Good day, and welcome to the Energy Transfer Third Quarter 2023 Earnings Conference Call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note that this event is being recorded. I would like to turn the call over to Mr. Tom Long, Co-CEO of Energy Transfer. Please go ahead.

Thank you, Operator, and good afternoon everyone. Welcome to Energy Transfer's third quarter 2023 earnings call. I'm also joined today by Mackie McCrea and other members of the senior management team who are here to help answer your questions after our prepared remarks. Hopefully, you saw the press release we issued earlier this afternoon as well as the slides posted to our website. As a reminder, we will be making forward-looking statements based on our current beliefs and available information, which we will discuss in more detail in our upcoming Form 10-Q for the quarter ended September 30, 2023, expected to be filed tomorrow, November 2. I will also refer to adjusted EBITDA and distributable cash flow, or DCF, as non-GAAP financial measures. We will start today by reviewing our financial results for the third quarter of 2023. We generated adjusted EBITDA of $3.5 billion, up from $3.1 billion for the same quarter last year. Our core business performed strongly, with record volumes through our NGL pipelines, fractionators, and terminals, as well as in our crude segment. Volumes in our intrastate and midstream segments were also near record levels. DCF attributable to Energy Transfer's partners as adjusted was $2 billion, an increase from $1.6 billion year-over-year, leading to excess cash flow after distributions of $1 billion. On October 20, we announced a quarterly cash distribution of $0.3125 per common unit, a 17.3% increase from $0.2650 the previous year. In August, Energy Transfer's senior unsecured credit rating was upgraded by S&P to BBB with a stable outlook, reflecting our significant focus on balance sheet improvement and leverage reduction. As of September 30, 2023, our total available liquidity under the revolving credit facility was approximately $2.12 billion. During the third quarter, we invested $418 million in organic growth capital. In October, we completed the issuance of $4 billion in senior notes, which we used to repay borrowings on our revolving credit facility and pre-funded 2024 maturities. Now, turning to our segment results for the third quarter, starting with NGL and refined products, adjusted EBITDA was $1.1 billion, compared to $634 million in the same quarter last year, driven by strong performance across our transportation, storage, terminal, and fractionation operations. We also achieved $107 million in marketing margin from optimization of hedged NGL and refined products inventories, a significant turnaround from a loss of $126 million in the previous year. NGL transportation volumes on our pipelines increased 14% to a record 2.2 million barrels per day, attributed mainly to higher volumes from the Permian region and our Nederland Terminal. Average fractionated volumes also rose 9% to a record 1 million barrels per day. Total NGL export volumes were over 20% higher than last year, setting a new record, mainly due to increased international demand. Throughout the first nine months of this year, we loaded over 47 million barrels of ethane from Nederland and around 21 million from Marcus Hook, continuing to be the leading exporter of NGLs with approximately 20% market share internationally and nearly 40% of U.S. exports. In our midstream segment, adjusted EBITDA was $631 million, down from $868 million year-over-year due to lower natural gas and NGL prices, despite near-record throughput levels. Gathered gas volumes rose 4% to 19.8 million MMBtus per day compared to the previous year. In our crude oil segment, adjusted EBITDA increased to $706 million from $461 million, thanks to higher volumes on several pipelines and the acquisition of Lotus assets in May. Crude oil transportation volumes reached a record 5.6 million barrels per day. Our interstate segment reported adjusted EBITDA of $491 million, compared to $409 million last year, largely due to the Gulf Run Pipeline entering service and higher volumes. For the intrastate segment, adjusted EBITDA was $244 million, facing some challenges from lower spreads across the pipeline network. Regarding our acquisition of Crestwood Equity Partners announced in August, Crestwood unit holders recently voted to approve the merger. We expect this merger to be immediately accretive to DCF per unit upon closing and will extend our operations into the Williston and Delaware basins while enhancing our fractionation capacity and export capabilities. We anticipate the acquisition closing on November 3 and achieving around $40 million in annual cost synergies, with additional financial and commercial benefits expected. Turning to our growth projects, our Nederland and Marcus Hook export terminals had their best months ever recently, fueled by increased demand. We have FID'd an expansion of our NGL export capacity at Nederland, projected to cost approximately $1.25 billion, increasing our capacity by up to 250,000 barrels per day by mid-2025. Construction is ongoing, and we will provide updates as we progress. We are also optimizing our Marcus Hook Terminal to enhance ethane refrigeration and storage. At Mont Belvieu, we brought Frac VIII online in August, boosting our fractionation capacity over 1.15 million barrels per day, achieving record throughput in October. In the Delaware Basin, we've activated eight processing plants at 200 million cubic feet per day, with plans for possible additional capacity contingent on the Crestwood acquisition. Our Lake Charles LNG project is attracting significant interest, and we are negotiating with equity partners targeting a 20% interest for Energy Transfer, alongside substantial LNG offtake agreements. We are finalizing our EPC contract and seeking expedited approval for our export authorization application from the Department of Energy. On carbon capture and sequestration, we are advancing our partnership with CapturePoint for CO2 capture and pipeline projects, as well as exploring CCS initiatives with Oxy in Louisiana. We are also assessing ammonia projects in collaboration with several companies, along with other CCS efforts tied to our facilities in Texas. Looking at our growth capital expenditures for the nine months ended September 30, 2023, we spent $1.2 billion primarily in the midstream and NGL refined product segments. We expect our full-year growth capital expenditures to be slightly below our earlier $2 billion guidance, including those for Crestwood. We will announce our 2024 growth capital outlook in our fourth-quarter earnings call. For adjusted EBITDA guidance, we now anticipate adjusted EBITDA for the full year to be between $13.5 billion and $13.6 billion, inclusive of two months of Crestwood. We expect solid volumes and stable cash flows across our business segments, with records achieved this quarter. We are excited about closing the Crestwood acquisition shortly and the strategic opportunities it will provide. Our financial position is robust, and we are committed to our distribution growth rate while actively reducing leverage and maintaining cash flow for growth initiatives. This concludes our prepared remarks. Operator, please open the line for our first question.

Thank you. I'll start the question-and-answer session. The first question will be from Jeremy Tonet of J.P. Morgan. Please go ahead.

Hi, good afternoon.

Hey, Jeremy.

Just wanted to start off, if I could, if you could just provide high-level thoughts for us, as the platform sits now after a number of acquisitions and projects, what type of organic growth level do you see innate in your business? What type of EBITDA growth do you see? And also at the same time, how does this impact your capital allocation philosophy? It seems there's a somewhat newer slide in the deck there that maybe alludes to buybacks potential or distribution increases as well. So, just wondering if you could update us on these fronts?

Yes, Jeremy, good afternoon. We have provided guidance of $2 billion to $3 billion annually and expect to maintain mid-teen to high-teen returns, indicating our growth rate. We're keeping our distribution growth rate at 3% to 5% for now, which is consistently discussed in our board meetings. Currently, the ratio is 90% fixed to 10% floating due to lower commodity prices, which affects our scaling. Considering all these factors and future optimization opportunities, we anticipate this growth rate. Additionally, we will update the 2024 adjusted EBITDA guidance during the fourth quarter results. Did you want to discuss the unitholder buyback as part of your question?

Yes, overall capital allocation and thoughts in light of what you talked about for organic opportunities.

Yes. Well, the capital allocation is real consistent with what we've been saying for a while, and which we're going to continue to focus on the balance sheet. And it's a great place to be as you start approaching the low end of our 4 to 4.5 times leverage target. So, I think when you continue to look out, you look at all these growth projects, you look at the distribution growth that we're looking at, the unitholder buyback clearly remains as an option that we'll look at. You're probably going to look at being at the very low end of that range, if not a bit in the upper three, where you could start seeing opportunistically starting to buy back units. But that's the way that you should probably look at that.

Got it. That's helpful there, thanks. And then, just want to shift gears a little bit towards Permian, just wondering if you could provide us thoughts. I think you touched on it a bit in your prepared remarks as far as growth opportunities there. But just wondering how you see the scaling over time, particularly as it relates to the NGL business and opportunities along that value chain? Seemed like the NGL and products business had quite a nice step up this quarter, and just wondering if you could highlight a bit more of what was happening there?

Yes, Jeremy, this is Mackie. What an exciting area. You look at the consolidation that's going on upstream, a lot of that, of course, is around the bigger deals in the Permian Basin. And as you know and most on this call, nobody is better positioned to capitalize that than Energy Transfer, from every standpoint, from gathering, processing, NGL takeaway, intra-interstate pipeline takeaway, crude takeaway. And so, it all kind of begins upstream with our G&P group and our NGL team working to purchase not only those barrels from our affiliate, but also barrels from others out in that basin. And we couldn't be more excited and well-positioned to meet the growth there. And it feeds into our partnership revenue stream when you take all that downstream, and then ultimately frac it, and a lot of it is, of course, hitting our export markets now. So, what an incredible area of the world that we've heavily invested in, and we see it paying off for many years to come.

And if I could just follow up real quick on that, I guess on the other side of the NGL equation, just how much demand do you see materializing? How does that impact pricing for NGLs? Do you see the LPGs continuing to price to export, or just any broader thoughts on the NGL supply-demand dynamics and impact on NGL pricing?

It's hard to over-exaggerate the ethane and, more importantly, the LPG growth. Assets cannot be built quickly enough in the U.S. to meet the international demand or by the PDHs that are being built in Asia, and especially in China. There's a lot of ethane crackers that are being built, so you really can't build quickly enough. But we're being very prudent. We've announced our Flexport project that's under budget, on track. So, we expect to have that in service by the third quarter of '25. We're close to fully filling that out. And we're analyzing another expansion, which would be a much less expensive expansion, and a much lower cost per barrel to expand more. So, we're going to continue to ensure that all of the gas that we're gathering and processing, that we have a home for all those liquids. So, we're looking ahead, and we see significant growth in our NGL business, especially our export business, both on the Gulf Coast and Marcus Hook, once again, for many years to come.

Got it, makes sense. Seems to certainly build momentum for your Panama initiatives there. Thank you for the color. I'll leave it there.

Thank you.

Thank you. Next question will be from Spiro Dounis of Citi. Please go ahead.

Thanks, operator. Afternoon, guys. Just want to go back one of Jeremy's questions actually. And Tom, I fully respect that you're not in a position to provide '24 guidance yet, but maybe just looking at the S4 filing from Crestwood as we look to 2024. I know it's not guidance, but some of those pro forma numbers seem to indicate you guys will be approaching $15 billion in EBITDA next year, on a combined basis. And so, pretty meaningful step up from 2023. So, just wondering, qualitatively or however you see fit, could you help us bridge from 2023 to those S4 numbers, what parts of the business could be driving that upside?

Yes. No, listen, it's great to be talking about a number that has a 15 handle on it. So, let's start with that. When you look at that S4, remember that those were estimates. We take our estimates very seriously when we file these things, obviously. And we are still in the process of finishing up the 2024 budget numbers, etc., which all go into the guidance. And that's the reason we'll always wait till that fourth quarter to come out with the very best numbers that we can. But listen, Spiro, we sure hope we hit these numbers. It would be great even if we came out with something more. But let us get through that before we put out any type of official guidance on that. We're so excited about everything we're seeing at this stage with closing on the transaction on Friday. It's going to give us now the opportunity to start digging deeper into the other synergies that we didn't account for in any of the estimates especially the commercial synergies. So, let us get through the close on Friday, and we're going to be very excited to be able to talk about what the '24 numbers should look like, but yes, what a great place to be to have earnings numbers this size.

Yes. No, fair enough and do your best to stay patient. One quick follow-up, once again going back to capital return, just as we think about the distribution growth now that's become predictable when you talk about the 3% to 5% range. I guess I'm just curious, what would you need to see to flex toward the higher end of that range? Is that a function of getting leverage lowered or is it something else you really focused on?

Well, the leverage is within our targets. So, I wouldn't want to necessarily guide you toward that 4% to 4.5%. You can already see that we've got the one upgrade from S&P like we've mentioned. And the other two, have us on the positive outlook, and we're going to continue to work with them to get those up to that triple-A levels. So, I think the other components we always look at is we're always looking at the coverage ratio, making sure that we're staying in a good solid range there but as much as any we're also looking a lot at the growth opportunities. So, the usual capital allocation debates that you have, any company has here and that's what we're going to evaluate. But it's not a matter of looking at any one single point in time it is a matter of looking out with the best crystal ball we have over the next three, four, or five years. So, we try to make decisions here that we stick with without kind of jumping up and down or moving around with.

Got it. I'll leave it there, Tom. Thanks for your time.

All right. Thank you.

Thank you. Next question will be from Michael Blum of Wells Fargo. Please go ahead.

Hey, thanks. Good afternoon, everyone. I wanted to ask about CapEx close in terms of this year just what exactly is driving the reduction there, slight reduction. And then, for next year, if I recall correctly your last update, I know you see your long term run rate I think is to 2 to 3 billion but I think at least as of last update you said, you don't even have to go in community projects for '24 or so. Just want to get the latest update on where that stands as well.

Yes, Michael. Good afternoon. You know as far as the first part of your question, I would say that we continue to work on some very, very good projects. Some of that is going to be timing, but even with that, I want to be careful using that word because it doesn't mean that 2024 is necessarily going to go up. That blends straight into the second part of your question. If you really kind of look at that 2 to 3 billion, you could isolate $750 million a year that are just kind of those growth capital projects that connect well with all the other great projects we have that are good high returning projects that help with the utilization, optimization of our system overall, especially with the M&A that we've been so successful on. A lot of these projects fall in that category of that $750 million. I will say that some of the stuff that we've talked about, and I know Mackie's talked about here, is that those have the other projects that aren't necessarily the FID, so we can't say that we've got all of that fill in right now by any means, the other $2 billion or so from that standpoint we're continuing to work on them. I think we feel good about a lot of the projects, so once again it's probably $750 million and then we'll be talking more about the other projects as we get them to FID. The one that we get highlighted in prepared remarks, of course, was Flexport.

Got it. Okay, that helps. Thank you. And then, it sounds like a pretty encouraging update on Lake Charles. So, I guess, what I'm wondering is what would be the earliest timeframe from your perspective where you think Lake Charles could actually get the FID and then in service?

Hey, Matt, this is Mackie. Tough question in that, we've got a lot of balls in the air, we've covered it pretty well with Tom's remarks, so we're sending a really good position. We really need to get the DOE to extend the permit. We think they will. As we said, a lot of folks involved behind the scenes trying to make that happen, including other countries, other businesses in other countries, but we're just keeping our head down pushing. We don't really have a lot of estimates. We're hopeful that we'll have something to the DOE, sometimes kind of mid-first quarter we're pushing, and others are also pushing and to maybe do that sooner, we don't know. It's the regulatory agency that we're working closely with, and I hope to make that happen sooner than later. But at the meantime, Tom Mason's team are working hard back over there now, trying to finalize a lot of these contracts and agreements around equity, as well as new LNG offtakers. So, it's hard to predict that, but everything went exceptionally well, in the second quarter could be a possibility, but we'll see how things go in the next three or four months.

Great, thank you.

Thank you. Next question will be from Brian Reynolds of UBS. Please go ahead.

Hi, good morning, everyone. Maybe to follow up on some CapEx questions as it relates to the Permian natural gas egress seems like we could be seeing the last brownfield expansion get contracted here over the near future. But beyond that, seems like we need a larger pipe, which Warrior still exists out there. So, just as it relates to the Warrior Project at this juncture, has the scope or size of the project changed or evolved since you started marketing the project a few years ago, just to perhaps meet specific customer needs and to get the project that ultimately FID?

Yes, Brian, this is Mackie again. Yes, we actually started really aggressively marketing this first part of this year, but we are pushing hard, and we've mentioned we've got about 25% already signed up. We're working on several other shippers that would bring us to about 60% or 65%. But we're going to be pretty careful on this, we're very careful, like we always are, we're going to be prudent, we're not going to move forward with that on FID until we have a substantial amount of that capacity sold out. And also, it will feed into not only markets that we're already connected to with our intrastate network, but also, we'll have a lot of momentum if some of these other LNG projects get to FID. So, we're kind of like a lot of these big projects working on, they're just taking time, we see spread other than a few days or weeks where it blows out a little bit, spreads are very tight, there's not a lot of pain. Right now, for the most part, we think that's going to get really difficult as we go in '24 until the next pipelines built. So, we do think we'll pick up more momentum and we're going to push hard and kind of similar to the comments around LNG. We hope to maybe get the FID on Warrior, sometime maybe in the second quarter of next year.

Great, super helpful. And maybe to just touch on the M&A for the year with Crestwood and Lotus coming into the fold here, can you just maybe talk about how some of these acquisitions have maybe perhaps helped defer some capital? I know Crestwood has some Permian processing capacity and I think you alluded to, and the prepared remarks that some of that excess processing capacity might be able to defer a processing plant a little bit. So, how should we think about processing capacity for '24, '25? Do we need to see another new build coming in next year, or could we see some capital get deferred into the following year as it relates to maybe the crude side Lotus or Crestwood on the NGL on processing side?

Yes, this is Mackie again. Yes, as you can understand, we haven't been able to really dig into the Crestwood assets yet. We don't close officially till Friday, but from a high level we certainly recognize some capacities, they were really in all regions as well from the back end and the powder, as well as the Delaware. We are constantly evaluating when is the next time to kick off the next trial to make sure we meet our obligations that we signed up producers, but clearly we believe that this is going to give us some time to defer that decision. We're thinking we're going to make that decision first quarter of next year, whether we're going to start picking up another plant, that's probably going to push it back at least three to six months, so we'll see. And as we fully are able to analyze and look at these assets and see how they would just fully blend in, but we're pretty confident that a minimum is going to delay building a new plant at least some period of time.

Great, thanks. I appreciate it. I'll leave it there and then enjoy the rest of your afternoon. Thanks.

Thank you.

Thank you. Next question will be from Jean Ann Salisbury of Bernstein. Please go ahead.

Hi. There's a lot of new NGL pipes coming to the Permian in 2025. I think ET is actually the only main company not doing an expansion. How well-positioned are Lone Star and West Texas Gateway to whether that contractual duration-wise, and does it drive more interest in inorganic opportunities in the basin?

Yes, Jean, this is Mackie again. We have noticed that there's a lot of pipelines announced here in the last couple of days, but what we try to do as a partnership is not really worry about what others are announcing or what others are building. We kind of focus on what do we need to build to accommodate our customers and to meet the demand growth of those that we're working with, and we are very well positioned right now. We move about a third of every barrel of NGL that's produced in the Permian Basin. We have the ability to move 100-plus thousand more barrels. We can add pumps and move probably in the neighborhood of 250,000 more barrels, so we've got some kind of dry powder or available capacity we'll be able to expand on. So, I think any kind of considerations or determinations from us are probably a year or longer away on even contemplating another pipeline. We're positioned pretty well to move everything we've signed up in addition to more growth that we expect from our G&P business.

Great. That makes sense. To be clear, I'm certainly not pushing you to expand Lone Star, but that's super helpful. And for your Nederland NGL export expansion, I know that you're talking to a lot of ethane counterparties, but it seems like you haven't quite signed the contracts yet. Is there a way to think about it that given how tight LPG export capacity is, it'll probably start mostly as LPG, and then as your ethane contracts eventually get signed and kicked in, a greater share will become ethane?

Yes, I think I would answer it this way. We are in constant dialogue and negotiations across the board. We have probably at least 140,000 barrels of ethane customers that we're negotiating with right now, of which some prefer Marcus Hooks on the Gulf Coast. We'll have the ability to swing the volume between either one. But clearly, LPG is also in high demand. So, there's not a shortage of international customers. And we're very excited, as we've said earlier, that we're not only very well positioned to meet that, but also very well positioned to meet the growth two years from now and beyond. So, we do think space is going to get pretty tight. As you can see by results, we're moving more volume. We're hitting records on almost every aspect of our NGL business, including our export, and we're seeing the margins widen. We think we'll see that over the next couple of years, and then we'll have new contracts lined up to come online on our Flexport. So, we're pretty excited. We got in this export business a little later than most of our competitors, certainly our biggest competitor. We've kind of gone from nowhere to the leading exporter in the world, and we're proud of that. Proud of our commercial team that's done all these deals. Proud of our E&C team who builds these assets so quickly, proud of our operating team led by Greg McIlwain who runs these systems efficiently and reliably, and more importantly, safely. So, we are very proud of our team and what we've done over the last five or six years to kind of start from nowhere and grow to where we're at today, and we have such a bright future on the assets that we are building now and the contracts that we have in place.

Great, I'll leave it there. Thank you.

Thank you. Next question will be from John Mackay of Goldman Sachs. Please go ahead.

Hey, everyone. Thanks for the time. Maybe just taking that last piece, I mean, talking about exports probably being the tightest part of the value chain for you right now, at least that's what we're picking up on. But I guess if you're looking across the kind of broader ET and kind of ET combined Crestwood footprint right now, where else are you seeing relative tightness and a call on the market, either you guys or others, to add incremental capacity? Is it the Haynesville? Is it more on processing in the Permian, just curious your thoughts overall, if we're looking maybe beyond export?

Yes. Let me just hit every region real quickly to kind of address, I hope, your question. And so, you start in the northeast, we're positioned incredibly well. On any kind of product growth up there, whether it's ethane or LPG, we are kind of the only outlet with our mariner franchise. So, we call it dry powder or available capacity, whatever you want to call it, we are ready to capture any kind of growth up there. And then, as you come further south, we mentioned that we've got the ability to grow our transport volumes from the Permian Basin fairly significantly. We're expanding our Flexport fairly significantly. And we haven't really hit on this on this call, but there is a lot of gas in north Louisiana. Yes, it's slowed down a little bit with gas prices here the last two or three months. We think it's going to pick back up as prices have improved and will continue to improve. There's enormous reserves there. But on top of that, we have multiple intrastate and interstate pipelines that feed into east Texas and north Louisiana. And so, we're very optimistic on our Gulf Run expansion. We can add compression and add a Bcf a day, but we think it's much more likely that we will sign up enough to loop our existing Gulf Run Zone 2 pipeline, especially aligned with LNG if we get that FID. But we see that as certainly a huge growth area for us on a large pipeline project somewhere in the future, along with what we've already talked about, our Warrior export project and other areas. So, depending on where the area is, we're either situated very well to grow with next to no capital, or we have such an excellent position to aggregate volumes to support a project like Gulf Run, and expansion project like Gulf Run.

All right, that's clear. Thank you. Maybe just following up, if we're thinking about '23 guidance overall, can you just maybe a quick breakdown of how much of the step-up was Crestwood versus kind of underlying business outperformance? And maybe if you're touching on the Gulf Run contributions third quarter interstate was particularly strong, or third quarter gas overall was pretty strong, particularly for kind of a shoulder season. Is this a clean new run rate from here, or are there any kind of one-offs in there?

Yes, no, listen, I think the best way to look at that as far as the guidance goes in the split between the two is the guidance we had coming into this quarter that we provided in the second quarter was $13.1 billion to $13.4 billion, as you know. As you really looked at the new numbers we gave, you can probably say that the existing business was right at the top end of that range, and the rest of it would be Crestwood, but Crestwood would be net transaction cost. So, that's what we're currently expecting right now. Still maybe some moving pieces as we get into the fourth quarter, but we feel pretty good about the $13.5 to $13.6.

All right, that's clear. I appreciate it.

Thank you. Next question will be from Neel Mitra of Bank of America. Please go ahead.

Hi, good afternoon. Thanks for taking my questions. Firstly, it seems that Cushing inventories are extremely low right now, so wanted to understand how your Centurion flows and your overall Lotus acquisition was able to materialize on this dynamic in the third quarter?

Yes, you bet. This is Mackie again. Yes, I have to do a shout out to Chris Hefty and his team and what they've done over the last two years has just been phenomenal as you look at Enable and kind of what it's done over the last year and a half and the synergies that we've found and the same with WEX. And Lotus is the same thing. We continue to look at significant commercial synergies around blending. As we have made an announcement, we are looping pipes so that we can move more volume to benefit when the spread blows out between Midland and Cushing. So, we're slowly positioning ourselves to become a much bigger player to be able to move volumes between the Cushing and Midland areas, as well as, of course, to the Gulf Coast, to our Houston and Nederland Terminal. And I think, likewise, we're going to see with Crestwood a lot of the same synergies. So, we're pretty excited about our ability to buy these assets at the values we're able to buy at. They're great standalone companies and assets. And then, once we blend them in, like your question with Lotus, we're finding significant synergies that we didn't recognize as we were pursuing these acquisitions.

Got it. And then, my second question, you've had a lot of success building Permian to Mexico natural gas pipelines, and it seems like the utilizations on Comanche Trail and Trans-Pecos are picking up, and you have a competitor looking to build a pipeline to the border as well. With some of the West Coast LNG demand and increased industrial demand in West Mexico, are you seeing any appetite for pipeline expansions down to the border or possibly participating in a new project to move gas to Mexico?

This is Mackie again. No, we're not pursuing anything right now. As you mentioned, we are ramping up our two pipelines out in West Texas that deliver to Mexico. We still have quite a bit of capacity to fill up to fully utilize those pipelines. We have some pipelines in South Texas that we deliver either directly into Mexico or into other larger diameter pipelines, but no, we don't have anything on the drawing board. Yes, we are aware of some proposed pipelines out of the WAHA area and heading west, but we aren't involved in any of those projects at this time.

Okay, great. Thank you very much.

Thank you. Final question will come from Gabe Moreen of Mizuho. Please go ahead.

As sort of the uplift in pricing on your interstate gas pipelines and storage, it seems like if I'm reading it right, some of that uplift may be accelerating. Can you just talk about sort of how you feel your position, rate case outcomes aside, and to what extent that's still going to be winded to your backs going forward into 2024?

Hey, Gabe, this is Mackie, and I apologize. We started hearing about halfway through your question. Sorry.

Okay. Can you hear me now, Mackie?

Yes.

Okay, great. I was just going to say to what extent repricing your interstate gas pipeline and storage capacity is going to be winded to your backs in 2024? It seems like some of that's accelerating as we progress through 2023.

Yes, years ago this wasn't fun to talk about. It is now. When you look at the value, for example, on the MEP or on Tiger or on Gulf Run or even on SESH, we're seeing growing, growing demand on all of those assets. GW, I mean, just pick an asset, and most of what we're doing right now is either at tariff or close to tariff. The demand is there. A lot of the gas throughout this country is trying to find its way to the Gulf Coast. We're very well-positioned to benefit from that with all the pipelines I just mentioned and others. So, we don't really, unlike years past, we might have had some concern when contracts were terminating of what we could do with that available capacity. I mean, Tiger is a great example. I mean, Tiger was about half empty with spreads down to $0.05 or $0.06, and now we're running at full at much bigger spread. And so, we're pretty excited about any available capacity. Once it comes out from the contract, we think worst-case we'll roll it over it somewhere, if not higher rates than we already are at unless we're already at tariff.

Thanks, Mike.

Thank you. That concludes our question-and-answer session. I'd like to turn to call back over to Mr. Tom Long for closing remarks.

Once again, I thank all of you for joining us today. We greatly appreciate all your support. And we look forward to talking to you in the near future.

Thank you. That concludes our conference today. Thank you for attending. You may now disconnect.