Enterprise Products Partners L.P. Price & Performance (EPD)

Good morning, and welcome to the Enterprise Products Partners conference call to discuss Q4 2024 Earnings. Our speakers today will be Co Chief Executive Officers of Enterprise General Partner, Jim Teague and Randy Fowler. Other members of our senior management team are also in attendance for the call today. During this call, we will make forward looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, based on the beliefs of the company as well as assumptions made by and information currently available to Enterprise management team. Although management believes that the expectations reflected in such forward looking statements are reasonable, and can give no assurance that such expectations will prove to be correct. Please refer to our latest filings with the SEC for a list a list of factors that may cause actual results to differ materially from those in the forward looking statements made during this call. With that, I'll turn it over to Jim.

Thank you, LABY. I want to just go through some bullet points to highlight some of the things we achieved in 2024.

And a few of the things we expect to do this year. First of all, 2024 EBITDA of 9.9 $1,000,000,000 Randy, it reminds me of a line in a Frankie Valley song so close, so close. And yet so far We had $7,800,000,000 of DCF We had 1.7 times coverage. $3,200,000,000 of retained DCF, Chris I thought that was a record, but it's not. But it's close. 12 financial records 16 operational records, In 2024, moved 12,900,000 barrels of oil equivalent a day In the 4th quarter, we moved 13,600,000 barrels of oil equivalent per day.

In the 4th quarter, we loaded out on for export 2,100,000 barrels a day of liquid hydrocarbons against term commitments of 2,500,000 barrels a day. During 'twenty four and early 'twenty five, we completed 2 process plants in the Permian, we purchased. [indiscernible] our Midland Echo 1 crude oil pipeline. And the JV interest in our 7th and 8th fractionators. For 2025, we'll add 2 gas processing plants in the Permian We'll add the Bahia NGL pipeline frac 14 the first phase of our NGL export on the Natchez River and expansions of our ethane and ethylene terminal at Morgan's Point.

That list almost needs to pause and take a breath. We get a lot of questions on spot. I want to give you a status report of where we are with spot. I believe that spot should be the poster child for the need for permit reform. By law, the record of decisions should be issued 356 days you can have clock stoppages on top of that. Frankly, I thought 356 was a typo. But it wasn't. Alto, it took over 5 years to get the spot license, including almost 4 years to get the record of decision and a year and a half to get the license to construct. Our initial application was 13,000 pages. I thought that was ridiculous. But by the time we completed the process, Our final submission was over 30,000 pages. We addressed over 80,000 comments over 2 comment periods predominantly from NGOs, [indiscernible] comment was 60 pages long. We had to answer a ton of questions. One of my favorites was from a lady from Murad, Asking how we plan to mow the right of way. She was concerned that fuel mice would be protected from hog The process we went through due to federal bureaucracy pushed us beyond the drop dead day that allowed our anchor customer to opt out of their contract.

Which they did. Granted a lot has changed since we entered our spot application in January. 2019.

When we started that application, it was a assumed that the majority of crude imports would go to Asia on VLCCs A lot of forecasters were predicting back 2024 the U. S. Would be exporting between 7,000,000 8,000,000 barrels a day. Instead, we're exporting around 4,000,000 barrels a day. All of that with Russia invading Ukraine which has resulted in the amount of crude oil export out of the U. S. To Europe to have doubled over 2,000,000 barrels a day and that will grow more. That move to Europe can be done on an Aframax or Suezmax. Today, we have not gotten enough traction in commercializing spodum. Though we continue to promote Spot as we are the only company with a license to construct did a lot of research around cost And our data shows that the cost to load on our spot and project are always much lower than multi reverse lighter DLCs have a lower all in cost than 50% of single [indiscernible] And then our competitive with the best 50% single reverse laddered VLCCs. However, in order to build spot, we know what we need and volumes fees and terms, We're not going to establish a drop dead day.

But if we can achieve these within a reasonable amount of time, we will move on. [indiscernible] Regardless, Enterprise remains laser focused on growing our [indiscernible] As I said earlier, currently have expansion projects on the Natchez River in Beaumont at Morgans Point on the ship channel, and at our main terminal on the ship channel, We exported over 70,000,000 barrels of hydrocarbons in December. Everything from ethylene to crude oil and our goal is that we will export over 100,000,000 barrels of hydrocarbons a month. 2027. We recently contracted for yet another ethane uptake customer in Asia this one with a plant in Vietnam And we were working with numerous other customers around the world on hydrocarbon supply agreements. The last 24 months, we've visited over 25 cities to sell U. S. Hydrocarbon, some we visited multiple times. I know I've been in Mumbai at least 4 times. In Asia or Europe and no one even comes close to having the history and experience We have Think about it. If we built our 1st LPG import terminal in 1983 and our first export terminal in 1999. We've been active in the international market for over 40 years.

On a personal note, [indiscernible] The first cargo of imported propane that I ever purchased with through [indiscernible] In total, our term commitments at our dock today exceed 2,500,000 barrels a day. And that's hydrocarbons. Ethylene to crude oil, We 3forced the way to reaching our goal 100,000,000 barrels a month. And with that, I'll turn it over to Randy. Okay. Thank you, Jim, and good morning to everyone on the call.

Starting with 4th quarter income segment items, net income attributable to common unitholders for the 4th quarter of 2024 was $1,600,000,000 or $0.74 per common unit on a fully diluted basis. This is a 3% increase compared to 1 point $6,000,000,000 or $0.72 per unit for the same quarter in 2023. Adjusted cash flow from operations, which is cash flow from operating activities before changes in working capital increased 4% to $2,300,000,000 for the 4th quarter This compares to $2,200,000,000 for the Q4 of 2023. We declared a distribution of $0.55 per common unit for the Q4 of 2024 which is a 4% increase over the distribution declared for the 4th quarter of 2023 The distribution will be paid February 4th, to common unitholders of record as of the close of business on January 31st. In the 4th quarter, the partnership purchased approximately 2 point 1,000,000 common units off the open market for $63,000,000 Total purchases for 2024 were $219,000,000 or approximately 7,600,000 Enterprise common units, bringing total purchases under our buyback program to approximately $1,100,000,000 In addition to buybacks, our distribution reinvestment plan and employee unit purchase plan purchased a combined 6,500,000 common units on the open market or $188,000,000 in 2024, This includes 1,600,000 common units for 48 $1,000,000 during the Q4 of 2024.

Of note, almost half of our employees participate in the employee unit purchase plan. 2024, Enterprise paid out approximately $4,600,000,000 in cash distributions to limited partners. Combined with the $219,000,000 of common unit repurchases over the same period Enterprise total capital return of $4,800,000,000 resulted in a payout ratio of 55%. Since our IPO in 1988, [indiscernible] we have returned approximately $56,000,000,000 to unitholders in the form of distributions and buybacks while building one of the largest energy infrastructure networks in North America. Total capital investments in the Q4 of 2020 4 were $2,000,000,000 which includes $946,000,000 for growth capital projects, dollars 949,000,000 for the acquisition of Pinion Midstream and $113,000,000 of sustaining capital expenditures. Capital investments for the full year of 2024 were 5 point $5,000,000,000 which includes 3,900,000,000 for organic growth capital projects, $945,000,000 for [indiscernible] for sustained capital expenditures. As mentioned in last quarter's earnings call, we have received noteworthy support from our producer customers following And for that reason, we are fine tuning our 2025 estimated growth capital expenditures range to $4,000,000,000 to 4,500,000,000 to include new opportunities in sour gas gathering and treating projects as well as additional natural gas gathering and compression projects in the Delaware Basin.

Our expected range of growth capital expenditures for 2026 remains unchanged at $2,000,000,000 to $2,500,000,000 dollars We expect 2025 sustaining capital expenditures will be approximately 525,000,000 which includes a planned turnaround at our Octane Enhancement Plant. Moving to capitalization, our total debt principal out outstanding was approximately $32,200,000,000 as of December 31, 2024, Assuming the final maturity date for our hybrids the weighted average life of our debt portfolio was approximately 18 years Our weighted average cost of debt was 4.7% and approximately 98% of our debt was fixed rate. Our consolidated liquidity was approximately 4,800,000,000 dollars at the end of the year, including availability under our credit facilities and unrestricted cash on hand. Our adjusted EBITDA was $2,600,000,000 for the 4th quarter and as Jim mentioned, dollars 9,900,000,000 for 2024. Ended the year with a consolidated leverage ratio of 3.1 times on a net basis, after adjusting debt for the partial equity treatment of our hybrid debt and reduced by the partnership's Our leverage target remains 3x plus or minus a quarter, so in the range of 2.75 to 3.25. And with that, Libby, I think we can open up for questions.

Thank you, Randy. Operator, we are ready to open up the call for questions.

Thank you. Or 2 questions to allow everyone the opportunity to participate. Please stand by while we compile the Q and A roster. Our first question comes from the line of Spiro Dounis of Citi. Your question please Spiro.

Thanks, operator. Good morning, everybody.

First question, maybe just go to the outlook for 2025. I know you guys don't provide guidance, we just get results the way you closed the year, it seemed like it was pretty strong. So just curious, 2 part question here, Any reason that that's not a good baseline to sort of run rate as we think about 2025? And then if you could, maybe just outline some of the bigger drivers of growth this year?

Yes, Spiro. I'll go back to what we said our Investor Day call a year ago that really we think near term We've got the potential for, call it, mid single digit cash flow growth. Over the near to intermediate term. And I think that's sort of our view going into 2025.

Jim mentioned the number of projects that we have coming on. Most of them The larger ones for sure come on lighter in the year. So we'll see some of that growth on the second half of the year But 2025 is setting up strong year, especially when you come in and just look [indiscernible] Great. That's helpful. Thanks, Randy. Second question, to go back to spot. So I know you're not providing a drop dead date to get that facility FID ed, but two parts here once again. Does it seem less likely or unlikely at this point that a 2025 FID is possible? You also mentioned being the only one licensed. Just curious, can you just talk about license expiration timing, what that looks like and what do we take to renew it if you don't FID, let's call it within 2 years?

Yes.

I think we've renewed one for a bit, Bob. Yes. We renewed the air permit, right, Graham, to 2028.

We're not that worried about renewing permits if we need to.

And does it seem like a 25 FID based on customer feedback at this point maybe less likely?

I'm not going to admit to that.

Okay. Trying to get you. All good. I appreciate the color here. I'll leave it there. Thank you, guys.

Thank you. Our next question comes from the line of Theresa Chen of Barclays. Please go ahead, Theresa.

Thank you for taking my questions. Follow-up to the cadence of earnings growth in 2025, can you help us think about the path to recovery for the petchem segment what are the puts and takes there And as far as operations and utilization goes for the larger the newer projects, how's that going at this point?

I think we've got to run the BDHs. That's one thing from our perspective. And we will From a petrochemical market perspective, I don't think Chris is here. But there he is.

But it looks Pretty bad right now, doesn't it Chris?

Yes. I think what we're hearing from most of our customers domestically is they're seeing moderate improvement from last year and they're not expecting anything much bigger But globally, the market is oversupplied. So that's the headwind there. Theresa? Yes. Theresa, this is Jim. What I see is we are we are signing We just signed recently within the last 2 or 3 weeks a contract with the Southeast Asian chemical company for a sizable ethane contract. I think we'll be back in Southeast Asia for another one. The other thing that I [indiscernible] ethane feedstock 2 crackers in other parts of the world has advantaged to naphtha. It wouldn't surprise me and help me, Chris, to see crackers shut down in other parts of the world and ethylene exports beginning to fill that void.

Yes, I mean, we're already seeing some of that. And that helps not only our ethylene, but it also helps the propylene markets because those naphtha crackers in the rest of the world also do make a little amount of propylene So that will help rationalization.

Interesting. Thank you so much. And then on the LPG side, following a competitor announcement of a new export project in Galveston Bay, Today, how do you think about the potential change to export economics to competitive economics within the region?

Trish, this is Brent. As you see capacity come online and there's industry capacity come online this year, We'll have some in the back half of this year as well. And then a larger expansion for next year.

But right now the dock the dock FOB values are pretty healthy. Obviously, as this capacity comes online, those will start to become eroded. When you look at our our capital for expansion, it's less than a third of what a Greenfield expansion is. So we'll see I didn't listen to the call, but That's in terms of when we run the numbers, that's a little bit of a challenging project.

Theresa, this is Jim. We're not going to give up our LPG export franchise. We'll repeat more valuable to our customers than anyone.

Understood, nor would I expect you to give anything up, Jim.

Thank you. Our next question comes from the line of Gene Ann Salisbury of B. A. Your question please, Gene Ann.

Hi, good morning. Can you talk about how you see the size of the eventual price for being able to handle sour gas in the Permian? Do you expect sour gas to grow much faster as a share? Or is it mainly a strategy to be able to have a broader customer offering and get more customers?

Hey, Jean Ann, this is Natalie. I don't think anything is going to be fast However, we are permitting a 3rd AGI well or we're in the front of it. We're also expanding the 2 AGI wells there.

We'll build our 4th train and then we have our eyes on the 5th train. Don't know how quickly, but I think we'll it does give us a a new asset base to be able to expand the integrated value chain to the upstream side. Okay. That makes sense. And then as a follow-up, can you just kind of talk about how you expect your flex NGL exports to ramp as they come online? Roughly how much in ethane versus propane service to start Hi, Jean. This is Doug Hamlett here. On the ethane side, so we're fully contracted on our base capacity of 540,000 barrels a day. We're in the process. We've identified low cost expansion debottlenecking projects we're well into contracting that additional capacity. So if you think about how that's going to play out, we're waiting on the DLEC, the ships get delivered. As those ships continue to get delivered and ramp our ethane exports at our Natchez River terminal, That timing coincides with our ship channel expansion around 300,000 barrels a day. So long term, we expect it to be ethane and nachos. And we'll have our ship channel expansion packfill that and we're continuing to see robust demand on ethane exports And as Brent alluded to, we have great brownfield expansion opportunity across all three of our export terminals.

And then when our expansion comes on for LPG, we're 85% contracted 85% contracted on LPGs.

Well, great. That's great color. I'll leave it there. Thank you.

Thank you. Our next question comes from the line of Michael Blum of Wells Fargo. Your question please, Michael. Thank you. Good morning, everyone.

So I appreciate the slide.

And the comments on capital allocation. I wanted to ask you about buybacks specifically. Just if you're thinking about buybacks any different as a component of capital return, Should we expect the cadence we've seen in the last couple of years should be consistent going forward or any change there?

Yes, Michael. Good morning. We sort of come in and carry that thing as far as the potential for cash flow growth to be mid single digits. Jim mentioned earlier that we had 3.2 $1,000,000,000 of excess distributable cash flow. In in 2024 and if you take that forward a couple of years to 2026, that probably puts you in the neighborhood of 3.5%, 3 point $6,000,000,000 of excess DCF. And then if we're up at the upper end of our growth CapEx range of $2,500,000,000 that leaves you about $1,000,000,000,000 1 [indiscernible] of excess DCF after fully funding your growth CapEx excess DCF that's left over for buybacks and debt retirement. Where Our leverage target again is the range 2.75 to 3.25 our midpoint is 3. That's about where our leverage is today. And so I think we'll have a lot more flexibility to do buybacks maybe a little bit of debt retirement once we get out to 2026.

Thanks for that Randy. Appreciate it. And then just wanted to ask about head here into 2025, the M and A landscape how active what's out there for you and do you expect this to be an active year [indiscernible] Thanks.

Yes. 2024 was a pretty active [indiscernible] And we've looked at virtually every asset package that came across. And again, Pinion was the most attractive to us. And we executed on that. We do see some additional asset packages or we think we'll see some later in the year and we'll take a hard look at those and see what fits well in our system. Public company M and A is a little bit harder to do. Especially if you're in goal is to drive cash flow per share, cash flow per unit growth, Public M and A can be a little on the problematic side, Don't see as much value as we do with with asset purchases. But we'll take a look at both. Thank you.

Thank you. Our next question comes from the line of Neil Dingmann of Truist Securities. Your question please, Neal. Good morning. Thanks for the time.

First question, guys, just on GOM, I'm just wondering, looks like that the processing spread and others have stayed or I guess they were pretty stable for the remainder of last year. You expecting more of that this year or maybe just talk about the activity there?

I mean, I think in terms of the forward curve, Neal, I think we think that spread is going to be there. It's probably more you look at Waha, it's a function of Waha gas price I would probably think ethane is fairly stable. For this year. It's probably going to escalate a little bit. But in terms of the process thing, it's probably more of a function of the oil and gas price. Got it. Okay. And then just one forward, love to hear just on prospects of now where we sit on the [indiscernible] on how you all are looking at it, you've talked about M and A now today. Is that predicated on what you're thinking on on the macro on both the oil and the gas side? I just wanted to hear kind of what you're thinking for the remainder of the year?

On the macros and commodity side?

Hey, Neil, would you mind repeating that? Yes. Randy, you'd laid out kind of I know you guys are active on the M and A side. I'm just wondering, is this predicated? I'd love to hear you guys always give a pretty good forecast on what you're thinking the commodity wise, both I'd say gas NGLs and oil.

I'm just wondering, are you expecting a bit of a ramp commodity wise for remainder of the year And I guess I'm asking is, you know, is M and A predicated on this? I don't know if that M and A is predicated on it, but you're talking a ramp in price or ramp in production? [indiscernible] Just trying to figure out what you all are thinking for price in the remainder of the year.

For price, if we start with oil, it's it's been range bound, not at really bad prices quite frankly, it's really been quite range bound.

And not just for the last year, but even longer than that, Our belief is that the OPEC plus continues to be very focused on that. They don't want prices too high.

And they don't want them too low. I don't know what changes that landscape. Right now, there's a lot of discussion about will we move into a for lack of a better term, drill baby drill scenario. And all signs are that that we will not.

That it will be call it, slow and steady from very large numbers already. That said, we continue to see that rich natural gas production just sticking to the Permian continues to exceed our expectations and we will be reforecasting and publishing new forecast probably sometime in the Q2. We're working on it now.

And I'll say, Neil, I wouldn't be surprised if our natural gas liquids forecast in the Permian specifically is not up again from the prior one, but give us some time to work through it.

And then, Brent's pointed to the natural gas equation. It's somewhat weather related. Waha is very much what pipes can you count on running related. That matters a lot to us.

So there you have that.

Perfect. Thank you. That's helpful.

Last but not least, we're pretty constructive on natural gas long term.

Just because of what we see from the demand standpoint for LNG and for power.

Okay.

Thank you.

Our next question comes from the line of Jeremy Tonet of JPMorgan Securities. Please go ahead, Jeremy.

Hi, good morning. Good morning. Just want to start off, I guess, any updated thoughts out of DC. Just wondering, in the Trump administration, imagine permitting might be easier also talking about energy emergency and how that could impact permitting overall. Just wondering what you hear coming out of DC, anything different and could that impact, I guess, your growth strategy going forward?

Reform would be nice, but got to see it to believe it, frankly.

Got it. Anything else out of DC on your radar right now or just kind of business as usual?

Jeremy, again on the permit reform, it just seems like that's going to take some time and pretty involved. The other thing is just what What the administration is looking to do as far as from a tax packages and tax package and extend some of these Some of these provisions at sunset at the end of 20 25 to get extended. So thus far really no surprises from where we were frankly, right after the election. It seems like the administration and Congress are following through with what they were talking about during the election cycle and right after the election.

Jeremy, the lack of permit reform seems to make what we have in the ground a heck of a lot more valuable.

Got it. Yes, no, absolutely. And I just want to touch base real quick on the PDH facilities 1 and 2. Where are the current, I guess, operating run rates in where do you see them going over the course of 25% and kind of hitting a normalized level?

You want to hit it, Graham? Yes, Jim. This is Graham.

Right now, we're looking to increase the run rates of the the PDHs. Obviously, they haven't met our expectations. Currently, we're working through a mechanical issue on PDH 1. But coming out of our turnaround last year, it really ran pretty it ran pretty well. We had a minor blip we're working through right now. Expect a sustained run rate there. PDH2, we're working through design issue with our licensor that has the rates the rates currently limited. We expect to get that resolved and long term target is to have those operating in the upper 90% of utilization.

Okay, got it. Thank you.

Thank you.

Our next question comes from the line of John Mackay of Goldman Sachs. Please go ahead, John.

Hey, good morning. Thanks for the time. I want to stay on some of the policy stuff. We've obviously seen a lot of different headlines. On the tariff front, we had some kind of retaliatory tariffs from China overnight, I guess. So far from China, they're not on the NGL front. I guess I'd just be curious to hear your takes overall on any of these energy tariffs how you think about that in the context of your export footprint?

China imports I think we have one contract with 1 Chinese company on the program. Is that right, Chris? That's right. But a lot of propane out of U. S. Goes to China. Are there PDH plants, Doug? I've got a lot of PDH plants and they don't have any propane. So I don't see it affecting that. We have ethane contracts with 1 customer with 2 customers. And those crackers can only use that thing, Ted?

So they don't have any ethane. So from an NGL perspective, I'm not worried.

Now most of what we have that on LPG that goes China goes through trading companies.

We're getting interest in places like Southeast Asia We're going to have 2 contracts before it's all said and done.

And we're expanding another contract in Asia by 40,000 barrels a day. And then we have a huge contract in Europe. So Doug was a little modest when he says 540,000 I think where we will end up on ethane is 600,000 And he's pointing higher. And then I'd I think 85% LPG. I think we'll contract that out for it's offsetting to it. I appreciate all that. Thank you. Maybe just follow-up wanted to ask about the NGL pipeline side volume and if we're just looking year over year, I know there's always a little bit of noise, but volumes were up a lot Margin itself wasn't up a ton. You guys called out some higher costs. I'd just be curious your take on kind of NGL pipe margins going from here how to think about those that extra OpEx side? And then maybe comment on this in the context of broader NGL pipe competition?

Yes.

Justin. A few things going on in the volume side, so let's cover that. Significant walk up volume, which incorporates a lot of our purity movements along with the trajectory that we see on just overall Y Grade growth So you're seeing some a big quarterly step up as a function of some of those month to month movements. On the purity side. But we are continuing to see that nice ramp of Y Grade volumes trending in the right direction. On the when you look at the GOM side, it's one thing to note that while Permian Y Grade rates stay in the reinvestment economic range as we build out Bahia, a lot of what changes associated to Rockies flows and those Rockies tariffs are significantly higher. And so sometimes that can when you look at this volume and GOM perspective can make the fee may otherwise skew the fee. So changes in our Rockies flows can sometimes make the per unit GOM otherwise more skewed than what you'd anticipate So all in all though, the growth that we're seeing in the Permian continues support reinvestment economics on the wide grade side.

Sorry, just on the context of kind of competition from new pipes coming in, how are you feeling about that? Yes. We still like our platform. We're still growing our GMP footprint. I'd say, when you look at in service, [indiscernible] in the 4th quarter we're quickly right behind that going to convert Seminole back to crude service. We've guided to that in prior calls. And so when you take that into account, going into 2026, we'd expect that he had to be 60% full with more coming behind it as we continue to ramp. So we still feel like our platform gives us a pathway to being full over the coming All right. That's clear. Appreciate the time. Thanks so much.

Thank you. Our next question comes from the line of A. J. O'Donnell of TPH. Your question please, A. J. Yes. Thanks. Good morning, everyone. I was just hoping maybe we could start on NGL Marketing.

There were some notable strength there quarter over quarter. I was just wondering if you could expand a little bit on on the prospects for 2025 In light of commodity price movements and maybe the potential to offset any lower margins from natural gas marketing as a result of higher Waha spreads.

Yes. I mean, it's a function. We had some higher FOB values across our dock and LPG side, but the bottom line is, as volatility presents itself, and the market will be there to monitor we continue to do that and those opportunities continue to present themselves Okay. Thanks for that. [indiscernible] On data centers.

We saw the Stargate announcement I'm just curious, I know you guys have some intrastate lines in the area.

Is there any capacity on your Texas Interstate system to be able to feed that project?

We've pulled out the capacity on both of our it just depends on where the project is. Just to give you some perspective of how much data center demand is out there, we probably 20 data center projects in the queue on the tech side, we placed over 2 Bcf a day of demand.

We believe only probably 15% of this project are showing signs of progress. On the power plant side, which may see data centers, if you believe it's [indiscernible] power from from those.

We're looking at probably 15 potential projects. Around one 1.2 Bcf a day and maybe 50% of those are real.

So where it depends on where the data center project is and it all the way from Dallas to San Antonio So if our lines are closed, we're we're going to take the opportunity to serve the data centers where it makes sense.

Okay, great.

Thank you.

Our next question comes from the line of Brandon Bingham of Scotiabank. Question please, Brandon. Hi. Thanks for taking the questions.

If we could go back to the volumes side and the volumes outperformance, this quarter, just wondering how sticky those volumes are and kind of how you see that progressing throughout 2025?

Yes, Brandon, I think if you come in, I mean that's really just the growth at the wellhead, especially the growth at the Permian. [indiscernible] really the benefit of a value chain So it's flowing into our gas processing plants. Those liquids out of the processing plants flow into our downstream pipelines. Our fractionators all the way to the dock. So what is that thing, wellhead to water? Think that's pretty much what you're seeing across our system.

Awesome. Thank you. And then if we could just quickly go back to the petchem side.

And on the margin front, you guys had previously discussed the PDH plants contributing, I think it was roughly $200,000,000 a year in EBITDA whenever they're running as they should. Could you just talk about what margins were baked into that $200,000,000 number and how those compare to what you're currently seeing?

The margins haven't changed because it's a formulaic price, isn't that right? Chris?

Yes. The way our PDH contracts are set up, they're all toll based. So it's cost plus. So it's really just a function of utilization rates And really what we were talking about was I think when we looked at where earnings were in 2024, we see the potential for the PDHs to contribute incremental $200,000,000 in 2025.

Got it. Okay. Thank you.

Thank you. Our next question comes from the line of Manav Gupta of UBS. Please go ahead, Manav.

Good morning. My question here is any update on the Morgan Point fire Flex expansion that you can provide?

As far as an update on where we are with the Morgan's Point Flextrain?

Yes.

Yes, this is Chris Danna.

The construction at the end of December of last year. So it's in service and ready to serve. Today, it's mostly being filled for for ethane because there's a lot of both planned and unplanned outages on the cracker side that's limiting the ARB for ethylene. But the and the ethane opportunities are there.

Perfect. And second one is more on the Hainesville side. Do you still see that as a growth basin? And are you looking at growth opportunities coming out of the Haynesville Basin?

Haynesville has it's a growing basin. Although it rig counts wouldn't show that to be true, We have seen some growth in our portfolio and this is from new acreage development. Producers are hitting However, I don't know that the Haynesville has truly grown over the last year. I would say the opposite.

Over the next year, I think we do see some growth potential again, gas price drives that story.

Thank you so much.

We'll be updating our Hainesville forecast at least for its potential when we update our forecast in the quarter. It's what it's doing and what its potential is key.

That's what it is.

That's why I use the word potential.

Thank you.

Thank you. I would now like to turn the conference back to Libby Strait for closing remarks.

Madam?

Thank you to our participants for joining us today. That concludes our remarks.

Have a good day.

This concludes today's conference call. Thank you for participating. You may now disconnect. [indiscernible]