Enterprise Products Partners - Q3 2024

Transcript

Operator (participant)

Thank you for standing by, and welcome to Enterprise Products Partners LP's Third Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. To remove yourself from the queue, you may press star one one again. I would now like to hand the call over to Libby Strait, Senior Director of Investor Relations. Please go ahead.

Libby Strait (Head of Investor Relations)

Good morning, and welcome to the Enterprise Products Partners Conference Call to discuss Third Quarter 2024 earnings. Our speakers today will be Co-Chief Executive Officers of Enterprise's General Partner, Jim Teague, and Randy Fowler. Other members of our Senior Management Team are also in attendance for the call today. During this call, we will make forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 based on the beliefs of the company, as well as assumptions made by and information currently available to Enterprise's management team. Although management believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Please refer to our latest filings with the SEC for a list of factors that may cause actual results to differ materially from those in the forward-looking statements made during this call.

With that, I'll turn it over to Jim.

Jim Teague (Senior Executive)

Thank you, Libby. Today, we reported Adjusted EBITDA of $2.4 billion for the third quarter compared to $2.3 billion for last year's third quarter. We generated $2 billion of Distributable Cash Flow, providing 1.7 times coverage. In addition, we retained $808 million of DCF. Our retained DCF totals $2.3 billion year to date. Operationally, we set five volumetric records, including 7.5 billion cubic feet per day of inlet natural gas processing volumes and 12.8 million barrels a day of crude oil equivalent pipeline volumes. We benefited from contributions from the three new natural gas processing plants and wide natural gas price spreads between Waha and other market hubs. We're on track to complete construction of two additional processing plants in the Permian, our Bahia Pipeline, Frac 14, phase one of our Neches River NGL export terminal, and the last phase of our Morgan's Point terminal flex expansion in 2025.

We'll have one additional process plant coming online in Delaware in 2026. These projects provide visibility to new sources of cash flow for our company and enhance and expand the NGL value chain at the core of our business. We also announced yesterday that we completed the acquisition of Piñon Midstream. These assets are highly complementary to our Permian processing footprint by providing treating services to a prolific area of the basin that generally has been infrastructure limited to the lack of sour natural gas treating and acid gas injection capacity. The Piñon assets are also a very strategic addition to our NGL value chain that touches everything from the wellhead to the water.

I'd be remiss if we didn't recognize the tireless efforts of over 200 of our employees at Mont Belvieu, who rolled from our most comprehensive turnaround for the PDH-1 plant right into a turnaround for our PDH-2 plant. Our employees completed these 24/7 turnarounds with extreme diligence and without any lost-time accidents. We believe this time and investment will result in higher utilization rates and performance for both of these facilities going forward, and we look forward to their contributions in 2025. We're excited about the number of inbounds that we're getting related to new natural gas demand in Texas from both data centers and the new gas-fired power plants that would be built under the Texas Energy Fund. There are a lot of people talking about exposure to data centers.

It seems that it's a very sexy thing to say, and everybody who has a piece of pipe in Texas is talking it up. The reality is there is a very small list of companies with pipeline and storage assets best positioned to benefit from this buildout, and Enterprise is one of them. It is difficult to quantify the ultimate demand and timing at this point, not knowing which projects will go forward. That being said, it is one of the most promising signals we've seen in natural gas in a long time, and we're looking forward to serving this new influx of demand. At Enterprise, we take pride in the fact our organization is not siloed. Everyone is important. We all pull in the same direction every day. The dedication, commitment, and creativity of all our employees has always been the key to our success.

We always strive to get better. We operate an integrated value chain, providing a wide range of services from the wellhead to the water. Our systems are highly automated and provide us with billions of data points. Each link in that chain presents an opportunity to provide a service, earn a fee, or enhance profitability by enhancing our margins or reducing our costs. Over the last five years, we have developed a very talented big data and data science team that works closely with all areas of our company. We're now using big data for everything from predictive maintenance to market analytics to asset optimization. One of the many examples is our pipeline controllers now use real-time profit optimizer programs to help determine when and how they run compressors and pumps based on real-time power and fuel cost.

Data and the insights it can provide in many respects is the new currency, and our proprietary data will forever be an opportunity for Enterprise. As we sit in the final quarter of 2024 and head into 2025, our work is not done. Each year presents new opportunities and new headwinds. We built a network of assets and a culture that delivers strong results throughout business cycles, administrations, and market conditions. Our company is built for the long run. As always, we have never been more excited for what the future will bring for our company. With that, Randy.

Randy Fowler (CEO)

Thank you, Jim. Good morning. Starting with income segment items, net income attributable to common unit holders was $1.4 billion, or $0.65 per unit for the third quarter of 2024. This is an 8% increase over the third quarter of 2023. Our Adjusted Cash Flow from Operations, which is cash flow from operating activities before changes in working capital, increased 4% to $2.1 billion for the third quarter of 2024 compared to $2 billion for the third quarter of last year. We declared a distribution of $0.525 per common unit for the third quarter of 2024, which is a 5% increase over the distribution declared for the third quarter of last year. This distribution will be paid November 14th to common unit holders of record as of the close of business on October 31st.

In the third quarter, the partnership purchased approximately 2.6 million common units off the open market for $76 million. Total repurchases for the trailing 12 months were $252 million, or approximately 9.1 million Enterprise common units, bringing total purchases under our buyback program to approximately $1.1 billion. In addition to buybacks, our Distribution Reinvestment Plan and Employee Unit Purchase Plan purchased a combined 6.5 million common units on the open market for $181 million during the last 12 months. This includes 1.6 million common units on the open market for $47 million during the third quarter of 2024. Of note, 48% of our employees participate in the unit purchase plan. At Enterprise, we really do eat our own cooking. For the 12 months ending September 30th, 2024, Enterprise paid out approximately $4.5 billion in distributions to limited partners.

Combined with the $252 million of common unit repurchases over the same period, our total capital return was $4.8 billion, resulting in a payout ratio of Adjusted Cash Flow from Operations of 56%. We returned roughly $1 billion more than our growth capital expenditures were for the same period. Total capital investments in the third quarter of 2024 were $1.2 billion, which included $1.1 billion for growth capital projects and $129 million of sustaining capital expenditures. Our expected range of growth capital expenditures for 2024 remains unchanged at $3.5 to $3.75 billion. We have received overwhelming interest from our producer customers following our recent acquisition of Piñon Midstream. As Jim noted, these assets not only enhance our processing footprint but allow us to attract more acreage in the Delaware Basin.

Additionally, yesterday, we announced a contract with Oxy to potentially build a CO2 pipeline that would serve the Houston Industrial Corridor. We are updating our 2025 estimated growth capital expenditure range to $3.5-$4 billion to encompass potential growth opportunities in connection with these announcements. Sustaining capital expenditures are expected to be approximately $640 million in 2024, which is higher than our original estimates, primarily due to costs associated with the turnaround of the two PDH facilities. As of September 30th, 2024, our total debt principal outstanding was approximately $32.2 billion. Assuming the final maturity of our hybrids, the weighted average life of our portfolio was approximately 19 years. Our weighted average cost of debt is 4.7%, and approximately 98% of our debt was fixed rate. Our consolidated liquidity was approximately $5.6 billion at the end of the quarter.

This includes availability under our credit facilities and unrestricted cash loans. Our Adjusted EBITDA was $2.4 billion for the third quarter and $9.8 billion for the 12 months ended September 30th, 2024. As of that date, our consolidated leverage ratio is 3.0 times on a net basis when adjusted for the partial equity treatment of our hybrids and reduced by the partnership's unrestricted cash on hand. Our leverage target remains our range 2.75-3.25, and at 3.0 times, we're in the middle of that range. Libby, with that, we can open it up for questions.

Libby Strait (Head of Investor Relations)

Thank you, Randy. Operator, we are ready to open the call for questions.

Operator (participant)

Thank you. As a reminder to ask a question, you will need to press star one one on your telephone. To remove yourself from the queue, you may press star one one again. Please limit yourself to one question and one follow-up or two questions to allow everyone the opportunity to participate. Please stand. Our first question comes from the line of Theresa Chen of Barclays. Your question, please, Teresa.

Theresa Chen (Analyst)

Good morning. I wanted to follow up on Jim's comments about the data center and power demand theme. Just how do you see Enterprise participating in this and if you have any color details on commercial discussions to date?

Natalie Gayden (EVP)

Hi, Teresa. This is Natalie. As Jim said, we've been inundated with data center demand infrastructure players that have likely exceeded the BCF a day of demand in the next several years. I think that's probably a couple of different reasons. Some of them have shared with us that no longer bringing power to data centers, rather data centers going to power sources. As you know, we've got several pipelines in the Dallas, Fort Worth area, and San Antonio. Just a couple of facts that I think are interesting. If you think about it, Dallas area data centers rank fourth in power today, but they're second in the most planned power. Then San Antonio is even more impressive. It's 17th in power, but ninth in most planned power.

So if you think about it that way, there's some regions that are probably losing market share to San Antonio and Dallas, and we stand in a good spot to be able to serve those centers.

Theresa Chen (Analyst)

Thank you. And then related to the recent Piñon acquisition, can you provide some details on how you plan to integrate it across your NGL assets and the ability you have to roll out treating services beyond the immediate Piñon midstream acreage and just the long-term value creation you see from these assets, please?

Randy Fowler (CEO)

Natalie, you're still up.

Natalie Gayden (EVP)

Yes. I think you can think of it this way. We won't treat Piñon any differently than our integrated G&P assets. There won't be many treating deals behind Piñon that don't come with processing deals to serve the integrated value chain.

Randy Fowler (CEO)

At least more organic growth through processing.

Natalie Gayden (EVP)

Yeah.

Theresa Chen (Analyst)

Thank you.

Operator (participant)

Thank you. Our next question comes from the line of Jean Ann Salisbury of Bank of America. Your question, please, Jean.

Jean Ann (Senior Analyst)

Hi, good morning. Ethane storage is full. There's no new demand until Enterprise's export facilities come online next year. Can you kind of talk about how you see this resolving? Do you see a big step down in ethane recovery? Would that change your growth rate the next few quarters? And is there kind of a positive offset to that for Enterprise in your portfolio?

Tug Hanley (Analyst)

Hi, Jean. This is Tug Hanley. As far as recoveries and rejection, that'll balance the market. Regionally, there's other places other than the Permian Basin where the gas base it doesn't make sense to recover necessarily or further to transport to market. As far as opportunities set for us, it's going to lead to some positive storage opportunities on collecting contango.

Jean Ann (Senior Analyst)

Okay. That makes sense. And then my follow-up is about the TE Products line. Is this the final state of the TE Products system? I think you said in the release that it's 20,000 barrels a day of truck loading capacity in Utah. Can the pipe do more than that if you add truck loading capacity, or should we think about this as being the end state of the system?

Justin Kleiderer (VP)

Hey, Jean Ann, it's Justin. No, we have more capability to add truck racks. In fact, we're doing that right now in our Permian terminal because our terminal is full. So as we identify additional demand and our demand further up system continues to ramp, we'll look for those de-bottlenecking opportunities to take advantage of it.

Jean Ann (Senior Analyst)

Okay. Great. Very clear. I'll leave it there. Thanks.

Operator (participant)

Thank you. Our next question comes from the line of Spiro Dounis of Citi. Your question, please, Spiro.

Spiro Dounis (Analyst)

Thanks, Operator. Morning, everybody. I want to come back to Piñon really quickly. Maybe if you just walk us through your decision to buy versus build there. Just curious if that was in any way reflective of some sort of bottleneck on the treating side in the basin.

Randy Fowler (CEO)

I guess I'll start, Natalie. First of all, we're to build greenfield. We're looking at three years, if I'm not mistaken. We've missed some opportunities because we didn't have this service. So we didn't get the platform, and it was the easiest, quickest way to get it.

Natalie Gayden (EVP)

Yep. That's it.

Randy Fowler (CEO)

Does that answer it, Spiro?

Spiro Dounis (Analyst)

It does. I appreciate that. Second question, just maybe sticking with New Mexico. I guess last week, there were some news headlines just around a new setback rule that could come into play. I know this can pop up from time to time, and it sounds like, at least for now, there's not much to do around it. But just curious maybe to get your all's view on how you think about the potential impact there if something like that comes into play.

Randy Fowler (CEO)

I didn't hear the question, Tony. Did you?

Natalie Gayden (EVP)

Setbacks in New Mexico.

Randy Fowler (CEO)

Yeah, setbacks in New Mexico. I'll speak for myself, and then. Yeah, I'll speak for myself from a fundamental standpoint, and then Natalie, you address it. I think the industry's very firm, and as always said, tell us what the rules are, and we'll figure out how to adjust to them. Natalie, I haven't heard, and maybe you have or have not, anybody say that they're doing anything other than studying these rules. It certainly, from the meetings I've been in, hasn't changed people's plans at this point. I think the other thing to add to that is remember that we drill horizontally laterals that may be three or four miles. So I'm confident from a fundamental standpoint that the industry's going to be able to adjust once they know what the rules are. Are you hearing anything different?

Natalie Gayden (EVP)

Nothing different. I think it's too early to speculate on what impacts it will have, and nothing more than commentary from a few New Mexico producers.

Spiro Dounis (Analyst)

Great. I appreciate the color. Leave it there. Thank you, team.

Operator (participant)

Thank you. Our next question comes from the line of Jeremy Tonet of J.P. Morgan. Your question, please, Jeremy.

Jeremy Tonet (Analyst)

Hi, good morning.

Natalie Gayden (EVP)

Good morning.

Jeremy Tonet (Analyst)

Just wanted to touch base with Tony here on, I guess, more on the macro outlook and, I guess, producer-customer conversations as well as what the macro team sees as far as production trends at this point in time, given the volatility we've seen in commodity prices.

Anthony Chovanec (Senior Executive)

Yeah, this is Tony. I'll start with it. I think as long as we've been publishing forecasts, this is maybe the second or third time that we've actually republished mid-year, and that's because what we're seeing both in traditional benches and newer targets to gassier benches. When you look at EIA numbers, I'll kind of go ahead and go there. I understand that's a very hard thing to set your watch to. That's not what we use. They're trying to get better at it, but they're making slow progress. What we said in the Permian Basin, there's been a lot of noise also relative to weather in the Bakken and in the Gulf of Mexico relative to hurricanes. So let's go to what's stable and what's the large thing that moves the number, and that's the Permian Basin.

We said that over a three-year period, just looking at black oil, that we would have about 1.5 million barrels a day of growth over that three-year period. For 2023, we're at about 750,000 barrels. We think that that number for 2024 will be 350,000-400,000 barrels. From what we're seeing as far as turn-in line from our producers, it's likely that when it's all said and done, that number's going to be very heavily weighted towards the second half of the year. It's not a long putt, as a matter of fact, is what we expect, that we will still, the Permian, will meet that goal of probably a million and a half barrels in 2025. That said, you can look at our forecast, and the one thing that is changing and likely to change is the commitments that producers are making to gassier basins.

Natalie, I'll let you take it from there.

Natalie Gayden (EVP)

I agree. I think we see it in our production plans from our producers, and either PDP isn't coming off as expected, or let's just say some of the declines are holding a little bit longer. But definitely gassier, even if on the order of 10%, sometimes they miss it by that order of magnitude. We see it time and time again. Not large numbers, but definitely something to keep up with.

Jeremy Tonet (Analyst)

Got it. That's helpful there. Thank you for that. And maybe shifting gears a little bit here with Bahia. It looks like the timeline shifted a little bit there, so just wondering if you could update us on project development there and also just our current thoughts on Permian NGL pipeline egress, how you see that shape.

Justin Kleiderer (VP)

Hey, Jeremy. This is Justin Kleiderer. So just minor delays in our expected timing on permit to construct, causing the delay from the first half into the third quarter. On the commercial development front, I would say, as you saw in our latest deck, Tony's updated NGL forecast paints a very different picture for overall industry utilizations. I think by 2028 now, the updated supply numbers have us upwards of 90% utilized as an industry. So we're still working the same playbook as we talked about in prior quarters around how we're developing commercially there. But it really just comes down to how that incremental supply gets contracted, whether that be a combination of additional G&P assets that Natalie alluded to earlier or continuing to pursue third-party NGLs.

Jeremy Tonet (Analyst)

Got it. That's helpful. Thank you.

Operator (participant)

Thank you. Our next question comes from the line of Michael Blum of Wells Fargo. Your line is open, Michael.

Michael Blum (Managing Director)

Thanks. Good morning, everyone. I wanted to ask about the announcement yesterday on the CO2 pipeline project with Oxy. Once you've just confirmed this is new pipe, you're not repurposing, and get a sense for how many miles of pipe are we talking about, and would you expect to get your kind of typical midstream contract structure and typical midstream return on a project like this?

Robert Sanders (Senior Executive)

Good morning, Michael. This is Bob Sanders. So the contract with 1.5 is a fairly straightforward transportation agreement. When 1.5 goes to FID, they will tell us what emitters to connect to so we know what to design for. It is new pipe because it is ANSI 900 pipe. It's a high-pressure pipeline system. We expect 1.5 to FID sometime in the first half of 2025, and at that point, we'll know what the capital is, and the fee will be set accordingly.

Michael Blum (Managing Director)

Great. Great. Thanks for that. And then I just wanted to ask about LPG export dock spot rate dynamics. I guess the rates have increased in recent months. I wanted to get a sense how full the docks and your docks specifically from that perspective. Are you able to capture any of these higher spot rates, or are you basically fully contracted?

Tug Hanley (Analyst)

Yeah, this is Tug. So we've talked about it in the prior earnings call, but we did a de-bottlenecking project at the Ship Channel that's provided us higher capacity. So right now, we're having anywhere between two to three spot cargoes per month, and we are capturing those higher values, call it mid-$0.20 per gallon.

Michael Blum (Managing Director)

Great. Thank you.

Operator (participant)

Thank you. Our next question comes from the line of Neal Dingmann of Truist Securities. Please go ahead, Neil.

Neal Dingmann (Managing Director)

Morning. Thanks for the time. My first question is on your petrochem specifically. Are you all continuing to expand the ethylene and propylene systems? And I'm just wondering, do you continue to believe more export capacity will be needed there?

Chris D'Anna (Senior Executive)

Anything else, Chris D'Anna? We are continuing to grow, particularly our ethylene pipeline system, so if you remember, that pipeline system didn't exist before 2019, and we built a pretty substantial system, and we plan to continue to grow that and then in terms of our exports, we have an expansion underway. It's at our Morgan's Point dock, and that'll come online. The first phase of that will be online at the end of this year.

Neal Dingmann (Managing Director)

Chris.

Perfect. Thanks, Frank.

Talk about real quick what you're seeing in Europe and what you think that creates for us.

Chris D'Anna (Senior Executive)

Yeah. And I think one of the growth opportunities that we see for ethylene exports in particular is Europe. With the economics that those crackers have, one, they're quite a bit smaller, so they don't have the economies of scale that we have here in the U.S. And then secondly, just the overall feedstock. It's a whole ethane versus naphtha there, or natural gas versus crude kind of fundamentals there. So we expect to see, and we've heard from a lot of the chemical companies that they're doing strategic reviews of their European assets. So we expect to see some closures, and we expect that to lead to additional ethylene exports going that way.

Neal Dingmann (Managing Director)

Great details. Thanks, Chris. And then my second is just on marketing specifically. It seems like Waha continues to be quite volatile, so I'm just wondering based on that, can we assume the marketing business continues to remain strong for you all?

Justin Kleiderer (VP)

Yes. We have roughly 370 million a day open on that, west to east, Waha spread. So we do expect that to continue to contribute.

Chris D'Anna (Senior Executive)

Great to hear. Thank you.

Operator (participant)

Thank you. Our next question comes from the line of Keith Stanley of Wolfe Research. Your question, please, Keith.

Keith Stanley (Analyst)

Hi. Thank you. Good morning. First, just curious for an update on commercial conversations on the SPOT project. I think there was a quote a week or two ago from a conference of trying to get a first customer to sign up for that project. Just an update on any momentum you're having there.

Randy Fowler (CEO)

You want to take it, Jay?

Jay Baney (VP)

Hey, Keith. This is Jay Baney. Yeah, just related around commercial conversations. They're quite extensive and in various degrees of conversation, anywhere ranging from we're working through definitive agreements, changing term sheets. I'd say a large portion of our customer base are currently just evaluating the cost inefficiencies related to ship-to-ship transfers and how that affects their business, both their, call it, netback as an American producer expenses or ultimately delivered price for international customers. And so we expect to hear some of that feedback here, call it, the end of this quarter, early first quarter.

Keith Stanley (Analyst)

Thanks for that. Second question, admittedly, not sure there's a great answer to this necessarily, but the valuation gap between the C corps in the space and the MLPs is at a record high above anything I can recall. Are there any potential ways the company could capitalize on that?

I don't know if it's selling assets at higher valuations or other ways to respond to the market seemingly valuing C corps much more highly than MLPs these days.

Randy Fowler (CEO)

Hey, Keith. This is Randy. I don't think there's any quick solution or answer there. I think coming in and trying to play the game of selling assets at a higher valuation is somewhat short-sighted, especially when you come in and you look at the depreciation recapture that comes and it gets pushed down to all your limited partners. All it becomes is a tax event for your limited partners, and I don't know what actually you've accomplished. So we've seen two or three years ago, I think it was near these levels, and then we saw the spread compressed. But generally, when there's this big of a difference in asset classes, normally the market solves it one way or the other.

Keith Stanley (Analyst)

Thank you.

Operator (participant)

Thank you. Our next question comes from the line of John Mackay of Goldman Sachs. Please go ahead, John.

John Mackay (Analyst)

Hey, all. Thanks for the time. I just want to maybe do two quick clarifications. First one is, Randy, this is to you, I guess. Just on that last comment, is the Up-C idea still out there, or is there any reason you guys have kind of permanently put that to the side at this point?

Randy Fowler (CEO)

No, I appreciate the thought there. Again, I think that's another sort of the devil's in the detail there. Number one, now you would have two securities outstanding. You need to build liquidity up in that second security. And oh, by the way, then what do you do with use of proceeds? So I think, and if I come in and look over time, there's not really been and there's been examples, whether it's the Up-Cs or whether it's been the, oh, gee, where was the i-units that were done way back 20 years ago, and you really never saw that much differentiation, whether it was the i-units, the institutional class units of partnership that was more institutional investor-friendly, or whether it was the Up-C and the underlying MLP.

So to us, that adds a lot of complexity, and really, you don't get that much bang for your buck.

John Mackay (Analyst)

All right. That's clear. Appreciate that. Second quick follow-up. Appreciate the comments on all the work done on the PDHs. I just want to clarify. Are both up and running fully now? Is this a fourth quarter run rate going forward? Is this a first quarter 2025? And then maybe if you could just remind us maybe what those two assets in aggregate could add from an ongoing cash flow basis, that'd be great.

Randy Fowler (CEO)

They're up and running, both of them, running at full rates, if not higher, and Chris, I'd say it's in the neighborhood of $200 million.

John Mackay (Analyst)

That's correct. All right. That's clear. Congrats on getting that done, and thanks for the time.

Operator (participant)

Thank you. Our next question comes from the line of AJ O'Donnell of TPH. Your question, please, AJ.

A.J. O'Donnell (Director of Equity Research)

Hey, good morning. Thanks for taking my question. Just a quick one on Matterhorn. With that pipeline now running about a BCF or over a BCF a day, curious if you guys have seen a jump in flush production into your system in Q4, or if the majority of the pipeline volumes are just flow shifting around the basin or redirected gas?

Randy Fowler (CEO)

I don't think we've seen a flush production yet, have we, Natalie?

Natalie Gayden (EVP)

No.

A.J. O'Donnell (Director of Equity Research)

Okay. Maybe just going back to the capital budget then, just trying to understand on the increase in the 2025 budget. I was hoping maybe you could provide just a little bit of color on the types of the projects you're seeing in the Permian. And I'm just curious if there's any more of that to potentially be announced in the 2025 budget, or does that seem a little bit further off?

Randy Fowler (CEO)

Natalie, you're going to have Piñon projects next year?

Natalie Gayden (EVP)

Yes. We're doing our job, we will.

Randy Fowler (CEO)

Natalie says yes.

A.J. O'Donnell (Director of Equity Research)

Okay. Thanks. Thanks, guys.

Operator (participant)

Thank you. Our next question comes from the line of Manav Gupta of UBS. Your question, please, Manav.

Manav Gupta (Executive Director)

Hi. Good morning. You guys did a very good job of explaining some of the 2025 growth projects. Help us understand the product pipeline is pretty strong with its Mentone West 2 or Neches River. How should we think about the key growth projects for 2026 at this stage?

Randy Fowler (CEO)

Yeah. Manav, thanks for the question. I think we're still at the point where, and we try to point this out in our supplemental slides for earnings, when you come in and you look at the projects that have been FID, I want to say that the runoff in 2026, what we have remaining to spend on currently FID projects, is probably about $1 billion to $1.2 billion. So if you would, in 2026, we have room that we put in there that we think will probably be in the range of $2 billion. Maybe it's upward of $2.5 billion, but we have room for development of other growth-oriented projects between now and then. And that's where we think 2024 and 2025 is really a period of elevated CapEx, and that will come back in more on a longer-term basis to see that come back down to around $2 billion to $2.5 billion.

Manav Gupta (Executive Director)

Perfect. Thank you.

Randy Fowler (CEO)

And you saw this, and again, I'll come back in. I'm sorry. You sort of saw the same thing in 2018, 2019. In those years, we were about $4 billion in growth CapEx. And again, those had some large projects and some step changes in capacity. And then you saw our growth CapEx moderate back down, and we think the same thing will happen once you get out to 2026.

Manav Gupta (Executive Director)

Perfect. My quick follow-up is there was a little bit of a step-up in buybacks in 3Q versus 2Q, and again, as you're going through this build-out, how should we think about shareholder returns for the rest of the 2024 or even 2025?

Randy Fowler (CEO)

I think, again, with 2024 and 2025 CapEx being at elevated levels, you'll probably continue to see buybacks in that $200-$300 million range. I think once we get out to 2026, we'll need to reassess what the opportunities are at that time, and we'll go from there.

Manav Gupta (Executive Director)

Thank you for taking my questions.

Operator (participant)

Thank you. I would now like to turn the conference back to Libby Strait for closing remarks. Madam?

Libby Strait (Head of Investor Relations)

Thank you. And thank you to our participants for joining us today. That concludes our remarks. Have a good day.

Operator (participant)

This concludes today's conference call. Thank you for participating. You may now disconnect.