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

Mackie McCrea: Hey Mark, this is Mackie. Let me kind of break it down a little bit. With the Enable assets, some of the things we have been able to do, for example, out in the Panhandle in Western Oklahoma, we’ve been able to actually shut down a couple of smaller plants and move those at much higher margins, saving a lot of operating costs with better returns. So there has been some synergies there. There’s also been synergies on connecting some of the enabled pipelines, for example, North Louisiana to our Carthage facilities, some of their interstate pipelines. And then as far as connecting the dots between Oklahoma and the Gulf Coast, yes, we will be having the vast majority of the liquids that are the tailgate of Enable’s cryo will be delivered to our fractionators when those contracts run out in a couple of years.

Marc Solecitto: Got it. I appreciate the time.

Mackie McCrea: Thank you.

Operator: Our next question comes from John Mackay with Goldman Sachs. Please go ahead.

John Mackay: Hey thanks Tom, I appreciate it. Maybe I just wanted to talk about the Haynesville a little bit. I know you’ve touched on it in a couple of other questions so far. But be curious to hear your view on just what the basin looks like given where gas prices have gone, kind of what you’re thinking for Basin growth overall and what that can mean for maybe your gathering footprint specifically, and maybe for the opportunity to get more contracts at Gulf Run?

Mackie McCrea: Hey, John, this is Mackie again. Yes, I did mention a minute ago. We have three intrastate 42-inch pipes. One 42-inch intrastate multiple other pipes, we connect Carthage to Perryville. We now are connected from the Haynesville down to our trunk plant system in Golden Pass. So we’re so well positioned. The reserves are there. Do we have a strong opinion of where the gas price will go below $2 where they’ll keep drilling? We don’t know, but we do know that these wells come on at $50,000 or $60,000 a day. You don’t need a real high gas price to justify drilling those. We haven’t had any huge indications of slowdown. In fact, we’re adding significant treating capacity in North Louisiana. So we believe that the reserves for there are going to grow and much of that volume is going to hit our system.

John Mackay: All right. That’s helpful. Maybe just a follow-up on the CapEx guide. Talked a little bit about potential NGL export debottlenecking projects. Just it wasn’t clear. Is that in the current growth guide? Or is that something we’d see more in 2024, and then more broadly I’m not trying to pin you down on the 2024 number. But is the 2023 CapEx level kind of a reasonable run rate to think about now that a lot of the bigger projects have rolled off?

Mackie McCrea: I’ll start this and then maybe Tom can follow-up. But yes, our Flex port expansion and our potential expansion up at Marcus Hook, those are not in our guidance numbers. However, as we alluded to on the last call and have been for a while, we will expand, it’s going to happen. You wouldn’t be surprised if we announce something by the next call. we have the volumes to justify it. We’re just trying to make the most prudent decision on do we expand Nederland first, do we expand Marcus Hook first or with some of the successes and the negotiations going on? Do we expand both. So that is a very positive side of our business. We’ve been growing over the last five or six years enormously. We with the world has an insatiable desire for NGLs. We think that’s going to grow for many, many years to come and we believe we’ll play a bigger role than anybody else in the industry on meeting that demand.