Jeremy Tonet: And maybe just kind of circling back to the point at the top there, you talked about as it relates to capital allocation, red bar, blue bar, I think there might have been some purple bar points in the past. But just wondering as you think about, I guess, the potential bolt-ons, would you look to retain more for the to improve the balance sheet if there are future opportunities that materialize or is leverage low enough at this point or is buybacks really kind of the focus for that?
Mike Hennigan: Jeremy, we always say it’s a good problem to have. We think we’re in a great position on financial flexibility. Like you mentioned, the balance sheet is in good shape. We’re generating excess cash beyond distributions and capital at this point. We also feel like we have different opportunities for us and you’re right, thanks for that reference. Sometimes the cash flows are hard to debate and we sometimes call them purple. But in general, I’m hoping the takeaway is we’re going to generate enough cash to put ourselves in a good financial flexibility position. That’s where it all starts. And then we debate the color of the cash flows and how we think we can get the most shareholder value. We’ve been leaning more towards distribution because it’s blue and as you know, the way we run the business is to generate cash flows that we think will be there long-term.
So that’s why they’re mostly blue. I know people have been asking a little bit about our buyback strategy and hopefully when I answered John’s question, I gave you a little bit more color around that. So we’ll have that flexibility. We have the financial flexibility for where we are. We’re going to continue to look at our organic growth. We’ll evaluate some organic as it comes along. And at the end of the day, all we’re trying to do day in and day out is create more value for our unitholders.
Operator: Our next question comes from Theresa Chen with Barclays.
Theresa Chen: Going back to Dave’s comments about the expansion in the Permian NGL platform. In relation to the Texas City frac and the storage project, can you just help us think about how a long haul pipeline productivity solution could come about, whether it would be independent or an extension of the, I believe 42% UJI that, BANGL has an Epic NGL? And then also downstream from that, is there space in Texas City on MPC’s Galveston Bay docks for LPG export opportunities if the Tech City frac and storage projects do come to fruition? And would it be the parent that would be marketing, those volumes and taking the commodities risk? Just help think about how that value chain could play out?
Mike Hennigan: I’ll let Dave give a little more detail there. But you kind of laid out a lot of optionality that we have and we’re going continue to evaluate all the different options. But let me let Dave give a little more color.
Dave Heppner: Therese, I think Mike said it extremely well. There’s a couple of key things to think about as we look at these large projects, multiyear value chain build out projects. One is how do we leverage the existing assets we have either in the ground or in the vicinity, number 1. Number 2, how do we leverage and incorporate existing partnerships and JVs we have such as BANGL? And then third is how do we leverage our parent company, MPC, back to the Galveston Bay. And so as we look at all those and that’s and we think through the scenarios and the options of both near-term build out and commercialization, but long-term value creation, right now, we’re going through multiple scenarios. And as you can imagine, we want to make sure we look through all those, both from a financial return perspective, near-term, a commerciality and flexibility and then also a long-term growth platform.
So I think as you stated, there’s a lot of pieces to that puzzle and we’re in the, all the work of doing that right now. But we feel good about our options and our flexibility, and now we’re just trying to determine how we bring it to realization. Hopefully, it helps a little bit.
Theresa Chen: And maybe turning to the residue side, can you give us an update on the in service timeline for Matterhorn? And given your partnership with Enbridge and WhiteWater combining with our ADCC with Rio Bravo. Would you be evaluating participation in another bullet residue pipe that is evidently necessary out of the basin come couple of years?
Dave Heppner: Yes. So I’ll touch on Matterhorn and then I’ll turn it over to Shawn. He can give a little more update. First of all, I think Matterhorn is planning to come on 3Q of this year. So I’ll start with that. So as you think about clearing natural gas out of the Permian, you can think of Whistler, Whistler expansion, Matterhorn, you can think of ADCC, not that we’re participating today, but you have Blackfin out there, and then you have Rio Bravo. So as you go forward, this is our view is that you’ve got 2 sides of the equation. You’ve got the pull coming from these LNG facilities down in the Gulf Coast, which are majority of them backstopped by 20-year take or pays, which is a nice long-term pull. And then you’ve got the growth platform that Mike touched on earlier out of the Permian.
And you really look at those by the 2030 timeframe, there’s substantial growth profile. So to answer your question, whether it be continued expansions that we’ve done very similar to Whistler and Matterhorn or is it new pipes? I think you can maybe read the tealeaves that there is incremental capacity needed clearly with barrels out of the Permian to the Gulf Coast.
Mike Hennigan: I’ll just add. The main drive between what Dave has mentioned as far as us doing these partnerships, et cetera, is to get to the very point that you just made. There’s going to be more takeaway out of the basin. We want to participate in that, whether it’s another residue pipe or not, and we’re trying to position ourselves to be part of that.
Operator: Our next question will come from Keith Stanley with Wolfe Research.
Keith Stanley: First, just wanted to ask, can you talk to the conversion of some of the preferreds? It looks like it was a lot in Q1. And I just want to make sure, did that factor at all into the decision to buyback stock in Q1 since you had new stock coming into the market?
Greg Floerke: You’re correct. You did see some significant conversions happen during the quarter. I think with the investor base, in those units, they have that ability to do that, at their leisure quarterly. It did not have any impact on our unit buyback program. That kind of that capital allocation strategy is unchanged as Mike had hit on.
