Energy Transfer LP (NYSE:ET) Q3 2023 Earnings Call Transcript

Mackie McCrea: Yes, no, listen, I think the best way to look at that as far as the guidance goes in the split between the two is the guidance we had coming into this quarter that we provided in the second quarter was 13.1 billion to 13.4 billion, as you know. As you really looked at the new numbers we gave, you can probably say that the existing business was right at the top end of that range, and the rest of it would be Crestwood, but Crestwood would be net transaction cost. So, that’s what we’re currently expecting right now. Still maybe some moving pieces as we get into the fourth quarter, but we feel pretty good about the 13.5 to 13.6.

John Mackay: All right, that’s clear. I appreciate it.

Operator: Thank you. Next question will be from Neel Mitra of Bank of America. Please go ahead.

Neel Mitra: Hi, good afternoon. Thanks for taking my questions. Firstly, it seems that Cushing inventories are extremely low right now, so wanted to understand how your Centurion flows and your overall Lotus acquisition was able to materialize on this dynamic in the third quarter?

Mackie McCrea: Yes, you bet. This is Mackie again. Yes, I have to do a shout out to Chris Hefty and his team and what they’ve done over the last two years has just been phenomenal as you look at Enable and kind of what it’s done over the last year and a half and the synergies that we’ve found and the same with WEX. And Lotus is the same thing. We continue to look at significant commercial synergies around blending. As we have made an announcement, we are looping pipes so that we can move more volume to benefit when the spread blows out between Midland and Cushing. So, we’re slowly positioning ourselves to become a much bigger player to be able to move volumes between the Cushing and Midland areas, as well as, of course, to the Gulf Coast, to our Houston and Nederland Terminal.

And I think, likewise, we’re going to see with Crestwood a lot of the same synergies. So, we’re pretty excited about our ability to buy these assets at the values we’re able to buy at. They’re great standalone companies and assets. And then, once we blend them in, like your question with Lotus, we’re finding significant synergies that we didn’t recognize as we were pursuing these acquisitions.

Neel Mitra: Got it. And then, my second question, you’ve had a lot of success building Permian to Mexico natural gas pipelines and it seems like the utilizations on Comanche Trail and Trans-Pecos are picking up and you have a competitor looking to build a pipeline to the border as well. With some of the West Coast LNG demand and increased industrial demand in West Mexico, are you seeing any appetite for pipeline expansions down to the border or possibly participating in a new project to move gas to Mexico?

Mackie McCrea: This is Mackie again. No, we’re not pursuing anything right now. As you mentioned, we are ramping up our two pipelines out in West Texas that deliver to Mexico. We still have quite a bit of capacity to fill up to fully utilize those pipelines. We have some pipelines in South Texas that we deliver either directly into Mexico or into other larger diameter pipelines, but no, we don’t have anything on the drawing board. Yes, we are aware of some proposed pipelines out of the WAHA area and heading west, but we aren’t involved in any of those projects at this time.

Neel Mitra: Okay, great. Thank you very much.

Operator: Thank you. Final question will come from Gabe Moreen of Mizuho. Please go ahead.

Gabe Moreen: As sort of the uplift in pricing on your interstate gas pipelines and storage, it seems like if I’m reading it right, some of that uplift may be accelerating. Can you just talk about sort of how you feel your position, rate case outcomes aside, and to what extent that’s still going to be winded to your backs going forward into 2024?