Michael Blum

Michael Blum inquired about the timing to achieve the 5 million tons expansion from the December FERC filing for CCL Stage 3 and Midscale 8 and 9, and the use case for this incremental capacity. He also asked about the expected kick-in date for the new CPC contract.

Answer

CFO Zach Davis explained that the FERC filings are for debottlenecking and engineering to accommodate peak production, fitting into the overall plan to reach 75 million tons, including a first phase of Train 4 at Corpus Christi and other debottlenecking projects. President and CEO Jack Fusco stated that the new CPC contract commences mid-year, with the 1.2 million tons representing the volume for the vast majority of the term, but including some flexibility starting mid-year.

Michael Blum asked about the timing and use case for the 5 million tons per annum expansion at CCL Stage 3 and Midscale 8 and 9, and the expected kick-in date for the new CPC contract.

Answer

Zach Davis (EVP and CFO) explained that the FERC filing for the 5 MTPA expansion reflects ongoing debottlenecking and engineering, accommodating peak production and contributing to the overall plan to reach 75 million tons with accretive economics. Jack Fusco (President and CEO) stated that the new CPC contract commences mid-year 2026, with flexibility built into the transaction to leverage debottlenecking opportunities.

Michael Blum asked how Cheniere is thinking about China as a key long-term market in light of a potential permanent realignment of global trade and how this affects future contracting strategy.

Answer

EVP and CCO Anatol Feygin explained that while China is a very important market and Chinese counterparties are critical partners, the physical delivery of U.S. volumes to China is 'not important to us in the slightest.' He highlighted that their sophisticated Chinese partners have the capability to optimize and redirect cargoes to other premium markets, mitigating the impact of trade dynamics.

Michael Blum questioned whether the portfolio optimization and higher production that drove the Q3 beat are sustainable into 2025 and asked for clarity on the Stage 3 completion timeline.

Answer

EVP and CFO Zach Davis explained that while optimization opportunities are inherent to Cheniere's scale, the specific drivers of the Q3 beat—favorable basis differentials, sub-chartering, and ideal weather—are difficult to forecast and will not be baked into initial 2025 guidance. President and CEO Jack Fusco stated that completing three Stage 3 trains in 2025 is the target, with a fourth being unlikely. Davis added that the high-end production forecast assumes sequential quarterly completions for trains 1-3 through Q3 2025.

Michael Blum requested more detail on Kinetik's growth CapEx, specifically rich gas opportunities in New Mexico, optimization, and field CapEx, asking if these are recurring items. He also asked about the quarterly cadence of EBITDA and the expected Q4 exit rate.

Answer

Trevor Howard, Senior Vice President and Chief Financial Officer, explained that approximately 50% ($240 million) of the $480 million capital budget is regular-way field and maintenance capital. Non-recurring items include trunk line completions, the ECCC pipeline, Kings Landing sour conversion, Delaware South optimization, and the behind-the-meter power project. He projected a 'tale of two halves' for EBITDA, with Q1/Q2 2026 normalized at $230-$240 million and Q3/Q4 at $260-$270 million to reach the $1 billion full-year midpoint, with a 1.5x dividend coverage exiting the year.

Michael Blum requested more detail on Kinetik's growth CapEx, specifically asking if 'rich gas opportunities in New Mexico, optimization, and field CapEx' are recurring items. He also asked for the expected EBITDA exit rate for Q4 2026.

Answer

Trevor Howard, SVP and CFO, clarified that about 50% ($240 million) of the $480 million capital budget is 'regular way' field and maintenance capital (low pressure gathering, compression, and annual maintenance), which supports 8% volume growth. He stated that trunk line completions, ECCC, Kings Landing sour conversion, Delaware South optimization projects, and the BTM power project are more one-time in nature. For EBITDA cadence, he indicated a normalized Q4 2025 run rate of $230-$240 million for Q1/Q2 2026, ramping to $260-$270 million in Q3/Q4 2026 to hit the full-year $1 billion midpoint.

Michael Blum of Wells Fargo Securities sought clarity on the Permian macro environment, noting conflicting reports on producer activity, and asked if the increasingly sour gas in the region represents a potential upside for Kinetik.

Answer

CEO Jamie Welch explained that as a Permian pure-play, Kinetik sees producer activity shifts directly, but emphasized that well quality remains high, especially in New Mexico. SVP & CFO Trevor Howard added that the 2026 outlook is stable and the focus is on building infrastructure to meet producer needs. On sour gas, Welch confirmed it is becoming more sour, which requires significant investment in Acid Gas Injection (AGI) but creates an opportunity for higher, tiered treating fees and is a key differentiator.

Michael Blum of Wells Fargo & Company asked for clarification on whether Kinetik is trending towards the lower end of its 2025 guidance range, given the commentary on producer activity and commodity price headwinds.

Answer

CEO Jamie Welch responded directly, confirming that after factoring in items like the $20 million commodity price headwind, Kinetik would be 'below the midpoint' of its 2025 adjusted EBITDA guidance range. He clarified, 'We're in the range, but we are below the midpoint.'

Michael Blum from Wells Fargo asked about the relationship between the targeted 15% EBITDA growth and the 3-5% dividend growth, and whether the long-term 10% EBITDA CAGR assumes staying within the stated CapEx range.

Answer

CFO Trevor Howard explained that the delta between EBITDA and dividend growth is a prudent measure to retain financial flexibility and free cash flow for funding high-return organic and inorganic growth opportunities. Howard confirmed that the long-term 10% growth target is achievable within the company's existing long-term capital expenditure framework and operational footprint.

Michael Blum asked for clarification on the drivers of the Q3 EBITDA outperformance, questioning if it was a one-time event, and also inquired about the CapEx trajectory for 2025.

Answer

President and CEO Jamie Welch refuted the 'one-time' benefit idea, attributing the strong performance to a multitude of factors including superior NGL recoveries, optimization of PHP capacity during negative Waha pricing, strong Shin Oak volumes, and contributions from the Durango acquisition and increased EPIC ownership. For 2025, Welch guided CapEx toward the upper end of a $250 million to $400 million range.

Michael Blum inquired about ONEOK's open capacity to capture Waha basis spreads, the assumed Waha spread in the 2026 guidance, and whether the guidance assumes no spread. He also asked about the wide ranges in the Bakken, Rockies, and Midcontinent processing volume guidance and the drivers for reaching the lower or higher end of those ranges.

Answer

Chief Commercial Officer Sheridan Swords did not disclose exact open capacity but mentioned contracted capacity on the Eiger pipeline system and current good spreads, expecting them to narrow after Q3 2026. Swords attributed volume guidance ranges to producer activity, timing of well completions, and potential for higher crude prices to influence rig and completion crew deployment.

Michael Blum asked about the open capacity to capture Waha basis spreads, the assumed Waha spread in the 2026 guidance, and if the guidance assumes no spread. He also inquired about the drivers for the lower or higher end of the Bakken, Rockies, and Midcontinent processing volume guidance ranges.

Answer

CCO Sheridan Swords stated that the company has contracted capacity on the Eiger pipeline system beyond current needs, allowing for good spreads, which are expected to continue through Q3 before new pipelines come online. He noted potential upside if current spreads persist. For processing volume guidance, CCO Sheridan Swords explained that ranges account for producer activity, well completion timing, and potential delays or accelerations, with higher crude prices potentially driving volumes to the higher end.

Michael Blum sought clarification on the removal of the mid-single-digit to high-single-digit growth language for ONEOK's 2026 guidance from the investor presentation.

Answer

Pierce Norton, President and Chief Executive Officer, stated that ONEOK is focused on a strong finish to 2025 and will finalize 2026 guidance in early Q1 2026, expressing confidence in the company's positive trajectory. Michael Blum also inquired about the potential financial impact of widening Waha spreads and ONEOK's capacity on its NLink and WestTech assets to capitalize on these spreads. Sheridan Swords, Executive Vice President and Chief Commercial Officer, confirmed that the Waha to Houston Ship Channel spread has positively impacted ONEOK, leveraging capacity across its West Texas, NLink, and legacy gathering systems, including park and loan opportunities.

Michael Blum asked for clarification on ONEOK's 2026 guidance, noting the removal of mid-single-digit to high-single-digit growth language from the presentation deck. Blum also inquired about quantifying the potential impact of widening Waha spreads and ONEOK's ability to capture this through its EnLink assets or open capacity on WesTex.

Answer

Pierce Norton, President and Chief Executive Officer, stated that ONEOK's focus is on finishing 2025 strong and carrying that momentum into 2026, with 2026 guidance to be finalized in early Q1 2026, expressing confidence in a positive trajectory. Sheridan Swords, Executive Vice President and Chief Commercial Officer, confirmed a positive impact from the Waha to Houston Ship Channel spread, leveraging the West Texas, EnLink, and other pipeline systems for gas movement and park-and-loans.

Michael Blum of Wells Fargo Securities inquired about the performance and outlook for the BridgeTex pipeline following ONEOK's increased stake. He also asked for an update on the West Texas LPG pipeline's utilization and the strategy for increasing its volumes.

Answer

EVP & CCO Sheridan Swords reported that BridgeTex volumes are increasing and that the pipeline's connection to ONEOK's East Houston facility enhances downstream value. Regarding West Texas LPG, Swords confirmed it has a base volume contract and that volumes will be added from the new Shadowfax plant, Delaware expansions, and the newly announced Bighorn plant, creating a long runway for growth.

Michael Blum asked about the volume recovery trend in the Bakken for the remainder of the year and the sensitivity of Bakken ethane recovery to market pricing.

Answer

Chief Commercial Officer Sheridan Swords stated that only low single-digit growth is needed in the Bakken to meet guidance, and current trends suggest they will meet or exceed that. Regarding ethane, he explained that recovery is currently driven by the price spread to Mont Belvieu. The company has the flexibility to reject ethane into the Northern Border pipeline if pricing is unfavorable and has already locked in some of the favorable spread for the year.

Michael Blum asked for a directional outlook on 2026 capital expenditures and whether the 2025 level represents a new run rate. He also sought clarification on how synergies from recent acquisitions are tracking against original targets.

Answer

CFO Walter Hulse clarified that 2025 represents a peak for capital spending. While the new baseline for the larger company will be higher than in the past, he expects spending to decrease in 2026 and 2027. Regarding synergies, Hulse confirmed ONEOK exceeded its 2024 target and that the $250 million guided for 2025 is incremental to what has already been realized, reflecting continued opportunities.

Michael Blum of Wells Fargo asked for clarification on Bakken volume trends in light of recent basin-level data and questioned if the 2025 EBITDA guidance of 'comfortably above $8 billion' is a conservative estimate.

Answer

Sheridan Swords, Executive Vice President, attributed recent softness in basin-level data to temporary 'noise' from wildfires and unplanned outages, stating ONEOK's volumes have since recovered. Walter Hulse, CFO, addressed the EBITDA guidance by emphasizing the phrase 'comfortably over $8 billion,' implicitly confirming that an analyst's math showing a higher run-rate was not incorrect.

Michael Blum asked for more details on deeper zone development referenced on slide 16 and its contribution to Targa's robust outlook. He also inquired about Targa's open pipeline capacity for Waha spreads, direct Waha price exposure, and how the company benefits from improved Waha prices.

Answer

Matthew Meloy, CEO, noted early activity in deeper zones (Barnett Woodford) from some producers, viewing it as potential upside for longer-term growth beyond traditional formations, with positive early well results. Regarding Waha, Matthew Meloy stated Targa has significant transport positions for flow assurance, creating basis opportunities, though much is hedged. He clarified that Targa benefits more from higher Waha prices due to fee-based contracts and fee floors, and the multi-year forecast assumes not being above floors or having significant marketing gains. Jen Kneale, President, added that Targa is well-hedged on equity volumes, and while NGL prices offer direct exposure, gas marketing opportunities have benefited from transport positions in recent years.

Michael Blum asked for more information on deeper zone development referenced in Targa's slide 16, what producers are observing in these zones, and their contribution to Targa's robust outlook. He also sought clarification on Targa's open pipeline capacity to capitalize on widening Waha spreads, its direct Waha price exposure (given hedging), and how Targa benefits from improving Waha prices.

Answer

CEO Matthew Meloy noted early activity in deeper zones from some producers, viewing it as potential upside for longer-term growth, with positive early well results. Regarding Waha, he explained Targa maintains significant transport positions for flow assurance, which creates basis positions for capturing differentials, though much of this is hedged. He emphasized that Targa benefits longer-term from higher Waha prices due to its fee-based contracts and fee floors.

Michael Blum asked about Targa Resources Corporation's decision to increase its dividend by 25% versus leaning more heavily into share buybacks, seeking insight into the company's capital allocation strategy. He also requested an update on Q3 LPG export volumes, including seasonality, end market demand, and regional strengths or weaknesses.

Answer

Matt Meloy, CEO, explained an 'all of the above' capital allocation approach, emphasizing room for meaningful multi-year dividend growth supported by underlying fundamentals, alongside continued opportunistic share repurchases. Scott Pryor, President of Logistics and Transportation, confirmed Q3 LPG export volumes were seasonally in line, with demand growing globally and high contract levels. He noted benefits from a Q4 bottlenecking project and that the 2027 export expansion is driven by anticipated global demand growth and increased NGL production.

Michael Blum asked about Targa Resources Corporation's decision to increase its dividend by 25% for 2026, inquiring how this balances with opportunistic share buybacks, especially given recent stock price performance. He also sought an update on LPG export volumes for the quarter and insights into end-market demand strength or weakness across different regions.

Answer

CEO Matt Meloy explained that Targa's 'all-of-the-above' capital allocation approach allows for both meaningful dividend increases and opportunistic share repurchases, supported by strong underlying fundamentals and growing EBITDA. President, Logistics and Transportation Scott Pryor stated that Q3 LPG export volumes were seasonally in line with expectations, typically dipping in Q2/Q3. He confirmed strong, growing global demand, high contract levels, and anticipated benefits from a small bottlenecking project in Q4, with the 2027 export expansion driven by expected global demand growth.

Michael Blum asked for clarification on LPG export docks being 'effectively full' despite lower sequential volumes and inquired about Targa's strategy for handling growing competition.

Answer

President of Logistics & Transportation, D. Scott Pryor, explained their strategy is underpinned by long-term contracts tied to their own growing G&P supply, not the spot market. He stated new entrants don't change their strategy. SVP of Downstream Commercial, Benjamin Branstetter, added that all downstream expansions have line-of-sight to dedicated volumes.

Michael Blum asked for clarification on LPG export docks being 'effectively full' despite lower sequential volumes and questioned how Targa will handle growing competition from new Permian-to-export projects.

Answer

President of Logistics & Transportation D. Scott Pryor explained their strategy is underpinned by long-term contracts with ramping volumes from their own G&P system, which will fill their expansions. He stated that new market entrants do not change their strategy, as success depends on controlling supply. SVP Ben Branstetter added that expansions are backed by millions of dedicated acres, ensuring volume.

Michael Blum asked if Targa is seeing any changes in LPG export destinations due to global tariffs and about the strategy for share buybacks in a more volatile macroeconomic environment.

Answer

Scott Pryor, President of Logistics and Transportation, stated that while overall demand remains strong and activity at the docks is unchanged, some cargo destinations are shifting on the water as the market adapts, with hopes LPGs may be excluded from tariffs. CEO Matt Meloy addressed buybacks, describing the program as intentionally opportunistic. He highlighted Targa's strong balance sheet (3.6x leverage) as enabling the company to repurchase shares during market dislocations, as it did in April, and expects to remain active.

Michael Blum asked about the dynamics behind the modest sequential increase in Q4 Permian volumes despite new plants coming online. He also inquired what level of Permian volume growth is assumed in the 2025 guidance compared to the 14% achieved in 2024.

Answer

President Jen Kneale explained that the modest Q4 sequential growth followed several quarters of staggering increases and was impacted by a low-margin contract rollover. For 2025, she indicated that while growth would not reach the 14% seen in 2024, it is expected to be above the previously discussed 'high single-digit' framework and will be weighted toward the second half of the year.

Michael Blum questioned the long-term growth CapEx trend, asking if the previously guided '$1.7 billion typical year' is now higher, and inquired about the company's share buyback strategy, specifically if it has become more ratable versus opportunistic.

Answer

Executive Jennifer Kneale clarified that the $1.7 billion CapEx framework was for a high single-digit growth environment, and current 18% YoY growth necessitates higher spending. She affirmed that the buyback strategy remains 'very much opportunistic,' driven by strong conviction in the business outlook, and that variability in repurchase activity should be expected.

Michael Blum asked if DT Midstream could provide the gross backlog number or a way to size the 'shadow backlog,' given that the gross backlog is much larger than the risk-adjusted figure. He also inquired about the 2025 growth CapEx coming in below guidance, asking if it was due to capital efficiency or timing.

Answer

Executive Chairman and CEO David Slater responded that the gross backlog is 'multiples' of the committed backlog, describing it as a 'generational investment opportunity' and reiterating DT Midstream's disciplined and prudent approach to capital deployment. Regarding the 2025 CapEx, Mr. Slater confirmed it was a combination of 'performance, capital efficiency, and timing.'

Michael Blum inquired about the magnitude of DT Midstream's gross backlog, or "shadow backlog," relative to the provided risk-adjusted number, seeking a sense of the total opportunity set. He also asked for clarification on why 2025 growth CapEx came in light compared to guidance, questioning if it was due to capital efficiency or timing shifts to 2026.

Answer

David Slater, Executive Chairman and CEO, indicated that the gross backlog is "multiples" of the committed backlog, describing it as a "generational investment opportunity." He reiterated the company's commitment to prudent and rational capital deployment, learning from past sector cycles, and focusing on high returns. Regarding the 2025 growth CapEx, Mr. Slater confirmed it was a combination of "performance, capital efficiency, and timing."

Michael Blum questioned the recent changes in DT Midstream's capital expenditures, seeking clarification on whether the reductions in growth and maintenance capital were due to timing or genuine efficiencies, and asked for guidance on the future run rate for maintenance capital. He also requested an update on the Millennium open season and the current status of that project.

Answer

President and CEO David Slater attributed CapEx reductions primarily to exemplary performance and capital efficiency from the construction team, with a small amount of timing. EVP and CFO Jeff Jewell concurred, adding that maintenance capital efficiencies were also achieved, and advised assuming a flat run rate for maintenance capital going forward. Slater stated that the Millennium team is actively working on both R2R (near-term) and Pro (heavier lift with regulatory complexities), emphasizing a patient pace due to New York's regulatory environment.

Michael Blum asked about the change in DT Midstream's CapEx for the year, distinguishing between timing versus real efficiencies for growth and maintenance capital, and sought an updated outlook on the Millennium open season and project status.

Answer

David Slater (President and CEO, DT Midstream) attributed CapEx reductions primarily to capital efficiencies, with some timing shifts, praising the construction team's performance. Jeff Jewell (EVP and CFO, DT Midstream) added that maintenance capital efficiencies are also being realized, suggesting a flat run rate for future planning. Slater stated the Millennium team is actively working on R2R (near-term) and Pro (larger, complex, regulatory challenges), emphasizing a patient, disciplined approach due to New York's complexities.

Michael Blum from Wells Fargo Securities inquired about the progress and potential timing of data center-related lateral pipeline investments. He also asked for clarification on the 2025 CapEx forecast, noting that spending in the first half appeared light relative to the full-year guidance.

Answer

President & CEO David Slater explained that while DTM has numerous proposals for behind-the-meter data center projects, recent growth has primarily manifested as larger, utility-scale expansions like the Guardian project, driven by overall power demand. He expressed confidence that DTM will secure lateral projects over time. Slater also stated he fully expects the company to land within its full-year CapEx guidance range for 2025, despite the lighter spending profile in the first half.

Michael Blum asked for details on the drivers behind the Q1 gathering volume changes, specifically the significant increase in the Haynesville and the decrease in the Northeast, and inquired about the outlook for the remainder of 2025. He also requested an update on the status of potential projects to supply natural gas to data centers.

Answer

President and CEO David Slater explained that the Haynesville volume uptick was in line with public producer plans and noted that private producers have been very active and responsive to price signals, with a ramp expected to continue through year-end. He stated the Appalachia volumes were tracking as expected, with new projects anticipated to contribute in the second half of the year. Regarding data centers, Slater confirmed that the project file remains very active, with numerous advanced commercial proposals for both behind-the-meter data centers and utility-scale power generation across DTM's footprint.

Michael Blum asked for clarification on new power generation projects, inquiring if they were distinct from previously discussed behind-the-meter data center opportunities, and requested details on the CapEx, returns, and contract lengths for the new Midwest and Appalachia projects.

Answer

President and CEO David Slater confirmed the two new projects are utility-scale power generation opportunities and are separate from the company's behind-the-meter data center projects. He explained the Midwestern project is a modest-capital lateral with a long-term firm capacity commitment, while the Appalachia project involves a 20-year contract for a new combined cycle power plant, with a customer FID expected next year.

Michael Blum inquired about the development timeline for potential data center projects and the impact of their 'behind the meter' nature on regulations. He also asked about Northeast volume trends and sought clarity on the expected Q4 volume ramp.

Answer

David Slater, President and CEO, confirmed that data center opportunities are advancing in detailed discussions, highlighting that favorable intrastate regulatory paths are a key factor for site viability. Regarding volumes, he acknowledged a softer profile in Q2 and Q3 but stated he expects a modest volume recovery in both the Northeast and Haynesville in Q4, with a focus on the exit rate into 2025.

Michael Blum asked about the impact of Waha pricing volatility on Energy Transfer, specifically how much open capacity the company has to capture spreads. He also inquired if the expansion of frac capacity at Mont Belvieu by Energy Transfer and its competitors is leading to any changes in fractionation rates.

Answer

Co-CEO Mackie McCrea stated that Energy Transfer has about 160,000 Mcf per day benefiting from Waha spreads and expressed excitement for Hugh Brinson to open up the basin. He acknowledged that the NGL transportation and fractionation segment has become highly competitive, with a tendency towards overbuild in NGL transport, but emphasized Energy Transfer's focus on filling its own assets.

Michael Blum asked about Energy Transfer's open capacity to capture Waha natural gas price spreads, given recent volatility. He also inquired if the expansion of fractionation capacity at Mont Belvieu by Energy Transfer and competitors is impacting fractionation rates.

Answer

Co-CEO Mackie McCrea stated that Energy Transfer has approximately 160,000 Mcf per day of open capacity that benefits from Waha price spreads. Regarding Mont Belvieu, he acknowledged that the NGL transportation and fractionation segment has become more competitive, with a potential overbuild in NGL transport, but expressed confidence in filling their assets, including the upcoming Frac IX.

Michael Blum asked for a framework to understand the capital outlay and expected returns for Energy Transfer's data center supply projects, such as those with Oracle, Entergy, and Fermi. He also sought clarification on the certainty and timing of Lake Charles LNG's Final Investment Decision (FID).

Answer

Mackie McCrea (Co-CEO) explained that capital for data center projects varies significantly, from very low (e.g., laterals off existing pipelines like Hugh Brinson) to exclusive capital for specific, larger opportunities, including low-capital projects for reliability backup. He reiterated that Lake Charles LNG's FID is not certain and is strictly conditional on securing 80% equity partners, emphasizing financial discipline and alignment with EPC contract costs.

Michael Blum asked for a framework to understand the capital outlay and expected returns for Energy Transfer's various data center supply projects, acknowledging their diverse nature. He also sought clarification on the certainty of reaching a Final Investment Decision (FID) for Lake Charles LNG and the latest estimated timing if FID is achieved.

Answer

Mackie McCrea (Co-CEO) explained that capital outlay for data center projects varies, ranging from very low capital for laterals off existing or announced pipelines (like Hugh Brinson) to more exclusive capital for projects in remote areas. He also highlighted low-capital projects where data centers pay demand charges for reliable gas supply during interruptions. Regarding Lake Charles LNG, McCrea unequivocally stated that FID will not proceed until 80% of equity partners, similar to Energy Transfer, are secured, emphasizing financial discipline and the need to align with EPC contract costs.

Michael Blum of Wells Fargo sought clarification on the commercial requirements for reaching FID on Lake Charles LNG, specifically regarding the mix of firm contracts (SPAs) versus heads of agreement (HOAs). He also asked about the expected cadence of growth CapEx beyond 2025.

Answer

Co-CEO Marshall "Mackie" McCrea explained that the company would proceed with financing for Lake Charles LNG once it reaches its target contracted level with a combination of SPAs and HOAs, expressing confidence that HOAs will convert to firm contracts. Co-CEO Thomas Long added that growth CapEx is expected to increase, with more detailed guidance to be provided later in the year.

Michael Blum from Wells Fargo & Company asked a follow-up question on the Hugh Brinson pipeline, inquiring about options to expand beyond Phase II, such as compression or a new pipeline, and whether the high demand provides greater pricing power and potential for higher returns.

Answer

Executive Mackie McCrea responded that they can always consider adding compression or another pipeline to expand Hugh Brinson and are also evaluating making it fully bidirectional. He affirmed that the strong demand allows them to capture significant value from the remaining capacity, creating revenue opportunities for the partnership on both west-to-east and east-to-west routes.

Michael Blum from Wells Fargo asked about the expected mix of 'front-of-the-meter' versus 'behind-the-meter' data center projects and whether Energy Transfer would consider building the associated power generation facilities.

Answer

Executive Marshall "Mackie" McCrea projected that the majority of data center projects would be 'behind-the-meter,' with natural gas as the primary power source. He stated that while building power plants is not ET's core business, the company would evaluate such an opportunity if the project had strong returns and involved ET supplying the natural gas.

Michael Blum asked how the significant new gas demand opportunities fit within the company's capital spending framework and requested details on the proposed Sabina 1 pipeline project.

Answer

Executive Dylan Bramhall noted that the company's illustrative capital spending framework has already evolved to a $2.5 billion to $3.5 billion run rate to reflect a larger asset base and more opportunities. Executive Mackie McCrea explained that the Sabina 2 natural gasoline project will be in service in Q1 2025, while Sabina 1 is an associated asset that provides access across the ship channel, for which the company is actively pursuing commercial opportunities.

Michael Blum inquired about the 2026 guidance, specifically asking for a breakdown of the $35 million-$40 million delta between annualized Q4 2025 EBITDA and the 2026 midpoint, and the assumed EBITDA deduct for hurricane disruptions and higher marine maintenance. He also asked about the company's leverage ratio target and timeline, and the cadence for future common unit distribution increases.

Answer

CEO Grant Sims explained that the guidance assumes 10 days of anticipated downtime for the offshore business due to potential hurricane disruptions and a $5 million-$10 million reduction in Segment Margin from the heavy dry-docking schedule on the marine side, emphasizing a conservative approach. Regarding capital allocation, Mr. Sims stated the long-term leverage target is around 4 on a bank-calculated basis, with improvement expected from debt reduction and increasing LTM EBITDA. He noted that distribution growth is discussed quarterly by the board, with no fixed program, but a commitment to an "all-of-the-above" approach including preferred unit redemptions.

Michael Blum inquired about the 2026 guidance, specifically the delta between Q4 2025 annualized EBITDA and the 2026 midpoint, asking for a ballpark figure for EBITDA deducts from typical hurricane disruptions and higher marine maintenance. He also asked about Genesis Energy's long-term leverage ratio target and timeframe, as well as the cadence and drivers for future common unit distribution increases.

Answer

CEO Grant Sims explained that the 2026 guidance assumes 10 days of anticipated downtime for offshore business (treating Q3 as an 82-day quarter) and a $5 million-$10 million reduction in Segment Margin from the heavy dry docking schedule on the marine side, emphasizing a conservative approach and that any variance would be a timing issue. Regarding capital allocation, Mr. Sims stated the bank-calculated leverage was 5.12 at 12/31, with a long-term target around 4, expecting improvement from debt reduction and increasing LTM EBITDA. He noted that distribution growth is discussed quarterly by the board, with a commitment to an 'all-of-the-above' approach including debt reduction and preferred unit redemptions.

Michael Blum of Wells Fargo Securities inquired about Genesis Energy's confidence in the Salamanca project's timeline and asked whether capital returns could commence in 2025 or would be deferred until 2026 due to project ramp delays.

Answer

CEO Grant Sims expressed high confidence in achieving first oil from Salamanca by the end of Q3 2025, with named storms being the primary variable. Regarding capital returns, Sims stated that the immediate priority for 2025 is to pay down the revolving credit facility. However, he noted that with several months of operating history from the new projects, the company might have the flexibility to consider a distribution increase for Q4 2025.

Michael Blum of Wells Fargo Securities inquired about Genesis Energy's capital allocation strategy, asking if the distribution would remain flat for 2025 due to project timings and if there was a way to quantify the volume opportunity from new offshore tiebacks.

Answer

CEO Grant Sims stated that while the distribution will likely remain flat for Q2, the company will be in a position to consider increases for Q3 and beyond as new projects come online. He quantified the tieback opportunity by noting that 7 active rigs are drilling on dedicated acreage, with new wells typically producing 7,000 to 10,000 barrels per day, which should lead to a cumulative increase in throughput during the year.

Michael Blum from Wells Fargo Securities inquired about the potential financial impact of ongoing offshore producer disruptions on 2025 cash flow and sought clarification on the assumptions for the Marine segment within the 2026 EBITDA guidance.

Answer

CEO Grant Sims responded that the company's guidance already incorporates a cushioned timeline for the offshore production to return, estimating a potential impact of $5 million to $10 million per quarter if all production were offline, but noted that a full-year outage is not an expected scenario. Regarding the 2026 forecast, Sims clarified that it assumes a reasonably flat performance for the Marine segment compared to 2025, around the $130 million to $140 million range.

Michael Blum of Wells Fargo Securities inquired about the 2025 outlook, questioning if the expected inflection point and potential distribution increase might be delayed to 2026 due to first-half softness and elevated leverage.

Answer

CEO Grant Sims stated it was premature to give a specific 2025 forecast, noting that the plan is still under development. He explained that key variables, like Gulf of Mexico production profiles and soda ash pricing for the majority of 2025 volume, are not yet finalized. Sims emphasized a focus on cost reduction and said a detailed outlook and capital allocation strategy would be shared after the Q4 results and board discussions in January.

Michael Blum from Wells Fargo sought clarification on the decision to set the distribution coverage threshold at 150% rather than a lower figure, and requested details on the $350 million growth CAPEX for 2026, including specific projects and whether this represents a new run rate.

Answer

Willie Chiang, Chairman and CEO, explained that the 150% threshold is a conservative, modest reset from 160%, aligning with peers and providing confidence for multi-year distribution growth. Christopher Chandler, EVP and COO, confirmed the $350 million CAPEX is within the typical $300-$400 million range, driven by Permian connections, Cactus 3 integration, and potential Canadian crude oil business expansions, following the completion of prior large projects.

Michael Blum from Wells Fargo sought clarification on the rationale for setting the distribution coverage threshold at 150% rather than a lower figure, and requested details on the $350 million growth CAPEX for 2026, including specific projects and whether it represents a new run rate.

Answer

Al Swanson, EVP and CFO, explained that the 150% coverage is a modest reset from the conservative 160% set in 2022, reflecting a more durable cash flow stream and providing a nice balance for multi-year distribution growth, consistent with peers. Christopher Chandler, EVP and COO, detailed the $350 million growth CAPEX, confirming it's within the typical $300-$400 million range for future years, driven by Permian connection programs, Cactus III integration, and potential Canadian crude oil business expansions, following the completion of prior large projects.

Michael Blum asked a high-level question about Plains' long-term strategy post-NGL divestiture, specifically whether the company would remain focused on crude or diversify. He also noted a subtle change in the slide deck's language regarding distribution growth.

Answer

Chairman, CEO & President Willie Chiang clarified that the primary objective is value creation, not becoming a pure-play crude entity. He stated the company will redeploy proceeds into the liquids business where it has scale and synergy advantages, likely focusing on crude assets. EVP & CFO Al Swanson confirmed there was no intentional shift in messaging and the company remains committed to multi-year sustainable distribution growth.

Michael Blum asked for an update on the previous guidance for flat EBITDA from 2024 to 2026, given the slight growth guided for 2025. He also sought details on the progress of operational streamlining initiatives and their inclusion in the 2025 guidance.

Answer

Willie Chiang, Chairman and CEO, stated a desire to move away from the 'flat '24 to '26' guidance, which was meant to show stability despite contract roll-offs. He now expects 2026 EBITDA to be higher than 2024, driven by base business growth and bolt-on acquisitions. He described streamlining as a continuous process, confirming that some efficiencies are already baked into the 2025 guidance, with more opportunities to come.

Michael Blum asked about the drivers behind strong Permian gathering volumes, questioning the split between organic growth and acquisitions, and inquired about the strategic implications of the company's leverage ratio falling below its target range.

Answer

EVP & CCO Jeremy Goebel confirmed that strong Permian volumes were primarily driven by organic growth from well completions. Chairman & CEO Willie Chiang stated that the company does not intend to lower its leverage target range of 3.25-3.75x, explaining that the current low leverage provides greater confidence to execute on their strategy of maximizing free cash flow, pursuing disciplined bolt-on acquisitions, and increasing shareholder returns.

Michael Blum asked for confirmation on previous commentary that 2026 crude EBITDA would be flat with 2024, given the new guidance increase, and also inquired about the outlook for Permian production growth and potential takeaway constraints.

Answer

CEO Willie Chiang confirmed that the company's perspective on 2026 crude EBITDA relative to 2024 has not changed, reiterating that they do not expect a sharp decline. Executive Jeremy Goebel addressed Permian growth, stating that despite some near-term constraints, he expects continued lumpy growth of 200,000-300,000 bbl/d annually, which will lead to a tighter takeaway market.

Michael Blum sought further insight into Plains All American's decision to set the distribution coverage at 150%, questioning why not a lower figure like 140% or 130%. He also requested details on the $350 million growth capital expenditure for 2026, including specific projects and whether this represents a new run rate for crude-focused investments.

Answer

Willie Chiang, Chairman and CEO and President, explained that the 150% coverage is a modest reset from the conservative 160% set in 2022, reflecting a more durable cash flow stream and providing a balance for multi-year distribution growth. Chris Chandler, Chief Operating Officer, detailed that the $350 million CapEx is within the typical $300-$400 million range, driven by a healthy Permian connection program, Cactus 3 integration for synergies, and potential Canadian crude oil business investments, following the completion of prior large projects.

Michael Blum asked for more insight into the decision to set the distribution coverage at 150%, questioning if there was a formulaic approach. He also requested details on the $350 million growth capital expenditure and if it represents a future run rate.

Answer

Willie Chiang, Chairman and CEO, explained that the 150% coverage is a modest reset from the previous conservative 160%, aligning with peers and providing a nice balance for multi-year distribution growth. Chris Chandler, Chief Operating Officer, confirmed that the $350 million growth capex falls within the typical $300-$400 million range and is a good run rate for the future, detailing that it includes a healthy Permian connection program, Cactus 3 integration, and potential Canadian crude oil business investments, following the completion of several large projects in 2025.

Michael Blum asked for the latest outlook on Permian production volumes for 2025 and 2026 based on producer conversations, and also inquired about the acquisition multiples for the two recent bolt-on deals.

Answer

An unnamed executive stated that producers are in a 'wait and see' mode due to volatility, but the 200k-300k bpd growth for 2025 still seems achievable. Executive Jeremy Goebel clarified that the acquisitions were evaluated based on hitting internal return thresholds rather than a specific multiple, consistent with their strategy of compressing multiples via synergies.

Michael Blum with Wells Fargo Securities inquired about a supplier's bullish 30% growth CAGR projection for Bloom through 2030 and the company's stance on long-term guidance. He also asked about the U.S. versus international mix of the backlog and the future international market opportunity.

Answer

K.R. Sridhar, Founder, Chairman, and CEO of Bloom Energy, clarified that Bloom has not provided long-term guidance to any party, including suppliers, and cannot comment on their projections, citing the rapidly accelerating nature of the digital infrastructure market. He stated that Bloom does not break down U.S. vs. international backlog mix but expects Bloom to become a global company. However, Sridhar noted that the U.S. is currently the key area of focus due to LNG infrastructure availability and policy frameworks, while international expansion, particularly in Europe, may lag by a few years. He also highlighted strong growth in the CNI business (135% year-over-year backlog growth) across the U.S.

Michael Blum from Wells Fargo asked for insights into the scope and size of the Oracle partnership opportunity and Bloom Energy's specific role within that collaboration, given Oracle's significant ambitions.

Answer

K.R. Sridhar, Founder, Chairman, and CEO of Bloom Energy, stated he could not disclose specific customer details but referred to Oracle's previous statement that their initial deal was "the first of many." He noted Oracle's anticipated significant growth in the space across many geographies and their familiarity with Bloom's technology roadmap, emphasizing Bloom's focus on customer satisfaction.

Michael Blum requested similar information for the Oracle partnership as provided for Brookfield, seeking insight into the size of the opportunity set and Bloom's specific role in that collaboration, given Oracle's significant ambitions.

Answer

K.R. Sridhar, Founder, Chairman, and CEO of Bloom Energy, stated he could not speak for Oracle but referred to their previous statement that Bloom's initial project was 'the first of many.' He indicated that Oracle is expected to play a substantial role in the space, grow across many geographies, and is well-acquainted with Bloom's technology roadmap and value proposition. Sridhar emphasized Bloom's focus on customer satisfaction.

Michael Blum inquired about the AEP deal, asking if deployments beyond the initial 100 MW are included in 2025 guidance. He also asked about the dynamics behind the 2025 gross margin guidance being flat year-over-year despite expected cost improvements.

Answer

CEO KR Sridhar deferred to AEP for specific announcements but noted their public statements about using Bloom's platform for data centers. CFO Dan Berenbaum explained that the flat gross margin guidance for 2025 reflects a balance between strong 2024 execution, ongoing cost reductions, and a changing product mix that includes more third-party equipment for solutions like islanded microgrids.

Michael Blum asked for details on the AEP agreement beyond the initial deployment and its inclusion in 2025 guidance. He also questioned the rationale for the flat 2025 gross margin guidance despite expected service improvements and cost reductions.

Answer

CEO KR Sridhar deferred to AEP for specific deal details but noted their public statements about using Bloom's solution for data centers. CFO Dan Berenbaum explained the 2025 gross margin guidance of ~29% is appropriate after a strong 2024, factoring in a product mix that includes new offerings like islanded microgrids with more third-party equipment.

Michael Blum inquired about Enterprise Products Partners' exposure to Waha price volatility, asking how the company is impacted by both low Waha prices with wide spreads and high Waha prices during events like winter storms. He also asked about producer plans for 2026 and Permian supply growth.

Answer

Tug Hanley, a Company Representative, stated that Enterprise benefits from low Waha prices through gas transport capacity and higher west-east/west-to-south spreads, and from high Waha prices through storage assets. Natalie Gayden, SVP of Natural Gas, added that Midland volumes are outperforming, with record well connects (590) and steepening growth in the Delaware Basin, projecting 500 wells turning to production in 2026.

Michael Blum of Wells Fargo Securities asked about a potential uptick in activity in the San Juan Basin and its possible impact. He also asked for confirmation on whether the company's Permian production forecast from April remains largely unchanged.

Answer

SVP of Natural Gas Assets Natalie Reagan stated that activity in their San Juan footprint is stable and flat with only slight growth. EVP Anthony C. Chovanec confirmed that any tweaks to their Permian forecast would be minor, as producer profitability remains extremely high, supporting their guidance and the company's liquids forecast.

Michael Blum of Wells Fargo Securities inquired about a potential uptick in activity in the San Juan Basin and whether the company's April production forecast for the Permian remains largely unchanged.

Answer

SVP Natalie Reagan stated that activity on their San Juan assets remains stable and flat with only slight growth. EVP Anthony C. Chovanec confirmed that any tweaks to their Permian production forecast would be minor, as producer profitability remains strong, keeping their outlook on target.

Michael Blum asked if Enterprise would consider slowing its NGL expansion projects if tariff policies lead to a sustained slowdown in global demand, or if the projects are locked in by contracts.

Answer

Co-CEO A. Teague stated the company is 'pretty well contracted' and would not slow down projects currently under construction. Co-CEO W. Fowler added that even with flat crude production, Permian natural gas growth would still drive NGL volumes. He also noted that while global GDP growth might slow, it is still expected to grow, supporting demand for ethylene and propylene.

Michael Blum asked about the company's approach to share buybacks as a component of capital return and inquired about the M&A landscape for 2025.

Answer

Co-CEO Randy Fowler indicated that by 2026, after funding growth CapEx, the company could have over $1 billion in excess DCF for buybacks and debt retirement, providing significant flexibility. On M&A, Fowler stated that while they will look at asset packages, public company M&A is more difficult for driving per-unit cash flow growth.

Michael Blum sought details on the CO2 pipeline project with Oxy, including its contract structure and return profile, and asked about LPG export spot rate dynamics and Enterprise's ability to capture them.

Answer

Executive Bob Sanders described the Oxy project as a straightforward transportation agreement for new, high-pressure pipe, with capital and fees to be set after Oxy's FID in H1 2025. Executive Douglas Kiste confirmed that a recent debottlenecking project allows them to handle 2-3 spot LPG cargoes per month, capturing higher current market rates.

Michael Blum inquired about Kinder Morgan's exposure to data center opportunities, specifically the 70% figure, and sought regional insights and further data points. He also asked for an update on the SS5 project's timing, scope (compression-first vs. looping), and the firm utility load required for a formal filing. Later, he questioned the next steps for the Western Gateway Pipeline after its second open season, comparing capital allocation and returns against natural gas opportunities. He also asked about maintaining leverage levels within the 3.5-4.5x range versus leveraging up for CapEx. Subsequently, Blum asked about the net EBITDA impact of Western Gateway, specifically the displacement of existing SFPP EBITDA, and sought an update on the Double H conversion's progress, Bakken outlook, and expected NGL throughput and EBITDA contribution. Finally, he inquired about the impact of Continental Resources halting Bakken drilling on Kinder Morgan's business and Double H expansion, and whether the company is actively looking to sell more non-core assets or reduce exposure to certain segments.

Answer

CEO Kimberly Dang clarified that 60% of the backlog is power-related, not just data centers, citing significant demand growth across KMI's network, particularly in states like Georgia. President of Natural Gas Pipelines Sital Mody noted strong interest in the Southeast for SS5, with the final scope dependent on subscription, likely involving more than just compression. Dang explained that project returns are risk-adjusted and above the cost of capital, with Western Gateway being a 50/50 joint venture with Phillips 66 where KMI contributes assets. She stated KMI plans $3 billion in annual CapEx, fully funded by cash flow, and expects leverage to decline, providing ample capacity without nearing 4.5x. Regarding Western Gateway's EBITDA impact, Dang deemed it too early to quantify. For Double H, she indicated Phase 1 is expected online late Q1/early Q2, is well-contracted, and future phases are under discussion, with growing GORs in the Bakken. Mody added that Phase 1 volumes have good visibility from KMI's plants. On Continental Resources, Dang stated Bakken EBITDA is 3% of KMI's total, and no material impact is expected due to stronger volumes, ongoing well completions, and other customers. She described asset sales, like EagleHawk, as opportunistic, driven by attractive multiples and reinvestment opportunities, affirming KMI's comfort with its current portfolio.

Michael Blum asked about the potential impact of Continental Resources' decision to halt drilling in the Bakken on Kinder Morgan's current business and future Double H expansion plans. He also inquired about any active plans for non-core asset sales and strategic intentions to reduce exposure to specific business segments.

Answer

CEO Kimberly Dang stated that the impact from Continental Resources is expected to be manageable, representing only about 3% of Kinder Morgan's total EBITDA, with volumes stronger than expected and other customers in the region. She clarified that asset sales are opportunistic, citing the EagleHawk sale as an example of recycling capital at an attractive multiple, and expressed comfort with the current portfolio mix.

Michael Blum inquired about the Hiland Express NGL conversion project, asking for an update on committed initial volumes, potential for growth, and any takeaway opportunities from the Powder River Basin. He also asked about Kinder Morgan's stance on behind-the-meter opportunities, their potential as a meaningful driver, and if they are included in the $10 billion opportunity set.

Answer

Sital Mody, President of Natural Gas Pipelines, confirmed the Hiland Express project is on track for Q1 next year for initial commitment, noting aggressive competition and plans to repurpose assets for incremental barrels. Kim Dang, CEO, reiterated that Kinder Morgan is not interested in investing in power generation (behind-the-meter) as it focuses on its existing infrastructure business. She clarified that any small investment would only facilitate a project, and it's unlikely KMI would invest behind the meter. Mr. Mody added that KMI would look to work with partners to supply gas and build supporting infrastructure.

Michael Blum inquired about the Highland Express NGL conversion project, specifically its committed initial volumes and potential for Powder River takeaway. He also asked about behind-the-meter opportunities as a meaningful driver and if they are included in the $10 billion opportunity set.

Answer

Sital Mody (President of Natural Gas Pipelines) stated the Highland Express project is on track for Q1 next year for initial commitment, but declined further details due to competition. Regarding behind-the-meter opportunities, Kim Dang (CEO) reiterated that Kinder Morgan is not interested in investing in power generation, focusing instead on infrastructure. Sital Mody clarified they would work with partners to supply gas and build infrastructure, not invest in the power generation itself.

Michael Blum from Wells Fargo Securities asked about the capital allocation strategy, specifically comparing the returns on traditional gas pipeline projects versus the recent $500 million investment in Haynesville gathering. He also requested an update on 'behind the meter' opportunities related to data centers.

Answer

CEO Kimberly Dang clarified that the company's investment approach remains unchanged, balancing risk and reward. Higher-risk projects with volume exposure, like gathering, require returns at the higher end of their target range. Regarding data centers, she noted most activity comes from regulated utilities. Sital Mody, President of Natural Gas Pipelines, added that KMI is exploring partnerships with hyperscalers to combine expertise for behind-the-meter projects.

Michael Blum inquired about the pace of discussions for new gas pipeline investments driven by utilities and data centers, and specifically requested an update on project progress in Arizona.

Answer

An unnamed executive noted that while data center site specifics are evolving, activity with utilities is strong, highlighting the new Bridge project as a 'step 1' platform for growth. CEO Kimberly Dang added that over 70% of new backlog additions this quarter and 50% of the total backlog are power-related, with the most concrete data center activity coming from regulated utilities. Regarding Arizona, an executive confirmed KMI is pursuing both brownfield and greenfield opportunities to meet growing demand but remained general due to competitive dynamics.

Michael Blum from Wells Fargo asked about potential opportunities for Kinder Morgan related to a new large data center campus in Abilene, Texas, and inquired about the progress and scope of the open season for the Kinder Morgan Louisiana (KMLP) Texas Header project.

Answer

Sital Mody (Executive) confirmed that KMI's intrastate and NGPL footprints are well-positioned to compete for the Abilene data center opportunity. He also stated that the KMLP open season resulted in binding commitments for the initial phase, which is contracted and will connect to projects like Trident, positioning KMI for future growth into the Louisiana corridor.

Michael Blum from Wells Fargo inquired about the potential future trajectory of growth CapEx given the expanding project backlog and asked if the company is seeing a trend of higher returns on new projects.

Answer

President Kimberly Dang stated that while CapEx could increase, the current guidance remains roughly $2 billion annually, noting the company can fund about $2.5 billion from cash flow and has balance sheet capacity for more. She clarified that project returns are consistent with historical targets and that the South System 4 project's return profile is not substantially different from past projects.

Michael Blum asked if MPLX is actively evaluating or discussing bringing power to data center projects, or if it remains a longer-term potential. He also inquired about the potential impact of lower crude oil prices on the logistics segment.

Answer

Greg Floerke (EVP and COO, MPLX) clarified that MPLX is not actively evaluating or discussing bringing power to data centers, but maintains the capability and optionality for future consideration. Shawn Lyon (Senior VP of Logistics and Storage, MPLX) stated that crude oil and product logistics volumes remain strong, supported by the partnership with Marathon Petroleum. Kris Hagedorn (CFO, MPLX) emphasized that contracts with Marathon include significant minimum volume commitments, protecting the segment's EBITDA even in challenging market conditions. Greg Floerke (EVP and COO, MPLX) added that producer demand for gas, NGLs, and crude oil remains strong, with no changes in activity plans.

Michael Blum asked if MPLX is actively evaluating or discussing bringing power to data center projects, or if it's a longer-term potential item. He also inquired about the potential impact of lower crude oil prices on MPLX's logistics segment, both positively and negatively.

Answer

Greg Floerke, EVP and COO, MPLX, clarified that while MPLX has the capability, they are not actively evaluating or discussing bringing power to data center projects, but rather maintaining optionality for the future. Shawn Lyon, Senior VP of Logistics and Storage, MPLX, stated that crude oil and product logistics volumes remain strong, anchored by the partnership with Marathon Petroleum. Kris Hagedorn, CFO, MPLX, added that the segment is well-protected by significant minimum volume commitments and capacity arrangements with Marathon, even in extreme market conditions.

Michael Blum requested clarification on whether the incremental gas and liquids from the Northwind acquisition could be accommodated by MPLX's existing and planned infrastructure, or if new capacity and investment would be necessary.

Answer

EVP & CFO C. Kristopher Hagedorn clarified that the previously announced Gulf Coast NGL value chain, including BANGL and the fractionators, is already fully subscribed. Therefore, the incremental liquids from Northwind will require exploring other opportunities for monetization, though it provides valuable optionality. SVP Shawn Lyon added that the BANGL expansion to 300,000 bpd provides flexibility to execute their strategy.

Michael Blum sought clarification on whether the incremental gas and liquids from the Northwind acquisition could be accommodated by MPLX's existing and planned infrastructure, or if new capacity and investment would be required.

Answer

EVP & CFO C. Kristopher Hagedorn clarified that the previously announced Gulf Coast fractionators and BANGL pipeline were already fully subscribed with existing volumes. He explained that the incremental liquids from Northwind are new volumes that provide valuable optionality for optimizing the entire NGL value chain. SVP Shawn Lyon added that the BANGL pipeline's expansion to 300,000 b/d provides the flexibility needed to execute on the strategy and maximize the value of these new options.

Michael Blum of Wells Fargo inquired about the level of share buybacks in Q1, given increased CapEx and macro uncertainty, and asked for the forward-looking strategy on repurchases. He also asked about any potential impacts from tariffs on project costs or returns.

Answer

President and CEO Maryann Mannen explained that capital allocation priorities remain unchanged, focusing on growth, returns, and supporting the distribution. She noted that because management views the equity as undervalued, buybacks remain a key tool for capital return. Regarding tariffs, she stated that the impact on MPLX is expected to be minimal, as the company has worked to get ahead of potential cost increases on its major projects.

Michael Blum asked about the noticeable increase in 2025 maintenance CapEx, questioning if it was due to one-time items or a new baseline. He also inquired if the change in ownership at Epic NGL would impact MPLX's ability to expand the BANGL pipeline.

Answer

CFO Chris Hagedorn explained the increase is partly due to new emissions regulations but affirmed the company's confidence in its growth targets. SVP Shawn Lyon added it's part of normal maintenance cycles. Regarding BANGL, Shawn Lyon stated they do not anticipate the relationship with Epic changing due to its new ownership and that BANGL remains a capital-efficient growth project.

Michael Blum questioned if the 20% return cited for the Harmon Creek III project is a new, higher hurdle rate for investments. He also asked if the annual capital expenditure budget is likely to trend higher than the current ~$1 billion run rate in 2025 and beyond.

Answer

Executive Gregory Floerke confirmed that a 20% return is the target for new organic projects, supported by strong customer contracts. Maryann Mannen, President and CEO, acknowledged that CapEx could potentially increase above $1 billion to sustain mid-single-digit growth on a larger EBITDA base, but stated it was too early to provide specific 2025 guidance.

Michael Blum asked for clarification on the $250 million CapEx guidance for 2026, questioning if it reflects conservatism or other underlying factors, especially given the positive outlook.

Answer

President and CEO Brad Childers explained that the $250 million growth CapEx for 2026 is consistent with the high end of prior years' investment levels, not necessarily conservative. He noted that approximately $70 million of the 2025 CapEx budget was attributable to inherited expenditures from recent acquisitions, making the year-over-year comparison more consistent when adjusted. Mr. Childers emphasized that this level of CapEx supports significant growth with core customers and is currently a minimum, with customer budgeting still underway.

Michael Blum asked about the $250 million CapEx guidance for 2026, questioning if it reflects conservatism given the positive outlook, or if other factors are at play.

Answer

Brad Childers (President and CEO) clarified that the $250 million growth CapEx for 2026 is consistent with historical high-end investment levels, especially when accounting for approximately $70 million of 2025 CapEx attributable to inherited budgets from recent acquisitions (NGCSI and TOS). He emphasized that this level provides significant growth with core customers and in the market, and is currently a minimum, with customer budgeting still ongoing.

Michael Blum asked why most of the gas turbine backlog increase is in slot reservations rather than firm orders, inquiring about timing, other dynamics, and if 2026-2028 capacity is effectively sold out.

Answer

CEO Scott Strazik explained that slot reservations precede orders as customers secure long-lead equipment while working on EPC contracts, gas availability, and permitting. He noted a conservative approach to moving items to backlog to avoid volatility, despite slot reservations having non-refundable deposits. He anticipates slot reservations will continue to grow faster than orders due to the lag in securing other project components. CFO Ken Parks emphasized that both slot reservations and orders involve measurable, non-refundable upfront cash funding.

Michael Blum inquired about the prevalence of slot reservations over firm orders in the gas turbine backlog increase, asking if it's a timing issue and if the 2026-2028 period is effectively sold out.

Answer

CEO Scott Strazik explained that slot reservations are a natural first step for customers to secure long-lead equipment while they finalize EPC contracts, gas availability, and permitting. He noted that GE Vernova's conservative classification aims to prevent backlog volatility. Scott Strazik clarified that 2026-2028 is not 'sold out,' but rather they are booking orders for later fulfillment. CFO Ken Parks added that both slot reservations and firm orders involve non-refundable upfront cash commitments from customers.

Michael Blum from Wells Fargo & Company questioned whether project cost increases are borne solely by Venture Global or shared with customers, and asked if the various arbitration cases are heard by the same tribunal and could be consolidated.

Answer

CEO Michael Sabel confirmed that all cost increases are borne 100% by Venture Global, with customer contract prices remaining fixed. He emphasized that Plaquemines' return profile remains 'extremely attractive' due to nearly $6 billion in commissioning cargo sales. He also clarified that the arbitration cases are heard by separate tribunals and will not be consolidated.

Michael Blum of Wells Fargo Securities questioned whether the recent cost increases at Plaquemines and CP2 are borne by Venture Global or if they can be passed on to offtake customers. He also asked if the same tribunal is handling all arbitration cases and if they might be consolidated.

Answer

CEO Michael Sabel confirmed that cost increases are fully borne by Venture Global, as the projects are 100% owned, and customers' long-term contract prices are unaffected. He then highlighted that Plaquemines has already contracted nearly $6B in commissioning cargoes, making its return profile extremely attractive. Regarding arbitration, Sabel stated that they are separate tribunals for each case, though they are looking at the same facts and contract terms.

Michael Blum asked for clarification on total planned capital expenditures for 2025, seeking to understand spending beyond the amounts disclosed for the CP2 project.

Answer

CEO Mike Sabel and CFO Jack Thayer confirmed that the CP2 project represents the vast majority of planned 2025 CapEx. They emphasized that these expenditures are funded through asset-level, non-recourse project financing, highlighted by the recently secured $3 billion bank loan, which funds the project's growth ahead of a full Final Investment Decision (FID).

Michael Blum from Wells Fargo asked for details on the new greenfield processing plant in the Delaware Basin, including its financial impact and current utilization.

Answer

Executive Kristen Shults explained that the new 250 million cubic feet per day plant, WES's first major greenfield project, increases total Delaware Basin capacity to 2.2 Bcf/d. She noted the plant will slightly boost gross margin by eliminating offloading fees but will also increase OpEx due to staffing. Shults confirmed the plant has been full since its startup, effectively shifting existing volumes back onto the WES system.

Inquired about how much of the domestic content tax credit is assumed to be retained by Sunnova versus shared, and whether the company plans to completely exit its non-solar ancillary businesses.

Answer

Sunnova expects all dealers to use domestic content compliant equipment, implying the benefit is captured. The company is not exiting non-solar businesses but is shifting its strategy for them. While leases/PPAs are the focus for cash generation, ancillary products will still be offered via loans, which are likely to be sold off in forward flow agreements, turning it into a fee-based business.

Michael Blum from Wells Fargo & Company asked for clarification on 2023 capital expenditures beyond the Corpus Christi Stage 3 spending and inquired about the decision-making process for allocating capital between debt repayment and share buybacks, noting the quarterly shifts.

Answer

EVP and CFO Zach Davis clarified that the $1.5 billion for Stage 3 is the primary CapEx for 2023, supplemented by hundreds of millions for optimization and development. Regarding capital allocation, Davis explained that Q3 buybacks were lower due to a significant stock price increase, making them less opportunistic. He noted the new, upsized buyback plan officially began in Q4, leading to an immediate acceleration of repurchases.

Michael Blum of Wells Fargo inquired about current construction cost estimates for new capacity, asking if the prior range per tonne is still accurate. He also asked for the expected CapEx cadence for Stage III and the reason for higher O&M expenses at CQP.

Answer

President and CEO Jack Fusco confirmed that due to their strong relationship with Bechtel and early procurement, they managed inflation and kept Stage III costs within the $700 per tonne range. EVP and CFO Zach Davis added that the CapEx spend would average about $800 million per year through construction. He also confirmed the higher O&M at CQP was due to a full quarter of operations for Train 6 and is a reasonable run rate.

Michael Blum of Wells Fargo asked for the company's perspective on how a second wave of COVID-19 lockdowns in Europe could impact LNG demand.

Answer

President & CEO Jack Fusco highlighted the V-shaped recovery in Asia. EVP & CCO Anatol Feygin added that Europe is better positioned to manage a second wave, noting resilient natural gas demand, lower storage inventories compared to earlier in the year, and the overall flexibility of the LNG market to respond.