EnLink Midstream, LLC

Hello, and welcome to the NMIC Midstream 2Q 2023 Earnings Conference Call and Webcast. If anyone should require operator assistance, please press star zero on your telephone keypad. A question and answer session will follow the formal presentation. You may press star one at any time to be placed in the question queue. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Brian Brungardt, Director of Investor Relations. Please go ahead, Brian.

Thank you, and good morning, everyone. Welcome to NLINC's second quarter of 2023 earnings call. Participating on the call today are Jesse Aranivas, Chief Executive Officer, and Ben Lam, Executive Vice President and Chief Financial Officer. Walter Pinto, Executive Vice President and Chief Operating Officer, is also in the room to answer any questions during the Q&A session. We issued our earnings release and presentation after the markets closed yesterday, and those materials are on our website. A replay of today's call will also be made available on our website at investors.inlink.com. Today's discussion will include forward-looking statements, including expectations and predictions within the meaning of the federal securities laws. The forward-looking statements speak only as of the date of this call, and we undertake no obligation to update or revise. Actual results may differ materially from our projections, and a discussion of factors that could cause actual results to differ can be found in our press release presentation and SEC files. This call also includes discussions pertaining to certain non-GAAP financial measures. Definitions of these measures, as well as reconciliation of comparable GAAP measures, are available in our press release and the appendix of our presentation. We encourage you to review the cautionary statements and other disclosures made in our press release and our SEC filings, including those under the heading Risk Factors. We'll start today's call with a set of brief prepared remarks by Jesse and Ben, and then leave the remainder of the call open for questions and answers. With that, I would now like to turn the call over to Jesse Aranivas.

Thank you, Brian, and good morning, everyone. Thank you for joining us today to discuss our second quarter 2023 results. We're in an exciting time at InLink as we are on pace to report another record year of adjusted EBITDA and have a unique position to grow through the ongoing energy transformation. We consider this an energy transformation, not a transition, as we believe the world's energy mix will continue to include hydrocarbons while adding cleaner synthetic sources like hydrogen, as well as renewables. Enlink has what it takes to achieve sustainable growth through this transformation because of the combined strength of our traditional midstream business with our new carbon transportation business. This enables us to provide energy products critical to modern society and America's energy independence, while offering solutions to reduce greenhouse gas emissions across the industries that utilize these products. This is the future of midstream. We are seeing robust demand for traditional midstream service today as exhibited by our strong second quarter results. For the quarter, we generated $334 million of adjusted EBITDA, which represents 11% growth over the prior year. That's despite volatility in the commodity prices. These strong results place Enlink on pace today. to achieve the midpoint of our 2023 adjusted EBITDA guidance of just over $1.35 billion. NLINK is well positioned for sustainable growth through the energy transformation. We expect the transformation to include a continued and growing need for traditional energy sources and midstream services. For example, solar and wind power represent the majority of new investments in power generation. However, Natural gas fire generation continues to be the largest component of the fuel mix during the warm winter summer months in Texas, in which ERCOT recently experienced a record power demand. According to the EIA's latest annual report, the agency projects natural gas generating capacity will increase, depending on the scenario, between 20% and 87% through 2050. This outlook includes significant expansion of renewable sources that could see solar increase by as much as over 1,000% by 2050. Said simply, the U.S. will need additional energy from all sources to power our development for decades to come. The EIA recently highlighted that natural gas demand increased 43% or over 34 billion cubic foot per day over the last 10 years. Demand in the Gulf states of Louisiana and Texas grew by 110 percent, or 16 billion cubic feet a day, with the largest driver being LNG export activity. This robust demand for natural gas is expected to continue to grow as another wave of export LNG projects comes online through 2030. Along the Gulf Coast alone, there's approximately 12 billion cubic feet a day in operation today, with nearly 9 billion cubic feet per day of capacity under construction and an incremental 15 billion cubic feet per day approved but pre-FID. Our assets are well positioned to benefit from the energy transformation. We have three large natural gas oriented GNP systems that are well positioned to meet the needs of our diverse customer base. In addition, we have an extensive network of natural gas pipelines in Louisiana that can meet the increased end-user demand through attractive expansion projects. As part of the energy transformation, the energy sector has an opportunity to help decarbonize other industries. We view this as a significant growth prospect for Henley, given our unique position, leveraging our existing pipeline network in Louisiana to provide CO2 transportation. Last year, we executed the first-of-its-kind definitive CO2 transportation agreement with ExxonMobil. This is a 25-year ship-or-pay agreement with attractive project returns that, at a minimum, compete with traditional midstream projects. We are excited about ExxonMobil's continued commercial success as they recently signed up a second industrial CO2 emitter, Nucor, along the Mississippi River industrial corridor. Combined with the initial customer, CF Industries, they have signed up approximately 2.8 million metric tons per year of CO2 emissions that are being emitted into the atmosphere today. We look forward to continue working with ExxonMobil and others to help make a meaningful impact in reducing industrial CO2 emissions while generating attractive economic returns. To sum it up, InLink offers investors a compelling opportunity. We are seeing another record year of adjusted EBITDA driven by solid demand for natural gas and NGO products. This attractive growth and strong cash flow generation is driving attractive valuations that compare favorably in many instances to the top quartile of the S&P 500 constituents. In addition, InLink offers investors a unique opportunity to participate in the energy transformation due to our CO2 transportation business. With that, I'll turn it over to Ben to provide an overview of our operations and our financial results.