Energy Transfer LP (NYSE:ET) Q4 2022 Earnings Call Transcript

Brian Reynolds: Great. Appreciate the feedback. Maybe as my follow-up, I appreciate some of the color on the prepared remarks around Lake Charles LNG just maybe taking a little bit longer than expected. Curious if you could just talk a little bit more about, one, just the equity interest in the projects; two, to spa contracting. It seems like, broadly speaking, it’s very hard to term out LNG in any environment. And then lastly, just any update on the EPC provider. I guess in the greater context, is there just a focus on returns for this project versus, I guess, just pursuing this project just to ultimately bring value to the downstream system? Thanks.

Mackie McCrea: You bet, Brian. This is Mackie again. And you hit the nail on the head, it has taken us longer than we had anticipated. It is extremely competitive out there. The need for natural gas for many years to come is out there. There’s international customers throughout that are looking for supplies, especially reliable, cheaper gas supplies in the U.S., but it’s extremely competitive. And we are disappointed we’re not further along in signing up customers. But even as we speak, we have Tom Mason and his team are actually over there for on a two-week trip meeting with customers, some of which were down the road quite a ways on consummating new deals, which will certainly make public. So we’re working hard on that front.

We’ve got our work cut out for us. We still believe we have the best project for a number of reasons, especially with the ability to feed it from so many different basins. So we’re still very excited about it. On the EPC front, we have received some of our costs in over the next 60 to 90 days, we’re going to fine-tune those. We’re going to put kind of €“ to get a better understanding about any risk and mitigation of those risks. But really, our focus right now is on getting the customers. And we’ve got a great effort on that, and we still remain optimistic that we will get it to FID.

Brian Reynolds: Great. Appreciate the color. I’ll leave it there. Enjoy your evening.

Mackie McCrea: Sure.

Operator: Our next question comes from Michael Blum with Wells Fargo. Please go ahead.

Michael Blum: Thanks. Good afternoon, everyone. So maybe just want to talk about €“ start with capital allocation for 2023. Tom, in your prepared remarks, you seem to indicate that deleveraging, is it continues to be a priority? So I’m wondering if you’re thinking that you want to push towards the lower end of that 4 to 4.5 leverage target? And then how should we think about dividend growth rate in 2023? And then anything on buybacks? Thanks.

Tom Long: Yes, good afternoon Michael. I’ll start with this. When you really look at it, we have been just absolutely just more than pleased, if you will, that we’ve been able to get the distributions back up to about 2022. Really, when you look at a lot of the distribution cuts that were made back that year, we’re very proud with what we’ve been able to achieve. I think we’re probably one of the few that we’re able to get it back up to the precut levels. So when you really look at the allocation, we’re going to €“ you worded it well. We’re going to continue to probably keep a lot of financial flexibility and some dry powder, which means we’ll keep it at the lower end of that 4 to 4.5, so we’ll continue to focus on bringing that down as far as the leverage ratio.