DT Midstream, Inc. Q1 FY2025 Earnings Call

Welcome to the DT Midstream First Quarter 2025 Earnings Call. I will now turn it over to our speaker today, Todd Lohrmann, Director of Investor Relations. Please go ahead.

Good morning, and welcome, everyone. Before we get started, I would like to remind you to read the Safe Harbor Statement on Page 2 of the presentation, including the reference to forward-looking statements. Our presentation also includes references to non-GAAP financial measures. Please refer to the reconciliations to GAAP contained in the appendix. Joining me this morning are David Slater, President and CEO; and Jeff Jewell, Executive Vice President and CFO. So with that I will go ahead and turn the call over to David.

Thanks, Todd, and good morning, everyone, and thank you for joining. During today's call, I'll touch on our financial results, provide an update on the latest commercial activity and construction progress on our growth projects. I'll then close with some commentary on the current market fundamentals before turning it over to Jeff to review our financial performance and outlook. So with that, we are off to a strong start in 2025, giving us confidence in our full year plan. We are reaffirming our 2025 adjusted EBITDA guidance range and our 2026 adjusted EBITDA early outlook range. And we continue to execute on our $2.3 billion organic growth project backlog. Our teams remain focused on integrating our newly acquired interstate pipelines. The key integration activities are progressing on schedule, and we completed full cutover of all financial activities into DTM systems on April 1, and are on track to complete all remaining milestones by year-end. We onboarded all key employees at close and benefited from the team's expertise with these assets during the winter season, when our pipelines were highly utilized and provided reliable service. As we gain additional insights into these assets and how they operate, we're developing a clearer view of the commercial opportunities they present, including synergies with our existing network, and we feel that the growth and modernization opportunities offered from them are better than our initial assessment. Construction is currently underway on the first of these growth projects, the Midwestern Gas Transmission Power Plant Lateral to serve AES Indiana's Petersburg Generating Station. On the broader construction front, all of our in-flight growth investments remain on track and on budget. Expansions across the gathering footprint will begin to contribute during the second half of the year. As a reminder, we expect these projects to ramp over a period of time and look forward to their contributions as they serve some of the most strategic supply areas in the country. Finally, I'd like to take a moment to address the recent market volatility and its long-term impacts to DTM and the broader natural gas sector fundamentals. The first quarter of '25 was a volatile period for the market, with significant cold weather in January rebalancing the market and driving natural gas prices up, followed by a decline in pricing as the market tried to understand the impact of tariff announcements. Despite the uncertainty ahead and volatility, DTM, a pure-play natural gas midstream company, is fundamentally well-positioned and our plan remains unchanged. Our contracts have been structured to be durable even in volatile markets with significant demand-based revenues, a customer base that is over 80% investment-grade rated and contract terms that average seven years. In addition, we have no commodity exposure and minimal volume exposure across our portfolio, with our Pipeline segment comprising 70% of adjusted EBITDA, serving strong demand pull utility customers anchored by long-term contracts. We expect tariffs will have no material effect on us as we have procured long lead critical components for our projects currently in progress and maintain strong strategic relationships with suppliers, which is why we are confident in reaffirming our '25 and 2026 adjusted EBITDA guidance ranges as well as our CapEx guidance. Looking out over a longer-term time horizon, we remain bullish about the outlook for natural gas infrastructure. Total U.S. natural gas supply and demand are both expected to grow by approximately 19 Bcf per day through 2030, with demand growth primarily driven by LNG exports, data center power generation, utility scale power generation, and industrial onshoring. Our Louisiana assets are very well-positioned to serve this growing LNG demand in the Gulf Coast region. Likewise, data center and utility scale power generation is expected to drive 25% growth in the PJM and MISO power market regions by 2030, and this is where the bulk of our pipeline assets are located. In addition, the long-term positive effects of higher tariffs will result in the reshoring of industrial demand, requiring more power and natural gas to serve energy-intensive industries that relocate manufacturing and industrial operations to the United States. Two-thirds of the supply increase to meet this demand growth is expected to come from the Haynesville and Appalachia regions where our assets are located, providing opportunities for higher utilization and expansion of our gathering systems to feed our pipelines. Finally, there is growing political and regulatory support emerging for natural gas and energy infrastructure, with the recognition of a national energy emergency and appreciation of the need to streamline the process for getting much needed infrastructure built. So overall, the fundamentals supporting the need for more natural gas infrastructure remain intact, and we are confident in our ability to continue to deliver on our commitments to our customers, suppliers, and investors. I'll now pass it over to Jeff to walk you through our quarterly financials and outlook.

Thanks, David, and good morning, everyone. In the first quarter, we delivered adjusted EBITDA of $280 million, representing a $45 million increase from the prior quarter. Our Pipeline segment results were $39 million higher than the fourth quarter 2024, which includes a full quarter contribution from our acquired interstate pipelines. Gathering segment results were $6 million greater than the fourth quarter of 2024, reflecting lower overall expenses in the first quarter of 2025 and the impact of growing volumes in the Haynesville. Operationally, total gathering volumes across the Haynesville averaged 1.67 Bcf per day, an increase from the fourth quarter, driven by new volumes and the return of offline production. In the Northeast, volumes averaged 1.3 Bcf per day, a decrease from the fourth quarter, driven by timing of producer activity, primarily across our Appalachia and Susquehanna gathering systems, but remain in line with our full year plan. Looking ahead to the second quarter, our plan, which our full year guidance is based on, is for adjusted EBITDA to be lower than the first quarter, driven by seasonality across our interstate pipelines, including JVs, and expected rate step-down on Guardian pipeline, which was settled earlier in 2024, and included in our transaction purchase multiple and typical maintenance activity across our gathering assets. We remain confident in our full year outlook and reaffirm our 2025 adjusted EBITDA guidance range and our 2026 adjusted EBITDA early outlook, reflecting the strong positioning of our assets and the durable nature of our contracting. We've increased our committed capital in 2025 and 2026 to reflect several new projects being executed, with approximately $365 million total committed in 2025 and approximately $100 million committed in 2026. We look forward to our annual rating agency meetings in mid-May, where we will discuss the strength of our credit profile and our commitment to preserving the strength of our balance sheet and achieving an investment grade credit rating. As a reminder, we are currently investment grade with Fitch ratings and on positive outlook with both Moody's and S&P requiring only one additional agency to upgrade us before fully achieving an investment grade rating. Finally, today, we also announced that our Board of Directors approved our first quarter dividend of $0.82 per share, unchanged from the prior quarter, and we remain committed to grow the dividend 5% to 7% per year in line with our long-term adjusted EBITDA growth. I'll now pass it back over to David for closing remarks.

Thanks, Jeff. So in summary, we remain confident in delivering on our guidance, continuing our track record of strong performance that we've maintained since we spun the company in 2021. Our high-quality pure-play natural gas pipeline asset portfolio is very well-positioned to take advantage of opportunities across our network and execute on our large organic project backlog. And the fundamentals supporting natural gas infrastructure remains stronger than ever, with significant increases in demand coming from LNG exports and the power sector, increased political support behind natural gas and energy infrastructure, and a broader realization of the key role natural gas will need to play as a reliable, cost-effective, and clean fuel to meet our country's growing energy demands. And with that, we can now open up the line for questions.

We will now begin the question-and-answer session. Your first question comes from Michael Blum with Wells Fargo. Please go ahead.

Thanks. Good morning, everyone. I'd like to begin by discussing the gathering volumes in the first quarter. There was a significant increase in Haynesville, while the Northeast experienced a decline. Could you provide some insights into what is happening there, especially in Haynesville? Is this the new normal, or is there something specific influencing this change? Additionally, how do you anticipate the situation will develop for the rest of 2025 and beyond in both the Northeast and Haynesville?

Yes. In Haynesville, which is where you saw the biggest uptick, that's completely in line with our large public producers on what they've communicated and reported to the markets on their activity. I'd say the other activity that's happening, particularly in the Haynesville, is the privates have become very active. We have a number of privates on the network. So we're working very closely with them as they seem to have been responding quicker to the price signals and the demand showing up in the area than some of the publics. But yes, we feel very confident in the Haynesville activity, very confident in our guidance for what we expect to see there for the balance of the year, likely continuing to see some ramp throughout the year towards year-end. So again, I feel very optimistic about the Haynesville right now. Appalachia, it's playing out exactly as we expected it to play out in our guidance. There's some timing of activity that's kind of embedded in those volume numbers. And I think in our disclosures, we've talked about a number of projects clicking in, in the second half of the year in Appalachia, and that's how you should think about the profile for Appalachia. But in general, very aligned with what we've got in our full year plan.

Okay. Great. And then I just wanted to ask in the past you've talked about multiple, I think, six or maybe even more potential projects aimed at supplying data centers and want to kind of hear the update where that stands today?

Yes. That continues to be very active. There is a large group of proposals on the table with numerous sites across our entire footprint. And I'm referring to what I'll call behind-the-meter data center power demand. In addition to that, there are also numerous proposals across our entire footprint on what I would call utility scale power generation. So we're seeing both those sectors very active and advanced commercial conversations in both those categories. It's very active and ongoing. And yes, as we have FID projects, we'll be happy to share that with our investors.

And your next question comes from the line of Jeremy Tonet with JPMorgan. Please go ahead.

Hi, good morning. I just want to start off with Millennium here, if I could. It looks like I think there might be an open season for about half a year or so. I'm just wondering if you could provide any color there on the outlook, if that's in the backlog or any other thoughts you could share?

Thank you for bringing that up, Jeremy. That information is quite recent, as it became public at the end of last week. It highlights the significant level of inquiries we are currently receiving across all our pipelines, particularly in the upper Midwest and Northeast regions. There is strong interest in additional capacity, and Millennium is in a unique position to capitalize on that. They have the capability to repurpose existing capacity and leverage local assets, creating synergies between the Millennium Pipeline and those resources to better tap into the New York and New England markets. The market has recognized that they are facing a significant capacity shortage. As I mentioned in my opening statement, the fundamental backdrop has shifted positively, leading utilities and markets to reassess their needs. We'll see how the open season progresses; its purpose is to gather more insights from those markets regarding their demand and how Millennium can address it. This marks the first step in a larger expansion initiative. We're experiencing similar inquiries across other FERC-regulated assets, including our recently acquired properties. This reflects the demand growth occurring across our areas of operation. We are in the early stages of evaluating how we can meet this demand and what types of expansions would be viable in the market. Notably, we reached peak send-outs on three of our FERC-regulated assets, including our storage business and two new pipelines, indicating increasing demand in the region and the emergence of constraints. Regarding our backlog, this project is not included as it represents an earlier phase. We only account for projects that are either fully sanctioned or close to being so. The overall backlog, unadjusted, is currently growing, which is promising. Our focus now is on commercializing these opportunities. We will keep our investors updated as we advance these projects. Great question.

Got it. And maybe if I could just dig in at a high level a little bit more on some of the comments you said there. I mean clearly, there's a change at the federal level dealing with energy infrastructure and the utilities have a duty to serve their customers. And so we see that alignment. But just curious, I guess, maybe more at the local level or really at the state level. We've seen legal filibuster and other tactics in the past, timely energy infrastructure development. Do you see, I guess, different tone coming out of some of those stakeholders?

We do. A series of events over the past 12 months has contributed to changing market sentiment. One significant factor is that many of the announced renewal projects have not performed as expected; they have either been canceled or are delayed, with costs differing greatly from initial estimates. This is impacting the market. Additionally, the reliability challenges posed by the intermittency of new generation assets are becoming more apparent. Utilities have an obligation to serve their customers, and any future service issues will likely lead to public sentiment being directed toward the utilities, which puts pressure on them. This situation is evolving the mindset of utility executives. There is considerable growth occurring behind utilities, both in gas and power sectors. These foundational shifts are influencing market sentiment, highlighting a potential capacity shortfall that necessitates strengthening supply. Furthermore, public sentiment has evolved, particularly following the recent administration and election outcomes. There is a growing public acknowledgment of the need for economic fuel and energy resources, which we have domestically available. Over the last year, numerous factors have contributed to a shift in perspective, moving from an extreme viewpoint to a more balanced understanding that we require a comprehensive approach. This shift should benefit both the natural gas pipeline sector and the electric sector.

Got it. That's very helpful. One last one, if I could sneak in here. Just on LNG demand pull side, we saw the Woodside FID here. I'm just wondering if you could comment on opportunities that might stem from that or anything else we're seeing on LNG commercialization moving forward across the board?

Yes, I was really pleased to see that FID the other day. As a reminder, Woodside's FID includes the header system for that facility, which has a capacity of about 3 Bcf per day and is designed to connect directly to LEAP. We are very happy to see that FID. Having worked closely with the previous owner, we will continue to collaborate closely with Woodside and the new ownership, so I'm very pleased about that FID.

Next question comes from the line of Theresa Chen with Barclays. Please go ahead.

Morning David, I would like to explore your backlog further, particularly regarding your comments on potential expansions that are in progress. Can you provide more details on the status of the integrated solution for your Northeast gathering and the existing pipeline into the newly acquired Midwest assets? Are there any noteworthy commercial developments in that area? Additionally, can we discuss the potential CapEx for DTM if you were to transport that molecule from our gathering system to the Nexus expansion and vector expansion directly to end users in the Midwest?

Yes. Sure. I can provide a bit more color there. Maybe I'm going to pivot. I think we talked about what's happening already, so I'm going to pivot over to the new pipelines that we acquired from ONEOK. We're in month four. We had a really strong winter. Those assets, like I mentioned earlier, performed really well, with really strong demand, had some record high sendouts on those assets. So I'm really pleased fundamentally with how they performed and our assessment of their importance to serve those load centers in the Upper Midwest. We're taking a harder look, and we obviously have more information now around the growth opportunities, the modernization opportunities and how they will integrate into the other assets, particularly storage and vector. And what I'll say at this point is that what we thought when we announced the transaction, based on what we think today, we are more bullish. The opportunity set is more robust than we thought it was when we announced the acquisition. So very positive about that. Obviously, it's our job to commercialize that now. That power plant on Midwestern literally commercializing late last year right around close was a really good early indication of the opportunity set and the speed at which it can move. So as we get more confident in this, we will be providing more clarity and updates to the investors. But at this point, I would just put a green arrow up on the backlog opportunities that are manifesting as we get more confident with them and can clarify them, we'll provide further updates.

And your next question comes from the line of Spiro Dounis with Citi, please go ahead.

Thanks, Operator. Good morning, team. I wanted to just start with LEAP actually. David, I just want to pull some of your comments together. It sounds like Haynesville activity is kind of ramping back up again. At the same time, Woodside LNG starts to FID again. And I think our working assumption around the next LEAP expansion was that maybe it was years away just given the competing pipelines coming online soon. But any sense that, that timeline is moving forward? Just want to get your latest thoughts there.

Good morning, Spiro. Yes, regarding LEAP, over the past two to three years, we have expanded it through manageable increments, and I expect this approach to continue. We are well-positioned in the market with competitive service offerings and strong connections throughout the basin. We also have significant delivery flexibility to various LNG facilities on the Gulf Coast, which puts us in a good competitive stance. You can anticipate ongoing small-scale expansion opportunities. We're emerging from a period where Haynesville was somewhat restrained over the last 18 months, and they're beginning to ramp up activity again. We'll need some time to observe how the basin reacts. As for the new projects set to come online later this year, those will be integrated into the market, and then we will progress from there. My outlook on this hasn't changed. The Woodside FID is definitely a positive development, and we're eager to see how the market absorbs that news. Overall, I feel confident in our current positioning.

Got it. Got it. Good to hear. Second question, maybe just a finer point on the cadence as we think about the rest of the year. Jeff, as you pointed out, 2Q maybe dips down a little bit on seasonality and some other factors, which does seem to imply kind of a pretty strong second half of the year. And so just curious if you guys put maybe a finer point on what the specific drivers are you maybe get you to that midpoint? How much is volume growth versus projects versus other items?

Yes, sure. Hello, Spiro. You're correct that we expect the second half of the year to be stronger than the first half, driven by increased volume and some additional projects coming online. The transition from the first quarter to the second quarter includes a minor decline in rates related to the Guardian, which was accounted for in the acquisition and factored into our full-year guidance. These are the key elements to consider when modeling, as the second half will outperform the first half.

Spiro, I want to clarify that we haven't changed our guidance for the year. If we felt we were deviating from that, we would update you during the call. Additionally, we experienced a particularly cold winter, which contributed significantly to the seasonality of our pipeline assets. It has been nearly 30 years since we've had a winter like the one we just experienced here in the Midwest. This situation is also influencing our results in the first quarter.

And your next question comes from the line of John Mackay with Goldman Sachs. Please go ahead.

Hey, good morning. Thanks for the time. I wanted to go back to some of your comments, David, on the privates in the Haynesville. You commented that they're kind of responding quicker to price signals, definitely makes sense for first quarter. I guess I'd be curious to your view though, we've got a bounce back from $4.50 down to about $3 now. Are we seeing them kind of respond quicker in the opposite direction at this point? Or do you think this kind of first quarter strength can follow through, even if prices are a little weaker here in shoulder season?

Yes, John, that's a really good question. That's a topic that's at the forefront of my mind right now. We're watching that very closely to see what you just described, if we see any signals of that happening. My high-level sense, John, is that they're fairly quick on the draw, but they also are pretty disciplined about hedging when they see those attractive prices. Privates are typically PE backed and capital recovery is paramount in their minds. If they can drill an edge and turn that capital quickly, that's their business model. So we're watching for that. We're not seeing any signals of that at this point. We've seen a little bounce back here on price over the last week or so, but we're definitely watching closely for that. Currently, we don't see any evidence of that.

I appreciate it. That's helpful. Maybe just staying in gathering, we're about a year into the Utica pickup. Maybe if you can kind of just share your latest thoughts there, maybe what that looks like in this kind of softer liquids environment? And maybe anything you can kind of share on just pace of development from here.

Sure. To remind everyone, the area of the Utica that we're gathering for EOG is primarily the oil window, which is not dependent on NGL economics. It's mostly driven by oil economically. I would like to highlight what they've publicly stated about their resources in that area. They have established a substantial resource footprint, and it's a new area with unlocked technical potential. The pace of development aligns with our guidance for this year and next. They are a strong partner, and we are collaborating closely with them. We view this as a long-term growth opportunity within the Appalachia gathering portfolio. Additionally, it supports one of our pipelines.

Your next question comes from the line of Keith Stanley with Wolfe Research. Please go ahead.

Hi, good morning. First, just wanted to start and clarify Slide 10, the high end of the 2026 CapEx range looks lower than last quarter. Was that intentional or not?

Hey, good morning, Keith. No, there is no change to the high end. If that looks different, we'll check the formatting on the slide, there could be a formatting blip there, but there is no change in the high end of '26 CapEx guidance.

And so Keith, from our guidance and what we've guided you get to is we're going to spend our free cash flow on organic growth projects. So that's in your mind that what you assume. And you're right, we'll adjust that slide and make that match up to that guidance. There's been no change in that.

Okay, great. The second question. Last quarter, you introduced a significant number of pre-FID projects in the updated backlog, and you've mentioned various opportunities today as well. Are there any projects you would identify as being closer to advancement based on customer demand and timing from that list? I'm also curious about which ones seem the most interesting in the near term or are making the most progress.

Yes. I'm going to give you a high-level answer to that because I don't want to get too specific just given the discussions that are happening directly with the anchor customers and some of our commitments, contractual commitments with them. But what I'll say generally, and I'm probably going to repeat what I said earlier is there's a green up arrow sitting in that $2.3 billion backlog. A number of things are driving that. Our assessment of the new pipelines we acquired is part of what's driving that. The Millennium open season, which is hot off the press, is driving that. I'd say a number of the projects that we've been talking to you about are progressing to FID. So what I'm seeing in that backlog is nothing but kind of fundamental green arrows up. And again, as we get more confident because just to remind everybody, that backlog is not the total opportunity set, it's only the opportunity set that we feel highly confident in executing on and delivering to our investors. So as that gross backlog continues to grow, it's going to eventually push into that $2.3 billion, which we talked to the investors about. So I'm feeling really bullish about it, but I don't want to communicate anything until we're highly confident in it. And I'd just say it's consistent with my fundamental assessment earlier on the call that it feels like we went from a situation a year ago where it felt like we had a headwind to today, where it feels like we actually have a tailwind around the business. And we're working hard to better quantify and assess that tailwind and how that would adjust into our future long-term outlook for the company.

And your next question comes from the line of Jean Ann Salisbury with Bank of America. Please go ahead.

Hi, good morning. Boardwalk recently announced an open season for the Borealis project, which would source gas very close to your Appalachian footprint. If this project goes forward, do you see DTM as being a material beneficiary?

Thanks for the question. Yes, that's a really interesting project because as we look at our new asset footprint, just to remind everybody, Midwestern connects directly to Texas gas at a point called Portland. There is an existing pathway into Clarington between that asset and one other asset that could potentially avoid a greenfield build or maybe said a different way, there could be some lower cost capacity expansions that could kind of marry into their open season. So we're very aware of that and assessing that. But if there's a benefit to our asset footprint, it would predominantly be as I just described, and that's on the pipeline side, looking over to the gathering side, a project like that leaving Clarington, there is not an incremental couple of Bcf a day of gathering capacity to Clarington. So yes, if a project like that, that size and scale was to FID, I think there would be upstream incremental gathering investments that would trigger. And I think we would be one of a short list of parties that would be a beneficiary or would be able to participate in some of that to get more gas to Clarington. That's a great example of what I just talked about on the previous question, just this tailwind that's emerging in the region.

Great. That's super helpful. And then as a follow-up, there are concerns that if the China tariffs remain in place, you can see eventual significant pressure on U.S. propane prices, which could reduce kind of the call on the NGL portion of Appalachia. Can you remind us what share of your Appalachia footprint is in the wet versus dry footprint? And do you view that as a risk?

Yes. So first off, we don't view that as a risk and very little of our Appalachian gathering footprint gathers, what I'll call the wet side of the Marcellus or the NGL side of the Utica. The EOG assets are really the oil side of the Utica, not the NGL side of the Utica. The bulk of our gathering in Appalachia is on the dry side, so we don't have any derivative exposure to the NGL side in Appalachia. What I will say, though, is if that crack spread collapses or shrinks, we see ethane rejection, which means they put more of the NGLs into the gas stream, which basically grows the gas production in the basin by toggling over to the gas infrastructure versus the NGL infrastructure. And that would be a positive for us because that typically would show up on the egress pipelines, NEXUS, for example. The capability to pivot that in Appalachia is capped by the gas quality specs. So you can only put so much ethane into the stream before you cap out on the quality specs. But that would actually be an opportunity for us versus a risk.

And your next question comes from the line of Manav Gupta with UBS. Please go ahead.

Good morning. There's a lot of macro uncertainty out there. You saw GDP shrinking a little today. Some companies are actually withdrawing guidance. It's very positive that you actually reaffirmed your 2025 guide and '26 guides. So help us understand what gives you the confidence that you can navigate this kind of very tough macro environment and deliver on both '25 and '26 goals?

Yes. So I would say the worry in the market is the word, right? That's the worry is that we slide into a recession in the short term. So we've talked already about the long-term fundamentals and how we feel about that. I'd say in the near term, the way we've built the portfolio, it's a highly durable portfolio, and it's intentionally built to protect to the downside. So if I just talk at a very high level, we have no commodity exposure in this portfolio, none. Very minimal volumetric exposure, and that only exists in our Gathering segment, which is only 30% of the business. And on the pipeline segment, which is the bulk of the business, 70%, that's predominantly 100% demand-based contracts. So it's highly resilient to short-term economic fluctuations. So that's really the short answer. I think, Jeff, you may want to add from a balance sheet perspective and a durability perspective, how we feel about what I'll call our company itself going through turmoil.

Yes, certainly. Just as we've built the company on the commercial side, we've done the same with our balance sheet. We have no debt maturities until 2029 and over $1 billion in liquidity. We are on the verge of being upgraded to investment grade soon. Our leverage metrics reflect this strong position. Looking ahead to 2025, 2026, and beyond, we maintain a very healthy balance sheet and are not affected by wider macroeconomic events.

And maybe my last proof point on that question. It's an important question. I think it's on the mind of a lot of investors, so I'm glad you're asking it, is when you look at historically look back at other cycles, that economic cycles that we've gone through, we've been able to grow through those cycles. And I'd say that's the other maybe proof point to provide confidence that nothing has changed with the management team in terms of how we're running the company. And past performance is only one data point, but I think it's another comforting data point to point to.

Perfect. My quick follow-up here is, last year, we were in this power trade where data centers are going to need a lot more power. And then first, DeepSeek came in, then came these all these announcements that Microsoft is pulling back from the data center. You are obviously negotiating with a bunch of customers about their power needs. Has anything actually changed on the ground because of either DeepSeek or Microsoft pulling back the data center spend? Or when you go out there, the underlying demand for power is still growing and very resilient out there?

Yes. So let me kind of break that question up into two parts. I'll address the behind-the-meter site-specific power generation opportunities, and then I'll address the utility scale power generation opportunities, because I think there's different fundamentals driving those two different opportunity sets. On the site-specific data centers, we have numerous like many. And I don't want to put a number out there because every time I put a number out there, everybody chases the number. I'm just going to tell you there are a lot of what I'll call mature commercial proposals sitting in front of developers for numerous sites across our entire footprint. A lot of different elements have to come together for a site to commercialize; energy and fuel supply is only one of many elements. And then once all those elements are together and commercially lined up, then ultimately, the host has to commercialize the site. And I'd say that's the phase that we're in right now. We're in a phase where sites have all the elements that they need now. And the final step is commercialization of the site. So that's where we are with a host of opportunities across a myriad of our pipelines. To the extent that the ultimate host is waiting or making decisions, that's where I think we are today. And I suspect that's true for all the other pipelines as well. Flipping over to the utility scale generation, we announced the West Virginia project. That project is expected to FID next year. They continue to move along and do the things that they need to do to commercialize that site. They're in the PJM interconnect. They have full control of the site now. They've gone through the West Virginia regulatory process. Their air permit is underway. So we see these utility scale sites advancing and continuing. And like I said in my earlier comments, this realization that there's a reliability issue in PJM and emerging in MISO, the demand is more robust than they thought. The other generation that they thought was coming in isn't coming in or it's coming in at a different pace. All of those are positive catalysts to drive incremental utility scale generation. I'd say the last thing that we're seeing on the utility side is that many utilities have been quietly very successful in connecting these data centers directly to the utility grid. I would point the investors to public announcements made out of Wisconsin by some of the utilities there and in Michigan by some of the utilities there. Louisiana also had energy announcements. So the utilities are getting a fair share of this demand directly connected to utilities. And what that does is it drives utility-scale generation, so instead of site generation, utilities are just rolling it into their portfolio and will add a plant to their future development. So that's how I would characterize what's happening on the data center side. I know that was a long answer, but it's very interesting to watch. We're active on both of those two dimensions, the utility scale and on the site specific. And again, I'm highly confident we're going to get our future of that market across our geographic footprint. So I'll stop there. Do we have another question?

Your next question comes from the line of Robert Mosca with Mizuho. Please go ahead.

Hey, thanks everyone. Just one for me. It seems like your major customer in the Haynesville is building productive capacity this year that it could tap into in '26. Just wondering the extent to which that's captured in your preliminary '26 guidance. And if possible, the base case you're assuming there?

Yes. I'll keep it brief. All of our customers provide us insights into their plans, and this is reflected in our guidance for 2025 and 2026. So the short answer is included in there.

This time, we have no further questions at this time. I would like to turn it back to David Slater for closing remarks.

Well, thank you very much, everybody, for your great questions today, and I appreciate the support and look forward to catching up with everybody on the next quarter.

Thank you, Ladies and gentlemen, this concludes today's conference call. Thank you all for joining. You may now disconnect.