MPLX LP (NYSE:MPLX) Q2 2023 Earnings Call Transcript August 1, 2023

MPLX LP misses on earnings expectations. Reported EPS is $0.83 EPS, expectations were $0.89.

Operator: Welcome to the MPLX Second Quarter 2023 Earnings Call. My name is Sheila, and I will be your operator for today’s call. [Operator Instructions].Please note that this conference is being recorded. I will now turn the call over to Kristina Kazarian. Kristina, you may begin.

Kristina Kazarian: Good morning, and welcome to the MPLX Second Quarter 2023 Earnings Conference Call. The slides that accompany this call can be found on our website at mplx.com under the Investor tab. Joining me on the call today are Mike Hennigan, Chairman and CEO; John Quaid, CFO; and other members of the executive team. We invite you to read the safe harbor statements and non-GAAP disclaimer on Slide 2. It’s a reminder that we’ll be making forward-looking statements during the call and during the question-and-answer session that follows. Actual results may differ materially from what we expect today. Factors that could cause actual results to differ are included there as well as in our filings with the SEC. With that, I’ll turn the call over to Mike.

Michael Hennigan: Thanks, Kristina. Good morning and thank you for joining our call. Earlier today, we reported second quarter results. Our business delivered adjusted EBITDA of $1.5 billion, an increase of 5% year-over-year and a new quarterly record. Distributable cash flow of nearly $1.3 billion was up 6% versus the second quarter of last year and was also a new record. We continue to see strength in our base business and contributions from our growth capital investments driving DCF for the first half of the year up 6% as compared to last year. We also remain focussed on return of capital. We continue to expect our distribution to be the primary return of capital tool supplemented with opportunistic repurchases. Based on the strength of the business and our balance sheet we are well positioned to continue to optimize return of capital.

While natural gas and NGL prices are lower than last year, our long-term production outlook for our G&P producer customers in our key basins remains largely unchanged. In our largest base in the Marcellus the cost of develop remains at the low end of the cost curve and still below current commodity prices and we expect to see maintenance level drilling activity continue. The recent U.S. Supreme Court’s decision to allow the MVP pipeline construction to continue in support of for natural gas development in the region. In the Permian, our production outlook is unchanged as crude prices remain strong and prices for associated gas do not significantly impact producer activity. Our integrated footprints in these resilient basins position the partnership with a steady source of earnings and growth opportunities.

This quarter, we advanced our natural gas and NGL value chain strategies with the announcement of new projects in the Permian. We remain confident in our ability to grow and are focused on executing the strategic priorities of strict capital discipline, fostering a low cost culture and optimizing our asset portfolio all of which are foundational to the continued growth of MPLXs cash flows. We continue to enhance our ESG commitment and disclosures with the publication of both our annual sustainability and prospectus on climate related scenario reports. We continue to make progress on our 2030 target to reduce mid-stream methane emission intensity 75% from 2016 levels. To our focus on methane program, we have implemented measures that have achieved approximately 10,000 tons per year of methane emissions reduction.

We also continue progressing our biodiversity target to apply sustainable landscapes to 10,000 acres of pipeline rightaways by the end of 2025. Through last year, we’ve achieved over 10% of this target. MPLX is also participating in alliances focussed on CCUS and hydrogen hubs. We will continue to evaluate low carbon opportunities where we can leverage technologies that are complimentary with our asset footprint and expertise. We continue to challenge ourselves to lead in sustainable energy by meeting the needs of today while investing in an energy diverse future that creates share value for all our stakeholders. Now let me turn the call over to John to discuss our growth as well as our operational and financial results for the quarter.

John Quaid: Thanks Mike. As Mike referenced in his remarks, MPLX has a strong history of successfully executing the strategic priorities of strict capital discipline, fostering a low cost culture and optimizing our asset portfolio, all of which are foundational to the growth of MPLXs cash flows. And through the first half of this year, distributable cash flow has grown 6% year-over-year. Looking back over the last three years as you can see on slide 5, our growth is not linear but instead tends the common stair steps as we develop and bring projects online. For 2023, our capital program outlook remains at $950 million, including $800 million of growth capital and $150 million of maintenance capital. In the L&S segment, our joint venture projects in the Permian are progressing.

We see strong demand for the Whistler natural gas pipeline and its expansion to 2.5 billion cubic feet per day, which remains on schedule for completion in September. We’re also planning to expand the BANGL joint venture pipeline to 200,000 barrels per day as we look to grow our participation in the NGL value chain. The capital-efficient expansion of this long-haul pipeline is supported by existing and growing demand for NGL takeaway from the Permian’s Delaware and Midland basins to the fractionation hub in Sweeney, Texas. We expect the expansion to be completed in the first half of 2025. On the Wink-to-Webster crude pipeline, we expect volumes to ramp this year and over the next two years as the pipeline continues to place segments in service.

And as a reminder, these three projects, Whistler, BANGL, and Wink-to-Webster, are largely financed at the JV level, and therefore, our portion of the debt-financed capital spending is not reflected in our capital outlook. In the G&P segment, we remain focused on growth investments in the Permian and Marcellus basins in response to producer demand. In the Permian’s Delaware basin, we continue to bring online new gas processing plants to meet increasing customer demand while targeting strong returns with strict capital discipline. Our Tornado II processing plant began service at the end of last year, and we are advancing construction of Preakness II, which we expect to be online in the first half of 2024. We recently approved plans to build our seventh gas processing plant in the basin, Secretariat, which is expected online in the second half of 2025.

This will bring our total processing capacity in the Delaware basin up to 1.4 bcf per day. In the Marcellus basin, we are also progressing construction of the Harmon Creek II gas processing plant, which we expect will come online in the first half of 2024. Slide 6 outlines the second quarter operational and financial performance highlights for our logistics and storage segment. The L&S segment reported its second consecutive $1 billion adjusted EBITDA quarter. L&S segment adjusted EBITDA increased $56 million when compared to second quarter 2022, primarily driven by higher rates and growth in total throughputs. Crude pipeline volumes were up 4% and represent a new quarterly record for the partnership as we grew crudal throughputs through expansion and debottlenecking activities.

Product pipeline volumes were down 6%, driven by more favorable market dynamics in the second quarter of last year and effects from Marathon’s refinery turnarounds. Terminal volumes were up 3% due to effects associated with Marathon’s refinery turnarounds in both quarters. Moving to our Gathering And Processing Segment on slide 7, G&P segment adjusted EBITDA increased $18 million compared to the second quarter of 2022, as the benefits of higher volumes and throughput fees were offset by lower NGL prices. While our G&P segment is largely a fee-based business, we do have some direct sensitivity to natural gas liquids prices. For the quarter, NGL prices averaged $0.63 per gallon as compared to $1.18 in the second quarter of 2022, resulting in a roughly $50 million headwind for the results.

Total Gathering volumes were up 9% year-over-year due to increased production in the Utica and the Permian. Processing volumes were up 6% year-over-year, primarily from higher volumes in the Marcellus and Permian, driven by increased customer demand and our investment in Permian processing capacity. Focusing in on the Marcellus, by far our largest basin of G&P operations, we saw year-over-year volume increases of 3% for Gathering and 5% for Processing, driven by increased customer demand. Fractionation volumes grew 10%, primarily due to recent increases to our fractionation capacity to meet in-basin demand for ethane. Our capital allocation framework remains unchanged, and year-to-date we have returned $1.6 billion through distributions to our unit holders.

We continue to expect our distribution to be our primary return-of-capital tool, and opportunistic repurchases of units held by the public also remain a tool to supplement capital returns. The growth of our cash flows and strong balance sheet, including a quarter-end cash balance of over $750 million, provides us with financial flexibility to continue to optimize capital allocation and return of capital. Now let me hand it back to Mike for some final thoughts.

Michael Hennigan: Thanks, John. In closing, MPLX’s growth strategy continues to support our commitment to return capital to unit holders. MPLX remains a strategic part of MPC’s portfolio, supported by over $2 billion MPC expects to receive annually from MPLX distributions. And as MPLX pursues its growth opportunities, we expect the value of this strategic relationship will continue to be enhanced. We continue to be confident in our growth opportunities and ability to generate strong cash flows. By advancing our high-return growth projects anchored in the Marcellus and Permian basins, along with our focus on cost and portfolio optimization, we expect to grow our cash flows, allowing us to continue to reinvest in the business and return capital to unit holders. Now let me turn the call back over to Kristina.

Kristina Kazarian: Thanks Mike. As we open the call for questions, we ask that you limit yourself to one question plus a follow-up. We may re-prompt for additional questions as time permits. With that, we will now open the call to questions. Sheila?

Q&A Session

Operator: Thank you. [Operator Instructions] Our first question comes from Brian Reynolds with UBS. Your line is open.

Brian Reynolds: Hi, good morning, everyone. Fundamentals out of the Permian continue to be really strong. And I was just curious if you could provide a little bit more detail on the BANGL pipeline expansion. Is this really driven by growth on MPLX’s dedicated acreage? Curious about further potential expansion or extension opportunities on that BANGL pipeline in the future? Thanks.

Michael Hennigan: Yes, good morning, Brian. I’ll start off and I’ll let Dave kick in there. We’ve been trying to tell the market that our main basins, Marcellus, Permian, is where we’re concentrating a lot of our capital efforts. The announcement today of continuing the ad processing plan and as your question around BANGL just further solidifies where we’ve been putting a lot of our emphasis. So let me let Dave give you a little bit more color on BANGL specifically.

David Heppner: Hey, Brian. So let me start off just by a little background. Of course, we’re a 25% owner in existing a BANGL system and that was brought on service in Q4 2021. And we’ve been very happy with that capital efficient project. So start that as a foundation. And as we look at the expansion, it’s really anchored by what you touched on, our growth and also just the overall Permian growth. And so our expansion of BANGL 200 a day is kind of a two-prong. It’s the installation of additional pumping capacity on the existing main line and then also construction of a new pipe on the southern section. So those together is what we’re referring to as the expansion project. And as John noted, that project currently is projected to be complete the first half of 2025.

Looking beyond 2025, should the supply and demand dynamics remain strong in the Permian, the BANGL Partners are in a position, including ourselves, to consider additional expansions of the pipe. And the last comment I want to make is just to reinforce a note that John stated, is that we currently anticipate financing this BANGL Project at that level through the JV and therefore that will not reflect in our capital outlook going forward. So just a couple of points there. Thanks.

Brian Reynolds: Great. Appreciate all that color. And then maybe to pivot to capital allocation and I appreciate the color in the prepared remarks, but just kind of curious, just given that we’re approaching the 3Q distribution potential rate that we’ve seen in prior years. And given Emcolox’s [Ph] preference for the BP raise over buybacks from the last few calls. Curious if you could just perhaps talk about an optimized capital structure at MPLX just given that leverage is starting to trend below 3.5.

John Quaid: Hey Morning Brian. It’s John. Thanks for the question. Yes, I mean, I think as we’ve said, we’ve been focused on the distribution as our primary returning capital tool. We’ll look at that in the second half of the year, like we did last November. Certainly, we’re coming from a position of strength, right? The strong balance sheet leveraged around three and a half distribution coverage 1.7 and $750 million a cash on the balance sheet really gives us that flexibility to work to optimize capital return. Again, focused on the distribution as that tool, as we think about where we want leveraged comfortable with where we are. We did a 10% increase last year and our coverage is actually going up. So I think in a strong position and maybe one other thing too, I mean, certainly we haven’t done any buybacks to the last two quarters, but it does still remain a tool for us.

Again, we try and be trying to optimize in that area as well and being opportunistic with those repurchases, but as I’m sure you and others have seen the units, the volunteer and the units is almost moved to the nothing, which is maybe removed some of those opportunities for us recently, but still remains a tool for us. And Mike, I don’t know if you wanted to add.

Michael Hennigan: No, okay, that answers your question, Brian.

Brian Reynolds: That did appreciate all the color and enjoy the rest of your morning. Thanks.

Operator: Thank you. Next, we’ll hear from Keith Stanley with Wolfe Research. You may proceed.

Keith Stanley: Hi, good morning. Thank you. If I could just follow on the last question on capital return to start. Obviously, you haven’t done the buybacks in the first after the year, you did a lot less you did 500 million. How are you thinking about total capital return and prospects for growing total return of capital being at holders just because buybacks are going down? Should we think distribution growth can kind of offset that and make up for it? So you have growing total return of capital, just overall thoughts on that value proposition.

Michael Hennigan: Hey, Keith, it’s Mike. Let me start and I’ll pick up where John left off in the last answer and trying to give you a little bit more color. So, I color code our cash flows and I use red and blue as the examples. Red cash flows are cash flows that we don’t count on at a continuing basis, but they’re source of equity. Blue cash flows are those that we think that are there continually on-going in time. What we typically think about is, as a general rule, not that you can’t apply both, but red cash flows are buybacks and blue cash flows support the distribution. We can use blue for buybacks, but just as a general rule, think about it that way. As John mentioned, we have decent amount of cash on the balance sheet, mainly because in the last two quarters, our volatility has changed quite a bit.

I don’t know that we have a good reason for that, but prior to that, we were buying back using red bar cash flows at a significantly lower number than where we trade on average. In other words, during the quarter, we get these dips. The capital markets give these dips that we hit opportunistically. So if you look back in time, we’ve bought over $1 billion of buybacks and we’ve averaged less than $30. Mainly because we’ve gotten these dips to volatility of the stock trades in such a way that we get these dips that we’ve acted on. Now, in the last couple quarters, we haven’t had those dips the way we’ve seen in the past. Again, I don’t know exactly why the volatility has come out, but as a result, that cash is still sitting on the balance sheet.

So, we still have two sets of cash flows sitting on the balance sheet. Some that’s still targeted for buybacks, and some that’s targeted for on-going growth in the distribution. As a matter of course, the main thing that we concentrate on is generating cash. Obviously, that’s the name of the game here. And I’ve said on a couple other calls, they were trying to do mid-single digit. And if you look at our slides, it’ll show you, there’s a good chart in there that shows your distributable cash flow over last couple years. As average, the little on their 7% so the main focus for us is, let’s make sure we’re growing the partnership, growing those cash flows, identifying the type of cash flows we see, and then looking to implement a program that supports distribution growth, long-term, which we’ve said is our primary tool, mainly because we’re mainly growing blue cash flows.

When we get the red cash flows, we look at those to supplement our program and be a little bit more opportunistic. Now, some investors have said, hey why don’t you use blue for buybacks? That’s still a tool, as well as John used the analogy, these are all on our tool belt. And we’ll continue to think about those. So, where we stand right today is I don’t want people to look at our results and read into it that we’re not thinking about buybacks. We are, but we’ve just been surprised at how the volatility has changed quite a bit in the last couple of quarters. So, we won’t really think that a little bit going forward. In the meantime, as John mentioned we still have that cash on the balance sheet. We are looking in, we’ll talk to you next quarter about where we’re going to go with distribution growth.

But we’re in a good position, mainly driven by the fact that our concentration is growing the cash flows and then trying to optimize for as much value as we can. I hope that helps.

Keith Stanley: Yes, that is helpful time the cash balance to the, to the buyback activity. Second, on really the question, just curious that the company historically hasn’t been a big acquirer of assets, but it does seem like we’ve seen asset prices come down in the market recently. And obviously, you have a lot of financial flexibility. It’s just any updated thoughts on how you’re thinking about the potential ability to play a role in a minute.

Michael Hennigan: Yes Keith, it’s something. Again, it’s on the tool belt. It’s something that Dave and the team continually look at. We measured against our own internal organic growth projects. And very often, we find that we have a list of projects that we just think will get us a higher return compared to some of the opportunities out there. But we’re looking; we’re always active in trying to manage that process, whether it’s inbound or something that we’re thinking about. But we’re comparing it against what we have internally. I’ve said a couple times recently that some of these smaller, maybe not flashy projects, they generate significantly higher returns. We’re pretty large size MLP and to grow, 6% to 7% DCF CAGR requires us to get good returns on the project.

So I use the term strict capital discipline. We try to as best we can, look at all of our opportunities. And then put the capital to work to get us the best return. So it’s something that’s out there. We haven’t seen something that we would like. I will tell you we’ve been active in some processes, but we’re also kind of discipline as to what number we’re willing to do and what number we’re willing to walk away from. So I think that discipline serves us well and keeps us in a good position to grow the partnership with good returns.

Keith Stanley: Thank you.

Michael Hennigan: Now you’re welcome, Keith.

Operator: Our next question comes from Jeremy Tonet with JPMorgan. Your line is open.

Jeremy Tonet: Hi, good morning.

Michael Hennigan: Good morning, Jeremy.

Jeremy Tonet: Just wanted to pick up on last comment you put out there at the 67% DCF CAGR, is that something that you see the business being able to achieve over some sustained period of time realizing that’s not a guidance number, but just trying to dig into that comment a little bit more.

Michael Hennigan: Jeremy, I’ve said it a couple of times and thank you for saying it’s not meant to be guidance. It’s just meant to be what we see as far as our capital spend that we think is appropriate for us, the size of our, current EBITDA and DCF, that mid-single-digit growth, kind of fits what I think is our financial model. So as we sit down as a team and talk about our plans for next year and next three years and the next five years, I kind of think about where we’re going to be as far as growing our cash flows, etcetera, etcetera. So it’s not meant to be guidance and I said that a couple of calls ago, but I just kind of point to, like I said, if you look at our slide, and John mentioned this, our business can be stair-steppy as opposed to continuous because you bring a plan on here or there or start a pipeline up here or there.

So if you actually look at our slide, it’ll show you that we had 6%, then we had about 10%, then we had about 4% and if you look over the time frame, the CAGR was a little under 7%. So year-to-date this year, we’re about 6% DCF growth and that’s kind of for the size we are for the capital that I think we want to execute, it kind of puts me in that realm. And that’s why I think we’ve been showing, hopefully the market’s been seeing, very steady cash flows, but more importantly, growing cash flows. There was some concern if you go back a couple years with COVID on the stability of cash flows and I think we’ve shown that even through 2020 but more importantly I hope the market is picking up that we’re being really thoughtful as to our capital investments and we’re growing the partnership and then we get to the topic that keeps just recently asked after growing the cash which is the priority then then optimizing how do we how do we invest and how do we return.

So I continually say these businesses are both a return on and a return of capital business and we’re trying to concentrate on doing well in both areas.

Jeremy Tonet: Got it. That’s very helpful there. And just wanted to pick up on another company set there with regards to CapEx deployment just wondering any thoughts you might be able to share with regards to what type of capacity an annual basis you see MPLX having to deploy growth capital. And then on the other side of the gas given the assets as they sit right now what type of opportunity set do you see that does you see it matching there or is the interest and kind of expanding in other platforms to create new growth initiatives.

Michael Hennigan: Yes Jeremy it’s a good question and in our capital allocation framework we clearly identify return on to be a higher priority than return of. We are looking to grow the cash flows and we are looking to invest. Right now we’ve been kind of in a pattern such that we’re generating five billion of distributable cash flow but we’re investing capital such that we have about $1 billion of free cash flow beyond that. And that’s that’s served as well, but to your point it’s not limiting us if we see more investment that we like. We’re happy to do that and that’s countered by this concept of being strict on capital discipline making sure we get good returns. I think it’s really important in this space to show the market that when we invest capital that we’re going to get good returns on it.

And if we continue that track record, then I think people will support the equity. In the short-term, that’s about where we’ve ended up, but to the question that was asked earlier we are open and we constantly are debating what’s the right level and what are the right projects and where do we think we should deploy the money that’s owned by the owners. And to the extent that we feel good about it we’ve ended up with this roughly about $1 billion of capital investment roughly and that’s left us with about $1 billion of free cash flow. So we’ve kind of been in that mode recently. We’re comfortable with it, but we also have flexibility around it as well if that makes sense to you.

Jeremy Tonet: Got it. That is very helpful. Thank you for that.

Michael Hennigan: You’re welcome Jeremy.

Operator: Thank you. [Operator Instructions] Our next question will come from Theresa Chen with Barclays. Your line is open.

Theresa Chen: Morning. I’d like to touch on John’s comment earlier about the level of distribution increase. So from a backward looking perspective John it sounds like the 10% last year was covered still enough with maybe too low and as we think about the third quarter this year and beyond. Especially arguably as we have more and more blue cash flow flows with online projects based on fee based contracts and visible volume growth should we think about that 10% or the floor.

John Quaid: That’s a definition of a champagne problem Theresa, but I I’m not, thanks for the question but, I don’t know if I’d think about it as a floor again. We try and be cognizant of where we are again Mike talks about red and blue. We think about that blue, we think about the capital we want to put the work. We can look at that and say, how do we kind of fiddle that into kind of a self-funding model even though hey if we’ve got the right project we could go and finance it, but certainly where the balance is now, it’s not really a question. So I think we’re trying to be prudent around the increase in how we think about the percentage certainly that percentage last year versus our peers was very different. Again some peers have cut and they’re kind of — getting their distributions back to where they were.

We did, we haven’t cut our distribution. So I think about it more around the framework of that blue bar cash we have. How do we almost the glide pass to our ultimate growth rate of where the partnerships going to be because to some degree what we’ve done here is. We managed through COVID, continue to grow the partnership. We were driving blue bar cash flows and essentially drove our coverage up. So now we’re thinking about, are we’re comfortable with the business confidence in those cash flows how do we work those cash flows into the distribution, and ultimately overtime, kind of align that with the growth rate of the of the partnership. So, I don’t know that I would say it’s a floor, but certainly a marker for what we did last year hopefully that that helps a little.

Theresa Chen: Thank you. And on the topic of low carbon technology would you provide us some color on how you’re thinking about your potential participation and what are the pathways and really the likelihood of commercialization for hydrogen hubs is in — within your footprint?

David Heppner: Yes, Theresa this is Dave. Only touch on that for you, so our cells MPLX along the MPC, we’ve been we are involved right now on three of the hydrogen hubs out there. Three of the 33 that have made it to the final, are submittal for funding phase. So and those projects are unique in each of their own as far as level of level investment, so those are you know in the final submittment phase. We anticipate getting final response from the deal we at the end of this year. And I think I want to go back to the comments that that both Mike and John touched on. So while we’re involved in these a lot of it’s dependent on the funding but it’s all back to strict capital discipline. As we look at emerging energy evolution emerging technologies carbon capture hydrogen.

We’re excited about it, it is part of our strategy going forward but it’s with the backdrop of ensuring that the money we’re investing achieves the rate returns that we’re targeting. So more to come on that, and I think as DOE [Ph] makes the final decisions on their grants and their funding at the end of this year we’ll have some more updates on it.

Michael Hennigan: Hey Theresa, it’s Mike. I just want to add one of the benefits we have of is our footprint and as Dave mentioned we’re active in at least three of those hubs right now so that we can participate in the discussion whether it’s on the Gulf Coast or up in Marcellus or in the Bakken or wherever it is our footprint allows us to have these opportunities. And to the question I was asked earlier is one of the advantages of having this wide footprint and the connectivity that we have is our organic choices are strong which gives us the ability to forgo having to do something else because our plate has enough activity on it that gives us a good enough return. So I think one of the strengths we have is the breadth of our portfolio and we’re always trying to figure out how to optimize that and where we think we can benefit by being stronger.

As you heard today investing some more capital in the Permian we’ve been very open about that scenario of concentration for us and we put a lot of effort there. So continuing to grow our footprint in that area should not be a surprise to anybody. But to your question on low carbon, we are looking a lot at different things as Dave mentioned but we are coming back to, it’s got a show return that makes sense to us if we’re going to deploy capital. So hopefully that helps as well.

Theresa Chen: It does. Thank you.

Michael Hennigan: You’re welcome Theresa.

Operator: And our last question will come from Neal Dingmann with Truist. Your line is open.

Neal Dingmann: Good morning guys thanks for getting me in. My question first is just on potential non-core divestitures, I think. Simply you all mentioned the past how you’re looking to potentially shed some of the non-core terminals or G&P utility lines and just wondering what’s the magnitude of potential sales we still could expect going forward.

John Quaid: Yes, hey Neil it’s John thanks for the question. Yes we’ve had some assets here and there smaller ones and probably the both the L&S and G&P side of the shop that we’ve been able to find other owners for I think when — this comment and we continue to look at that right around all of our assets if they don’t make sense in our hands did they make sense and others. I would say the large majority of those assets on the L&S side we know our customer MPC and we know how critical those are to their operations on the G&P side. We talk from time to time about some of the basins we’re in, which are much smaller than our presence say in the Marcellus, which is really the largest part of our G&P operations. Look those are generating free cash flow but we’re maybe not looking to significantly invest in those, so if there’s someone that maybe that fits better in their portfolio we would, we would listen.

Again, there’s been a little bit of a gap between the bid and the asset there, and given they’re not kind of a burning platform for us, we haven’t had significant urgency to do something there, but something we’ll always look at.

Neal Dingmann: Yes, that makes sense. And then my, just my last one is on the crude pipeline growth. You all mentioned volumes, I think you said are up 4% part due to the bottleneck and I’m just wondering, can this growth continue as maybe there’s future opportunities you’re looking at?

Shawn Lyon: Hey, Neal, this is Shawn. We’re pleased where we are right now with the crude pipeline’s growth, and it’s really driven by the high refinery utilization, but we continue to look for organic projects that unlock, debottlenecking, increased capacity. So we’ll continue doing that, as Mike and John said, as we look forward and future capital outlays again really to match the refineries and the needs of our customers that are connected to our crude pipeline. So again, we’re pleased at where we’re at, and we’ll continue looking for those organic growth opportunities.

Neal Dingmann: Great. Thank you all for the time.

Shawn Lyon: You’re welcome.

Kristina Kazarian: All right, Sheila, is there anyone else in the queue?

Operator: We are showing no further questions at this time.

Kristina Kazarian: Sounds great. Thank you so much for joining us today. And thank you for your interest in MPLX. Should you have additional questions or would you like clarification on any of the topics discussed today, members of the Investor Relations Team will be here today to help out and take your calls.

Operator: Thank you. That does conclude today’s conference. Thank you once again for your participation. You may disconnect at this time.