Title

Presentation

Energy Transfer LP beats earnings expectations. Reported EPS is $0.36, expectations were $0.3587.

Operator: Good day, everyone, and welcome to the Energy Transfer Q1 2025 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note today’s event is being recorded. I would now like to turn the conference over to Tom Long. Please go ahead.

Tom Long: Thank you, operator. Good afternoon, everyone and welcome to the Energy Transfer first quarter 2025 earnings call. Also joined today by Mackie McCrea and other members of the senior management team, who are here to help answer your questions after our prepared remarks. Hopefully, you saw the press release we issued earlier this afternoon. As a reminder, our earnings release contains a thorough MD&A that goes through the segment results in detail, and we encourage everyone to look at the release, as well as the slides posted to our website to gain a full understanding of the quarter and our growth opportunities. As a reminder, we will be making forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934.

These statements are based upon our current beliefs, as well as certain assumptions and information currently available to us and are discussed in more detail in our Form 10-Q for the quarter ended March 31, 2025, which we expect to file this Thursday, May 8. I’ll also refer to adjusted EBITDA and distributable cash flow, or DCF, both of which are non-GAAP financial measures. You’ll find a reconciliation of our non-GAAP measures on our website. So let’s start with our financial results today. For the first quarter of ’25, we generated adjusted EBITDA of $4.1 billion compared to $3.9 billion for the first quarter of 2024. We saw strong volumes through our midstream gathering, crude gathering, natural gas interstate and NGL pipelines, as well as through our NGL fractionators.

In addition, we saw strong NGL exports during the quarter. DCF attributable to the partners of Energy Transfer, as adjusted was $2.3 billion. And for the first three months of 2025, we spent approximately $955 million on organic growth capital, primarily in the interstate, midstream and NGL and refined products segments excluding Sun and USA Compression CapEx. Now turning to our results by segment for the first quarter. Let’s start with NGL and refined products, adjusted EBITDA was $978 million compared to $989 million for the first quarter of 2024. This was primarily due to higher throughput across the NGL export terminals and across our Permian and Mariner East pipeline operations, which were offset by higher operating expenses and lower blending margins compared to the first quarter of 2024.

For midstream, adjusted EBITDA was $925 million compared to $696 million for the first quarter of 2024. The increase was primarily due to higher legacy volumes in the Permian Basin, which were up 8% as well as the addition of the WTG assets in July of 2024. In addition, results for the first quarter of 2025 were favorably impacted by the non-recurring recognition of $160 million associated with Winter Storm Uri in 2021. This represents the remainder of the midstream segment margin from Winter Storm Uri that had not already been recognized. Still outstanding in the intrastate segment is approximately $285 million, excluding interest, that is currently in litigation. The vast majority of which is due from CPS. For the crude oil segment, adjusted EBITDA was $742 million compared to $848 million for the first quarter of 2024.

During the quarter, we saw growth across our crude gathering systems as well as contributions related to the recently formed Permian joint venture with Sun. These were offset by lower transportation revenues, primarily on the Bakken pipeline, higher expenses as well as lower gains due to the timing of the recognition of optimization gains in Q1 of 2025 as compared to Q1 2024. Lower optimization gains were primarily due to lower hedge gains realized during the quarter, a write-down to hedged inventory at the end of the quarter and the timing of the recognition of gains on certain physical crude sales. We expect approximately $30 million of losses related to the hedge inventory that were realized in the first quarter of 2025 to reverse during the second quarter of 2025.

In our interstate natural gas segment, adjusted EBITDA was $512 million compared to $483 million for the first quarter of 2024. During the quarter, we achieved record volumes driven by higher throughput on Panhandle, Gulf Run and Trunkline. The growth on Trunkline was related to our backhaul project to support growing Gulf Coast natural gas demand. We also had increased rates on several of our pipelines in the first quarter. For the intrastate natural gas segment, adjusted EBITDA was $344 million compared to $438 million in the first quarter of last year. During the quarter, we saw increased gains related to storage optimization opportunities, which were more than offset by reduced pipeline optimization as a result of lower volatility in natural gas prices compared to the first quarter of 2024.

Now let’s take a look at the organic growth capital guidance. We continue to expect approximately $5 billion on organic growth capital projects in 2025. Our projects are expected to achieve mid-teen returns with most of them also providing incremental downstream benefits. In addition, the majority of these projects are expected online in 2025 or 2026, including our Flexport NGL export expansion, several Permian processing plant expansions and our Hugh Brinson pipeline project. As such, we continue to expect the majority of the earnings growth from these projects to significantly ramp up in 2026 and 2027. Taking a closer look at some of our largest growth projects that are currently underway. During the first quarter, we commenced construction on Phase 1 of the Hugh Brinson pipeline, which we expect to be in service in the fourth quarter of 2026.

We have secured the majority of the pipeline steel, which is currently being rolled in U.S. pipe mills and as a result, do not expect any material impacts to cost of the project from tariff announcements. Phase 1 is completely sold out, and we are currently in negotiations that are well in excess of Phase II capacity. At our Nederland Terminal, construction of our Flexport expansion project is nearing completion. We expect to begin ethane service later this month and propane service in July, and we continue to expect to begin ethylene export service in the fourth quarter of this year. Looking at our Permian processing expansions, the Red Lake IV processing plant is now expected to be in service by the end of the second quarter of 2025. The Badger processing plant remains on schedule to be in service in mid-2025 and the Mustang Draw plant is now expected to be in service in the second quarter of 2026.

Now let’s look at Lake Charles LNG. We are making substantial progress towards commercialization of the project. In April, Lake Charles LNG and MidOcean Energy signed a heads of agreement, which provides a non-binding framework for the joint development of the LNG project. Pursuant to the HOA, MidOcean would commit to fund 30% of the construction cost and be entitled to 30% of the LNG production. MidOcean is an LNG company formed and managed by EIG Global Energy Partners. In April, Lake Charles LNG signed a binding SPA with a Japanese utility company for up to one MTPA with the agreement subject to the approval of the Board of this company, which is expected to be received by the end of May. Also in April, we signed an HOA with a German energy company for one MTPA.

Lake Charles LNG is in discussions for the remaining uncommitted LNG offtake volume and is targeting FID by year end. Now for a brief update around our power generation opportunities, the level of activity from demand pull customers has remained strong, and we’re in advanced discussions with several other facilities in close proximity to our footprint to supply store and transport natural gas from gas fired power plants, data centers and industrial and onshore manufacturing. On our last earnings call, we were excited to announce that we have entered into a long-term agreement with CloudBurst data centers to provide natural gas to their flagship AI-focused data center development in Central Texas. We would expect these type of projects to require very low capital and to generate revenue relatively quickly.

There is a lot of competition around these projects, but our team has done an excellent job of identifying the most likely opportunities, and we will continue to provide updates as we move forward. Lastly, construction of eight 10-megawatt natural gas fired electric generation facilities continues. The first facility was placed into service in the first quarter, and we expect the next one to be in service by the end of the second quarter. With the remainder expected to be in service throughout 2025 and 2026. And now turning to our guidance. We continue to expect our 2025 adjusted EBITDA to be between $16.1 billion and $16.5 billion. We benefit from an integrated business model that is well diversified by products and geography. Our cash flows are highly fee based with limited commodity price exposure and financially, our balance sheet is in the strongest position in our history.

We also have a high percentage of take or pay contracts helping to reduce impacts from market volatility. We are executing on a solid backlog of well contracted growth projects with strong counterparties, which are expected to generate strong returns, enhance our integrated value chain and promote strong growth. We will start to see contributions from some of these projects this year with additional benefits really ramping up next year as we quickly convert CapEx into cash flow. Given Energy Transfer’s extensive natural gas infrastructure, we are excited to see the growing demand in and around our franchise to support power plant data center and LNG growth. With our diverse integrated asset base and strong financial position, we believe we are well positioned to manage volatility while we continue to grow.

Before we close, we’d like to take a moment to mention Sunoco’s recently announced plans to acquire Parkland Corporation. We are excited for SUN as they work to bring these assets into the family of partnerships. This combination is expected to create the largest independent field distributor in the Americas. This concludes our prepared remarks. Operator, please open the line up for our first question.

Operator: Thank you, sir. [Operator Instructions] Our first question today comes from Theresa Chen at Barclays. Please go ahead.

Theresa Chen: Good afternoon. I’d like to first ask on the Lake Charles progress. Looking to your year-end target FID, can you talk about additional steps from here either from a commercialization financing or permitting a regulatory perspective? And more broadly, how do you think U.S. LNG is situated given increasing competitive dynamics domestically, as well as increasing demand abroad with the EU commission proposing to phase out imports of all Russian gas and LNG.

Marshall McCrea: Hello, Theresa. This is Mackie. We continue to gain momentum and be excited about getting to FID. We’ve worked many, many years on this project. We’ve got teams over as we speak. In fact, even on this call moments ago, we got a text. We signed up another 1 million tons from a large international energy company. So we’re very excited. However, we’ve still got work to do. We now pass 10.4 million tons. We’re targeting about 15 million tons. As Tom just said on his opening statements, we have a big partner in this now. We’re looking for other partners where at the end of the day, we won about 75% to 80% equity and/or infrastructure partners still have that box to check. We are finalizing our EPC cost over these next couple of months and everything is looking good.

Like I said, we’ve got a lot of work to do, but we’re very excited about where we’re at, and we’re also very excited about the new administration that will not hold up. In fact, we’ll promote these types of projects, not only benefit our country, our partnership, but also our friends around the world that need — so desperately need LNG. So we’re excited about a lot of work to do and certainly hope we reach FID by the end of the year. As far as the second question you had, kind of hard to address that. We feel pretty good where our prices are. We know there’s a lot of competition out there. Some are already at FID. Some aren’t. We’re successful in continuing to price our capacity in a manner that works for our returns. So we kind of don’t worry and think much about what others are doing.

We focus on what we’ve got, and we’re excited and are hopeful to get there by the end of the year.

Theresa Chen: Thank you. And with one of your portfolio companies getting a C Corp (ph) currency soon potentially, how does that parlay into the potential for energy transfer to also have a C Corp presence? What are your thoughts on that topic at this point?

Tom Long: Hey, Theresa. This is Tom. We’ve always had that on the options list, if you will. We continue to evaluate it and see what makes sense from an energy transfer standpoint. Obviously, very excited to see SUN to be able to first execute on one, and we’ll evaluate that carefully. But as we sit here right now, it’s really not any more plans than probably we had before this transaction as far as energy transfer goes. So it’s an option, and we’re going to continue to look at it, and we’ll – stay tuned.

Theresa Chen: Thank you.

Operator: Thank you. And our next question today comes from Jeremy Tonet with JPMorgan. Please go ahead.

Jeremy Tonet: Hi. Good afternoon.

Marshall McCrea: Hey, Jeremy.

Jeremy Tonet: Hey. I was just curious, given the volatility we have seen in commodity prices and we’re starting to see some rigs being dropped even in the Permian. Just wondering, I guess, with your latest producer customer conversations, what your outlook is for production, if that has changed meaningfully or how do you expect it to impact the Energy Transfer?

Marshall McCrea: Okay. This is Mackie again. Typically, I’ll make a brief statement at the end. Sometimes I’ll make a brief statement real quick. And I think it’s important for this question and also for other questions that might come up. We were talking a couple of weeks ago and a lot of us have been in this business for 35, 40 years, someone like Tom, longer than that. But anyway, we’ve seen a lot of cycles. It’s a very cyclical business. And we’ve seen gas at $1.50. We’ve seen gas at $8 or $9. We’ve seen oil at less than $10. We’ve seen oil at $120. We’ve had quarters where we were panicked about what the spread is between Waha and Katy because we were a natural gas pipeline company. And fortunately, where we are today with Kelsey’s leadership and guidance is we’re the most diversified kind of unparalleled midstream pipeline company in the United States.

And just quickly a few comments on that. In addition to kind of our segments, we’ve got our USA compression run by Clint, who’s doing a great job of not only maintaining what they have, but look for growth over the coming years. We got Joe Kim and his team with Sunoco. He’s done an incredible job with the assets they purchased. Now they just made a huge announcement that we see a lot of upside for them. Of course, that also provides additional distributions, which don’t hurt our feelings at all. And then you look at our segment, you look at our Crude segment, run by Adam and his team. And we move about 20% of the barrels out of West Texas, about 30% of the barrels that are produced in the United States go through our pipes, over 50% in the Bakken.

We’re one of the largest deliverers of barrels to the refineries around Port Arthur and then, of course, Bayou Bridge to the Lake Charles and St. James, and then on and so forth, up the Mid-Continent. Then you jump over to the NGLs and the massive pipelines we’ve built with Mariner and we are the company to go to with any ethane, propane growth out of the Northeast through our Marcus Hook terminal. And then, of course, our incredible expansion at Nederland that we’re also completing our next 250,000 in our NGL world where we move a lot of barrels, over 1 million barrels a day go into that. Very excited about that. And of course, midstream. We’ve got a big presence in the Permian and a lot of other places. And then you look at what’s going on in the pipeline — our intrastate, our interstate and how well, we’ve built all those out from all the major basins, delivering to all the major markets, whether it’s LNG or whether it’s power plants or the utilities or cities or whatever, we just have positioned ourselves in such a good way to where if one segment slows down or whatever, the other one picks it back up.

So all that saying, going to your question, yes, we are seeing a slowdown a little bit over the last few weeks. We actually have been in conversations, Tom and I have, with some of the majors. They really haven’t indicated at these kind of mid — $50 barrel of pricing that necessarily going to slow down. But we have seen even in the last day, yesterday and today, there’s been some statements on slowdown. We’re well positioned to manage that. This is what happens in this industry. It will slow down and then it will come back as a barn burner. We certainly anticipate that happening with oil but even ten-fold on gas. Any kind of slowdown on gas, if you look over the next three or four years, 5 to 7 Bcf of growth in the LNG market, who knows where the AI data center and power plants are going to go on a high side or even a medium side on that.

I mean, it’s just a wonderful outlook for our pipeline business, both intra and interstate. So yes, if there’s areas where drilling has slowed down. It will slow down some parts of that. But as a whole, we think some of the other areas of our well-balanced partnership will kind of even things out and we just stay very positive and bullish on the future, especially around NGLs and natural gas transportation.

Jeremy Tonet: Got you. Makes sense. Yeah. I know it’s certainly important to have a diversified platform there. It seems like a slowdown in oil could help the gas supply demand dynamics and could help you out there as well. And maybe just building a gas a bit more, I guess, the opportunity set as you see it to service growing power demand in data centers even and thinking particularly to the west of Texas, just wondering how you see, I guess, the opportunity set to feed more power in Texas or data centers and also further West in Arizona as well.

Marshall McCrea: Yeah, I’ll tell you, this is one of those areas where we feel like we’re sitting on a gold mine. As I just mentioned, we built a lot of assets, bought a lot of pipeline assets, moving molecules from production basins to markets. We wake up here over the last six to 12 months and find ourselves in an incredible position. Adam and his team are — you got a really good team he’s put together to chase deals all over Texas. There’s 150 approximate data centers that we’re looking at just in Texas alone, we would love to elaborate and talk about some significant progress we make. We do believe in the next four to six weeks, we’ll be able to make some significant announcements. But what’s really cool about our assets, and we’ve said this before is that, if we were going to go out and develop and we’re kind of doing this to a certain degree to help some of the hyperscalers and try to place some of these data centers.

We place them almost right on top of our pipes. In fact, like, we said last time, CloudBurst location, our pipeline actually runs through that acreage. But we’re so well positioned from an electrical transmission standpoint, a lot of the major electric lines running through Texas parallel or very close to our pipelines. A lot of the low latency fiber optics runs in the same quarter as our pipeline. So we’re very optimistic. We’d love to elaborate. Yes, even outside of Texas, we see Arizona as a very significant growth area for data centers, really growth area for natural gas demand in addition to data centers elsewhere in other states, call from other states, we expect to make some significant announcements over the next four to eight weeks.

So a little premature, but very excited about where that’s going to take us and couldn’t be — couldn’t feel better about our situation on where our pipeline sit, our ability to move large volumes through these large diameter systems in the storage, we have to back up that we just couldn’t be more excited about these opportunities we’re chasing.

Jeremy Tonet: Got it. We’ll be listening in the coming weeks for that announcement. Thank you.

Operator: Thank you. And our next question today comes from Jean Ann Salisbury with Bank of America. Please go ahead.

Jean Ann Salisbury: Hi. Thank you for the update on the timing of the ethane and propane in service for the Nederland Flexport expansion that starts in the next few months. Can you speak to how you’re viewing the speed of the ramp for that project? And if you expect it to mainly be shipping propane or ethane in the medium term?

Marshall McCrea: Yeah. This is Mackie again. Believe we’re coming on the end of this month, early next month with ethane. Regardless of what everybody is hearing about all the negativity around what’s going on in China and other areas, we’re not having a problem finding a home for our product or ethane or LPG. In fact, we did a deal this morning for another ethane spot cargo to China. So with those tariffs apparently being lifted around ethane and possibly LPG, we feel very good about it. July or August, we’ll be ramping up the propane portion of that. And then by the end of this year, ethylene. All of that, we expect on a spot basis and/or some of it’s turned up to stay very full for the second half of this year. And then we’re on this new flexible expansion, we’re over 90% sold out under three to five year agreement starting January 1 of ’26.

So we’re very excited about that. It needs to come online for the international demand around the world, and we’re excited to finally — for all that hundreds of millions of dollars were spent, we’re excited about the revenue that we’re about to bring in the door.

Jean Ann Salisbury: Okay. That’s super helpful. Thank you. And then you kind of touched on this, but my follow-up was just real time what you’re seeing in the LPG export market. Is there basically enough rerouting, I guess, going on to avoid the China tariff on U.S. LPG. And how do you think that plays out in the next few months?

Marshall McCrea: Yeah. With all these questions, a lot of uncertainty about what’s going on in the industry. We have very little concern, even talking to our team today, as I just said, there’s a lot of international demand, not just China, all over the world for ethane, propane and butane, and we really don’t expect to see any major challenges if any challenges at all selling out our terminal every month, the rest of this year.

Jean Ann Salisbury: Great. I’ll leave it there. Thank you.

Operator: Thank you. And our next question today comes from Spiro Dounis with Citi. Please go ahead.

Spiro Dounis: Good afternoon, team. Maybe just to go to Hugh Brinson. Tom, you pointed out that negotiations now are well in excess of that Phase II capacity. So multipart question here. One, what does that mean for the timing of Phase II? Is there an ability to accelerate that now? And does this actually create some bottlenecks, maybe even downstream of Hugh Brinson where that could precipitate more expansions? And then lastly, what kind of customers are you dealing with here? Is this largely data center driven demand?

Marshall McCrea: Yeah. This is Mackie again, Spiro. I tell you, it’s funny we’ve been trying to get a 42-inch across Texas FID for, I don’t even know four or five years, and we finally got that done, and it couldn’t have been better timing, especially larger last question was related data centers. However, getting that to FID had nothing to do with data centers, not one data center supported that project to get it off the ground. As we’ve said, we have sold out now Phase 1. We are in negotiations with — I wouldn’t say twice as much, but significantly more volume request and we have capacity available to take it from 1.5 Bcf to 2.2 Bcf. But as I was just alluding to what an incredible time to announce a new 42-inch, 2.2 Bcf pipeline out of the most prolific basin in the United States that connects to multiple 42 and 36-inch pipes of ours that feeds markets throughout the state of Texas and then also, of course, accesses Carthage and Tex Oak (ph) to feed the Southeast, LNG, everything else.

So we’re very excited about that. And then as far as data centers, we call it kind of the gold rush. It’s something where not only is it — are we working with customers that we will end up probably utilizing some of the remainder capacity we have available. We also have customers that won’t diversification of receipt points, meaning they may want some from Waha, some from Katy, some from Carthage. We’re able to accommodate that with this massive system we’ve built. So we’re in such a good situation very excited about, as I keep saying we can’t express our excitement enough and one kind of exclamation point on this. Tying in all these — and it’s not just data centers. That’s one thing that we probably need to elaborate on negotiating with as many power plants unassociated with data centers that we think are more likely to happen just because of the need, especially here in Texas to meet the growing demand from population, etc.

So kind of the exclamation point is, there’s not a lot of capital to this. As I mentioned earlier, a lot of these areas where these data centers are proposed are right on top of us. So we’re talking about moving 250,000, 300,000, 400,000, 500,000 in different directions with some good healthy margins and yet we’re laying a mile of — 5 miles of pipe. So it’s exciting enough time, I’ll say, again, we’re thrilled with this new opportunity for our pipeline assets and very excited where that’s going to take revenues for those assets in the future.

Spiro Dounis: No. It’s great to hear, Mackie. Second question, maybe this one for you as well. And I kind of want to go back to Jeremy’s original question. Ask it a different way and hopefully not make you repeat yourself. Your point is well taken. I think over longer-term periods, you’ve proven to be pretty durable and resilient duty cycles. I guess we narrow the focus a little bit. Obviously, a lot of projects coming online this year, $5 billion of CapEx in the hopper here. And I think last time we caught up, it did suggest you’d be sort of at the higher end of your sort of 3% to 5% growth rate this year and maybe next year. And so I guess I’m curious, given everything we’ve seen, I realize a lot of uncertainty still. Crude in the 50s, this still feel like that $5 billion of CapEx has got enough hardwired growth inside of it to still drive 5% growth or maybe some of that come off a bit.

Marshall McCrea: No. That’s a good question. And certainly, we’re always looking at everything. Every impact we might have on our system with some of the statements that have come out even recently, one thing we were joking about before this call is, every time we bring on a plant, we just brought on Lenora 1 here not too long ago within days, certainly within weeks, it’s full. And so when we bring on Lenora 2 here in the next 30, 45 days, we don’t know how full it’s going to be. Our expectations are, it’s going to fill up pretty fast. But we do have the luxury of kind of watching what happens over the next quarter, maybe 1.5 quarters, two quarters. And if we really do see a slowdown, we will have the ability to defer some of these costs.

We can delay Mustang draw, certainly not talk about — think about that or anything right now on that, but it’s certainly a tool and something that we can look at as well as other projects that we have. If we see a huge downturn and it’s extended for some period of time, we will be able to push some of that $5 billion into $26 billion. But way premature to any kind of that type of – I wouldn’t say panic, but any of that type of moves. We remain bullish Yes, we see some softening. Yes, we see some potential challenges over the next quarter or two. But, a year, two years through 10 years, we’re extremely bullish on our industry and on the need for all the products that we transport. And we’ll just see how the next quarter plays out before we make some of those decisions.

Spiro Dounis: Got it. It’s great color, Mackie. Appreciate it. Thanks everyone.

Marshall McCrea: Thank you.

Operator: Thank you. And our next question today comes from Keith Stanley, Wolfe Research. Please go ahead.

Keith Stanley: Hi. Good afternoon. Two follow-ups on that. So on the CapEx conversation, Tom, is there a figure that you have just roughly, if we’re talking $5 billion of growth CapEx this year. What would that look like based on just sanctioned projects right now for 2026? Does that number come down a lot or how are you looking at that and flexibility for ’26 spend?

Tom Long: Yeah. Thank you. Keith, that’s actually a very good question. Of course, we generally don’t give our guidance for the current year until the end of the year. But when you really look out and you probably look at a lot of these projects that we’re talking about coming on right now, we don’t have that same size number currently filled up. But we do have, as always, a big backlog of projects to look at. So I don’t really have an answer for you on how to guide. But probably take it to less than half of that is probably where I would take it with you, Keith. So let’s see how the year continues to develop. But as we sit here right now, that’s probably a good marker without it being guidance, though.

Keith Stanley: Okay. So less than half of the $5 billion is sanctioned today and obviously, that can change over time.

Tom Long: Yeah. That’s correct.

Keith Stanley: Okay. That’s very helpful. The second follow-up, I just wanted to check on the contracting position just across NGL exports. And so I think, Mackie, you said you expect to fully sell out on a spot basis, all of your available export capacity. We also said Flexport is 90% contracted for three to five years. Is there — just looking holistically at your NGL export portfolio, is there a percentage of capacity that you would point to as being under fixed fee contracts going forward, including Flexport.

Marshall McCrea: Yeah, Keith. So our spot prices, they’re fixed when we negotiate each month. And then our term prices, they are fixed. So all the — whether it’s a three year or four year or five year term, it’s a fixed fee for us to load ethane, propane or butane onto these ships. Does that answer your question?

Keith Stanley: I guess, I was trying to get at what percentage the mix? So what percentage is term contracts versus kind of month-to-month?

Marshall McCrea: So the Flexport project that we’re bringing on ethane and propane and then ethylene throughout the remainder of this year, fully contracted fixed price on average three to five years for the Flexport capacity that we’re putting in service this year.

Keith Stanley: Got it. Thank you.

Marshall McCrea: Thank you.

Operator: And our next question today comes from Michael Blum with Wells Fargo. Please go ahead.

Michael Blum: Thanks. Good afternoon, everyone. I had a follow-up question on Hugh Brinson. So it sounds like you have more demand than your Phase II expansion. So I guess the question is, could you expand it further with compression or do you have another option? Would you somehow need to add another pipeline? And the other question related to that is, does this give you more pricing power and the ability to charge higher rates or could you see a higher return on a project like that?

Marshall McCrea: Well, let me just say our prices are always fair and competitive. We may have some markets on the phone. But no, anything like that, of course, we can always look pipe. We can always add compression. We actually now are looking at making Hugh Brinson fully bidirectional that’s at a relatively inexpensive price to make that work. But I guess to kind of round out the answer, we feel really good about the value of the capacity that we have yet to sell on Hugh Brinson and the amount of revenues that’s going to create for our partnership, both from a west-to-east route as well as from an east to west out across Texas. So as I mentioned, we’re very well positioned and we think we’re going to do very well on adding significant value with all of these, not only data centers but with all the power plant opportunities that we have, not only in Texas, but in a number of other states.

Michael Blum: Got it. Thanks. That’s all I had today.

Operator: Thank you. And our next question comes from Manav Gupta with UBS. Please go ahead.

Manav Gupta: Good afternoon. I wanted to ask you, it’s been about six months since you have had a new President and a new government. Have things actually changed on the ground? Are you seeing more supportive permitting process? And in general, are you seeing more support for oil and gas industry from the new administration?

Marshall McCrea: Yeah, absolutely. We didn’t expect it to be this big of an impact on things yet. But long term, we think the decisions that this administration will be very good for our country and very good for our industry and very good for our partnership. In regards to permitting, it goes without saying that the pause around LNG, whatever pause there was left has been lifted the energy dominance Council under the Department of Interior is doing everything they can to learn about projects and to help projects get to the finish line where they make sense. As far as any extensions, for example, around our LNG project with FERC extensions or DOE extensions, we feel very good about getting those. So general overall statement is things are much more positive.

We think it will become much easier to build infrastructure with a lot more certainty for ourselves and for our customers and for the country. So as we talked about for the last four years, we are very excited about this new administration and where it’s going to take this country and how our partnership will benefit from it.

Manav Gupta: Perfect. My quick and easy follow-up here is, your guidance still remains for 2025, 16.1% to 16.5%. And those of us really like ET, hope it’s 16.5%. Help us understand, despite some of the small slowdowns that you are seeing, what could still get you closer to 16.5% versus the midpoint of the guidance? Thank you.

Dylan Bramhall: Yeah. This is Dylan here. So when we think about that guidance range. One thing I do want to point out is, before I start here, we put out this range. We put out this range of $400 million, and that’s on at a midpoint of $16.3 billion. So if you think about that from the midpoint to the high and the low end, we’re only going at less than 1.25% each way. So that’s a pretty tight range. There’s a lot of drivers in there. We feel really good about this plan when we put it out, and we still feel really good about it right now. It’s the usual things, commodity price movements, spreads, those make up about 10% of our business there. And then, there’s a little bit of volume exposure as well within primarily the midstream segment. That’s fairly muted as well. But those are really the drivers that can move us within that 2.5% range top to bottom end.

Manav Gupta: Thank you so much.

Operator: Thank you. And our next question today comes from John Mackay with Goldman Sachs. Please go ahead.

John Mackay: Hey, guys. Thanks for the time. I wanted to talk about WTG for a second. It’s been about, I guess, three quarters since you guys closed on that. Just anything you can kind of update us on in terms of how that asset is going right now, your ability to kind of ramp it up and start to retake share in the Midland. And then anything that’s coming out of it on the NGL side that’s given you some confidence on the contracting piece on the TMS side. Thanks.

Marshall McCrea: This is Mackie. I’ll start and Dylan may want to follow up. But what a great acquisition, a tremendous amount of reserve and contracts dedicated to those assets. We have discovered as we’ve kind of started operating on some issues that have come up that we continue to address. But long term, we’re excited about the growth, both from a cryogenic, from a gathering standpoint, but also from a downstream, we mentioned Hugh Brinson. Hugh Brinson will be at the tailgate of the majority of the WTG cryo’s that’d be a great outlet when there’s issues. We are having issues from time to time with the existing pipeline. So that will help in a big way. But as well as the NGLs, some of the NGLs are already dedicated. We do see growth in NGLs coming from these facilities in the future, for our NGL pipeline in fracking business.

But all in all, we’re very pleased about that asset and working hard to bring it up to the full standards of energy transfers, other assets and it’s going to be a great contributor to our partnership for many years to come.

Dylan Bramhall: Yeah. Mackie, you say that [indiscernible]. I think when we look back versus our acquisition plan, as many of you recall, had a lot of maintenance capital in for the first two years as we recognized there was going to be some work to do and we’re definitely spending that capital. But on the plus side, the volumes are ahead of the plan that we had an acquisition. And so I think we’re really pleased the producers behind the system are great partners, and we’re seeing the financial benefits of that on the revenue side. So all in all, financially, this is going to turn out to be a great acquisition for us.

John Mackay: I appreciate that. Thank you. And second, I want to be quick. Dylan, just going back to Manav’s question on the guidance, not to belabor the point. But since the range is so tight, I just want to ask the $160 million benefit in midstream this quarter? Was that kind of expected inside the guide? And then how are you guys treating the remainder storm proceeds that you haven’t recognized yet relative to that guidance range? Thanks.

Dylan Bramhall: Yeah. I would say that wasn’t explicitly as part of the guide now. When we look at the guide, the one thing that somewhat offsets that is the first quarter in our guide, we’ve assumed internally some volatility in there that we capture in the intrastate segment. I’ll say, this first quarter, we did not have the volatility that we’ve seen in past years. And so, we were short on that mark there. So this is a little bit of an offset there versus some stretch that we put into the business in the first quarter. So kind of consider that a wash as we go forward here.

John Mackay: I appreciate that. Thanks for the time.

Operator: Thank you. And our next question comes from Gabe Moreen with Mizuho. Please go ahead.

Gabe Moreen: Hey, good afternoon. I just had one follow-up on Lake Charles. Given, I guess, all the activity to try to get gas to the Gulf Coast for LNG exports and also the MidOcean agreement saying that they’ll use energy transfer pipes to get gas to their portion of the facility. Can you calibrate kind of the upstream opportunities on the pipe side now that you’re getting close to FID, whether it’s getting gas from the Haynesville across the border from Texas, just kind of your latest thoughts on how big that opportunity could be?

Marshall McCrea: You bet. This is Mackie again. It’s a huge opportunity. Yes, we do intend for all the molecules that come in Lake Charles will — were somehow moved through our pipelines. We have the ability to move quite a bit of gas in that area today. We will be needing to expand where exactly that expansion will come to and what size and timing and all that, we’re still working through that depending on what the customers’ desires are, but probably unlike any other LNG, we will have the ability to source from the Permian Basin, from Cartridge, from Oklahoma, from Perryville, from North Louisiana, from East Texas, from Katy. So with our extensive pipeline interstate network, we’re having the ability to provide our customers and ourselves with access to the cheapest sources of supply, wherever those may be from all those points we just talked about.

So we’re still fine-tuning and finalizing what additional upstream pipelines will be necessary and those will be also to FID by the end of this year as well in conjunction with the Lake Charles.

Gabe Moreen: Thanks, Mackie.

Operator: Thank you. This concludes our question-and-answer session. I’d like to turn the conference back over to Tom Long for closing remarks.

Tom Long: Well, thank you. And thank you to all of you for joining us. We’re always very, very appreciative of your support, and we look forward to any follow-up questions you might have.

Operator: Thank you. This concludes today’s conference call. We thank you all for attending today’s presentation. You may now disconnect your lines, and have a wonderful day.