MPLX LP Price & Performance (MPLX)

With the chain Just certain equity method investments serving natural gas and NGL customers now reside in the natural gas and NGL Services segment. Prior periods have been recast for comparability. Additional details on these reporting changes can be found on slides 16 17. With that, I will turn the call over to Mary Anne. Good morning and thank you for joining our call. In 2024, we executed our strategic commitments Full year adjusted EBITDA was $6,800,000,000 an 8% increase year over year. In the Crude Oil and Products Logistics segment, results were driven by strong operational performance, and demand. In the Natural Gas and NGL Services segment, we placed 2 processing plants into service in 2024 and achieved record throughput driven by our growing portfolios in the Utica, Marcellus and Permian Basins. And today, MPLX handles over 10% of all the natural gas produced in the United States generating mid single digit adjusted EBITDA growth. Since 2021, we have grown adjusted EBITDA at a compound annual rate of 7%. [indiscernible] $1,700,000,000 in organic growth projects and strategic acquisitions of increased ownership interest in existing joint ventures. These capital investments were targeted in key basins and value chains where we operate We believe these investments will generate mid teens returns extending the durability of our mid single digit EBITDA growth profile and our ability to return capital to our unitholders.

November, we increased our quarterly distribution by 12.5 percent marking the 3rd consecutive year MPLX by 10% or more. Over the course of 2024, MPLX returned nearly $4,000,000,000 of capital to unitholders while maintaining distribution coverage of 1.5 times. Strong given the stability of our business. Looking forward, our growth opportunities are robust. And today, we announced a capital expenditure outlook of $2,000,000,000 for 2025. 85% of our growth capital will be allocated to opportunities within our natural gas and NGL Services segment. Anticipate mid teen returns on these projects in aggregate and believe our execution on these investments will extend the durability of our mid single digit growth profile allowing us to invest in the business and support annual distribution increases in the future. And we believe we have the financial flexibility to execute strategic acquisition opportunities that would be complementary to these organic capital deployment plans. MPLX reached a significant milestone in its NGL well with the announcement of a project to construct a Gulf Coast fractionation complex and export terminal. MPLX's fully integrated NGL value chain connects Permian, to the Gulf Coast and will supply growing global demand for LPGs. Our $2,500,000,000 investment in the fractionation complex and export terminal complements MPLX existing asset base and leverages existing infrastructure MPLX will build and operate the Gulf Coast fractionation complex consisting of 2 150,000 and a 400,000 barrel per day LPG export terminal all of which will be located adjacent to MPC's Galveston Bay Refinery.

MPLX has entered into a joint venture agreement with ONEOK for the export terminal and a bidirectional purity pipeline between Mount Belvieu and Texas City. One Oak will market its 200,000 barrels per day and provide connectivity to Mount Belvieu Storage enhancing the competitiveness We also believe this strategic partnership with ONEOK will create additional optionality and value to our customers. We also see it as a platform for future collaboration and growth across our Gulf Coast. Assets. MPLX plans to market ethane production from the fracs to both existing and new customers. MPC plans to contract with MPLX to purchase the remaining LPG production from the fracs which MPC will market globally through its existing marketing business via the new export terminal. This contract structure once again demonstrates the strength of our strategic relationship with MPC. The fractionation facilities are in 2028 and 2029, and the export terminal is expected to be in service in early 2028, We anticipate mid teens returns on the project which is expected to begin generating EBITDA when placed in service in 2028 and will ramp through the end of 2,030. Additionally, we believe the expansion of our Gulf Coast NGL value chain will create a platform for optimization [indiscernible] incremental growth opportunities.

As we look at additional opportunities for MPLX, we are investing for durable growth in response to strong producer demand. MPLX is expanding its natural gas and NGL integrated value chains progressing long haul pipeline growth projects and investing in processing capacity. MPLX is constructing its 7th processing plant [indiscernible] 200,000,000 cubic feet per day processing plant expected online in the Q4 of 2025 bringing our gas processing capacity to 1,400,000,000 cubic feet per day. Integral to our wellhead to water NGL strategy, the Bangel joint venture is progressing segment expansions enabling additional NGLs to reach our Gulf Coast fractionation complex. The BANGL pipeline's expansion to 250,000 barrels is expected to be in service by the end of the Q1 and the JV partners have sanctioned the expansion of the mainline to 300,000 barrels per day which is expected online in the second half of twenty twenty six. Within our natural gas value chain, the Matterhorn XPress pipeline began full commercial service in November, and we continue to see strong demand from shippers. Additionally, MPLX [indiscernible] progressing the Blackcomb and Rio Bravo pipelines. Designed to transport natural gas, from the Permian to domestic and export markets along the Gulf Coast.

Both pipelines are expected in service in the second half of twenty twenty six. In the Marcellus Basin, MPLX is constructing the Harmon Creek 3 processing plant and adding fractionation capacity As we work with our customers to align capacity expansion This complex will comprise of a 300,000,000 cubic feet per day processing plant and 40,000 barrel per day deaffeizer. Following completion in the second half of twenty twenty six, MPLX expects gas processing capacity in the Northeast to total 8,100,000,000 cubic feet per day and fractionation to total 800,000 barrels per day. Within the crude oil and products Logistics segment, anticipate spending $250,000,000 on growth projects. This includes expanding crude gathering pipelines, supporting the Permian and Bakken basins various butane blending projects, at our products terminals and investing in other high return investments targeted at the expansion or debottlenecking of assets We have a very high degree of confidence in these investments as the macro environment Port Energy remains favorable. The United States is a low cost producer of energy fuels needed [indiscernible] and the outlook for hydrocarbons remains robust. Electrification, onshoring, [indiscernible] 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 fuels is expected to grow. The U. S. Refining industry is expected to remain structurally advantaged over the rest of the world Furthermore, We believe the MPC refining assets are the most competitive in each region MPC operates and our strategic relationship with MPC will provide additional opportunities to enhance value chains supporting their operations We are confident in our growth opportunities to generate durable cash flow for MPLX supporting our commitment to return capital to unitholders Now let me turn the call over to Chris. To discuss our operational and financial results for the quarter. Thanks, Mary Anne. Slide 8 outlines the Q4 operational and financial performance highlights for our crude oil Products Logistics segment. The segment adjusted EBITDA was a new record increasing $60,000,000 when compared to the Q4 of 2023. The increase was driven by higher rates and throughputs across our systems. Pipeline volumes were up year over year primarily because of the timing of refinery maintenance and increased volumes in the Permian [indiscernible] Terminal volumes were also up year over year primarily due to higher throughputs on the West Coast.

Moving to our natural gas and NGL Services segment on [indiscernible] the segment established a new record as segment adjusted EBITDA increased $79,000,000 compared to the Q4 of 2023. This is driven by increased volumes, including partially offset by increased ownership interests and existing joint ventures in the Utica and Permian Basins and growth from our equity affiliates. Gathered volumes increased 8% year over year primarily due to the addition of dry gas volumes from Utica assets acquired earlier this year and increased production in the Marcellus. Processing volumes increased 6% year over year primarily from higher volumes in the Utica and Permian Basins. In the Utica, processing volumes have increased nearly 50% year over year highlighting the value producers are seeing the liquids rich acreage. Utica processing utilization exited 2024 at 70% as new wells are placed online, we are positioned for additional volumes with minimal capital spending in 2025. Marcellus processing utilization was 92% in the quarter, reflecting the ramp of our Harmon Creek II processing plant, Total fractionation volumes grew 14% year over year primarily due to higher process volumes and ethane recoveries in the Marcellus and Utica basins. Moving to our 4th quarter financial highlights on Slide 10.

Total adjusted EBITDA of $1,800,000,000 and distributable cash flow of $1,500,000,000 is increased 9% and 7%, respectively, from the prior year. MPLX returned nearly $1,000,000,000 to unitholders and distributions, and $100,000,000 in unit repurchases. During the quarter, MPLX retired $1,150,000,000 of senior notes insured in December. We ended the quarter with a cash balance of $1,500,000,000 and expect to retire another $500,000,000 of senior notes maturing later this month. MPLX maintains strong financial flexibility and we expect to continue the growing the partnership's cash flow enabling the return of capital to unitholders. Now let me hand it back to Mary Anne for some final thoughts.

Thanks, Chris. MPLX has a strong history of growing the partnership's cash flows, and its distributions to unitholders executing its strategic priorities all while maintaining capital discipline. While year to year growth may not be linear, we are targeting a mid single digit growth rate over multiyear periods. And as you can see from our results, we have achieved this growth. By deploying capital wisely, controlling our costs, and optimizing operations to get the most out of our assets we have delivered 7% growth on both an adjusted EBITDA and DCF. On a 3 year compound annual basis. Similarly, the growth and durability of our cash flows combined with the strong coverage of 1 point 5 times and low leverage, just above 3x has allowed MPLX to consistently increase its most recently by 12.5%. And we expect for years to come. Our capital allocation priorities are unchanged. 1st, maintenance [indiscernible] we are steadfast in our commitment to safely operate our assets protect the health and safety of our employees and support the communities we operate in 2nd, we are focused on delivering a secure and growing distribution and expect this will remain our primary return of capital tool 3rd, we will invest in growing the business seeking to its achieve superior returns After these priorities, we will assess the opportunistic return of capital to unitholders through unit In summary, the opportunities ahead of MPLX in 2025 are compelling as we execute our mid single digit adjusted EBITDA growth strategy in addition to optimizing our highly contracted asset base, we see growth across our natural gas and NGL value chains.

In the Marcellus and Utica, producer activity remains robust supporting growth of our gathering processing and fractionation footprint. Development of our Gulf Coast fractionation complex and export terminal will enhance our NGL value chain And with our joint venture partners, we are progressing long haul natural gas and NGL pipelines to meet growing demand from Gulf Coast international markets. Advancing these high return growth projects position us to grow our cash flow and return capital to unitholders through a growing distribution The growth and durability of our cash flows combined with strong coverage and low we believe MPLX is positioned for additional distribution increases like the 12.5% seen in 2024 At the current distribution, MPC expects to receive $2,500,000,000 annually from MPLX illustrating the strategic value of MPLX within MPLX's And as both pursue value enhancing opportunities, the value of this strategic relationship is further strengthened. Our commitment to operational excellence our growth opportunities and our financial flexibility position us to generate durable cash flow for MPLX supporting our commitment to peer leading capital returns unitholders. Now let me turn the call over to Christina. Thanks, Mary Anne.

As we open the call for your questions, as a courtesy to all participants, we ask that you limit yourself to 1 question and a follow-up. If time permits, we will reprompt for additional questions. We are ready for questions. Thank you. Will now begin our question and answer session. Our first question comes from John MacKay with Goldman Sachs. Your line is open.

Hey, good morning. Thanks for the time.

Wanted to start on the NGL value chain announcement. Maybe you could just share a little more background on the strategic rationale here among bringing the partners like ONEOK taking having MPC take the offtake and what that means for the your confidence that return profile overall?

Hey, good morning, John. Sure. First and foremost, this Gulf Coast NGL value chain expansion that we talked about this morning. As you know, over the last several quarters, we've been talking about our ability to build out our wellhead to water strategy We've shared our thoughts around how we were building up ensuring that this opportunity could yield mid single digit growth We think that this project demonstrates our ability over the long term to continue to do that. Beginning at the wellhead, we have incrementally grown processing capacity over the last few years. Serving some of the best producer customers in the Permian Basin. I mentioned earlier this morning, we're bringing on Secretariat 7th processing plant in the Permian as an example. Last quarter, we talked about our increase in owner ship in the BANGL pipeline to 45%. And as you know, this gives us this increased ownership to bring the volumes. BANGL, as I mentioned this morning, also expanding the mainline to 300,000 barrels a day. So So we think this investment in the fractionation complex and the export terminal really complements MPLX's existing asset base. I think the second part of your question was sort of why the JVs, if you will, with ONEOK The JV for the export terminal and the purity pipeline include 1 Oak One Oak will bring marketing and provide connect And we think this improves the competitiveness of the terminal Also, we think this strategic partnership with ONEOK will create additional optionality and value for our customers and clearly give us some optionality for the future.

So putting all of that together, given our current infrastructure, and the opportunity that we see, we have a high degree of confidence that this project will continue to extend our EBITDA growth into the future. Me pause there.

Thanks for that, Mary Anne. It made a lot of sense.

And maybe it's just my follow-up. You touched a couple of times on additional opportunities in the future. Maybe you could just flush that out for us. If we look at the capacity of this footprint, there's probably some more room for you to add some processing upstream what else could we be talking about here for this incremental opportunities?

Yes, certainly. So So as you know, the NGL and nat gas opportunity set for us as we've been talking about, we think is an extremely important platform, particularly as we look at the connectivity to our export markets and what we might be able to do in the future. I'm going to ask Dave to give you a little more color on what some of those opportunities longer term might be.

Yes. Thanks, Mary Anne. So maybe I'll set the stage with when we use the word strategy, think about long term roadmap of where we want to go within the crude, the nat gas and NGL value chains. [indiscernible] and those will continue to evolve and develop. So when you think about the announcement today of our Gulf Coast fractionation complex, We talked a lot and we continue to talk a lot about the justification, the rationale around that. But Also think about the Gulf Coast and within the Gulf Coast, some of our refinery assets at MPC and the interconnectivity opportunities that we'll provide in the future. In addition to that, the Gulf Coast, as everybody knows, has got a very large pet or new customers down the road in the petrochemical side of the business. And finally, and Mary Anne touched on it very well, with our new JV partner, ONEOK, as we continue to build out this project and look at incremental opportunities between that partnership we believe that there is a roadmap for some pretty substantial growth opportunities there also. So I think the combination of those [indiscernible] within the U. S. Gulf Coast footprint. Has a lot of growth potential in the NGL platform.

Thanks very much for the time. Appreciate it.

You're welcome, John. Thank you. Thank you. Our next question comes from Manav Gupta with UBS. Your line is open.

Good morning, Marianne. I think one of the unique features of your stock MPLX is your double digit distribution growth. And I'm trying to understand with these new projects that you have added, have you been able to extend that for a period of time where we can say maybe for the new and the next next 4 or 5 years MPLX could continue grow their distribution in double digits.

Good morning, Manav, and thanks for the question. So certainly, as we look at this opportunity as well as putting other capital to work this year, next year, We remain optimistic about mid single digit growth EBITDA I shared, it might not be perfectly linear just based on how that capital goes to work and when these projects actually come to fruition. [indiscernible] our reason for the 12.5% distribution increase last year was certainly predicated on the fact that we believed it was durable. The cash flows being generated from these projects as you've seen over the last few years, the growth in EBITDA, the growth in the DCF So we are certainly optimistic that this level of distribution increase like the 12.5% that our unitholders experienced in 2024, will be able to do that in for years to come.

Perfect. My quick follow-up is obviously these are very good organic projects at and returns. But I mean you have a good balance sheet. If the rights small bolt on opportunities do come along the way, could you still look at them for growth? And then the parent obviously has some assets, which also be moved into MPLX. So how are you thinking about those things?

Yes. Thanks, Manav. Sure. So maybe a minute on just to be sure we're clear on on how we think about capital. If I step back first to 2024, we've talked about capital in and about $1,000,000,000 per year. If you've seen, we actually put about $1,900,000,000 to work in 2024. Some of that what we would classify as true traditional capital, but another $800,000,000 or so in small bolt on M and A. You may remember early in the year, we did the Summit transaction. We took incremental ownership in BANGL. Wink to Webster. So a couple of examples This year, we're talking a capital project sorry, capital expenditure estimate in and about $2,000,000,000 Keep in mind, as you know, we've got the balance sheet capability to be able to do that But 85% of that capital we are saying would be targeted toward the Natgas and NGL services. So obviously, the project that we just got done announcing this morning is a part of that secretariat that we will be completing in the back half of this year. Harmon Creek 3 that we talked about back half of next year. And then certainly, if there were to be incremental bolt on M and A opportunities, that met all of our criteria.

So first and foremost, our mid teens returns extension of our value chains, All of those criteria we would certainly have the capacity at the MPL Lex level to be able to do that. I think your last question to me was whether or not we would consider drops And as you know, over the past couple of years, drops were probably lower on our items of [indiscernible] I think a few things about drops today. 1, it certainly makes sense that there's just a small few. To get those assets to the midstream side, putting those assets where they belong. Having said that, in no way would we do that to support mid single digit growth. We believe the organic opportunities that we have support our mid single digit growth If we were to do drops, then that cash that would be a part of part of MPC, of course, we could use to increase the buyback given the valuation that we see at MPC, but should be clear that if we do a drop, it would not be because we're trying to support mid single digit growth with those drops because that EBITDA the enterprise today.

You so much. I'll turn it over and congrats on a great quarter.

You're welcome. Thank you.

Thank you. Our next question comes from Jeremy Tonet with JPMorgan. Your line is open.

Hi, good morning.

Good morning, Jeremy.

Just want to come back to the NGL strategy a bit more, quite kicking up to high gear here. Wanted to touch base on a couple of points. As far as it relates to the fractionation component, is this a take or pay contract for MPLX where it's all kind of firmed up and MPCs responsible for the marketing, so there's not that type of exposure. At MPLX? And then if I think back on the Mark West assets, there's MPLX has GMP in a lot of different areas. Could those areas be piped into this ex track and export facility or what's the art of what's possible here?

Thanks, Jeremy. So first and foremost, want to be sure that we understand, particularly on the contract with MPC and MPLX. As you know, as we have in all other contracts, any commodity risk would be borne by MPC. Not by MPLX. I'm going to pass it to Dave first and he can give you a little bit of color on the contract and then I'll move on to Greg who can talk about the Mark West asset.

Hey, Jeremy. So let me touch on and I think Mary Anne did a nice job of articulating it. But I want to be clear with the contracts between MPLX and specifically MPC. From the fracs and then over the export terminal Those will be those will be termed up agreements without the commodity exposure on the MPLX side of the equation. So I just want to be clear there. That the commodity exposure and the marketing of those C3s specifically coming out of the fracs because as Mary Anne touched on earlier, the ethane will be going to existing customers or new customers, excuse me, in the market But contracts between MPLX and MPC for the C3 plus out of the fracs and across the dock will be commercial agreements without commodity exposure on the MPLX side of the equation. So hopefully that answers your question. Jeremy, this is Greg. With regard to your question on the data centers, data center power demand has continued I'm sorry, Greg. He was asking about Mark West assets, can they be integrated? That was Jeremy's question.

No worries.

I'm sorry, I apologize. Misheard the question. In terms of Yes. The new the facilities that we have, I'm sorry, I misunderstood the question. Our facilities in the Permian, Delaware Basin are already piped into to deliver NGLs to BANGL and the BANGL pipe will be extended to our our Gulf Coast facilities which then will allow access both for fractionation and for for terminal access to water.

Got it. But I think that you might have GMP assets in other basins Just want to see if those could be integrated into this Okay.

Yes.

We definitely have NGL access fractionation in other basins and those NGLs would have the ability in some cases to be directed down towards towards our fractionator fractionators and our export facilities on the Gulf Coast. Got it.

That's helpful. Hey Jeremy, just making sure we got your question now. You good?

Yes, I just wanted to see what was possible there. And then maybe I guess going towards the data center side, touching there, just there's a lot of talk about what's possible and what midstreamers could provide for solutions there. Would MPLX look at laterals to be gas into data centers or even possibly behind the meter or anything else. Just wondering what's on your radar at this point?

Yes, Jeremy. Great question. And I'm going to give Greg the opportunity to share because he's got a lot to offer on this topic. But as I mentioned, you look at the amount 10% of U. S. Gas production is going through MPLX We think there are opportunities, particularly when you look at the location of our producer customers, the amount of residue gas that we have and the opportunities over the long haul. We think we're well situated to support our producer customers. But let me pass it back to Greg because I know he's got some things that he wants to share there.

Jeremy, with regard to the power supply for data centers, data center power needs and demand has been growing and we think it will continue to grow Whether or not it's AI driven or whether it's basically cooling for for these large data centers. Natural gas is positioned to be the primary fuel source, we believe, for that growth. [indiscernible] in order to generate that power, you need processed and treated gas. So that could either be co location off of one of our large processing plants or any of our processing plants or off of [indiscernible] We think that we do have the ability either through short short pipe connections or co location to be locations where cogeneration would be favorable as well as potentially even data center development [indiscernible] easier at this point to to put in more fiber optic cable for long haul. To transmit data than to build new electric transmission lines or pipe. So we think there may be definitely co location for power generation, but potentially data centers as well.

That's very helpful. I'll leave it there. Thanks.

Thank you, Jeremy.

Thank you. Our next question comes from Theresa Chen with Barclays. Your line is open. Good morning. Thank you for taking my question. With the organic CapEx step up in 2025, just wanted to get more color and clarify your views on the cadence of capital deployment both organic and inorganic over the next couple of years. With the backlog that you have of organic projects. So is the $2,000,000,000 a good run rate organic taking into account additional potential processing in the backlog and then M and A would come on top of that. How should we think about that? Thanks, Theresa. What I would tell you, yes, indeed, the $2,000,000,000 is different than the $1,000,000,000 communicated historically. And as Mary Anne had articulated, we've always talked about the one, but we've been deploying more. Such as the one.9 that she went through last year in 2024. And if you look back even to 20 23, it was closer to about 1.4. With the Tornato acquisition we did at the end of the year. Looking forward, the $2,000,000,000 is a rough number. That is growth capital with maintenance this year. I would expect that number to look similar in future years, but I also tell you, I don't think it's going to be linear in nature.

I also would tell you, Teresa, that the 2,000,000,000 dollars is not inclusive of M and A. We're not projecting M and A. But as Marion had stated, we will absolutely look at M and A that fits into our strategic footprint and hits our return profiles. So with our significant balance sheet flexibility we currently have, we think we're in a great position to be able to do that.

Understood. And in terms of the LPG export project, can you share how that partnership with ONEOK is going to work? Will we be operating the facility? Is it a JV, UJI?

And will all the storage be in Mont Belvieu? Does all of it exist at this point? Is it underground? Any color around that would be great.

Theresa, this is Dave. Let me touch on that a little bit.

And we use the word JV, to be probably consistent. We use them plural JVs and I'll touch on that in a minute. So let me start on the pipelines. There'll be the JV pipeline from Mount Belvieu to Texas City bidirectional we'll be a 20% equity owner and there'll be an 80% equity owner in that. That will be constructed and operated by ONEOK. On that piece of the equation. The second JV, which is the export terminal, will be a fifty-fifty terminal which will be constructed and operated by MPLX. So that's a nuance on the JV as far as the equation. So there is no UGI within this Gulf Coast fractionation [indiscernible] different equity ownership on the 2 and different operational both construction operational differences between the 2 between One Oak and MPLX. Hopefully that gives a little more color on that.

Thank you. And just the storage piece, as alluded to earlier, how is that going to work?

Yes. I think I missed that piece. So yes, that is one of the strategic rationale [indiscernible] potential partners for this Gulf Coast fractionation project and the continuation of our wellhead to water storage was a key element in that. And that is one of the pieces that ONEOK brings to the table, storage in Mount Belvieu. It's existing storage And I think your question is what type it is cavern storage, just to be clear on that.

Thank you very much.

You're welcome. You're welcome, Teresa.

Thank you. Our next question comes from Keith Stanley with Wolfe Research. Your line is open.

Hi, good morning. First, any color you can give on how much of your NGLs from your Permian processing plants do you control today? And you'd be able to move through the pipeline fracs and export dock Are some of them committed long term elsewhere? Are they pretty much under your control?

This is Greg. The The answer to that question is that some of the we don't have our own fractionation right now. This is part of why we're building the fractionation. So all of the NGLs that are produced at our 6 plants soon to be 7 plants are fractionated at 3rd party facilities. [indiscernible] so right now, we don't have direct direct responsibility for those liquids the producers do. [indiscernible] The fact that we're building the plants and have the ability to redirect these barrels in the future give us what's given us confidence to build the new fractionators. So as those contracts roll off, we do expect to have the ability to redirect liquids to our fractionators.

Keith, it's Marianna. Just want to reiterate what Greg just said. Today, we are using 3rd party in the future. That won't be the case. And that's what gives us confidence in our ability to fill these fracs as well as its proximity to GVR. And other basins that we believe will also be contributing. So we've got a high degree of confidence in our ability to to feed these fracs.

Okay, great. The second question was a follow-up an earlier one understand there's no commodity exposure on the contracting with MPC. [indiscernible] percentage of the frac and export capacity is actually contracted with MPC. Versus still available to contract with the market is Is most of it kind of spoken for with MPC? Just any sense you can give there?

Yes, Keith. This is Dave.

Won't give specifics on percentage, but I'll say the vast majority of the of the volumes coming out of the fracs [indiscernible] [indiscernible] ethane, I'm talking C3 plus propane coming out of fracs will be contracted with MPC. Okay, great. Thank you very much.

Thank you. Our next question comes from Michael Blum with Wells Fargo.

Thanks. Good morning, everyone. [indiscernible] maintenance CapEx for 2025, it's a pretty noticeable jump from the run rate you've had the last few years. So I'm just wondering if there's anything any kind of one time items or anything to call out there or is this just result of I don't know, larger asset base? Thanks.

Yes. Thanks, Michael. What I would tell you, first, maybe let me step back and tell you how we develop our maintenance capital, both expense and capital every year. [indiscernible] it's bottoms up.

So when I say that, we look asset by asset and determine what we need to do to make [indiscernible] asset runs safely. Always our first priority is have safe reliable operations and that's what our capital and expense maintenance programs really reflect. What I will tell you, you do see a bit of a step up in 2025. But even with that step up, we remain extremely confident in our ability to grow EBIT in the mid single digits. One thing I would point to that is in the 2025 budget and it's something I know that you're familiar with, would be the new QUADO regulations. So when you look at some of the emissions capital spend requirements that you see from a regulatory perspective, some of that's built into that 2020 5 budget. So that's one reason you see a bit of a creep up.

Hey, Michael, this is Sean.

I'll just tag on to Chris' comments. So there's not any one particular thing that outside of what he mentioned about Quado, it's really just our ability to make sure our assets are safe, reliable based on the age and as we risk manage those what we need to do. So there's no special story on that. It's just the cycles that you go through on maintenance.

Great. Thanks for that. And then just wanted to ask about BANGL. With the change in ownership at EPIC NGL. I realize you're announcing a modest expansion of Bengal this morning, but just wanted to see if that does limit your ability at all to expand BANGL further down the road? Just how does that play into your wellhead to water strategy from the pipeline perspective? Thanks.

Thanks, Michael, for that question. This is Sean. As we look at if you take a step back on BANCO, it's been a really capital efficient growth project for us. And we'll continue that as we go. We've gone from [indiscernible] second half of twenty twenty six. And then as needed, the demand we will look at those expansion opportunities at that time and regarding the specific question about Epic, we don't anticipate that relationship will change just like we had our existing relationship with Epic, just because P66 is purchasing. So that will continue to be working closely on the operational side as we move forward on our NGL strategy. Thank you.

Thank you, Michael.

Thank you. Our next question comes from Neil Dingmann with Truist Securities. Your line is open.

Good morning. Thanks for the time. My first question is on Aflac for you all, specifically wondering when you see it today, is Marcellus activity trending today largely as you all were expecting and wondered if you're expecting any sort of step up in activity in the latter part of this year based on sort of macro today?

Neil, this is Greg. Yes, we are seeing the activity that we We are seeing growth in some of the areas as indicated by our New Harmony Creek III plant that's in construction and will come into service later next year. We've been as high as 95% utilization. In that area and as we brought on the Harmon Creek II plant, that that dropped down, but as we fill that we're moving back up. So So we're in that mid-ninety percent utilization range and expect we'll continue to keep those plants plants filled to Marcellus. Certainly, higher gas prices are good and the NGL market is very very good for us right now too.

Great details. And then maybe just a second question on how you all look at this on when I'm looking at sort of your growth versus shareholder return. I'm just wondering how do you weigh the prospects of buybacks against I know you all announced the 1.7 capital at Teetermark for growth because I mean I look at your shares still seem discounted after last year's solid return yet. You definitely have a number of exciting growth prospects like you've laid out this morning.

So wonder how you sort of balance those 2?

Neal, it's Mary Anne. Thank you for the question. I think, look, 1st and foremost, as we said, our main return to capital tool will continue to be our distribution And we hope based on our opportunities for mid single digit growth that you'll be able to see similar distribution increases for years to come. Our growth opportunities like we talked about here this morning, have to meet our strategic roadmaps. They have to have those mid teens returns that we think are critical to be sure that we're deploying capital We do that through the lens of strict capital discipline. Always have and we will continue to do that.

Absent that, share repurchase will be a tool that we will use to return cash [indiscernible] dollars really trying to support the fact that we continue to see our equity as undervalued. So certainly another opportunity for us post all of the allocations that I just mentioned, no change in that. Thanks for the question.

Thank you.

Thank you. Our last question comes from Neil Mitra with Bank of America.

Your line is open.

Hi, congrats on all the downstream NGL announcements today. I just had a couple of questions on the ex work facility.

So first of all, how are you able to kind of commercialize this with the MPC MPLX complex as a greenfield export facility when the brownfield players have been kind of very able to crowd people out And the second part of it is is this commercialized or are we waiting to see Contracts to to completely FID this how are you looking at kind of term versus spot?

How you're going to actually sell the NGLs over the dock Hey, Neal. This is Dave again. Let me touch on this. One of the key elements that I touched on with the dock and the export terminal is the joint venture with And the reason that that's important is it gives us to a world class scale dock. You're very capital efficient number 1, when you're doing a 400,000 barrel a day dock.

And then as I say, it's a it's a fifty-fifty JV. So each each of us both One Oak and MPLX will have control of 50% that dock and then MPLX will contract with MPC for our 50% of what we control the dock. So that will be that commercial relationship between MPLX and MPC and then MPC would then market internationally and take on any commodity exposure and any upside or downside relative to that. So On the second piece of your question on hey, do we have the the volumes to FID and commit this project, then the answer is yes. We wouldn't have FID'd it and announced it. So We're very confident in this project. We've been working on it for a long time. We've been been talking about it for a long time. As with any large complex projects, a lot of work done behind the scenes, to get this to this point.

Both from a project project schedule, project planning and then also commercial relationships with a new JV partner.

And Neil, this is Mary Anne. Just maybe one other point to all of Dave's comments. On the commercial side, particularly as we're looking at MPC, keep in mind export markets are clearly something that MPC participates in today. And our ability to continue to extend the sustainability of commercial excellence both in the short term and over the long term is the key strategic MPC's value proposition as well. So confident in our ability to execute that also.

Great. Thank you. And again, congratulations on all the announcements.

Thank you.

All right. With that, thank you for your interest in MPLX. Should you have more questions or would you want clarification on the topics discussed this morning, please contact us and our team will be available to take your calls.

Thank you for joining us today.

That concludes today's conference. Thank you for participating. You may disconnect at this time.