Theresa Chen

Theresa Chen sought to understand the momentum behind the increased cadence of project announcements, asking if it was driven by competitive advantages beyond asset incumbency. She also requested an update on the status of the Bruce C nuclear project and its environmental assessment.

Answer

CEO Francois Poirier explained that the momentum stems from their utility customers finalizing plans to accommodate significant data center load, a process that took time. He noted that while competitive processes are common, TC Energy's strategic footprint and incumbency in key regions provide a distinct advantage. EVP Greg Grant reported that the Bruce C project continues its development and environmental assessment work with strong alignment from government and Indigenous partners, positioning it as the 'next best option' for nuclear expansion in Ontario.

Theresa Chen asked for an update on the Bruce C nuclear project's path to FID and potential cost recovery model, and inquired about the steps needed to improve the company's BBB+ negative outlook from S&P.

Answer

President and CEO Francois Poirier explained that Bruce C is in early development and any new build would likely pursue a traditional cost-of-service model, not bearing significant cost/schedule risk. EVP and CFO Sean O'Donnell stated that delivering the Southeast Gateway project on time and on budget, while executing within the $6-7B annual capital plan, is the key recipe for organic deleveraging and maintaining strong relationships with rating agencies.

Theresa Chen from Barclays asked for details on the NGTL settlement's EBITDA uplift, the strategic importance of indigenous co-ownership, key hurdles for the Southeast Gateway project, and the evolving political landscape in Mexico.

Answer

Executive Stanley Chapman detailed the NGTL settlement's ~$200 million EBITDA uplift, while CEO Francois Poirier highlighted that indigenous partnership improves project alignment. CFO Sean O'Donnell confirmed Southeast Gateway is on track for a mid-2025 in-service date, with Francois Poirier adding that he sees policy continuity in Mexico and minimal impact from the U.S. election on their business there.

Theresa Chen inquired about the potential conversion of an NGL pipeline in the Permian to natural gas service, asking for details on the specific pipeline, associated costs, and economic rationale. She also asked about the earnings impact of the Enbridge crude deals, specifically whether they would backfill volumes or drive growth, considering DAPL recontracting and Bakken differentials.

Answer

Mackie McCrea (Co-CEO) explained Energy Transfer's history of asset conversions, citing competitive NGL market conditions and the potential for natural gas conversion to yield double the revenue due to data center demand. He expressed excitement about the Enbridge crude deals, noting their perfect timing to backfill Bakken volume declines and contract cliffs, with potential for growth and long-term 15-year agreements.

Theresa Chen of Barclays inquired about the commercial progress and timeline for Energy Transfer's gas-to-power projects supporting data centers, and also asked about the financial metrics and expansion potential of the newly announced Desert Southwest Pipeline project.

Answer

Co-CEO Marshall "Mackie" McCrea revealed that Energy Transfer has signed its first significant deal with a hyperscaler, growing from 80,000 to 380,000 dekatherms per day, with more deals pending. Regarding the Desert Southwest Pipeline, McCrea confirmed high confidence in fully subscribing the project, is already evaluating an expansion, and stated the project targets mid-teens returns.

Theresa Chen of Barclays PLC inquired about the remaining steps for the Lake Charles LNG project to reach a final investment decision (FID) by year-end and the competitive positioning of U.S. LNG. She also asked about the possibility of Energy Transfer adopting a C-corp structure.

Answer

Executive Mackie McCrea expressed excitement about Lake Charles LNG's momentum, citing a newly signed 1 million-ton agreement and progress toward securing equity partners. He emphasized focusing on their own project's returns rather than competitors. Executive Tom Long stated that a C-corp conversion remains an option that is continuously evaluated, but there are no immediate plans for Energy Transfer to change its structure.

Theresa Chen of Barclays inquired about the expected returns on Energy Transfer's significantly larger project backlog and sought details on the demand drivers for the new Hugh Brinson intrastate pipeline.

Answer

Executive Marshall "Mackie" McCrea stated that project returns are consistently targeted in the mid-to-upper teens, enhanced by synergistic benefits across the value chain. He highlighted the Hugh Brinson pipeline as a critical project to meet Permian producer needs and capture growing demand from power plants and data centers, noting many are strategically located near ET's existing infrastructure.

Theresa Chen asked about the expected returns on data center-related natural gas projects versus the current backlog and questioned the reasons for the $200 million reduction in 2024 growth capital guidance despite a new project addition.

Answer

Executive Mackie McCrea stated that the company applies the same return hurdles to all projects and feels ET is highly competitive for data center demand, especially in Texas. Executive Dylan Bramhall explained the capital budget decrease was due to three factors: certain projects coming in at a lower cost, disciplined scope reductions or cancellations of projects not meeting return hurdles, and the deferral of some smaller projects into the next year.

Theresa Chen questioned Targa Resources Corporation's strategy of investing in its own NGL infrastructure, like Speedway, rather than relying on third-party options for longer, seeking the rationale behind this decision. She also asked about the next anticipated bottlenecks within the Permian Basin.

Answer

President Jen Kneale explained that Targa aims for capital efficiency and de-risks investments by having flowing volumes ready to transition to new pipelines like Speedway upon completion. She emphasized providing best-in-class operational support, leveraging Targa's integrated footprint for flexibility and redundancy. Chief Commercial Officer Bobby Muraro identified residue gas takeaway as currently extremely tight, with significant relief expected from two new pipes coming online in late 2026, which will be well utilized.

Theresa Chen asked for the rationale behind Targa Resources Corporation's decision to invest in its own NGL infrastructure, such as Speedway, rather than leveraging third-party options for longer, given recent scrutiny. She also inquired about the anticipated next bottlenecks within the Permian basin, following the company's intra-basin residue strategy.

Answer

Jen Kneale, President, explained that the strategy focuses on capital efficiency, de-risking investments by base-loading new pipelines with existing flowing volumes, and providing best-in-class operational support, flexibility, and redundancy from wellhead to water. She confirmed the use of third-party transportation for a period. Bobby Muraro, Chief Commercial Officer, identified plant-specific bottlenecks due to long-haul pipe interruptions and overall tightness in residue takeaway, while expressing optimism for new pipes coming online in late 2026.

Theresa Chen requested color on Targa's customer composition (public vs. private, majors vs. smaller players) and asked how an ongoing trade war without an LPG carve-out could impact the competitive landscape for exports.

Answer

President Jennifer Kneale declined to give specific percentages but emphasized that Targa works with the 'biggest and best' well-capitalized producers, including majors and large independents, which provides confidence. Scott Pryor, President of Logistics and Transportation, addressed the competitive landscape by highlighting Targa's integrated 'wellhead-to-water' model. He stated that Targa's export growth is fed by its own 'homegrown' NGLs from its G&P and fractionation systems, making its brownfield expansions highly competitive regardless of new entrants.

Theresa Chen asked for quantification of the 'strong growth' expected in 2026 and when Targa might return to a more normalized CapEx cycle. She also inquired about the demand outlook from international customers for LPG exports.

Answer

CEO Matt Meloy indicated that 2026 year-over-year growth looks to be higher than 2025's, but declined to provide a specific volume forecast. He suggested CapEx could moderate after the current downstream build cycle. President, Logistics and Transportation, Scott Pryor noted that international LPG demand remains robust, particularly from Asia, and that the U.S. continues to gain global market share.

Theresa Chen inquired about the sustainability of Targa's accelerated growth, the potential magnitude of 2025 CapEx, and the forward outlook for downstream throughput, questioning the split between seasonal factors and supply push.

Answer

Executive Matt Meloy explained that higher-than-expected volume growth has accelerated capital spending on G&P infrastructure, with specific 2025 CapEx figures to be provided in February. Executive D. Pryor added that Q4 downstream volumes are expected to meet or exceed Q3's strong performance, driven by robust global demand and increased vessel availability, a trend he anticipates will continue into 2025.

Theresa Chen asked if the proposed Path4/Dino project would improve netbacks for Marathon Petroleum's Salt Lake facility, given its low CapEx and minimal looping requirements. She also inquired about the company's expectations for light-heavy crude differentials, their evolution, and key drivers, including geopolitical instability and macro volatility.

Answer

CCO Rick Hessling stated that the Path4/Dino project's de minimis volumes are not expected to negatively affect MPC's Salt Lake asset, where they hold a significant advantage as the largest refiner with feedstock benefits. Regarding crude differentials, he noted that TMX has kept them tighter than expected but anticipates sour differentials to widen slightly in Q1 due to incremental OPEC and Canadian production. He highlighted depressed WCS prices as a positive tailwind for MPC.

Theresa Chen asked if the proposed Path4/Dino project would improve netbacks for Marathon Petroleum's Salt Lake facility, similar to how a Midcon pipeline might benefit other regions. She then inquired about the outlook for light-heavy crude differentials, considering geopolitical instability and macro volatility, and identifying key drivers.

Answer

CCO Rick Hessling stated that the Path4/Dino project's de minimis volumes would not significantly affect MPC's Salt Lake asset, which benefits from being the largest refiner in the region with a significant feedstock advantage (black and yellow wax). On crude differentials, Rick Hessling explained that TMX has kept Canadian differentials tighter than expected, but with waning Far East demand, sour differentials are expected to widen slightly in Q1 2026 due to incremental OPEC and Canadian production. He highlighted depressed WCS prices as a significant positive for MPC, noting WCS is $2 weaker than earlier in the year and the forward curve is one of the weakest in five years.

Theresa Chen inquired about Marathon's view on the global refining capacity outlook and what the company sees as its next major area for growth.

Answer

CEO Maryann Mannen expressed a constructive long-term view, expecting demand growth to exceed net capacity additions, with the U.S. remaining advantaged. For future growth, she highlighted growing MPLX distributions, ongoing portfolio optimization, and expanding LPG export marketing capabilities as key drivers for MPC.

Theresa Chen asked if regular CARBOB imports from Asia could cap West Coast benchmark cracks over time. She also inquired about Marathon's appetite for pursuing midstream infrastructure growth in dry gas areas, given a potential slowdown in associated gas.

Answer

Executive Rick Hessling argued that Asian imports create volatility rather than a consistent price cap due to long transit times, which reinforces the advantage of their local assets. CEO Maryann Mannen addressed the midstream question by noting they evaluate all opportunities, including in dry gas basins like the Utica, but current priorities are focused on executing their existing strategy, guided by strict capital discipline.

Theresa Chen inquired about Marathon's current LPG export capacity and the potential economic uplift (in cash or EBITDA) for MPC from its role in marketing LPGs from the newly announced NGL infrastructure project. She also asked for clarification on whether MPC would be marketing ONEOK's share of the volumes.

Answer

Executive Rick Hessling stated that once the new project is complete, MPC's export footprint will be significant, allowing it to attack global markets with a diversified strategy. While not providing specific EBITDA figures due to market volatility, he expressed a very optimistic view based on global demand. He clarified that MPC will only be marketing its 50% share of the dock's volume, with ONEOK marketing its own barrels.

Theresa Chen from Barclays PLC asked Williams to quantify the potential uplift in utilization or the underwriting of additional expansion in its pipeline assets, including Gillis, Transco, and LEG, resulting from the recent LNG facility sale and partnership. She also requested an update on production activity levels in the Haynesville and Northeast regions, along with Williams' volume outlook across its assets into 2026.

Answer

President and CEO Chad Zamarin stated that Williams, through its Sequent marketing platform, will source the best, lowest-cost, and most reliable natural gas for the LNG terminal, which is expected to lead to growth in its gathering footprint, LEG, Transco, and storage assets. EVP of Corporate Strategic Development Rob Wingo added that the 3.1 Bcf/d pipeline will be bidirectional, creating optimization and additional marketing opportunities not included in the base case. COO Larry Larsen reported that Haynesville activity has picked up as expected due to demand and is not seen slowing into 2026. Northeast activity has seen pockets of growth, with an expected uptick in volumes in 2026, though mixed across customers and facilities.

Theresa Chen asked about the ability to source and supply gas to the liquefaction facility and its implications for Williams' base infrastructure assets, requesting quantification of potential uplift in utilization or additional expansion in pipeline assets like Gillis, Transco, and LEG following the upstream asset sale. She also asked for an update on production activity levels in Haynesville and the Northeast, and the outlook for volumes across Williams' assets into 2026.

Answer

President and CEO Chad Zamarin emphasized that Sequent's platform ensures reliable gas supply, leading to sourcing the best, lowest-cost volumes across Williams' footprint and other pipelines. He expects this to grow gathering, move volumes through LEG and other systems to Gillis, and support storage projects connecting LNG terminals to transmission. EVP of Corporate Strategic Development Rob Wingo added that the 3.1 Bcfpd pipeline will be bidirectional, creating additional optimization opportunities. COO Larry Larsen reported that Haynesville activity has picked up and is not expected to slow into 2026 due to demand. Northeast activity has seen mixed growth, with some areas flat due to pricing challenges, but an uptick in volumes is expected in 2026 as prices rebound.

Theresa Chen of Barclays asked why AFFO guidance was raised more than EBITDA guidance and inquired about how Williams is using AI internally for cost savings or commercial advantage.

Answer

Senior VP & CFO John Porter confirmed the AFFO outperformance was driven by both the EBITDA increase and a ~$100M reduction in 2025 cash taxes due to 100% bonus depreciation. President & CEO Chad Zamarin explained that AI is being integrated across the company for project execution, market intelligence, and operational efficiency, sharing an anecdote where an AI model outperformed a veteran trader.

Theresa Chen of Barclays asked why the AFFO guidance was increased more than the adjusted EBITDA guidance, and inquired about how Williams is using artificial intelligence within its own operations.

Answer

Senior VP & CFO John Porter explained that the larger AFFO increase was driven by both the higher EBITDA and a significant ~$100 million reduction in expected 2025 cash taxes due to 100% bonus depreciation. President & CEO Chad Zamarin detailed that AI is being integrated across the company for project execution and market intelligence, sharing an anecdote where an AI model outperformed a veteran trader in a marketing simulation.

Theresa Chen asked about the remaining capacity on the Transco system for additional high-return projects using existing right-of-ways. She also inquired about the assumed annual contribution from the new group of Deepwater projects within the current guidance.

Answer

An executive explained that Transco continues to find new brownfield expansion opportunities driven by power demand in Virginia, growth in the Southeast, and LNG demand along the Gulf Coast. Regarding the Deepwater projects, CFO John Porter and CEO Alan Armstrong clarified that the previously mentioned $300 million contribution is expected to be achieved at a run-rate level by the end of 2025, with potential upside from strong well performance.

Theresa Chen of Barclays inquired about the process for finalizing gas-to-power data center projects, the size of the addressable market, and the expansion potential and economics of Williams' gas storage assets.

Answer

CEO Alan Armstrong and EVP of Corporate Strategic Development Chad Zamarin detailed that data center projects require clearing complex regulatory, land, and permitting hurdles before announcements, with a focus on securing fully contracted commitments. They noted Williams can provide a full value chain solution, from pipeline interconnects to on-site power generation. COO Michael Dunn added that the company has significant expansion opportunities in its Gulf Coast and Western storage facilities, with expected returns comparable to high-value transmission projects.

Theresa Chen asked for Williams' perspective on the potential impacts of a Trump victory on the business and the energy infrastructure industry. She also requested an update on gas marketing activities and expectations for the fourth quarter.

Answer

CEO Alan Armstrong identified a favorable tax outcome, particularly the extension of bonus depreciation, as the most immediate and significant positive financial impact. He also expressed optimism for meaningful permitting reform. EVP Chad Zamarin noted that while they expect positive marketing results for the remainder of the year, the majority of the marketing business's financial impact is typically realized in the first quarter, driven by winter volatility.

Theresa Chen asked about the early days of integration for the Titan Complex following the recent sour gas acquisition, specifically if there has been any shift in commercial activity or incremental customer interest, and also sought clarification on the CapEx nature of the LOI with Mara and what positioned MPLX to secure this agreement.

Answer

Maryann Mannen, President and CEO, MPLX, stated that the integration of the Northwind sour gas acquisition has gone very well, with processing at 150 and positive feedback from customers, enhancing opportunities with key clients. Greg Floerke, EVP and COO, MPLX, detailed the successful integration of assets, people, and systems, and progress on Titan One and Two. Regarding the Mara LOI, Maryann Mannen reiterated that it involves MPLX providing gas at its plants in exchange for lower-cost, reliable power for producer customers, requiring low to no CapEx from MPLX.

Theresa Chen asked about the early integration of the Titan Complex (Northwind sour gas acquisition), any shifts in commercial activity, and incremental customer interest. She also sought clarification on the CapEx nature of the Mara LOI, what secured the agreement for MPLX, and the next steps.

Answer

Maryann Mannen (President and CEO, MPLX) reported successful integration of the Northwind sour gas acquisition, with processing at approximately 150 million cubic feet per day, positive producer feedback, and potential for accelerated growth. Greg Floerke (EVP and COO, MPLX) detailed the integration of personnel and systems, customer engagement, and the commissioning of Titan One and civil work for Titan Two. For the Mara LOI, Mannen explained MPLX provides gas at its plants in exchange for lower-cost, reliable power for producers, implying minimal direct CapEx for MPLX, and highlighted the benefit of increased in-basin demand.

Theresa Chen asked for clarification on the incremental capital expenditure required to expand the Northwind system to its full capacity. She also inquired about the logical next strategic steps for MPLX's residue gas business, considering long-term demand drivers like data centers and power generation.

Answer

President & CEO Maryann Mannen stated that approximately $500 million in CapEx will be invested over the next 12 months to complete the Northwind expansion. SVP David Heppner addressed the residue gas strategy, highlighting confidence in continued demand for long-haul pipelines from the Permian to the Gulf Coast. He noted that LNG and data center power needs create significant opportunities, and projects like the Traverse pipeline expansion enhance shipper flexibility and access to premium markets.

Theresa Chen sought clarification on the incremental CapEx required to expand the Northwind asset to its full capacity. She also asked about the logical next strategic steps for MPLX's residue gas business, considering long-term demand drivers like data centers and liquefaction.

Answer

President and CEO Maryann Mannen stated that approximately $500 million in capital would be spent over the next twelve months to complete the Northwind expansion. SVP David Heppner addressed the residue gas strategy, highlighting confidence in Permian long-haul pipe demand and noting that projects like the Traverse pipeline expansion provide customers flexibility to access premium Gulf Coast markets driven by LNG and data center demand.

Theresa Chen asked for clarity on capital deployment, questioning if the $2 billion organic CapEx for 2025 represents a new run rate and if M&A would be incremental. She also requested details on the LPG export project's partnership structure with ONEOK, including operations and storage.

Answer

CFO Chris Hagedorn stated the $2 billion is a rough number for the year that could be similar in the future but won't be linear, and it excludes potential M&A. SVP David Heppner detailed the JV structure: ONEOK will operate the pipeline (80% ownership), while the export terminal will be a 50-50 JV operated by MPLX. He also confirmed ONEOK provides existing cavern storage in Mont Belvieu.

Theresa Chen asked about the timing of the Texas City frac project in relation to contract renewals and export facility development. She also inquired about the potential impact on MPLX's West Coast logistics assets from the announced closure of a Southern California refinery.

Answer

Executive David Heppner detailed the company's integrated 'wellhead-to-water' strategy, positioning the Texas City frac as a final link under evaluation to connect Permian NGLs to waterborne markets. Executive Shawn Lyon stated that no near-term changes are expected for West Coast assets, citing the integrated nature of their system and tight regional supply-demand dynamics.

Theresa Chen asked if the EU's impending ban on Russian natural gas imports by January 1, 2026, could create upside for Cheniere's marketing activities next year, given its unsold volumes. She also questioned Cheniere's strategy for incremental capacity expansion beyond sanctioned projects, considering the recent increase in competing liquefaction project FIDs.

Answer

Jack Fusco, President and CEO, stated Cheniere's strong support for EU energy needs, with 60-66% of cargoes going to Europe in the last three years, and expects further opportunities. Anatol Feygin, EVP and CCO, clarified the EU ban's timeline and noted that while Russian LNG volumes might be impeded, they would likely find other markets. Regarding expansion, Jack emphasized adhering to 'Cheniere standards' for new investments, requiring robust financial hurdles, full contracting, and investment-grade counterparties. Zach Davis, EVP and CFO, added that Cheniere focuses on disciplined brownfield development, permitting 20+ million tons but only FIDing projects that meet strict financial targets like 10% unlevered returns and 6-7x CapEx to EBITDA at sub-$3 margins, with 90% contracting and 50/50 funding.

Theresa Chen asked about the potential upside for Cheniere's marketing activities in 2026, given the EU's move to ban Russian natural gas imports, and later inquired about Cheniere's strategy for incremental capacity expansion beyond sanctioned projects amidst increasing competition from other liquefaction FIDs.

Answer

Jack Fusco, President and CEO, affirmed Cheniere's strong support for EU energy needs and robust relationships with European counterparties, expecting continued opportunities. Anatol Feygin, EVP and CCO, clarified the timing of the Russian gas ban and its potential market implications. Regarding expansion, Jack Fusco reiterated Cheniere's commitment to its 'Cheniere standards' for new investments, focusing on robust financial hurdles, full contracting, and investment-grade counterparties. Zach Davis, EVP and CFO, added that Cheniere will stick to disciplined brownfield development, permitting significant capacity at both sites, with a near-term focus on Sabine's first phase expansion and Corpus Christi's fourth large-scale train, targeting specific economic returns.

Theresa Chen asked about DT Midstream's competitive strategy for securing gas-to-power demand projects in the Northeast and Upper Midwest, inquiring how their assets compare to competitors, what it takes to win projects, how they plan to sustain strong returns and low build multiples, and the extent of economically efficient expansion opportunities within their existing assets. She also sought an update on the appetite and outlook for additional BTN opportunities off the Nexus pipeline, particularly in light of recent developments in Northwest Ohio.

Answer

President and CEO David Slater acknowledged regional competition but emphasized the significant opportunity set, stating that DT Midstream's competitive posture is often geographical and proximity-based. He affirmed that all projects are FERC-regulated, requiring attractive returns that align with their disciplined strategy. Regarding Nexus, Slater expressed confidence in its strong position to capture market share for data center power demand in the concentrated Northwest Ohio area, citing its new, high-pressure infrastructure and direct basin connectivity.

Theresa Chen questioned DT Midstream's competitive position for gas-to-power demand growth in the Northeast and Upper Midwest, how its assets compare to competitors, strategies to sustain strong returns and low build multiples, and the outlook for additional BTN (Behind-The-NEXUS) opportunities off NEXUS.

Answer

David Slater (President and CEO, DT Midstream) acknowledged competition but highlighted the significant market opportunity, stating DTM's competitive posture is driven by geographical proximity to demand. He confirmed projects must meet attractive FERC-regulated return profiles and disciplined contract structures. Slater expressed confidence in NEXUS's strong position to capture market share from data center power demand in Northwest Ohio, citing its new, high-pressure pipeline and direct corridor to the basin.

Theresa Chen of Barclays asked about the gas sourcing strategy for the newly sanctioned Guardian expansion and whether it could trigger further upstream expansions on DTM's assets feeding the Joliet hub. She also inquired about the potential for additional phases of the LEAP pipeline to serve LNG demand and the evolving competitive landscape.

Answer

President & CEO David Slater stated that the Guardian customer will procure gas at the Joliet hub, which can be fed by DTM's Midwestern and Vector pipelines, creating future opportunities for upstream projects. Regarding LEAP, Slater highlighted recent short-term revenue gains and a 1.25 Bcf/day expansion of delivery interconnects. He expressed confidence that DTM will win its fair share of future LNG-driven projects due to its established, interconnected asset base.

Theresa Chen asked for more detail on DTM's project backlog, specifically regarding the potential for an integrated solution connecting Northeast gathering systems to the newly acquired Midwest pipeline assets, and what the potential CapEx for such a project could be.

Answer

President and CEO David Slater stated that after four months of ownership, DTM is more bullish on the growth, modernization, and integration opportunities for the newly acquired pipelines than at the time of the transaction announcement. He highlighted that the opportunity set is more robust than initially assessed and pointed to the recently commercialized Midwestern Gas power plant lateral as an early indicator of the potential. He noted that as DTM gains more confidence, it will provide more clarity and updates to investors.

Theresa Chen inquired about the expected returns and economic terms for the updated $2.3 billion project backlog and asked for DTM's outlook on the pace of production recovery across its footprint for the remainder of the year and into the next.

Answer

President and CEO David Slater reiterated that projects in the backlog are expected to fall within the previously stated 5-8x EBITDA multiple return band. Regarding production, he stated that 2025 guidance assumes Haynesville volumes will ramp up throughout the year, while Appalachia volumes are expected to remain relatively flat. He noted producers are encouraged by market changes but remain cautious.

Theresa Chen asked for details on the potential size, scope, and financial impact of data center projects. She also inquired about the company's credit outlook following the Fitch upgrade and the next steps with Moody's.

Answer

David Slater, President and CEO, characterized the data center projects as lateral opportunities with a potential CapEx range of $50 million to $100 million each, similar to the past Birdsboro project. Jeff Jewell, EVP and CFO, addressed the credit outlook, noting the recent Fitch upgrade to investment grade and the ongoing positive outlook from Moody's, with further updates expected after credit agencies review the recent Chesapeake/SWN merger.

Theresa Chen inquired about the strategic rationale and importance of the Western Gateway pipeline project, its competitive positioning against other projects, and the anticipated capital expenditure and cost-sharing structure.

Answer

Mark Lashier, Chairman and CEO, highlighted the project's role in bringing Mid-Continent strengths to the West Coast. Don Baldridge, EVP of Midstream and Chemicals, described the Gold Line's function as a supply header and the pipeline's ability to serve Phoenix, California, and Nevada markets. Brian Mandell, EVP of Marketing and Commercial, discussed the PADD 5 market post-pipeline and improved netbacks. Kevin Mitchell, EVP and CFO, noted the 50/50 partnership with Kinder Morgan for CapEx, with spending anticipated in 2027-2029.

Theresa Chen asked about the potential for an NGL carve-out in Chinese tariffs and the company's positioning for NGL price volatility. She also inquired about the cost and strategic rationale for the new Iron Mesa gas processing plant.

Answer

Brian Mandell, EVP of Marketing and Commercial, stated that most of the company's NGL business is secured by term contracts. Mark Lashier, Chairman and CEO, added that China has few alternative suppliers for ethane, making an accommodation likely. Don Baldridge, EVP of Midstream and Chemicals, described the Iron Mesa plant as a low-multiple investment (sub-5x) that enhances the NGL value chain by supporting Permian growth, improving operational efficiency at the existing Goldsmith facility, and supplying over 100,000 BPD of NGLs to the company's system.

Theresa Chen asked for details on the path to achieving the sub-30% net debt-to-capital ratio, including the expected timeframe and whether future asset sales are earmarked for this goal. She also asked if potential FTC concerns would preclude acquisitions of certain synergistic Midstream assets.

Answer

CFO Kevin Mitchell outlined that the debt reduction path is supported by operating cash flow allocation and proceeds from asset sales like the Germany-Austria retail business. CEO Mark Lashier and Don Baldridge (Midstream and Chemicals) addressed the M&A question, stating that their primary focus is on value creation, scalability, and strategic fit, rather than being driven by FTC concerns, and reiterated that the growth plan is focused on organic opportunities.

Theresa Chen from Barclays inquired about the impact of ethane contango on Chemicals margins and the company's view on its Permian residue gas exposure, specifically its GCX pipeline interest.

Answer

Don Baldridge of Midstream and Chemicals noted that the ethane advantage for CPChem will continue and that PSX's integrated assets provide flexibility to optimize the value chain. Regarding GCX, he stated that while they are pleased with its growth, the asset is subject to the same regular portfolio evaluation as all others.

Theresa Chen asked for early indications on how volumes across ONEOK's supply-push assets are expected to trend through the next year, considering recent crude price volatility. Theresa Chen also requested an update on ONEOK's LPG export commercialization efforts, including customer conversations and market interest.

Answer

Pierce Norton, President and Chief Executive Officer, and Sheridan Swords, Executive Vice President and Chief Commercial Officer, indicated that current drilling activity and rising gas-to-oil ratios (GORs), particularly in the Bakken (3.1 GOR), suggest continued gas volume growth even with flat crude production. They also highlighted opportunities to capture volumes from expiring third-party contracts. Sheridan Swords reported significant customer interest in ONEOK's LPG export dock, citing ample supply. He expressed satisfaction with the current contracting strategy but refrained from providing specific details due to the competitive market.

Theresa Chen asked for an update on the forward outlook for volumes across ONEOK's supply-push assets, considering recent crude price volatility and evolving producer budgets. Chen also requested an update on ONEOK's LPG export commercialization efforts, including customer conversations and market interest.

Answer

Pierce Norton, President and Chief Executive Officer, and Sheridan Swords, Executive Vice President and Chief Commercial Officer, discussed current drilling activity, rising gas-to-oil ratios (GORs) in regions like the Bakken, and expected gas volume growth even with flat crude production. They also highlighted efforts to compete for volumes from expiring contracts. Swords added that ONEOK has ample supply for its LPG export dock, attracting significant interest, and is pleased with its competitive contracting strategy, though specific details remain confidential.

Theresa Chen from Barclays asked for ONEOK's response to a competitor's bearish view on LPG export economics and questioned the commercialization progress of its Texas City JV terminal. She also requested an update on G&P volume expectations by basin amid commodity volatility.

Answer

EVP & CCO Sheridan Swords stated that ONEOK's Texas City export dock has strong commercial interest with rates in line with original estimates, citing its premium location as a key advantage. President and CEO Pierce Norton added that growing LNG exports will increase associated liquids supply, supporting global demand. Swords then detailed G&P activity, noting the Bakken is on track, Oklahoma is strong, and the Permian is ramping up, justifying the new Bighorn plant FID.

Theresa Chen questioned the extent to which ONEOK can flex down its capital expenditures to protect the balance sheet in a deteriorating macro environment and asked for an update on the execution status of the 2025 synergy targets.

Answer

CFO Walter Hulse explained that the company has a history of flexing capital, noting that about $1 billion in annual routine growth spending is tied to producer activity and can be reduced naturally. Chief Commercial Officer Sheridan Swords and CEO Pierce Norton confirmed that a substantial portion of 2025 synergies are already underway and largely within their operational control, involving system interconnects rather than depending on new contracts.

Theresa Chen inquired about the key drivers bridging the 2025 to 2026 guidance, the strategic benefits and competitiveness of the LPG export joint venture with MPLX, and the potential ultimate capacity of the Denver refined products pipeline.

Answer

CFO Walter Hulse explained that the 2026 outlook benefits from the full-year impact of synergy capital projects completed in 2025, particularly the Easton asset connections. CCO Sheridan Swords detailed the LPG dock's advantages, citing its open-water location, brownfield economics, and role in ONEOK's 'wellhead-to-water' strategy. He added that the Denver pipeline's capacity can be efficiently expanded from 35,000 bpd up to 250,000 bpd by adding pumps.

Theresa Chen asked about ONEOK's positioning to capitalize on growing natural gas demand from data centers and inquired about the synergy potential of directing Medallion crude volumes to ONEOK's Houston-area assets.

Answer

Sheridan Swords, Executive Vice President, confirmed ONEOK is well-positioned for data center demand, with 23 related projects in discussion, 10 of which are specifically for data centers. He also noted a key synergy with Medallion is redirecting its volumes onto ONEOK's long-haul pipes into the Houston area, where demand for pipeline capacity and exports remains strong despite the planned Lyondell refinery closure.

Theresa Chen inquired about Valero's observations on domestic demand across its distribution channels, particularly in light of recent DOE data, in addition to the previously discussed export demand.

Answer

Gary Simmons, Executive Vice President and COO, reported Valero's gasoline demand as flat to slightly down year-over-year, consistent with DOE data, attributing it to more efficient vehicles despite increased vehicle miles traveled. He noted constructive gasoline fundamentals due to strong export demand and closed transatlantic arbitrages. Jet demand aligns with DOE's 4% bump, and diesel sales in Valero's system were up 8% year-over-year in Q3, with good agricultural and heating oil demand expected.

Theresa Chen inquired about the potential impact of new product pipeline open seasons from Pad 3 and Pad 2 to Pad 5 on Valero's Gulf Coast and Mid-Continent assets, and whether Valero would consider being a shipper. She also asked for Valero's perspective on recent DOE data, domestic demand trends across distribution channels, and additional insights beyond export commentary.

Answer

Gary Simmons, Executive Vice President and COO, stated that Valero is evaluating the pipeline projects but prefers waterborne movements for their flexibility and international arbitrage opportunities, believing they can be more competitive than Jones Act movements. Lane Riggs, Chairman, CEO and President, added that such projects would likely firm up Gulf Coast margins. Mr. Simmons also noted flat to slightly down year-over-year gasoline demand, constructive gasoline fundamentals for Q4, consistent jet demand, and strong diesel sales in Valero's system, with good agricultural demand and the upcoming heating oil season.

Theresa Chen of Barclays inquired about current refined product demand trends across Valero's system, particularly for gasoline and diesel, and asked for the company's outlook on light-heavy crude oil differentials.

Answer

EVP & COO Gary Simmons explained that refining fundamentals remain supportive with low inventories. He noted that gasoline demand is flat year-over-year, while diesel demand is trending higher, supported by strong export markets. Simmons anticipates light-heavy differentials will widen in Q4 as OPEC+ increases production and Canadian supply recovers, though Russian sanctions remain an unknown variable.

Theresa Chen of Barclays inquired about current refined product demand trends across Valero's footprint, any notable shifts in sales patterns, and the outlook for the export market. She also asked for the near-to-medium term outlook on light-heavy crude oil differentials.

Answer

EVP & COO Gary Simmons responded that refining fundamentals remain supportive with low global inventories. He noted that gasoline demand is flat year-over-year, while diesel demand is strong, with sales up 3% and robust export demand keeping inventories low. Simmons anticipates light-heavy differentials will widen in Q4 due to increased OPEC+ and Canadian production, which should outweigh headwinds from Venezuelan sanctions and other issues.

Theresa Chen from Barclays followed up on the renewable diesel market, asking if the drop in production is structural, and requested an update on the suspension of Valero's import permit in Mexico.

Answer

Eric Fisher, EVP of Commercial, stated the drop in renewable diesel production is structural, as the new PTC doesn't incentivize the marginal producer, and a significant RIN price increase is needed for supply to return. Gary Simmons, EVP and COO, announced that Valero's Mexico import permit was reinstated after the company demonstrated full compliance with local regulations.

Theresa Chen followed up on the renewable diesel market, asking if the drop in production and imports is structural, and also inquired about the status of Valero's suspended import permit in Mexico.

Answer

Eric Fisher, an executive, stated that the drop in marginal renewable diesel production is structural due to the transition from the Blenders Tax Credit (BTC) to the Production Tax Credit (PTC), and a significant rise in RIN prices would be needed to incentivize that production to return. Gary Simmons, EVP and COO, announced that Valero's import permit in Mexico has been reinstated after the company demonstrated full compliance with import and tax obligations.

Theresa Chen asked for Valero's outlook on light-heavy crude differentials given potential tariffs and sanctions, and requested more details on the St. Charles FCC optimization project, particularly the expected yield improvements.

Answer

Gary Simmons, EVP and COO, responded that while fundamentals support wider differentials, the market is currently muted by tariff and sanction discussions. Greg Bram, an executive, detailed the St. Charles project, stating the $230 million investment will increase high-octane alkylate production by 6,000-7,000 barrels per day by boosting feedstock to the alkylation unit.

Theresa Chen of Barclays requested an outlook on the medium-to-long-term global product supply balance and an update on the new Sustainable Aviation Fuel (SAF) unit's operations and commercial progress.

Answer

EVP and COO Gary Simmons projected a tightening supply/demand balance, with 2025 light product demand growth of 700k b/d outpacing net capacity additions of 300k b/d. For SAF, executive Eric Fisher reported the project was completed ahead of schedule and under budget, with a smooth startup. Gary Simmons added that commercial contracts with airlines and freight carriers support the project's expected return of over 25% after-tax.

Theresa Chen asked about Kinder Morgan's improved growth outlook, specifically the over $10 billion opportunity set in unsanctioned projects, inquiring about the drivers, commercialization speed, and areas of customer interest. She also asked about the Western Gateway project's positioning relative to competitors and potential regulatory gating factors.

Answer

Kim Dang (CEO) explained that the $10 billion opportunity set is primarily natural gas, supporting LNG export, power generation, Mexico exports, and industrial growth across the southern U.S. She noted that most projects are smaller, but some exceed $1 billion. Regarding Western Gateway, Ms. Dang highlighted its broader market access compared to competitors and stated the open season ends December 19, targeting a 2029 in-service date after regulatory approvals.

Theresa Chen asked about Kinder Morgan's over $10 billion opportunity set in unsanctioned projects, inquiring about the drivers behind this improved outlook, the speed of commercialization, and areas of strongest customer interest. She also followed up on the Western Gateway project's positioning relative to competitors and potential regulatory gating factors.

Answer

Kim Dang, CEO of Kinder Morgan, explained that the $10 billion opportunity set is primarily natural gas-focused, supporting LNG exports, power generation, Mexico exports, and industrial growth across the Southern U.S. She noted that most projects are smaller, but some exceed $1 billion. Regarding Western Gateway, Ms. Dang detailed its strategic advantages, including serving multiple markets (Arizona, California, Las Vegas) and providing additional capacity. She mentioned the open season concludes December 19th, with a target 2029 in-service date pending regulatory approvals.

Theresa Chen of Barclays inquired about the structural changes in the commercial landscape for natural gas projects, what factors contribute to Kinder Morgan's success in winning new projects, and the progress on westward expansion from the Permian, such as the Copper State Connector.

Answer

CEO Kimberly Dang attributed project wins to Kinder Morgan's extensive existing asset footprint, its trusted track record for project execution, and high-quality customer service. Regarding westward expansion, she confirmed a clear need for gas in Arizona for utilities and data centers but noted it is a competitive process. A large project like Copper State could cost $4-5 billion and must meet the company's disciplined capital return thresholds.

Theresa Chen asked for an update on Kinder Morgan's Bakken strategy following the Outrigger acquisition and the Double H pipeline conversion, and inquired about the potential impact of California refinery closures on KMI's assets.

Answer

An unnamed executive stated the Outrigger integration is going well and the focus is now on operational synergies and capturing more of the value chain, including NGL takeaway, but declined to give strategic details due to competition. President Dax Sanders addressed the California refinery closures, stating that as long as end-market demand for fuel exists, KMI's pipelines remain the most economic transport option, regardless of whether supply sources shift to other refineries or waterborne imports.

Theresa Chen from Barclays asked about the key commercial drivers for the Mississippi Crossing project, including supply diversification, and questioned the potential for separating the products pipeline business to unlock shareholder value.

Answer

An executive explained that the Mississippi Crossing project addresses the need for both incremental supply and diversification to serve growing LNG demand on the Gulf Coast. President Kimberly Dang responded that the company sees strategic benefits and synergies in keeping the businesses together, citing shared integrity and project management teams, and stated there is no significant valuation discount that would justify the costs and risks of a separation.

Theresa Chen from Barclays followed up on the Caribbean fuel-switching opportunity, asking for the quantifiable size of the addressable market. She also inquired about the commercialization progress and the supply-demand outlook for the new-build FSRU, Hull 3407.

Answer

EVP & Chief Commercial Officer Oliver Simpson responded that while they haven't put a specific number on the addressable market, it is significant as most Caribbean islands still burn liquid fuels for power. President, CEO & Director Steven Kobos addressed Hull 3407, highlighting its best-in-class, low boil-off design. He expressed confidence in placing the vessel due to a tight FSRU market and strong global demand for LNG infrastructure, which is bolstered by expanding U.S. LNG supply.

Theresa Chen inquired about the pending Jamaica acquisition, asking for the remaining steps to close and the potential for growth projects and their EBITDA contribution. She also asked for an update on the newbuild FSRU, Hull 3407, regarding its deployment prospects, gas supply, and potential market economics.

Answer

CEO Steven Kobos stated that closing the Jamaica deal involves routine deliverables and expressed confidence in the timeline. CCO Oliver Simpson added that post-close, the focus will be on incremental gas sales and leveraging Jamaica as a regional hub. Regarding the newbuild, Mr. Kobos noted intense interest from multiple parties and highlighted its best-in-class features, while remaining cautious on specifics due to ongoing, competitive discussions.

Theresa Chen of Barclays asked for more color on the commercial discussions for the newbuild FSRU and the potential conversion project, given the anticipated tightness in the FSRU market. She also inquired about the key hurdles to advancing these commercial negotiations.

Answer

CEO Steven Kobos did not detail specific discussions but affirmed strong global demand for rapid LNG infrastructure access. He explained that market dynamics are reinforcing the need for long-term contracts, which benefits their projects. He highlighted that the newbuild's high efficiency and throughput appeal to certain customers, while conversions can be tailored for niche markets, giving Excelerate a flexible toolkit to meet diverse global needs.

Theresa Chen from Barclays asked how Pembina's fees compare to alternatives amid intensifying competition and for an update on progress at the federal and provincial level regarding Canada's energy strategy.

Answer

SVP & CFO Cameron Goldade and SVP & COO Jaret Sprott highlighted Pembina's competitive advantages, including superior capital execution leading to lower unit costs, extensive system connectivity, operational scale, and redundancy, which provide significant value to customers. On the regulatory front, President & CEO Scott Burrows noted that while government rhetoric is more supportive, significant hurdles like the emissions cap and tanker ban remain for major new projects, and progress will be complicated and time-consuming.

Theresa Chen of Barclays sought more detail on the Alliance Pipeline's risk-sharing model and whether shifting more risk to customers was on the table. She also asked when the gap between physical volume growth and revenue growth is expected to close.

Answer

SVP Jaret Sprott clarified that Pembina takes on operating cost risk on Alliance, which customers value, but noted the overall risk-sharing profile could change as negotiations proceed. CFO Cameron Goldade explained that the gap between revenue and physical volumes is a consistent phenomenon due to the lag between signing new take-or-pay contracts and subsequent volume ramp-ups, and it is not expected to fully 'true up' as new contracts are continuously signed.

Theresa Chen asked for the capital requirement and NGL composition of the potential Yellowhead straddle facility and its role in the Dow supply agreement. She also inquired about the contracting progress for the remaining capacity on Cedar LNG.

Answer

Jaret Sprott, an executive, estimated the straddle facility would cost between $400-$500 million, with the 25,000 bbl/d of NGLs being roughly 50% ethane, and noted more details would be provided in May. Executive Stu Taylor stated that for Cedar LNG, Pembina has received term sheets well in excess of available capacity from a broad range of customers and is moving to a shortlist for detailed negotiations.

Theresa Chen of Barclays questioned the path to expanding capacity from 75 MTPA to 100 MTPA, asking about key inflection points. She also asked when to expect more evidence of demand elasticity from developing nations as new global LNG supply comes online.

Answer

EVP & CFO Zach Davis emphasized that all growth, including the path to 100 MTPA, is contingent on meeting the 'Cheniere standard' of being demonstrably accretive versus share buybacks, with a focus on value over volume. EVP & CCO Anatol Feygin explained that demand elasticity will become visible through quarterly tender activity and cargo diversions, noting that price-sensitive markets like India and China can absorb significant volumes as prices moderate and infrastructure is built out.

Theresa Chen asked about key learnings from the permitting process for mid-scale Trains 8 and 9 that could apply to future projects, and also questioned Europe's vulnerability to LNG supply shocks in 2025.

Answer

President and CEO Jack Fusco stated that permitting reform is a major focus for the administration and highlighted that receiving the FERC permit for Trains 8 and 9 with no request for rehearing was a very positive sign. EVP and CCO Anatol Feygin agreed that Europe is vulnerable, pointing to Germany's low inventory levels and the cessation of gas flows through Ukraine as factors creating a difficult position for the continent.

Theresa Chen inquired about the impact of recent geopolitical developments, specifically the Russia-Ukraine situation, on the outlook for U.S. LNG and commercial discussions with European customers. She also asked if the Trump administration's focus on trade deficits with Asia could accelerate commercial development in that region.

Answer

President and CEO Jack Fusco emphasized that geopolitical conflicts have highlighted the critical need for energy security and diversity. EVP and CCO Anatol Feygin added that with Europe's depleted inventories and moves to cease Russian energy imports, Cheniere's reliable, destination-flexible product is a key solution. Regarding Asia, Mr. Fusco expects the administration to support U.S. energy dominance, similar to past actions that led to contracts, a sentiment Mr. Feygin echoed, calling it a tailwind for their business.

Theresa Chen asked how project delays at competitors are influencing Cheniere's commercial discussions and questioned the outlook for LNG regasification capacity growth in Asia.

Answer

President and CEO Jack Fusco and EVP and CCO Anatol Feygin stated that Cheniere's reputation for reliable, on-budget project execution with Bechtel provides a significant commercial advantage. Feygin added that the company's new methane emissions target further strengthens its position. Regarding Asia, Feygin anticipates robust long-term demand growth, particularly from China and India, and noted that moderating prices could attract additional price-sensitive buyers.

Theresa Chen from Barclays asked if joint partnerships with customers are becoming a preferred capital deployment model and requested quantification of the margin uplift expected from recent technology investments.

Answer

President & CEO Mickey McKee confirmed that such partnerships are a strategic way to help customers preserve capital in uncertain markets and that Kodiak will continue to pursue them. Regarding technology, he explained that while it's too early to quantify the exact margin benefit, the company sees clear upside from its new ERP system and AI initiatives, which are just beginning to be implemented.

Theresa Chen questioned the durability of the 15-20% pricing premium on new units amid a competitive landscape and asked how far along Kodiak is in its portfolio optimization process following the CSI acquisition.

Answer

CEO Mickey McKee asserted that the pricing premium is durable because it reflects a fundamental increase in new equipment costs, which are up 50% in recent years, rather than opportunistic pricing. Regarding the portfolio, he stated they are 'definitely the majority of the way there' on divestitures but may still pursue smaller, opportunistic sales of noncore assets.

Theresa Chen asked about Kodiak's recontracting strategy, specifically regarding the potential trade-off between securing higher rates versus extending contract duration.

Answer

CEO Mickey McKee stated unequivocally that the company does not trade contract rate for term. He explained that Kodiak views the longevity of the underlying oil and gas production as the true contract term. The company's strategy is to earn renewals through best-in-class operational service rather than sacrificing rate for a longer-term paper contract.

Theresa Chen of Barclays asked about the evolving competitive landscape for sour gas treating following a competitor's recent acquisition in the area, and how Kinetik's hedging strategy has changed amid commodity price volatility.

Answer

CEO Jamie Welch acknowledged the new competitor (MPLX) but stated that the sour gas market is growing significantly, providing room for multiple players, and Kinetik's early entry gives it a strategic advantage. SVP & CFO Trevor Howard explained that the company is now hedging further out to "levelize" year-over-year commodity impacts and expects a relatively flat pricing impact in 2026 compared to the $20 million headwind seen in 2025.

Theresa Chen of Barclays asked for details on the expected volume or EBITDA contribution from the new G&P agreement in Reeves County and inquired about Kinetik's commodity hedging profile for 2026.

Answer

Executive Kris Kindrick described the new G&P deal as a low-capital (sub-$5 million), high-growth opportunity, but hesitated to provide specific EBITDA guidance. CEO Jamie Welch explained that the company's multiyear hedging program is front-weighted, with 'good hedges in place through the first half of into next year,' after which the coverage level declines.

Theresa Chen of Barclays asked for clarification on the economic contribution path of the Barilla Draw acquisition and inquired about the timeline and strategic scope of the potential power generation project.

Answer

CFO Trevor Howard detailed that Barilla Draw will initially provide gathering services, with processing volumes and margin expansion ramping up later this year and more significantly later in the decade as existing third-party contracts expire. CEO Jamie Welch added that if the power project reaches FID this year, it could be in service by late 2027. He described it as a 'one and done' OpEx optimization project for the south, but noted its success could lead to a similar project in New Mexico.

Theresa Chen from Barclays asked for the reasons behind the impairment of the recently acquired Ohio utility and whether this changes the long-term outlook or capital allocation for the utility business.

Answer

EVP of Gas Distribution Michele Harradence explained the impairment was primarily due to the regulatory treatment of a pension asset, a position Enbridge is appealing as an error in law. EVP & CFO Patrick Murray and CEO Gregory Ebel affirmed that the situation does not change their positive view on the asset or capital allocation, citing its strong ROE, capital riders, and growth potential.

Theresa Chen questioned the long-term strategy for Enbridge's Permian to Gulf Coast gas transmission franchise, specifically regarding the preference for minority interests versus wholly-owned assets. She also asked about the goals of the working group for Western Canadian Sedimentary Basin (WCSB) egress.

Answer

President and CEO Greg Ebel explained that while Enbridge often prefers to control assets, joint ventures allow participation in more opportunities and provide valuable partner insights. He stated the company is patient but would ultimately like to own significant elements. Regarding WCSB egress, he outlined key goals for the industry group, including engaging the new government, addressing carbon tax issues, removing the West Coast tanker ban, and executing on indigenous loan guarantees.

Theresa Chen of Barclays asked who would bear the economic cost of potential tariffs on energy trade and inquired about the path forward for the Rio Bravo pipeline and Rio Grande LNG project given recent regulatory developments.

Answer

EVP, Liquids Pipelines Colin Gruending and CEO Greg Ebel opined that tariff costs would likely be shared between producers and refiners, with negligible impact on volumes due to sticky demand. EVP, Gas Transmission Cynthia Hansen stated that despite regulatory hurdles, she is confident the Rio Bravo project will continue to advance through the FERC's environmental review process, supported by its partners in the Whistler JV.

Theresa Chen asked about downstream synergies for the Blackcomb pipeline, the reasons for its competitive success, and the partnership's future growth prospects. She also inquired if the strong contribution from 'other' liquids systems represents a new normal and about the utilization of the Express-Platte system.

Answer

Cynthia Hansen, EVP of Gas Transmission and Midstream, attributed Blackcomb's success to the JV's strong execution track record and noted its intrastate status allows for quick completion. She highlighted synergies with Enbridge's significant presence in the Agua Dulce hub. CFO Pat Murray and EVP Colin Gruending confirmed that strong performance from assets like Express-Platte and the Bakken system is in line with expectations and represents a sustainable run rate, with business remaining strong across all basins.

Theresa Chen from Barclays inquired about the company's indirect exposure to PADD V, asking how far west products from Navajo can go and how much capacity is available on the UNEV pipeline. She also asked about the fragmentation and runway for inorganic growth in the Marketing and Lubricants segments.

Answer

Steven Ledbetter, EVP of Commercial, explained that Navajo serves the Phoenix market, while the Rockies complex can supply Las Vegas via the UNEV pipeline, which he called a key strategic advantage. CEO Timothy Go added that the UNEV pipeline has spare capacity and can be debottlenecked. On inorganic growth, Ledbetter noted the marketing landscape has many smaller chains available in core markets, while Matt Joyce, SVP of Lubricants & Specialties, described the lubricants market as fragmented with over 300 players, offering many complementary acquisition opportunities.

Theresa Chen asked for details on the UNEV pipeline's potential to serve the PADD 5 gasoline market, how profitability would be maximized, and Puget Sound's capacity to supply California. She also inquired about the breakdown of Midstream EBITDA between inter-company and third-party cash flows.

Answer

EVP, Commercial Steven Ledbetter and CEO Timothy Go discussed the flexibility of the UNEV pipeline and other routes to supply western markets, noting a small growth project at Puget Sound will increase its ability to produce CARB gasoline. They stated value can be unlocked without significant new capital. An executive also clarified that the midstream business is approximately 80% integrated with the refining segment.

Theresa Chen requested details on product demand across HF Sinclair's footprint, particularly in the Pacific Northwest and other niche markets. She also asked for the incremental margin benefit from the branded retail strategy and whether that financial uplift is sustainable.

Answer

EVP of Commercial Steven Ledbetter noted that regional demand remains healthy, with weakness in crack spreads being more of a supply issue. He highlighted growth opportunities in the Pacific Northwest and Southwest. CFO Atanas Atanasov quantified the branded strategy's impact, stating new sites see a 60-120% volume increase over time. He affirmed that the current EBITDA run rate of $75-80 million for the marketing segment is realistic and sustainable, with further opportunity from high-grading the portfolio.

Theresa Chen of Barclays questioned the lessons learned from the recent BIS ethane export license issue with China and its structural impact on the market. She also asked for the forward outlook on the PDH facility and octane enhancement spreads.

Answer

SVP Tug Hanley explained that while Enterprise was 'largely unscathed' due to a diverse customer base, the incident compromised the 'U.S. brand for reliable supply.' SVP F. Christopher D'Anna noted that PDH operating rates are improving but not yet at expectations, and octane margins have normalized from record highs to healthy historic levels due to new supply, not lower demand.

Theresa Chen of Barclays asked about the lessons learned from the recent BIS ethane export license incident, its structural impact on U.S. ethane exports to China, and the forward outlook for the PDH business and octane enhancement spreads.

Answer

SVP of Pipelines & Marketing Tug Hanley explained that while Enterprise was 'largely unscathed' due to its diverse customer base, the incident compromised the U.S. brand for reliable supply. SVP of Petrochemicals F. Christopher D'Anna noted that PDH operating rates have improved but are not yet at expectations, and octane enhancement margins have normalized to historic levels after several record years.

Theresa Chen requested an outlook for the Petrochemical & Refined Products segment, focusing on the impact of PDH plants returning to full utilization, the conversion of propylene production to fee-based contracts, and the octane spread outlook.

Answer

Executive F. D'Anna stated that both PDH plants are running well, with PDH 1 above nameplate, and they expect to maintain these rates. He noted the conversion of propylene contracts to a fixed-fee structure will reduce margin volatility. Regarding octane, he mentioned that about 75% of the normal-to-RBOB spread is hedged and that the company expects the overall MTBE spread to widen during the summer driving season.

Theresa Chen asked for details on the 2025 earnings growth cadence, focusing on cost recovery in the petrochemical segment, and also inquired about the potential impact of a competitor's new LPG export project on regional competitive dynamics.

Answer

Co-CEO Jim Teague and other executives noted the global petrochemical market is oversupplied but highlighted a new ethane contract in Southeast Asia as a positive sign. Regarding LPG competition, executive Brent Secrest stated that while new capacity will pressure dock values, Enterprise's brownfield expansion costs are significantly lower than greenfield projects, and Jim Teague affirmed the company's commitment to maintaining its LPG export franchise.

Theresa Chen inquired about Enterprise's strategy to capitalize on the growing demand from data centers and new power generation, and asked for details on the integration and long-term value creation of the recent Piñon Midstream acquisition.

Answer

Executive Natalie Gayden explained that Enterprise is well-positioned with its pipelines in high-growth Texas data center hubs like Dallas and San Antonio. She and Co-CEO A. Teague added that the Piñon assets will be integrated into the full value chain, linking treating services with processing deals to drive organic growth.

Theresa Chen asked if market volatility is creating more M&A opportunities and if Plains might accelerate its pace of acquisitions given its strong balance sheet.

Answer

CEO Willie Chiang explained that opportunities are broad and often arise from partners seeking to monetize assets. He emphasized that Plains' integrated network allows it to create unique value and 'win-win' situations, which is a more important focus than simply accelerating the pace of transactions. The goal is to find the right deals, not just more deals.

Theresa Chen of Barclays inquired about the M&A outlook, the fragmentation of the surface acreage market, and the capital expenditure required to achieve the company's surface efficiency targets.

Answer

Executive Scott McNeely described the M&A market as highly fragmented with a robust pipeline, highlighting LandBridge's competitive advantages like its public currency for tax-advantaged deals. Executive Jason Long reiterated that LandBridge's business model requires minimal capital expenditure, projecting only $1-2 million for 2025, as the company does not develop the assets itself. Therefore, achieving higher surface efficiency does not necessitate significant capital outlays.

Theresa Chen from Barclays asked for Sunoco's outlook on refined product demand and requested more detail on the Pipeline segment's Q4 volume and EBITDA cadence, seeking guidance on how to forecast the segment going forward.

Answer

President and CEO Joseph Kim reiterated his consistent and bullish long-term view on the refined product sector, believing it will fuel the U.S. economy for decades. Chief Operating Officer Karl Fails explained the Pipeline segment's strong Q4 was due to higher volumes from consistent refinery operations, seasonal agricultural demand, and some MVC true-ups. He cautioned against annualizing a single quarter's results due to inherent variability.

Theresa Chen inquired about the future outlook for fuel margins following strong Q3 results and asked for management's perspective on how the apparent U.S. election outcome could impact Sunoco's business and the broader industry.

Answer

Chief Commercial Officer Austin Harkness stated that while record margins every quarter is a stretch, the underlying fundamentals of elevated industry breakevens remain, supporting a bullish forward view on fuel profit. President and CEO Joseph Kim commented that the election results provide welcome clarity and are a net positive for Sunoco and the industry, while also highlighting the company's resilience and ability to perform well under various administrations.

Theresa Chen asked for a reminder of Plains' PLA (Purchase and Logistics Agreement) volumetric exposure to better understand the sensitivity to the WTI price assumption in the 2025 guidance.

Answer

Blake Fernandez, an executive, confirmed the company's exposure is approximately 4 million barrels per year. He clarified that this translates to a roughly $40 million impact on EBITDA for every $10 change in the price of oil.

Theresa Chen asked for quantification of the uplift from ISO-to-normal butane spreads and whether the opportunity is seasonal or structural, and also requested a figure for the amount of operating costs deferred into the second half.

Answer

Executive Jeremy Goebel quantified the butane spread uplift at roughly $15 million in Q2 and $5 million in Q3, driven by finding domestic shorts. CEO Willie Chiang characterized it as an opportunistic market capture, not a structural change. Executive Chris Chandler declined to quantify the deferred costs but noted the amount was contemplated in the updated guidance.