, while the new LPG expansion is already 85% contracted.

Jean Ann Salisbury asked about the resolution of the current ethane oversupply ahead of new export capacity coming online and whether the TW products pipeline system has reached its final capacity.

Answer

Executive Tug Hanley stated that the ethane market will balance through regional rejection and that Enterprise sees an opportunity in collecting contango from storage. Executive Justin Kleiderer clarified that the TW products system is not at its final state and that the company is actively adding more truck loading capacity to meet rising demand.

Jean Ann Salisbury asked about early results from testing chemical surfactants in basins outside the Permian, specifically the DJ and Bakken, and whether they are anticipated to work as well there.

Answer

CFO Eimear Bonner stated that the focus has primarily been on the Permian, with treatments increasing to almost 85% of new wells this year, aiming for 100% in 2027. She reported a 20% improvement in 10-month cumulative recovery for new Permian wells and a 5%-8% arrest in decline for existing wells. Pilots are underway in the DJ and Argentina, and Bakken treatments began in Q4, with results to be shared in due course as part of a broader effort to double shale and tight recovery.

Jean Ann Salisbury inquired about early results from testing chemical surfactants in basins outside the Permian, specifically the DJ and Bakken, and anticipated effectiveness.

Answer

CFO Eimear Bonner stated that while the primary focus has been the Permian, with treatments increasing to 85% of new wells this year, pilots are underway in the DJ and Argentina, and Bakken treatments began in Q4. She reported 20% improvement in 10-month cumulative recovery for new Permian wells and 5%-8% arrested decline in existing wells, expressing optimism for similar results in other shale basins, with data to be shared in due course.

Jean Ann Salisbury inquired about Chevron's portfolio weighting, which is approximately 85% upstream and 15% downstream post-Hess acquisition, asking if the company is satisfied with this mix or if it aims to balance it with more downstream or CCUS exposure over time.

Answer

Chairman and CEO Mike Wirth stated that the current portfolio weighting is consistent with historical levels, and Chevron does not feel compelled to increase its downstream exposure. He believes upstream returns are generally more resilient and self-correcting than downstream returns over the long term. While expressing a desire to grow petrochemicals due to long-term demand and economic opportunities, he expects the overall portfolio weighting to remain similar to current levels.

Jean Ann Salisbury asked about Chevron's portfolio mix, which is now more weighted towards upstream post-Hess, inquiring if management is content with this balance or if they aim to even it out over time with increased downstream or CCUS exposure.

Answer

Chairman and CEO Mike Wirth confirmed the portfolio is approximately 85% upstream and 15% downstream post-Hess, consistent with past decades. He stated there's no compulsion to increase downstream weighting, as upstream is a depletion business while downstream often sees capacity creep and more pressured returns over time. Wirth indicated a desire to grow petrochemicals (CP Chem projects) but expects the overall portfolio weighting to remain similar to today.

Jean Ann Salisbury from Bank of America asked for an update on the current status of Chevron's operations in Venezuela, including production levels and contract structures.

Answer

Chairman & CEO Michael Wirth stated that since the license change in May, Chevron has worked closely with the U.S. government. He confirmed that a limited amount of oil flow to the U.S. is expected to begin this month, consistent with sanctions policy. He noted the crude is valuable to Gulf Coast refiners but does not expect a material impact on Q3 results, though it will help recover debt owed to Chevron.

Jean Ann Salisbury asked about Chevron's strategic position in the California refining market, especially in light of recent competitor refinery closure announcements.

Answer

CEO Mike Wirth affirmed Chevron's strong position with two scaled refineries and an integrated value chain. He criticized California's policies for making investment difficult and increasing consumer costs, leading to tighter fuel supply. However, he stated that Chevron has no announcements regarding its refineries at this time.

Jean Ann Salisbury asked about the TCO FGP project ramp-up, inquiring if it is tracking to expectations and when the company might provide an update on potential debottlenecking opportunities.

Answer

CEO Mike Wirth reported that while it is 'very early days,' the FGP start-up has been very stable, with well performance meeting or exceeding expectations. He emphasized a methodical ramp-up to ensure reliability and stated that debottlenecking is a question for the future, after the plant reaches full, stable capacity.

Jean Ann Salisbury of Evercore ISI inquired about the Tengizchevroil (TCO) project, asking for specific milestones that would indicate the start-up is largely derisked.

Answer

CEO Mike Wirth stated that while significant complex commissioning work remains, the project is being progressively derisked with each passing quarter and they are being methodical to ensure a safe and reliable start-up. CFO Eimear Bonner added details from her recent site visit, highlighting the successful transition to low-pressure production and rigorous testing of injection and processing facilities, which reinforces confidence in a Q1 2025 start-up.

Jean Ann Salisbury asked about the real interest from data centers in using Carbon Capture and Storage (CCS) as an emissions offset and its potential for material uplift for ExxonMobil's CCS segment.

Answer

CEO Darren Woods acknowledged the initial hype around data center decarbonization but noted that gas-fired power generation with carbon capture is emerging as the only viable, at-scale option in the near to medium term. He emphasized ExxonMobil's unique position with the Denbury acquisition, providing the only scale end-to-end CCS system and integrated capabilities. Woods confirmed serious, substantive conversations with hyperscalers and expressed hope for a project announcement by year-end 2026, indicating a strong belief in the opportunity's materiality.

Jean Ann Salisbury asked about the reality and potential material uplift of data center interest in using Carbon Capture and Storage (CCS) as an offset to emissions.

Answer

CEO Darren Woods acknowledged the market's evolving understanding of CCS for data centers, noting that gas-fired power generation with carbon capture is the only viable, scalable option in the near to medium term. He highlighted ExxonMobil's unique position with the Denbury acquisition, providing the only scaled end-to-end CCS system. Woods confirmed serious, substantive conversations with hyperscalers, hoping for a project announcement by year-end.

Jean Anne Salisbury asked for more granularity on ExxonMobil's proppant results, specifically where recovery improvements are most significant (e.g., gasier, oilier, deeper zones). She also inquired about the strength of the company's patent and other barriers to entry for this technology.

Answer

Darren Woods, Chairman and Chief Executive Officer, explained that the proppant's success is a function of rock properties and material flow, with ongoing optimization. He noted it's one of many technologies aimed at improving recoveries and lowering capital, with a pipeline of ideas to potentially double recovery. He affirmed strong focus on protecting the proprietary technology and raw material supply through patents.

Jean Anne Salisbury asked for more granularity on ExxonMobil's proprietary proppant, specifically where recovery improvements are most significant (e.g., gasier, oilier, deeper zones), and the strength of its patent and barriers to entry.

Answer

Darren Woods, Chairman and CEO, explained that the proppant's success stems from its ability to achieve deeper penetration into fracs, influenced by rock properties and fluid flow, and noted ongoing optimization. He emphasized that it's one of many technologies in a promising pipeline aimed at improving recoveries and lowering capital, with a line of sight to potentially doubling recovery. He affirmed strong focus on protecting the proprietary technology and its benefits through patents and raw material supply.

Jean Ann Salisbury from Bank of America asked if the recent surge in U.S. LNG contracting represents a structural market shift and how it might affect ExxonMobil's LNG strategy or project timelines.

Answer

Chairman and CEO Darren Woods stated that he does not view this as a structural shift in fundamental demand. He believes it will likely alter trade flows but not the overall pace of new supply needed globally. He emphasized that ExxonMobil's major international LNG projects, like those in Papua New Guinea and Mozambique, are advanced based on securing long-term, crude-linked contracts, making them resilient to short-term market dynamics.

Jean Ann Salisbury from Bank of America followed up on the 'new Coke province' discussed at the December Investor Day, asking if well data from the last four months confirms or exceeds initial performance expectations.

Answer

Chairman and CEO Darren Woods confirmed that the company is 'as enthusiastic, if not more' about the value opportunity from the low-weight proppant technology. He stated that the initial estimate of a 15% improvement in ultimate recovery (AUR) remains a 'good solid base,' and he expects performance to improve further as the company gains more deployment experience.

Jean Ann Salisbury inquired about ExxonMobil's LNG contracting strategy and its medium-term outlook on whether the global LNG market will be oversupplied.

Answer

CEO Darren Woods affirmed a continued belief in strong long-term LNG demand driven by economic growth and decarbonization efforts. He stated the strategy is to underpin the majority of new production with long-term, crude-linked contracts while leaving a portion available for their growing trading business to capture value from market liquidity.

Jean Ann Salisbury inquired about ExxonMobil's LNG contracting strategy and its view on the medium-term LNG market balance, considering its new projects and third-party purchase agreements.

Answer

CEO Darren Woods affirmed a continued belief in healthy long-term LNG demand, driven by economic growth and coal-to-gas switching. He stated the strategy is to bring on advantaged supply, with the majority of new production to be underpinned by long-term, crude-linked contracts. A portion will remain uncontracted to support and grow the company's trading business.

Jean Ann Salisbury asked about the North Atlantic segment's capture outperformance in recent quarters, whether it's driven by closure-related tightness in Europe, and if it represents a structural shift. She also inquired about refined products pipeline open seasons, paths to California markets, and Valero's preference for waterborne product movement.

Answer

Gary Simmons (EVP and COO, Valero Energy Corporation) attributed North Atlantic outperformance to increased wholesale volumes in the UK as competitors exited the market, improving capture rates. He reiterated Valero's preference for waterborne supply due to California market volatility and optimization opportunities, but would consider pipelines for more efficient access to the Phoenix market.

Jean Ann Salisbury followed up on refined products pipeline open seasons, noting extensions and a path to multiple California markets, asking if Valero still prefers waterborne product movement as a better solution.

Answer

Gary Simmons, EVP and COO, reiterated Valero's preference for waterborne supply due to the volatility of the California market and the optimization opportunities it offers, avoiding commitments to pipelines that might lead to closed arms. He clarified that Valero would entertain pipeline projects if they offered a more efficient way to supply the Phoenix market, where they have significant commitments.

Jean Salisbury of Bank of America asked about the expected onetime cash impact from the Benicia refinery closure and the potential effect of Chinese tariffs on U.S. LPG on feedstock costs.

Answer

Jason Fraser, EVP and CFO, clarified that cash from inventory will be realized quickly, while other costs and potential real estate proceeds are longer-term. Regarding tariffs, an executive named Greg noted minimal disruption so far, while Gary Simmons, EVP and COO, suggested that weaker naphtha prices could emerge from other market factors.

Jean Salisbury inquired about the expected onetime overall cash impact from closing the Benicia refinery, including inventory liquidation and closure costs, and asked if Chinese tariffs on U.S. LPG could materially impact feedstock costs.

Answer

Jason Fraser, EVP and CFO, explained that the cash from inventory liquidation would be received fairly quickly, but other costs related to cleanup and dismantling would be extended over several years. Regarding LPG, an executive named Greg noted no significant market disruption yet, while Gary Simmons, EVP and COO, added that naphtha could weaken once flows to Venezuela as a diluent cease.

Jean Ann Salisbury of Bank of America asked for details on the various ways increasing OPEC supply could benefit Valero's operations and margins.

Answer

EVP and COO Gary Simmons detailed several positive drivers for heavy sour crude supply. He cited upcoming OPEC production increases, a seasonal ramp-up in Canadian output, continued growth from Venezuela, and reduced fuel oil burning in the Middle East. He also noted that the potential shutdown of the Lyondell refinery would remove a source of demand, likely further widening favorable quality discounts for Valero.

Jean Ann Salisbury asked if the earlier-than-expected in-service date for the MSX project indicated a broader acceleration in the permitting process or if it was project-specific. She also inquired whether Kinder Morgan would consider taking an equity stake in a U.S. LNG terminal, similar to a peer, especially if structured with back-to-back contracts.

Answer

CEO Kimberly Dang explained that the MSX acceleration is due to the removal of the 871 waiting period and FERC acting within a year, which is faster than previous large projects. She stated that Kinder Morgan generally sticks to its core pipeline business, serving LNG demand through its network, as LNG terminal equity returns haven't met their criteria, and they prefer the take-or-pay, utility-grade contracts of their current model.

Jean Ann Salisbury asked if the earlier-than-expected in-service date for the MSX project indicated a faster permitting process across the board or if it was project-specific. She also inquired if Kinder Morgan would have an interest in taking an equity stake in a U.S. LNG terminal, especially if it could be structured as a pay-for-pay equivalent.

Answer

CEO Kimberly Dang explained that MSX's earlier in-service is due to the removal of the 871 rule (a 5-month waiting period) and FERC acting within roughly one year, which is faster than previous large projects. On LNG terminal equity stakes, Dang stated KMI generally sticks to pipeline services for LNG demand due to unattractive returns and KMI's focus on take-or-pay contracts with investment-grade utilities, minimizing risk.

Jean Ann Salisbury asked about the challenges of building pipelines from tier-two basins (like the Eagleford) to LNG facilities, specifically regarding underwriting constraints due to LNG builders being linked to Henry Hub and E&Ps' reluctance for long-term contracts, and the expected mix of end users, E&Ps, and marketers.

Answer

Kim Dang (CEO) highlighted the Eagleford as a well-positioned basin for growth, with relatively easy infrastructure development. Sital Mody (President of Natural Gas Pipelines) added that the market pulling from supply, complemented by producers, will drive these developments, evolving as gas sourcing and movement through pipeline grids to consumers are discovered.

Jean Ann Salisbury followed up on the need to build pipelines from Tier 2 basins to serve new LNG demand. She questioned potential constraints due to underwriting, given LNG builders' links to Henry Hub and E&Ps' reluctance for long-term contracts, and asked about the expected mix of end users, E&Ps, and marketers on such pipelines.

Answer

Kim Dang, CEO of Kinder Morgan, highlighted the Eagle Ford as a well-positioned Tier 2 basin with significant growth potential and relatively easy infrastructure development. Sital Mody, President of Natural Gas Pipelines, explained that the market pull from demand, complemented by producers, would drive these developments. He anticipated that the mix of end users, E&Ps, and marketers would evolve as the pipeline networks and gas sourcing become clearer.

Jean Ann Salisbury from Bank of America asked about the timing of when LNG projects secure their gas pipeline capacity relative to their sanctioning date. She also inquired about the risk of a Permian gas pipeline overbuild and potential pressure on recontracting rates later in the decade.

Answer

CEO Kimberly Dang explained that LNG projects typically secure an initial pipeline contract to obtain financing for FID, then seek more diversified and competitive supply later. Regarding the Permian, she noted their existing pipes have attractive rates compared to new builds and that their financial models conservatively assume a rate step-down at recontracting. Sital Mody, President of Natural Gas Pipelines, added that their network provides strategic advantages for those assets.

Jean Ann Salisbury from BofA Securities asked if Kinder Morgan anticipates a shift in future projects from large-diameter pipelines to smaller, end-user laterals for power plants and data centers. She also inquired about the company's forecast for the recovery of Haynesville volumes.

Answer

Kimberly Dang (Executive) explained that while smaller 'singles and doubles' projects will be more frequent, KMI is still evaluating large-scale opportunities, so the future will be a combination of both. Sital Mody (Executive) added that activity is picking back up in the Haynesville in anticipation of future LNG demand, and sustained prices should drive more activity.

Jean Ann Salisbury from Bank of America questioned the risk of a gas oversupply in the Agua Dulce area by 2026 if LNG projects are delayed and asked for an update on the tailwind from re-contracting market-rate storage capacity.

Answer

Executive David Conover acknowledged potential for pricing exposure from LNG delays but highlighted that KMI's network offers downstream optionality for customers. President Kimberly Dang added that KMI has long-term contracts, and price volatility could create profitable opportunities for its Texas Intrastate business. She also confirmed that market-rate storage remains a tailwind, with about 25% of storage subject to market rates and recent deals hitting high watermarks, though contracts roll over a roughly 3-year period.

Jean Anne Salisbury at Bank of America inquired about the recent fluctuations in Calcasieu Pass (CP1) volumes, specifically regarding the longer-than-expected power maintenance, and the company's plan to achieve a sustained 12.4 MTPA. She also asked if these power maintenance issues are unique to CP1 or if similar challenges are anticipated for Plaquemines.

Answer

CEO Michael Sabel confirmed that CP1's maintenance took longer than expected but stated that similar issues are not anticipated for Plaquemines, though routine maintenance is always expected. He mentioned that the company has a specific plan to increase CP1 volumes to 12.4 MTPA and beyond, considering it holistically with investments in other projects like CP2, and expects future bolt-on expansions at CP1.

Jean Ann Salisbury inquired about the fluctuations in Calcasieu Pass (CP1) volumes due to power maintenance, the path to achieving a sustained 12.4 MTPA, and whether these maintenance issues are unique to CP1 or expected at Plaquemines.

Answer

CEO Michael Sabel confirmed CP1 maintenance took longer than expected but stated it's not unique to CP1, with routine maintenance occurring at all facilities. He mentioned conservative guidance for CP1 and a specific plan to increase volumes to 12.4 MTPA, with timing decided holistically. He does not expect CP1's specific power maintenance issues to carry over to Plaquemines.

Jean Ann Salisbury from Bank of America Corporation asked about potential constraints in the Plaquemines ramp-up, such as the power island or gas sourcing, and inquired about the contracting strategy for the Plaquemines expansion.

Answer

CEO Michael Sabel expressed confidence in the Plaquemines ramp-up plan for the remainder of the year, acknowledging the power plant is a key focus but remains on schedule. For the Plaquemines expansion, he outlined a strategy of securing large-scale, 20-year contracts to support large project financings, similar to CP2, noting that the immediate focus is on contracting for CP2's next phases first.

Jean Ann Salisbury of Bank of America asked about potential constraints, such as power island timing or gas sourcing, that could affect the continued ramp-up at the Plaquemines project. She also questioned the contracting strategy for the Plaquemines expansion, whether it would be done in large phases or more incrementally.

Answer

CEO Michael Sabel expressed confidence in the Plaquemines ramp-up plan for the rest of the year, acknowledging the challenges of commissioning but highlighting the team's experience. He stated the power plant is a focus but remains on plan. For the Plaquemines expansion, Sabel indicated the plan is for large-scale, long-term (20-year) contracts to support large project financings, similar to CP2, citing strong market demand. He clarified that contracting for CP2 Phase 2 and 3 would come first.

Jean Ann Salisbury asked about the primary limiting factors driving the Plaquemines production ramp and whether the recent FERC permit for CP2 was a critical factor for securing customer contracts.

Answer

CEO Mike Sabel identified the ramp-up of power as the main constraint for Plaquemines' production increase, noting that temporary power solutions have enabled a rapid start. He stated that the FERC permit for CP2 was an expected milestone and not a constraint on customer negotiations, as the company already feels unconstrained in its active contract discussions.

Jean Ann Salisbury inquired about the drivers behind the $7.94/MMBtu weighted average fixed liquefaction fee at Plaquemines and asked how future development plans would be affected by a potential drop in global LNG prices.

Answer

CEO Mike Sabel and CFO Jonathan Thayer explained the Plaquemines fee reflects a blend of historically sold forward contracts at lower prices and the challenges of contracting during the initial ramp-up phase. Sabel asserted that even in a lower-price environment, their projects generate highly attractive returns due to their cost advantages, allowing them to modulate growth while opportunistically gaining market share.

Jean Ann Salisbury asked about the impact of rising processing plant costs, specifically the new range of $225 million to $275 million, on Targa Resources Corporation's margin expectations and its ability to pass these costs through to producers.

Answer

Matt Meloy, CEO, confirmed the provided cost range remains accurate, with sour plants at the higher end. He clarified that capital costs are borne by Targa and factored into overall rates, not directly passed back to producers. Despite higher capital costs, Targa continues to achieve commercial success and good returns through its integrated system, remaining highly competitive.

Jean Ann Salisbury asked about the impact of rising processing plant costs, which Targa Resources Corporation previously indicated had increased to a range of $225 million-$275 million, on the company's margin expectations and its ability to pass these costs through to producers.

Answer

CEO Matt Meloy confirmed the $225 million-$275 million range for processing plant costs remains accurate, with sour plants at the higher end. He clarified that capital costs are borne by Targa and factored into overall rates, not directly passed back to producers. Despite these costs, Targa continues to achieve good returns through its integrated system and remains highly competitive for new volumes in the Permian.

Jean Ann Salisbury asked if new pipelines will unlock Permian gas egress and lead to a sustained move off fee floors, and also about the pros and cons of using third-party NGL transport.

Answer

Chief Commercial Officer Robert Muraro stated that new egress is welcome and that stronger Waha pricing would be an incremental tailwind above their fee floors. President Jennifer Kneale explained that using third-party NGL transport is a capital-efficient way to ensure service and avoid an overbuild, while SVP Benjamin Branstetter noted they have flexible offloads to optimize the timing of future expansions.

Jean Ann Salisbury asked if new gas pipelines will unlock the Permian basin and allow Targa to move off its fee floors, and also questioned the strategy of using third-party NGL transport as Grand Prix fills.

Answer

Chief Commercial Officer Bobby Muraro expressed excitement for new gas egress, noting it provides producer optionality and that stronger Waha pricing would be a tailwind for fee floors. President Jennifer Kneale and SVP Ben Branstetter explained that using third-party NGL transport is a capital-efficient way to manage growth, provide diversification, and optimally time future proprietary expansions.

Jean Ann Salisbury inquired if the new Matterhorn pipeline would cause an outsized volume increase for Targa, and asked about the strategy for future LPG export capacity, questioning if Targa would use third-party capacity to defer its own capital spending.

Answer

Executive Matt Meloy stated that Targa's producers were not constrained before Matterhorn, so no outsized impact is expected, and he cautioned against extrapolating recent high growth rates into Q4. Regarding exports, Meloy confirmed Targa plans to build its own future capacity to handle its volumes and is not looking to contract with third parties in a meaningful way. Executive D. Pryor added they will also pursue smaller debottlenecking projects.

Jean Ann Salisbury of Bank of America Corporation requested clarification on the wellhead-to-water announcement, specifically asking for a directional disclosure of the projected EBITDA share derived from contracted take-or-pay agreements, both currently and in the eventual vision. She also inquired about the sourcing strategy for the 3.1 Bcf/d Gillis to LNG pipeline, questioning whether Williams intends to source all volumes from its own gathering and processing (G&P) assets, utilize third-party pipelines, or expand its Louisiana Energy Gateway (LEG) system.

Answer

President and CEO Chad Zamarin clarified that the pipeline project (80% Williams investment) is 100% take-or-pay, and the 10% LNG terminal investment is into a facility with 100% of its capacity subscribed by take-or-pay contracts, primarily with Woodside. He noted that the LNG offtake, representing less than 1% of earnings, is the only portion not take-or-pay and will be used to attract producer customers. EVP of Corporate Strategic Development Rob Wingo added that the 3.1 Bcf/d pipeline will source gas from a combination of Williams' LEG system, Transco, and other market pipelines, with Williams handling short-term arrangements and Woodside managing long-term supply. He also mentioned capital protection on the construction side of the LNG facility.

Jean Ann Salisbury asked for clarification on the 'wellhead to water' announcement, specifically the share of projected EBITDA from the project that is contracted take-or-pay, both currently and in the eventual vision. She also inquired if the 3.1 Bcfpd Gillis to LNG pipeline, which is larger than LEG, would be sourced entirely from Williams' G&P assets, through third-party pipes, or if LEG would be expanded.

Answer

President and CEO Chad Zamarin clarified that the pipeline project (80% investment) is 100% take-or-pay, and the LNG terminal (10% investment) is also 100% take-or-pay, with only the small LNG offtake (<1% of earnings) not being take-or-pay. EVP of Corporate Strategic Development Rob Wingo added that there is capital protection on the construction side of the LNG facility. Mr. Wingo explained that the 3.1 Bcfpd pipeline would source gas from a combination of Williams' LEG system, Transco system, and other parts of the market, with Williams handling short-term arrangements and Woodside handling long-term supply setups.

Jean Ann Salisbury of Bank of America asked if the CECI project could be expanded further given rising Southeast demand and what constrained its current size.

Answer

President & CEO Chad Zamarin explained that the current 1.6 BCFD size for CECI was optimized for efficiency and to maintain the 2027 in-service timeline. While the scope of the current CECI project will not change, he confirmed that the team is actively developing additional, separate expansion projects along that same corridor to meet further demand.

Jean Ann Salisbury of Bank of America inquired if the CECI project could be expanded further and what factors constrained its current size.

Answer

President & CEO Chad Zamarin explained that the current scope of CECI was finalized to maintain the project's schedule for a 2027 in-service. While the CECI project itself will not be changed, he confirmed that significant demand exists along the corridor and the team is actively working on additional, separate expansion projects to meet that demand.

Jean Ann Salisbury requested more details on the Transco Power Express project, including its route and whether it relies on the Mountain Valley Pipeline. She also asked for an update on the status of the Constitution Pipeline project.

Answer

COO Larry Larson explained that the Power Express project is a 950 MMcf/d expansion sourcing gas from Station 165 and moving it north, and it is not dependent on the Mountain Valley Pipeline. CEO Alan Armstrong stated that while the Constitution project is still being worked on, it faces significant hurdles, and mentioned the Nessy project as a less complex alternative.

Jean Ann Salisbury asked whether debottlenecking efforts for Corpus Christi Stage 3 (CCL3) would occur gradually until 2028 or primarily coincide with the startup of Trains 8 and 9. She also inquired about the current wave of global project FIDs, asking Anatol Feygin if he believes the market is nearing the end or is in the middle of this cycle.

Answer

Jack Fusco, President and CEO, confirmed that CCL3 debottlenecking began with Train 1's commercial operations and is ongoing, with continuous refinement to maximize production. Zach Davis, EVP and CFO, added that Trains 8 and 9 will also incorporate debottlenecking equipment, with hopes to exceed 1.5 million tons per train soon. Anatol Feygin, EVP and CCO, acknowledged a robust year for FIDs and long-term contracting (over 80% for 20+ years) but believes this period of significant FIDs is in its 'denouement' or ending phase.

Jean Ann Salisbury inquired whether the debottlenecking efforts for Corpus Christi Stage 3 (mid-scale Trains 8 and 9) would occur gradually or concurrently with the startup of Trains 8 and 9. She also asked for an assessment of whether the current wave of global project FIDs is nearing its end or is still in the middle.

Answer

Jack Fusco, President and CEO, confirmed that debottlenecking for CCL3 has been an ongoing process since Train 1's commercial operations and will continue to be refined. Zach Davis, EVP and CFO, added that Trains 8 and 9 will also incorporate some debottlenecking equipment. Anatol Feygin, EVP and CCO, indicated that while there has been a robust year for long-term contracting, this period of significant global project FIDs is likely in its 'denouement.'

Jean Ann Salisbury of Sanford C. Bernstein & Co., LLC asked for a view on the medium-term LNG market, specifically whether it is more likely to be overbuilt or underbuilt in the latter half of the decade, and also inquired about the current waiting time for a new LNG FERC filing.

Answer

EVP and CCO Anatol Feygin stated he does not foresee an overbuild scenario due to enormous latent demand in Europe and growth in Asia, which will keep the market tight. President and CEO Jack Fusco added that the permitting process is increasingly difficult, noting they prefiled for Trains 8 and 9 and expect to file formally early next year, aiming for contiguous construction after Train 7.

Jean Ann Salisbury of Bernstein inquired about the EPA's NESHAP rule, asking about the timeline for a potential resolution. She also asked for an opinion on the maximum concurrent U.S. LNG liquefaction capacity that could be built in the next 4-5 years and the primary constraints.

Answer

President and CEO Jack Fusco addressed the NESHAP rule, expressing confidence that the situation is manageable and will not have a material financial or production impact. EVP and CCO Anatol Feygin discussed LNG capacity, noting that while the potential is high, the key constraints have shifted from commercial contracting to EPC economics, financing challenges, and securing gas supply solutions.

Jean Ann Salisbury asked about Midwestern pipeline's potential for both northbound expansion to Guardian and southbound expansion to a third-party Appalachia pipeline, if these opportunities are mutually exclusive, and if Haynesville's past year outperformance versus the basin was mainly due to 'leg pull through' requiring more build-out for continued outperformance.

Answer

David Slater (President and CEO, DT Midstream) confirmed Midwestern is bi-directional and can support both northbound expansion into Chicago and southbound expansion towards the Nashville area, stating both directions are possible. He attributed Haynesville's outperformance to the quality of DTM's underlying customers and resource, noting producers' nimbleness in responding to demand signals, implying continued outperformance is tied to this dynamic.

Jean Ann Salisbury inquired about the Midwestern pipeline's dual potential for both northbound expansion to Chicago, serving as a feeder to Guardian, and southbound expansion to support a third-party Appalachia pipeline, asking if these opportunities are mutually exclusive or if both could proceed. She also followed up on the Haynesville volume outlook, questioning if the expected Q4 volumes similar to Q3 implied that the significant outperformance against the basin over the past year was primarily due to 'leg pull through' that has now been realized.

Answer

President and CEO David Slater confirmed that Midwestern is bi-directional and can support both northbound expansion into Chicago and southbound expansion towards areas like Nashville, where power load is manifesting, indicating that both opportunities could potentially happen. Regarding Haynesville volumes, Slater attributed the outperformance to the quality of their underlying customers and resource, along with producers' increased nimbleness in responding to physical market realities, rather than just 'leg pull through.'

Jean Ann Salisbury of Bank of America questioned whether the pace of projects moving to Final Investment Decision (FID) is aligned with the expectations embedded in the company's 2026 early EBITDA outlook. She also requested the total gathering capacity figures for the Haynesville and Appalachia basins following recent expansions.

Answer

President & CEO David Slater confirmed that the company is reaffirming its 2026 early outlook and that project development is proceeding within that framework, indicating confidence in delivering on the guidance. For the specific capacity figures, Director of Investor Relations Todd Lohrmann was tasked to follow up with the analyst directly as the CEO did not have the numbers on hand.

Jean Ann Salisbury asked if DTM could be a material beneficiary of Boardwalk's recently announced Borealis pipeline project. She also inquired about the potential risk from China tariffs on U.S. propane prices and how that might affect DTM's Appalachian footprint, asking for a reminder of the wet vs. dry gas mix.

Answer

President and CEO David Slater explained that DTM could benefit from the Borealis project on the pipeline side, as its Midwestern asset connects to Texas Gas and could offer a lower-cost expansion path. He also noted it would likely trigger the need for new upstream gathering investments, where DTM could participate. Regarding tariffs, Slater stated DTM has very little exposure as its Appalachian footprint is predominantly in the dry gas and oil windows, not the NGL window. He added that lower NGL prices could lead to ethane rejection, which would be a net positive for DTM's gas pipelines like NEXUS.

Jean Ann Salisbury asked about potential limitations on Mid-Continent gas and NGL growth due to gas egress constraints, given the increasing demand from LNG exports. Salisbury also inquired about the dynamics behind Permian natural gas processing (GNP) volumes trending below guidance while Bakken volumes trended above, asking about ONEOK's market share versus overall basin growth.

Answer

Sheridan Swords, Executive Vice President and Chief Commercial Officer, noted some producers shifting to gasier portions of the Mid-Continent, which benefits ONEOK's GMP and NGL segments, and believes there is ample room for growth before egress becomes a limitation. Swords explained that Permian volumes started slower due to delayed pads but are now at expected levels, while Bakken NGL record volumes were driven by increased ethane recovery, capitalizing on wide spreads from low gas prices.

Jean Ann Salisbury asked about potential limitations on Mid-Continent gas and NGL growth due to gas egress constraints, given market rumblings about increased demand for LNG. Jean Ann Salisbury also inquired about the dynamics behind Permian natural gas processing (GNP) volumes trending below guidance and Bakken NGL volumes trending above guidance year-to-date, relative to ONEOK's market share and overall basin growth.

Answer

Sheridan Swords, Executive Vice President and Chief Commercial Officer, noted a shift towards gassier portions of the Mid-Continent, which benefits ONEOK's GMP and NGL segments. He believes there is significant room for growth before egress becomes a limitation and that ONEOK can implement solutions if needed. Sheridan Swords explained that Permian volumes were initially slower due to delayed pads but are now at expected levels. Bakken NGLs saw record volumes, primarily driven by increased ethane recovery due to favorable spreads from low gas prices, a trend expected to continue into Q4.

Jean Ann Salisbury from Bank of America asked about producer activity in the Bakken, including potential high-grading to oilier acreage and the trend for gas-to-oil ratios. She also sought more detail on the butane blending synergy, asking for a breakdown between recurring revenue and volatile marketing spreads.

Answer

EVP & CCO Sheridan Swords responded that gas-to-oil ratios are expected to continue rising naturally and that the Bakken remains a key basin for producers. On butane blending, Swords explained that while spreads were narrower than in 2024, the company compensated by increasing blend volumes through synergy projects that lower costs, creating upside potential if spreads widen.

Jean Ann Salisbury noted that EnLink volumes seemed light and asked if there was more ethane rejection in the Mid-Continent or Bakken than anticipated in Q1, which could affect the full-year outlook.

Answer

Chief Commercial Officer Sheridan Swords clarified that Q1 performance, including ethane rejection levels, was in line with the company's internal forecast used to set the full-year guidance in late February. He reiterated the typical recovery patterns: full recovery in the Permian, variable recovery in the Mid-Continent, and opportunistic recovery in the Rockies, with an expectation for more system-wide recovery in the summer months.

Jean Ann Salisbury asked about the assumptions for uncontracted rates at the new LPG export dock amid concerns of overbuilding, and whether the current natural gas price strip is sufficient to drive material production growth in the Mid-Continent.

Answer

CCO Sheridan Swords stated that ONEOK does not foresee an overbuilt LPG export market by the 2028 in-service date, given projected NGL growth and the volume ONEOK already controls. He confirmed economics assume typical market rates for spot volumes. Swords also noted increased drilling activity in the Mid-Continent is already driving a higher volume outlook. CEO Pierce Norton added that significant demand tailwinds from LNG and power generation support long-term gas growth.

Jean Ann Salisbury of Bank of America inquired about the drivers for minimum ethane recovery in the Bakken given flat demand and asked if the trend of operators moving to higher oil-cut areas has stabilized.

Answer

Sheridan Swords, Executive Vice President, explained that regional natural gas prices are the primary driver for ethane recovery decisions, with opportunities expected in the Bakken during periods of low local gas prices. He also confirmed that the shift by producers into different oil-cut areas has largely stabilized, with volume and GOR growth now also being driven by longer laterals and improved completion techniques.

Jean Ann Salisbury from Bank of America asked whether the weaker 2025 fundamental outlook was a year-to-date issue or a forecast for the second half. She also inquired about potential volume impacts on the Lone Star pipeline from new NGL capacity and if a new looping project would mitigate this.

Answer

Group CFO Dylan Bramhall explained the weakness was a mix of year-to-date underperformance and a continued trend in the second half. Co-CEO Marshall "Mackie" McCrea added that temporary issues impacted Bakken volumes but expressed long-term bullishness. On NGLs, McCrea stated the new Delaware looping project is designed to handle incremental growth and that the company is aggressively working to keep its pipelines full.

Jean Ann Salisbury of Bank of America requested an update on the ramp-up speed for the Nederland Flexport expansion, particularly the expected mix of ethane and propane. She also followed up on real-time LPG export market dynamics and the strategy for navigating potential Chinese tariffs.

Answer

Executive Mackie McCrea confirmed the Nederland Flexport expansion will begin ethane service by early June, with propane ramping up in July or August. He expressed high confidence in marketing the volumes, noting a recent spot cargo sale to China and minimal concern over tariffs. He added that the new flexible expansion capacity is over 90% sold out under 3- to 5-year agreements starting January 1, 2026.

Jean Ann Salisbury of Bank of America raised concerns about increasing competition and potential return compression in the Permian NGL pipeline, fractionation, and export value chain, asking if more consolidation was necessary.

Answer

Executive Marshall "Mackie" McCrea responded that ET focuses on its own customers and returns, not competitors, and is confident in its ability to fill assets and secure long-term contracts. Executive Thomas Long added that consolidation in the NGL space, and across all commodities, is a logical step and remains a focus for ET's M&A strategy.

Jean Ann Salisbury asked for an update on the status of the Lake Charles LNG project, including EPC contracts, and inquired about the potential to expand the Transwestern pipeline to serve westward demand.

Answer

Executive Mackie McCrea conveyed strong optimism for the Lake Charles LNG project, stating that following recent election results, he is bullish on reaching an FID. He confirmed an EPC contract is executed and new market agreements may be announced by year-end. On the Transwestern pipeline, McCrea acknowledged a potential future need for westward expansion but noted the system is currently "pretty maxed out," and a significant looping project, rather than just compression, would be required to substantially increase capacity.

Jean Ann Salisbury from Bank of America asked for an explanation of the new 'net crack' metric and whether the recent sale of the Northwind midstream asset is a good valuation indicator for Delek's assets, especially with its new acid gas injection (AGI) capabilities.

Answer

EVP Mohit Bhardwaj detailed that the net crack metric adjusts the Gulf Coast 5-3-2 crack by removing RVO costs, backwardation impacts, and the Midland-Cushing differential to better reflect Delek's inland refining business. President and CEO Avigal Soreq confirmed the Northwind sale is a positive indicator of value. Mr. Bhardwaj added that DKL's operations are more comprehensive than Northwind's, suggesting DKL's assets represent a superior business.

Jean Ann Salisbury of Bank of America asked for a definition of the new 'net crack' metric. She also questioned if the recent sale of the Northwind midstream asset serves as a relevant valuation benchmark for Delek's DKL assets, particularly its developing acid gas injection (AGI) capabilities.

Answer

EVP Mohit Bhardwaj explained that the net crack metric starts with the Gulf Coast 5-3-2 crack and adjusts for RVOs, backwardation, and the Midland-Cushing differential to better reflect their inland refining business. Regarding DKL, President and CEO Avigal Soreq stated that the Northwind sale is a positive indicator of DKL's asset value. Bhardwaj added that DKL's operations are more comprehensive, including gathering, treating, and processing, suggesting it is a better business.

Jean Ann Salisbury asked for an explanation of the new 'net crack' metric, how it is constructed, and if it will be used going forward. She also questioned whether the recent sale of the Northwind system is a good valuation read-across for Delek's midstream assets, particularly with the new acid gas injection (AGI) capability being developed.

Answer

EVP Mohit Bhardwaj detailed the 'net crack' calculation, which adjusts the Gulf Coast 5-3-2 crack for RVO costs, backwardation, and the Midland-Cushing differential to better reflect Delek's inland refining business. Regarding the Northwind sale, President and CEO Avigal Soreq agreed it was a positive indicator of the potential value of Delek's assets. Bhardwaj added that while Northwind is a good benchmark, DKL's business is more comprehensive, including gathering and processing, making it a 'better business.'

Jean Ann Salisbury from Bank of America requested an explanation of the new 'net crack' metric, including its construction and whether it will be used as an ongoing benchmark. She also asked if the recent sale of Northwind serves as a good valuation read-across for Delek's assets, particularly the Acid Gas Injection (AGI) capability under development.

Answer

Mohit Bhardwaj, EVP of Strategy, Business Development & IR, explained that the 'net crack' metric is calculated by taking the Gulf Coast 5-3-2 crack and adjusting for RVOs, backwardation, and the Midland-Cushing differential to better reflect Delek's inland refining operations. Regarding the Northwind sale, President and CEO Avigal Soreq viewed it as a positive valuation indicator. Bhardwaj added that DKL's gas business is more comprehensive, suggesting it is a strong but potentially conservative benchmark.

Jean Ann Salisbury asked for clarification on the new 'net crack' metric, including how it is constructed. She also inquired if the recent sale of the Northwind midstream asset serves as a good valuation read-across for Delek's assets, particularly with the new acid gas injection (AGI) capability being developed.

Answer

EVP Mohit Bhardwaj detailed the net crack metric, explaining it adjusts the Gulf Coast 5-3-2 crack for RVOs, backwardation, and the Midland-Cushing differential to better reflect Delek's inland refining business. Regarding asset valuation, President and CEO Avigal Soreq agreed the Northwind sale is a positive indicator. Bhardwaj added that Delek's DKL gas business is more comprehensive, offering gathering, treating, and processing, suggesting it is a superior asset.

Jean Ann Salisbury of Bank of America inquired about Phillips 66's exposure to a potential slowdown in Permian production growth and the stability of its integration synergies across different market environments.

Answer

EVP of Midstream & Chemicals Don Baldridge stated that the company remains confident in its Permian volume outlook, supported by higher NGL content in new wells and a robust portfolio of G&P processing and third-party contracts. He explained that the company's integration synergies are generally steady and throughput-driven, with some seasonality, and that they continue to see opportunities to extract more value.

Jean Ann Salisbury asked if management believes the stock is undervalued because of earnings volatility in other segments masking the Midstream business's stability, and what could be done, short of a spin-off, to address this.

Answer

Mark Lashier, Chairman and CEO, acknowledged the point, suggesting that as the stable earnings from the growing Midstream business become a larger part of the portfolio, investors will take greater notice. Kevin Mitchell, CFO, added that the company will continue to evaluate enhancing its Midstream disclosures. He framed the value proposition as a combination of the stable, growing Midstream business and the significant cash generation upside from the Refining and Marketing segments.

Jean Ann Salisbury questioned the strategy behind the EPIC acquisition, noting it adds NGL pipeline capacity without a corresponding increase in processing. She asked if this creates pressure to add more processing assets as existing pipeline contracts expire.

Answer

Don Baldridge (Midstream and Chemicals) explained that the EPIC acquisition provides needed Permian pipeline capacity to support their growing supply portfolio, which currently exceeds their own pipeline capacity. He detailed upcoming organic processing plant expansions that will fill this new capacity, stating that EPIC's timing and size are a perfect fit for their growth strategy, allowing them to move volumes onto their own system.

Jean Ann Salisbury from Bank of America inquired about the market impact of a new products pipeline in PADD 4 and PSX's exposure to the wide LPG export arbitrage.

Answer

Brian Mandell of Marketing and Commercial stated they have not yet seen an impact from the new pipeline. Don Baldridge of Midstream and Chemicals confirmed PSX is benefiting from strong LPG demand at its Freeport terminal, using a portfolio of contracts to capitalize on favorable spreads, and expects a healthy outlook to continue.

Jean Ann Salisbury from Bank of America sought to clarify if the guided free cash flow inflection was due to new midstream or chemical benefits or simply a reframing of existing ones. She also asked how lower EOR operating costs would affect the EOR production mix.

Answer

CFO Sunil Mathew confirmed that the components of the free cash flow inflection, such as the midstream contracts and Battleground project benefits, had been previously disclosed and this was a reframing of the overall picture. Richard Jackson, President, U.S. Onshore, explained that the EOR cost savings were efficiency-driven, expanding margins without changing the production mix, thereby improving the competitiveness of EOR within the portfolio.

Jean Ann Salisbury asked if the recent burst of U.S. LNG activity was driven by tariffs or pent-up demand, and whether competitors FIDing with less contract coverage changes Cheniere's view on mid-cycle margins.

Answer

President and CEO Jack Fusco attributed the activity to the administration's continued push for U.S. 'energy dominance.' EVP and CCO Anatol Feygin reaffirmed Cheniere's discipline, stating they will not change their model of requiring 90%+ contract coverage for FIDs and will continue to plan their business on a mid-$2 margin, regardless of competitor actions.

Jean Ann Salisbury asked about key learnings from the Corpus Stage 3 ramp-up, specifically regarding ramp-up time and performance of the smaller, mid-scale trains. She also inquired about the minimum portfolio-wide contract percentage Cheniere would target for the Sabine Pass expansion.

Answer

President and CEO Jack Fusco reported excellent progress on Stage 3, noting Train 1 is ahead of schedule and subsequent trains are expected to come online even faster. Regarding contracting, EVP and CFO Zach Davis reiterated that Cheniere is a contracted infrastructure company. He stated they target being approximately 90% contracted on a portfolio basis to ensure appropriate risk-adjusted returns, always comparing growth projects to the alternative of share repurchases.

Jean Ann Salisbury asked about potential changes to DOE permitting requirements post-pause and whether demand from U.S. E&Ps for IPM contracts remains strong.

Answer

President and CEO Jack Fusco stated that while it is speculative, he believes Cheniere is in 'very, very good shape' for future permits, as brownfield expansions are likely to be viewed more favorably. EVP and CCO Anatol Feygin confirmed that appetite from E&Ps for IPM contracts remains 'very robust,' noting that industry consolidation has improved counterparty credit quality and that overall demand for such deals is multiples of what Cheniere executes.

Jean Ann Salisbury questioned the assumption that Plains' long-haul volumes would capture over half of the projected Permian growth in 2025, asking for color on the underlying drivers given market competition.

Answer

Jeremy Goebel, an executive, attributed the strong projected volume capture to several factors: a step-up in contracts, recovery of physical flows on Cactus I and II after prior-year connecting carrier downtime, and unique demand pull on the Basin pipeline system. He described it as a function of specific timing and unique circumstances.