Capital Spending Outlook
Q: With larger projects like SNG and power demand, will capital spending stay around $2B long term?
A: Yes, capital spending is expected to be around $2 billion, potentially up to $2.3 billion. Projects like SNG will fill out CapEx in the outer years, giving confidence in maintaining this level of spending for years to come. " "

Permian Gas Egress
Q: Any updates on expansions for Permian gas egress?
A: There are no significant updates; they are not prepared to sanction the GCX project yet and are still in discussions with customers on broader Permian egress opportunities. It's a competitive space, and they are open to various structures to determine what's best for the basin. "

Backlog Increase and Returns
Q: Backlog increased by $1.9B, and the multiple went up; what's driving this?
A: The backlog is up by $1.9 billion, driven by two projects: South System 4 and Double H. Although the multiple increased slightly, these projects offer very attractive returns with internal rates well above the cost of capital. "

Interest Rate Exposure
Q: How does floating rate debt exposure look for 2025 amid potential rate cuts?
A: Floating rate debt exposure has decreased from about $7.5 billion to $5.3 billion. They've locked in about 10% of the $5.3 billion for 2025 at favorable rates, and potential rate cuts could be a tailwind. "

Data Center Demand and Returns
Q: Could data center demand lead to higher returns on gas pipeline projects?
A: It's too early to judge whether higher returns will be earned. Data centers prioritize reliability and speed to market. While confident in meeting return hurdles, they don't expect to achieve outrageous returns due to competition. "

Funding South System Expansion 4
Q: How will South System Expansion 4 be funded—any non-recourse debt financing?
A: Funding options are being evaluated. They generally prefer funding at the parent level due to their attractive cost of capital and are not big fans of project financing. A fair amount of equity contributions is likely to fund the project. "

Gathering Volumes Below Budget
Q: Which basins are tracking below expectations in gathering volumes?
A: Volumes are expected to remain flat in the second half. Weakness has been seen in the Eagle Ford, Haynesville, and Bakken, with more in Haynesville due to producers reacting to pricing. Improvement is expected as demand picks up later this year and next. "

Portfolio Optimization
Q: What's the approach to portfolio pruning and optimization over time?
A: They sold a non-core natural gas gathering asset earlier in the year. In the CO2 segment, they sold 3-4 fields with limited CO2 flood potential and acquired the North McElroy field and adjacent leasehold interest at SACROC with better potential. "

Double H Pipeline Conversion
Q: What is the capacity of Double H after converting to NGL service?
A: Capacity depends on customer demand and supply configurations. They have a firm commitment starting day one in Q1 2026, and the line is scalable from the Bakken and Powder River basins. Ultimate capacity depends on customers. "

RNG Business Acquisitions
Q: Are acquisition opportunities in RNG being considered?
A: They are not currently pursuing significant RNG acquisitions until existing operations perform consistently. Once plants operate more reliably, they may reevaluate acquisition opportunities. "