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spk09: Welcome to the MPLX Third Quarter 2024 Earnings Call. My name is Sheila and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. Press star one on your touchtone phone to enter the queue. Please note that this conference is being recorded. I will now turn the call over to Christina Kazarian. Christina, you may begin.
spk06: Good morning and welcome to MPLX's Third Quarter 2024 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 Mary Ann Mannin, President and CEO, Chris Haggadorn, CFO, and other members of the executive team. We invite you to read the Safe Harbor statements and non-GAAP disclaimer on slide two. It's a reminder that we will be making forward-looking statements during the call and during the question and answer session that follows. Actual results may differ materially from what are expected today. Factors that could cause actual results to differ are included there as well as in our filings with the SEC. And with that, I'll turn it over to Mary Ann. Thanks,
spk07: Christina. Good morning. And thank you for joining our call. We have grown MPLX adjusted EBITDA by over 7 percent through the first nine months of the year when compared to last year, which supported the decision to increase the distribution 12.5 percent this quarter. While delivering on our commitment to safely operate our assets, protect the health and safety of our employees, and support the communities in which we operate, in the third quarter, MPLX generated record adjusted EBITDA of $1.7 billion, a 7 percent increase compared to last year's third quarter. Distributable cash flow was $1.4 billion, which supported the return of nearly $950 million to unit holders. We are committed to returning capital to unit holders, primarily through a growing distribution, but also through unit buybacks. And our growing portfolio is expected to support this level of annual distribution increases in the future. Turning to the macro, the United States continues to be a low-cost producer of energy fuels needed across the globe, and the outlook for hydrocarbons remains robust. Grid electrification, on-shoring, near-shoring, and data center development are driving natural gas demand growth forecast through the end of the decade. As demand increases for natural gas-powered electricity, we are well positioned to support the development plans of our producer customers. Globally, demand for transportation fuels is expected to grow, outpacing near-term capacity additions. The U.S. refining industry is expected to remain structurally advantaged over the rest of the world, and we believe Marathon's refining assets are the most competitive in each region in which they operate. Our operations within these refining value chains will provide future growth opportunities. MPLX advanced its strategic growth objectives with capital spending expected at over a billion dollars for the year. Anchored in the Permian and Marcellus basins, our integrated footprint positions the partnership with opportunities to grow our natural gas and NGL assets. Within our gathering and processing businesses, producer activity remains robust across the Marcellus, Utica, and Permian basins. We are bringing new gas processing plants online to meet increasing customer demand in the Permian and Marcellus basins. In the Northeast, drilling efficiencies and longer laterals are allowing producers to hold costs steady while growing production volumes. In the Utica, producers are targeting economically advantaged liquids-rich acreage. Our -to-date processing volumes have increased 50 percent versus the prior year. Producers' interest in working with MPLX remains strong. As new wells are placed online, we are positioned for throughputs to increase in the Utica with minimal capital spending. In the Marcellus, we are building the Harmon Creek 3 processing plant and adding fractionation capacity as we work with our customers to align capacity expansion with their drilling plans. This project further enhances MPLX's position as the largest processor of natural gas and fractionator of NGLs in the Northeast. Once online in the second half of 2026, MPLX is expected to have Northeast processing capacity of 8.1 billion cubic feet per day and fractionation capacity of 800,000 barrels a day. Demonstrating our commitment to operational excellence, our Blue Stone plant recently became the first natural gas facility in the country to achieve the U.S. EPA's energy star. This requires reducing energy intensity by 10 percent within five years, and I am proud to share our team achieved an intensity reduction at Blue Stone of approximately 12 percent in just 24 months. This accomplishment demonstrates our approach to continuous improvements and will reduce operating costs at the processing plant. Moving to the Permian, the Preakness 2 processing plant began operations in July, and we are constructing the Secretariat processing plant. MPLX processing capacity in the Delaware basin in the Permian is expected to be 1.4 BCF per day once Secretariat is online in the second half of 2025. In the L&S segment, strong production in the Permian continues to create opportunities to execute on our -to-water strategy across crude, natural gas, and NGLs. In the third quarter, we close the acquisition of additional interest in the Bangal pipeline, bringing our ownership interest to 45 percent. The expansion of this pipeline to 250,000 barrels a day is expected to be completed in the first quarter of 2025 as we progress development of this strategic asset in our NGL value chain and -to-water strategy. Additionally, progress continues on the Blackcomb and Rio Bravo pipelines, which will connect Permian Basin supply to Gulf Coast domestic and export markets. Both pipelines are anticipated in service in the second half of 2026. The remainder of our capital plan is mostly comprised of smaller, higher-return investments targeted at expansion or de-bottlenecking of existing assets. For example, we have increased the size of our inland marine fleet to enhance product placement flexibility, expanded pipelines to serve regional demand growth, and added storage to optimize crude blending for third parties. We have been able to execute our growth strategy using cash from operations, funding organic opportunities like the Preakness 2, Secretariat, and Harmon Creek 2 and 3 processing plants and inorganic growth opportunities like the Summit Utica acquisition and our acquisition of additional interest in the Bangle Pipeline. We are confident in the potential of these growth opportunities to generate durable cash flow for MPLX, supporting our commitment to return capital to unit holders. Now, let me turn the call over to Chris to discuss our operational and financial results for the quarter.
spk02: Thanks, Mary Ann. Slide 6 outlines the third quarter operational and financial performance highlights for the logistics and storage segment. L&S segment adjusted EBITDA set a new record, increasing $66 million when compared to third quarter 2023. This was driven by higher rates and throughputs, including growth from equity affiliates offset by higher associated operating expenses. Pipeline volumes were up year over year, primarily due to a lower volume impact from refinery maintenance and higher throughputs on the West Coast. Terminal volumes were also up year over year, primarily due to higher throughputs on the West Coast. Moving to our gathering and processing segment highlights on slide 7, the GMP segment also established a new record to adjusted EBITDA, as adjusted EBITDA increased $52 million compared to the third quarter 2023. This was driven by increased volumes, including contributions from recently acquired assets in the Utica and Permian Basins. Total gathered volumes were up 8% year over year, primarily due to increased production in the Marcellus and the addition of dry gas volumes from Utica assets acquired earlier this year. Processing volumes were up 9% year over year, primarily from higher volumes in the Utica, Southwest, and the Marcellus. Our recently placed in-service processing plants, Harmony Creek II and Preakness II, continue to see increased volumes and are expected to reach capacity within the next 12 months. In the Utica, volumes have increased 43% year over year, highlighting the value producers are seeing in the liquids-rich acreage. Total fractionation volumes grew 4% year over year, primarily due to higher volumes processed and ethane recoveries in the Marcellus and Utica. Focusing on the Marcellus, by far our largest basin of GMP operations, we saw year over year volume increases of 11% for gathering and 4% for processing, driven by production growth. Marcellus processing utilization was 92% in the quarter, reflecting the continued ramp of our Harmony Creek II processing plant. Our gathering and processing business continues to grow, and today MPLX handles over 10% of all natural gas produced in the United States, having recently processed a new daily record of over 10 BCF per day. Moving to our third quarter financial highlights on slide 8, total adjusted EBITDA of $1.7 billion, and distributable cash flow of $1.4 billion increased 7% and 5% respectively from the prior year. MPLX returned $873 million in distributions, and $76 million in unit repurchases to its unit holders this quarter. As Mary Ann discussed, based on our confidence in the growth of the business, we increased the distribution by .5% to approximately $3.83 per unit annualized, while maintaining strong distribution coverage of 1.5 times. MPLX entered the quarter with a cash balance of $2.4 billion. As a reminder, MPLX expects to retire $1.65 billion of senior notes, maturing in December 2024 and February 2025. At the end of the quarter, our leverage was 3.4 times. Now let me hand it back to Mary Ann for some final thoughts.
spk07: Thanks, Chris. We have delivered over 6% adjusted EBITDA growth and just under 8% DCF growth on a three-year compound annual basis. We are executing our strategy and advancing growth opportunities across our value chains. In the Permian, we continue to see growth opportunities in our natural gas, NGL, and crude value chains. In the Marcellus and Utica, producer activity remains robust, supporting growth of our gathering, processing, and fractionation footprint. Advancing these high return growth projects position us to grow our cash flow. MPLX is a strategic investment for Marathon. And with the distribution increase, MPC now expects to receive nearly $2.5 billion annually from MPLX, illustrating the strategic value of MPLX within MPC's portfolio. And as both pursue growth opportunities, the value of this strategic relationship is further enhanced. The growth and durability of our cash flows, combined with strong coverage and low leverage, provides MPLX considerable financial flexibility, driving the decision to increase the distribution by .5% this quarter. Our commitment to operational excellence, our growth opportunities, and our financial flexibility position us to support this level of annual distribution increase in the future. Now let me turn the call back over to Christina.
spk06: Thanks, Mary Ann. As we open the call for questions, we ask that you limit yourself to one question plus a follow-up. We may reprompt for additional questions as time permits. With that, Sheila, we're ready for the questions.
spk09: Thank you. We will now begin the question and answer session. If you have a question, please press star then one on your touchtone phone. If you wish to be removed from the queue, please press star then two. If you are using a speaker phone, you may need to pick up the handset first before pressing the numbers. Once again, if you have a question, please press star then one on your touchtone phone. Our first question will come from John McKay with Goldman Sachs. Your line is open.
spk03: Hey, good morning. Thank you for the time. I appreciate all the comments around the distribution increase. Just curious if you could frame up a little more what drove the increase this year for 12.5 versus 10 prior, and how should we think about the forward pace of distribution growth from here?
spk07: Good morning, John. Thanks for the question. First, I'd say, look, the durability of our cash flows have really been the impetus for our decision to increase the distribution .5% versus the prior few years at 10%. We're executing our strategy. We're identifying and completing growth projects as we've talked about. We've announced a few of them here recently. I mentioned a few of them in my comments as well. We continue to reinvest in the business, and we're utilizing our portfolio of assets when you look at our capabilities in the Utica, as an example. Then we think what we're trying to do here is really responsibly return capital to shareholders through this distribution and using share buyback appropriately as well. We think we've demonstrated over the last three-year period distributable cash flows at just under 8%, EBITDA growth in a range of 6%. We hope that you see our ability to continue to grow that. We've talked about our opportunities in the short term. We talked about our wellhead to water strategy. We've announced over the last couple of quarters our commitment to build out our NGO and NatGas strategies as well. As we look out to the future, the strengths of that -single-digit growth opportunity gives us the confidence to share that 12% distribution increase and give you some visibility for that into the future.
spk03: Appreciate that. Thank you. Maybe just turning to the Marcellus. This is one of the larger projects you've announced up there in a while. Maybe if you can just frame up what you're seeing from the broader opportunities set there. Obviously, the Utica has recovered nicely. It looks like this would be some incremental growth on the Marcellus side. Curious on just, is Harmon 3 a one-off, let's say, or could there be more in the future?
spk07: Thanks. Sure, John. As you know, one of the things we've been trying to convey is the advancing of this strategy, Permian, Marcellus, and Utica. As I mentioned, we'll be completing the Secretariat gas processing plant. That was our seventh in late 2025. Then Harmon Creek 3, you know, I think is another example of working with our producer customers to provide just in time. I'm going to pass this to Greg because I think he'll share with you a bit more as how he sees the opportunities unfolding in the Marcellus.
spk10: John, you know, we look at the Marcellus. It's 6 billion cubic feet a day of our 10 billion cubic feet total that we process every day. It's our largest area. You saw utilization up towards 95% before we brought Harmon Creek 2 online earlier this year. That plant continues to ramp, you know, temporarily drop utilization down. But we're at high utilization there, and a lot of it is just driven by longer laterals, flatter declines on the new wells. And it's the heart in terms of NGLs and rich gas productivity. We're in a sweet spot there. So we'll continue to work with our customers. We work with them regularly in terms of understanding their needs and their forecasts. And there may be opportunities incrementally to build out, but this is a big project for us and certainly will help drive that volume forward on our processing and gathering, as well as liquid fractionation.
spk03: Greg, Maryann, thank you both very much. Appreciate the time.
spk09: Next, we will hear from Jeremy Tenet with JPMorgan. You may proceed.
spk01: Hi. Good morning.
spk07: Good morning, Jeremy.
spk01: You listed, you know, quite a good list of organic growth initiatives. And so realize that's probably going to be front and center. But as it relates to future growth, was just curious, I guess, on, you know, you've done some bolt ons recently and how you see the opportunities set for this organic, as you said, or even some of these other bolt ons out there. And at the same time, we've seen some of your peers make some larger M&A moves there. Just wondering how you think about balancing all that right now.
spk07: Yeah, Jeremy, thanks. So here's what I would say with respect to our opportunity set. We continue to see organic growth opportunities that will allow us really to deliver mid-single digit growth. You know, we've shared a couple smaller bolt on JV types. As you know, those JVs are not part of our capital program. You know, we've been spending about a billion dollars a year, give or take, depending on how you look at that. You know, those opportunities to expand our JVs are not part of that capital program and we'll continue to look for opportunities there. We did a recent one, as you know, first quarter of this year, Utica Summit bought out a JV partner where we think provided us fairly quick EBITDA growth in a JV that we knew well. So we believe there are efficient organic growth opportunities. We've been talking a bit about our wellhead to water strategy as well. That gives us some capabilities for the future. We've taken an incremental position in Bangalore. You heard us talk about closing that as well. So our focus here is organic opportunities that will allow us to maintain that mid-single digit growth that we are committing to.
spk01: Got it. That's helpful there. And then just want to kind of pivot a little bit towards, I guess, the LNG side or really Rio Bravo pipeline project more specifically in that joint venture. And now that the DC, you know, circuit court vacated for authorization, I guess, how do you think about progression on this project steps forward at this point given this setback?
spk07: Yeah, so first of all, the project is moving forward on schedule while all of that DC, you know, activity is happening. There's been a request for a rehearing filed at the DC circuit court. You know, this is not necessarily abnormal in terms of activities that happen. So as of right now, I would tell you project moving forward will continue to update as the results of that rehearing come to fruition and will provide you incremental activity around that as well.
spk01: Got it. That's helpful. I'll leave it there.
spk09: Thanks. Our next question will come from Munnav Gupta with UBS. Your line is open.
spk08: Good morning, Marianne. On your opening comments, you mentioned that you do expect, you know, incremental demand for electricity driven by, you know, data centers and natural gas, the role natural gas will play in it. Some of your peers have been more vocal about it. Can you help us understand multiple ways in which, you know, MPLX can win if suddenly, you know, by 2030, you do need five to six PCF incremental natural gas to support electricity generation in the U.S.?
spk07: Yeah. Good morning, Munnav. Thank you. I would say this. We stand ready to support our producer customers as that demand comes to fruition. You know, we think we're uniquely positioned to supply given, you know, you heard us speak about, you know, the level of capability that we have in the region. You see the amount of gas that we're processing, technically about 10%. We're ready to support the development plans of our producer customers and we'll continue to monitor the activity around data centers, et cetera. We stand ready. I'll pass it to Greg and see if he's got any incremental thoughts for you on that.
spk10: I would say that I support what Marianne says. We're very well positioned in the Northeast. It's 70% of our total processing and we also gather dry and lean gas there. So if you look at all of the molecules we touch, we're the largest player by far there and I think we're very well positioned.
spk00: Of generation facilities and data centers
spk10: closer to some of our facilities in the rich gas area. So we're excited about the opportunity. We'll be prepared to follow our customers there as required.
spk08: A quick follow-up here is can we get an update on the Texas City flag and the storage project? Thank you.
spk12: Hey, Manav, this is Dave. Yeah, happy to give you an update there. And, you know, as we look at our NGL value chain, our well-head to water strategy, both from the GMP side through Long Hall pipes, the Bangle and all the way down to the Gulf Coast, we look at the Texas City frac and storage and terminal and dock as one of the options that we're evaluating to continue to build out that value chain. So that process is continuing. We want to make sure as we do with any investments that is, you know, strict capital discipline, commercial flexibility and evaluating strategic alternatives. So as we continue that and have some, you know, more clarity, we'll update you when we can. So look forward to doing that in the future.
spk08: Thank you so much.
spk09: Next, we will hear from Keith Stanley with Wolf Research. Your line is open.
spk15: Hi, good morning. First, just wanted to follow up on the commentary of continuing the .5% distribution growth in the future. Can you give any sense of what time period that comment would apply to or guideposts to look at for how long that's sustainable, whether it's coverage thresholds or leverage or anything else?
spk07: Yeah, Keith, sure. So as you know, and we've been trying to convey, we think we've got quite a bit of financial flexibility. One, as we look at the length of our balance sheet, we look at our commitment around debt to EBITDA ratios. We've said, you know, we're comfortable in and about four times. You know, we're below that. But probably most importantly, as we think about the duration of that distribution increase, we're looking at the ability to continue those cash flow growth. So as I mentioned over the last three years, right, you've seen that distributable cash flow just under 8%. As we look at the projects that we are putting to work, I mentioned a few of them that will grow our EBITDA 25, 26. You know, we see a period of time where .5% is very doable. You know, it's tough to give you an extremely long horizon. You know that as well as I do. But, you know, we certainly are trying to convey to you that that distribution at .5% has the potential, notwithstanding all of the things that we talked to you about, to be durable for a period of time.
spk15: Thanks for that. Second question is just, I wanted to revisit the drop down concept. So Marathon's cash balance, if you take out the MPLX cash, has come down a lot over the past year because buybacks have been obviously very robust. Should we think of the timeline to consider drop downs of MPC assets into MPLX as more driven by cash needs at Marathon for their capital return targets? Or is it more tied to MPLX needing acquisitions to help meet its growth targets?
spk07: Yeah, Keith, first of all, what I would say to you with respect to the way that we MPLX think about capital allocation, we maintain strict capital discipline. So when we are evaluating where to put capital to work, we do that through our lens of strict capital discipline. We need to be sure that when we're putting capital to work, that capital is generating the returns that you all expect. As it relates specifically to your question around drop downs, you know, one of the things that we've said is they are certainly not a priority. We'll continue to look at them and and if they make sense versus the other organic opportunities that we have to continue to grow the EBITDA of MPLX, we will employ them. You made a comment about MPC cash and you're right, certainly, you know, we have seen that cash balance over the last several quarters as we've continued to meet our commitment of returning all cash that is not otherwise required via share buyback and we continue to be committed to do that. But the growth opportunities for MPLX will follow strict capital discipline and we'll evaluate whether or not a drop down versus another alternative putting capital to work yields the returns that you all expect.
spk15: Thank you for that.
spk07: You're welcome.
spk09: Next, we will hear from Teresa Chen with Barclays. You may proceed.
spk05: Good morning. As a follow up to the Permian NGL question, in terms of the Texas City frac, should we think about timing related to that project as that it should be in tandem of when your TNF contracts come up for renewal since your long gathering, processing, have more long-haul transportation and clearly short frac right now and maybe it doesn't make sense for that facility to come up prior and then in the same vein of thought, would you likely bring export up at the same time so as to keep that molecule along your own wellhead to water value chain or would it be more of a step process?
spk07: Yeah, good morning, Teresa. Thanks for your question. Let me try to start really with the wellhead to water strategy and try to give you some insight as to how we think about when we talk about our Texas City frac potential, we are really looking at a series of alternatives as we continue to progress around that strategy. Both the NGL and the NatGas wellhead to water approach really focuses on the integrated value chain strategies both in the Permian. And they're a really important piece of what we are trying to accomplish in MPLX. So we are trying to maintain flexibility as we work through all of the opportunities that we see to complete that very important value chain and growth opportunity for MPLX. I'm going to ask Dave to give you a little more color as we're progressing through that strategy.
spk12: Thanks, Mary Ann. So Teresa, we throw around the word wellhead to water, integrated value chain strategies quite a bit. So maybe if I step back and talk about how we think about it in MPLX. And as you would expect, it all starts, the value chains all starts back at the wellhead. So, you know, as you've heard, we've incrementally grown processing capacity over the last few years to serve some of the online which we've done earlier in the second half of 2025. We expect to have a total of 1.4 BCF a day of natural gas processing capacity. While this is the first step in serving our customers and processing gas, the also very integral part of that is the ability to clear the residual gas and the NGLs out of the basin. That leads us into the second piece of that value chain which is our investment long-haul pipelines which of course is the move of volumes out of the basin to the Gulf Coast markets. So NGLs as we touched on earlier, bangle is the key strategic asset to do that. And then third quarter we increased as we touched on earlier our stake in that. So we increased it 45%. And progress continues on the expansion of 250,000 barrels a day which expect to be in service, you know, in first quarter 2025. So not too far down the road. So with that, we're seeing strong volumes and we're confident in the growth profile of that asset. So on the NGL side, we're feeling very well. And then at gas side, our strategy is really anchored around our Whistler JV platform. So in addition to the Whistler main line which has been in service for a while, last quarter we announced the FID at Blackcomb which is that additional 42-inch pipeline that will connect the Permian Basin to the Gulf Coast. The final stage is what you touched on in your comments of the wellhead to water strategy is really down at the water. And that's focused on connecting the volumes to our customers while creating optionality for our shippers. So on the gas side, some examples of that strategy that we've already put in service are the ADCC pipeline which came in service in July of last year. I'm sorry, of this year, I apologize. And the Rio Grande pipeline which expect to be in service second half of 2026. And Marianne touched on that a little bit. And as we touched on earlier on the NGL side as we look at, you know, our Texas City fracks, docks, and terminals, we continue to evaluate those options to bring that last link of that value chain of the NGL. So hopefully, you know, from both an ATGAS and NGL perspective, you can see how over the recent past we've been building out those strong value chains from the Permian Basin to the Gulf Coast and access to the water. So hopefully that gives you an additional color. Thank you.
spk05: Thank you. In turning to the West Coast, following Phillips's announced closure of its Southern California refinery later this year into next year, I'm sure you'll touch on the implications for MPC at your later call today. But for MPLX, does this change flows or utilization of your logistics assets either from a direct or indirect manner?
spk13: Hey, Trisha, this is Sean. I'll touch on your question there. Really, we don't see any near-term change, you know, out of the gate here. It's really we've got an integrated value chain all the way from water to the refinery and the logistics to get it moving around the basin down there. So we don't see any near-term there. And if you look at the, you know, the demand and supply out there, it's all pretty tight out there. So we consider as we make those decisions and work with the refinery out there to make sure that we meet the supply that's needed in the time and manner. But don't see any near-term effect.
spk05: Thank you.
spk09: And once again, if you would like to ask a question at this time, you can press star one and record your name when prompted. Our next question comes from Michael Bloom with Wells Fargo. Your line is open.
spk11: Thank you. Good morning, everyone. Wanted to ask about Harmon Creek 3. I noticed on the slide you point to a 20% return there. So I'm wondering is that, would you say, is that like a higher return than normal or would you say that now on incremental investments, this is kind of a new hurdle rate?
spk10: Michael, this is Greg. I would say we target that type of return rate on any of our new projects. We have strong relationships with our customers, strong contractual support when we make these incremental organic project decisions. So we feel strongly about the project and we're excited about it.
spk11: Great. And then just wanted to ask about capex in 2025 and beyond. Obviously, you're laying out a lot of new high return projects. Just wondering if that, the cadence you've been on, which is roughly 1 to 1.1 billion of total capex, is that still kind of the right run rate or do you think that's going to trend higher over time? Thanks.
spk07: Hey, Michael. Thanks for the question. You're right. Over the last few years on average, we've been putting about a billion dollars to work to grow the enterprise. As you continue to think about the size of EBITDA and what it would take for -single-digit growth beyond that, it's possible that our capital spend would need to increase above a billion dollars in order to maintain -single-digit growth on a growing EBITDA. But we're a little early for 2025 yet. We'll give you good color as we head into the next earnings call. But certainly when we see those organic opportunities, like the project you mentioned, Harmon Creek 3, when you look at the return on that project, you look at the producer-customer relationship, you look at our ability to have just in time and you look for that to continue to deliver the EBITDA growth that we're talking about, we think again maintaining strict capital discipline and putting that kind of capital to work will allow us to grow in -single-digit growth. But we'll give you greater insight into the amount of capital as we head into the 2025 outlook. I hope that helps you, Michael.
spk11: Perfect. Thank you.
spk09: Our next question comes from Neil Dingman with Truest Securities. Your line is open.
spk04: Morning. Thanks for the time. I've got my first question just on your Marcellus organic activity. Specifically, there was a number of public application EMPs last week that just mentioned, no surprise, that they're going to defer a few more ducks and tills until things improve. And I'm just wondering, with these type of minor adjustments, does this impact either existing or sort of your near-term future plans?
spk10: Neil, this is Greg again. We don't see any current impact, material impact on our volumes. The producers, various producers, depending on whether it's lean gas or rich gas, have different plans around and economics around their wells. So we don't see an issue there.
spk04: Great, great response. And then just a quick follow-up on your Marcellus as well. Just wondering, specifically on the Marcellus process, and I'm just wondering, have you all seen the continued, it seems like there's been a continued ramp as MVP continues to go forward. I'm just wondering, have you seen this continue to help boost your, the Mobley Processing Plan of yours?
spk10: Yeah, I think that NBC, excuse me, MVP is a boost for the entire region. Anything that provides more residue gas takeaway is a boost. I think the other thing that we see is that, is there's a higher proportion of rich gas well pads that come online versus the higher volume lean gas, which is a sweet spot of ours because processing and fractionation in the northeast is our sweet spot. You actually see lower residue gas production versus lean. That opens up capacity as well out of the basin on existing lines other than MVP. Very helpful. Thanks, Greg. Thank you.
spk09: Coordinator And our last question will come from Neil Mitra with Bank of America. You may proceed.
spk14: Neil Mitra Hi. Thanks for taking my question. You've been very active in your downstream NGL operations, expanding the single, and talking about the Texas City Fract. Can you talk about how your producers view Sweeney as an alternative to Montbellevue and just how you see the logistics there and the opportunity to continue to grow with fractionation and possibly an export facility?
spk10: Greg Foss This is Greg. In terms of our producer customers, we started on that end when we built our first plant southwest with solid customers, and they've continued to rely on us to find outlets for them for the residue gas and for their NGLs. We've continued to do that, and incrementally as we've grown that capacity, we've used various options. Obviously, we'd like to have as much optionality as possible. So to get down into the Galveston, the Houston area, and have access to Bellevue and some of the storage there is going to provide that much more optionality and opportunity for our customers. We continue to focus on all of the above.
spk14: John O'Brien Okay, perfect. You've been very active in a short period of time in building out NGL and gas infrastructure. I was curious how you viewed crude infrastructure, whether that be a drop down longer term from MPC with Grey Oak or Leap or possibly a JV just with crude pipelines in the Permian. I wanted to understand how you viewed that business now that you have natural gas and NGLs.
spk07: Mary Ann Yes, Neil, thanks. It's Mary Ann. First and foremost, when we think about drop downs, I think you are asking how we think about that. We continue to believe that our growth opportunities organically have the opportunity to support our mid single digit growth. They remain largely a lower priority than the other projects that we've got and are evaluating. I'll pass it to Dave and let him give you some of the specifics that you're asking for.
spk12: Dave Hey, Neil. You touched on we spent a lot of time talking about our NatGas and NGL value chains and we don't want to forget about crude value chains. We have a pretty sizable platform in the Permian for crude gathering and blending benefits up there. As you've seen in the space, there's been a lot of activity in the recent past on the M&A side equation. Very similarly we touched on earlier, we continue to look at opportunities to grow out that platform. Very similar to how we've grown out the NatGas and NGL. Sometimes it's buying out JV partners, very low risk because we know the assets very well. Sometimes it's maybe buying single bolt on assets and sometimes it's maybe looking at maybe a little more sizable M&A opportunities. A lot of activity in that space. We continue to look at them and I appreciate you bringing that up because we don't want to forget about the third leg of our value chains, the crude side of the equation. So appreciate that.
spk14: Great. Thank you very much. Appreciate it.
spk09: We are showing no further questions at this time.
spk06: Perfect. Well, thank you all for joining us today and for your interest in MPLX. Should you have any additional questions or like clarification on any of the topics discussed this morning, members of the IR team will be available today to help with your calls.
spk09: That does conclude today's conference. Thank you for participating. You may disconnect at this time.
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