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DCP Midstream (DCP)

Participants
Irene Lofland Vice President of Investor Relations
Wouter van Kempen Chief Executive Officer
Sean O'Brien Chief Financial Officer
Shneur Gershuni UBS
Michael Bloom Wells Fargo
Jeremy Tonet JPMorgan
Jerren Holder Goldman Sachs
Chris Elliott Barclays
Jeremy Tonet JPMorgan
Call transcript
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Operator

Good day, ladies and gentlemen. And welcome to the Q1 2018 DCP Midstream LP Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time [Operator Instructions].

As a reminder, this conference is being recorded. to of host Investor like Irene today's now VP Lofland, Relations. would introduce for your conference, I

You may begin.

Irene Lofland

is the Thank you. under at XXXX call dcpmidstream.com. quarter DCP the Midstream webcast Good morning. our And earnings welcome Investors Section call. Web be slides can supporting to of first being accessed and site Today's

review Before today to Actual Please statements. differ listing due second includes certain refer filings. our Partnership's please I'd factors the results use to affect to statements. Factors, And out point the latest SEC describes like begin, for in forward-looking we that a discussion that risk deck complete our slide our Risk the forward-looking may of business. that of

the section and in to And we Sean speakers We your non-GAAP use after the will of O'Brien, over also our remarks, various turn the Kempen, GAAP to CFO, the scheduled nearest CEO Appendix measures, today. call their Wouter. Wouter reconciled questions. I'll slide. van are be and With that, take will measures will which

Wouter van Kempen

and you, us. for everyone Thank joining thanks, Irene,

great operational to We’re and a our team’s portfolio strong on the success start that growth. to XXXX, of diverse delivered and our focus dedicated QX excellence off and results innovation, we demonstrate

throughput coming flow and we quarter, is results record generated Sand is $XXX the expansion marketing During by ramping with online. distributable of volumes logistics efficiencies. driven had Hills and cash quickly outstanding million, and cost continued

distribution balance our was strengthen to leverage X.X and continue with coverage We of times X.X times. sheet our

Chairman’s XXXX perform financial remain top provides large in service low the the most value extend of focused portfolio cost our the with record On our for Midstream safety the second award Delving Midstream setting our significant and safety DCP for safety companies. the performance reliable, our safety our play to become integrated DCP and to GPA as Association, us XXXX, opportunity strong with with own strategy safe, award asset results, improvement remarkable team outcomes. recently we on to grow provider. continues on chain Our

We we of their are in country. discuss effort. excited employee’s most multi-year of two in commitment prolific consistent for extremely Today, them to basins safety, we’re and proud the expansion diligent the our our incredibly to substantial thank

snapshot me be things give O'Connor to day This and announcing Mewbourn of of inclusive Within a expansions. up Express XX Let strategy. new up well barrels you takeaway DJ call. top capacity we footprint plan XXX,XXX the are includes via on NGL decade already next today's leading into further in per and the our we’ll Texas capacity, a our Front integrated Cliffs X extensive establishing White both into Range On Basin, extension discussing accelerations bcf our the the position comprehensive of X.X and Plant the the through we're Southern to Hills day of and X that per plants. by expanding

are is the feet shipper gas we cubic Connector, million that XXX a Lastly, pipeline takeaway anchor day Cheyenne in an per development. on

an by completed where announce the growth we've day recently pipeline that XXX,XXX per to Sand to we capacity Permian The takeaway. barrels to on are NGL executing is now to day opportunities. solely of applied and I XXXX. expansion switch to pace strategic let’s also per barrels We of capacity is XXX,XXX to proud And our XXX,XXX through am Now, Hills of technology Hills the per innovation. increased approximately barrels expansion already on end day and Sand well expected next increase

in and quarter be very gas per close Express the pipeline in is to of of fully This fourth will is Coast the to pipeline service being subscribed. day bcf transport gas, approximately Additionally, Gulf X natural expected XXXX.

advantage. competitive our our to on customers long-term strategy for that solutions capital continuing allocation provide elevates laser focused are execute and our We significantly

next to value to integrated we chain provider. I home a as are of segment Turning fully want our midstream how drive expanding just the every substantially slide.

opportunities are highlight capital strong within to diversification. on for that our returns are and We focused projects tremendous disciplined fall organic planned DCP’s portfolio growth ceasing All dedication greenfield optimization capital X slide. and multiple well NGL target of or projects Notably, and times exception returns, even no can are that range see you have better. projects our X on times to better upcoming expansion expansion as the efficiency,

value business, to our and logistics greater to returns marketing We within footprint leverage and providing grow our our continue chain. financial stability GMP

multi-year we transforming ago, today, consistent, marketing this Let of the have me take over base, next business. Seven years. we our strategy. approach With our how to On our GMP XX% changed our DCP asset flow our responsible slide, are to of flow. business our logistics almost a a driven by much with put excited into into years strategic cash a perspective and DJ dive cash deep more for I'm was balanced half company

in Our had under any basin, customers right the rock success, Colorado. from in here our incredible have of great feet best some producing resources

to with necessary excited We’re this the unlock basin’s potential. production and to as full building we’re we’re that lockstep prolific the announce infrastructure in capacity

site, are capacity bcf in the online of to On coming next year. and up processing half the adding with we gathering of X.X bcf

August, we to We are second ensure acceleration as with timelines needed to facility customers exceed plant our capacity. this in-service X, provide continue target our XXXX. we to Mewbourn XXX This our is million of a of accelerating date to day out

we a this therefore up not a XXX by anticipated QX only a to In these As X its producer million up with XX% of benefit quickly. day XXX to we capacity the ramp remarkable significant are to very production bypass. date plant downturn, O'Connor also to volumes to response expect our XXXX, we by day expanding and accelerating following in-service agility

in the we're DJ. new today, plant announcing Additionally, a

Plant capital to secured come. expand Overall, the be barrel a a day what quickly increase announced and the We from plant, the Adding a bypass Southern yesterday have efficient full a actually of processed me residue We can This via bypass our capacity, still pipe we term to an in to initial projected new day remind tailgate X in value NGL unprocessed will not without footprint the pleased pipeline. all. our is expected bypass to while multi-pronged and deliver service our DJ are does? meeting we will will day. including with the very that’s to capacity explain the almost processing approach basin, and a In permits plant, and to phases further have triple increase the to midstream and chain. ability this will a land finalized our lease integrated a the begin up in to as a strategic by needs in day a years to with customers opportunity growth, advancing for tandem the to NGL with fully day White the capacity for the on DJ blend of Plant bypass At largest, To projects in Front XX a XX bcf way expansion from is the Hills plant that pipeline, Texas customers. long XXXX. gas let filed will operation very of announce our Cliffs. XXX,XXX converted with establish DCP the provider we XXX,XXX barrels to Range Express are growth capacity to via to meet upstream up gas you, these increasing capacity a the years XX,XXX specs. White we in pipeline crude DCP overall takeaway program processing barrel gas. clearly with and XX,XXX of But downstream basin throughout ensure an Cliffs barrels the rely exciting pipeline of

Southern this highly, to to White the be pipeline the NGL Southern of Hills, in-service flowing way Market Let a utilization me volumes from giving to potentially opportunity this in expand as Mont Southern the result, of are project to dedicated And XXXX. the Coast And to but to Hills, in This beyond. to all expand also the capacity QX increase highly is you. available DJ Gulf only volumes perspective Sweeney huge attractive capital This and in All is fill Hills. and put through is win-win. the from us pipe opportunity add for and up pipe future. on new not all our a Basin Cliffs Belvieu, a new basically will Hills Southern expected Centers efficient on

Texas and Range take away Front expanded by XXXX, adding DJ. pipelines the will of QX barrels XXX,XXX Express the Additionally, be capacity and another to

The adding changer of Finally, game our transition the producer only basin another project. maintain XXX DCP XXX million on the developments, million to in massive, ownership to basin to our provide the day expanding has isn’t the production well capacity our DCP are The for continued up our long-term stake come. talking a massive about success Takeaway will of have as connector end-use and is connector, access Hills head to DJ portfolio. and to be we markets, customers, to option equity the XX% Cheyenne continue acquire record customers, years we customers’ day this support to years we solutions per market important reliable gas half we secured fully All-in-all, continued exciting in a comprehensive set serve the securing next and where Cheyenne growth a partner the production. to Sand to of From in line.

no barrels this expansion increased to innovation was ago, operational XXX,XXX barrels XXX,XXX day. years real XXX,XXX per X.X that capital. to I'm recently excited day. further through capacity capacity a Just our that day barrels incredibly that is two per into our to now short Putting per Sand incremental And efforts. outcome completed DCP of Hills perspective, optimization requiring have we share We

we’re the capacity day quarter proud takeaway capacity real early the we day, ahead new barrels resulted incremental barrels excellent translates effective and demand of XX,XXX progress see we barrels Hills to next to in On earnings will increased with our increases in in DCP our which capitalize to fruition our QX of per Our on technology top utilization the future, fee-based margin day above per will increase capital. In size by XX%, to about come ensure volumes. making to efforts new of recurrence continues tangible to and into XX,XXX the is tens for and day, barrels continue year, opportunities are growing the DCP of Sand be end the of application XXXX. no of expense that well of additional an with These expansion X.X the millions XX,XXX per by drive previously this continue into QX per per XX,XXX of rate to NGL reaching of of year. day This strong Permian. approximately XXX,XXX again reported barrel

the strategic advantage competitive in DJ opportunities among our Our our growth underscore Permian peers. midstream both and

are that that, to risk, provide basins We results. strong I’ll continue it our and low turn Permian to you prioritize our through diversify to take to With returns portfolio. projects in continue financial over Sean

Sean O'Brien

good and share driven excited diversified quarter Wouter DCP’s morning. of first to details the strong portfolio. Thanks, Today by I'm our

Turning of X.X cash ratio to in with We metrics $XXX X. times for delivered strong financial flow, a million resulting of quarter. coverage distributable distribution Slide the

performed and ethane the set Guadalupe volumes gas logistics volumes. increasing by GMP revenue with our Our a continued some of cash cash due quarter, in Eagle well, increased our started the our see we’ve in DJ, Ford. as well partially from our to on out have as increased recovery, strong pipeline with higher and benefits pipeline. flows driven segments and We and volumes volumes marketing segment, storage generation to record strong pipelines, contributing record from quarter to Sand very coupled solid our Hills first NGL In gas modest

two the year. the Ford in reached March in Eagle almost highest volume fact, In level

driving to business diversified of discovery optimize investment efficiencies We our portfolio, impact and maintenance on than all the strong offset base of functions. around cost corporate as capital. continue and focused this stay higher our execution more adverse And our we

no Finally, the entire in was or the giveback anticipated first is IDR year. needed for quarter,

considerations of driving shape of maintenance basins. QX maintenance a year QX in maintenance, operating similar in in will as ahead, up and seasonal planned key we of on our our see capital, well similar this as the to assets costs. by seasonality, our result last Looking product higher driven levels replacement planned expect volume capital increases we as historical higher to to to Giving be aforementioned growth trends,

Hills track and of associated to to volume out meet we’re of growth earnings, half higher it X the half Permian, and online. first we Ford Also, and Mewbourn the forecasting see we're the expansions to These SCOOP be to expect the will you and drive the in growth guidance. portfolio. If as Sand Eagle increased than the volumes our that regions additional come are our year, look second confident on we projects GMP XXXX

flexibility. program We’ve $XXX to last our November times. our ample the in our successfully coverage touch leverage plan, million and strong Now available X.X executed our on $X.X financial we X.X prefunded execute preferred DCP financial have we via Slide liquidity with bank I’ll XXXX approximately capital and with its distribution year. raise the liquidity of on equity times X, facility. billion bank quarter And on of ending continues ratio

We flows. continue Range, fee-based our to on announced capital Texas our that demonstrate significantly efficient Front cash return capital like the investments and add White growth strong Express diversified discipline projects with grow focused portfolio Cliffs recently and

and preferred markets, program alternatives portfolio our Additionally, fund flexibility DCP facility, has continued substantial multiple optimization. our million financing financial $XXX to including to bank ATM our capital us growth, debt equity, via available

on the that allowance no policy MLPs revision. to briefly Now, I its income able XXth, want rates. policy FERC longer indicating pipeline will cost-of-service recover On tax in to provides their March touch an be FERC

mentioned we’ve the our could impacted. As minimis potentially only about revenue, expect be release, in associated impact of be prior de million which press $XX with to we

Let me walk the math. through you

XXXX would could impacted. small revenue, potential be we Then and rate million of that million reduction the portion is If which confident million. not are that reduce minimis. of $XX get de that a then of This only $XX $XXX be you are approximately be policy take that a that amount impact you by transportation only our FERC revenue impacted why revision, any revenues consider by would certainly

me to as further hedging program. layering hedges exposure. provide in Now an our moving let been We've incremental we crude, reduce Slide on you XX, and to update our active commodity on butane work propane

position. kept gas XXXX hedged. to have the now portion is from prices hedging Our Weak our and XX% estimated gross fee-based gas up margin us of

mentioned see line. However, are ethane starting we earlier, as recoveries reducing to I equity gas increased our

it crude taken and update XXXX and DCP on of advantage hand to hedges. crude stronger to to that, have Wouter back the also With on an we've layer Finally, NGL and provide NGL started X.X. I'll outlook,

Wouter van Kempen

Sean. Thanks,

next will is DCP slide, transformation, on differentiating the our our you I update X.X, company. digital how On

not us industry, see is to only curve. but continue gave we're results around that almost every We the feedback financial doing technological within customer remarkable of ahead the what advancements All our us how are and ways of DCP revolution industrial wave completely longer to fourth by and allowing transforming money. no industry. the of the the pass innovation that operate totally is companies they make midstream

potential and powerful We we Earlier, are tens increases XXX,XXX optimize the optimization example of big and X.X. DCP market allowing cease to quarter, drove noted utilizing data, of assets X.X tangible barrels real-time Sand outstanding from to XXX,XXX and millions DCP the day, from And first decision-making we benefits efforts with Hills. the capacity the opportunities. resulting in in capacity margin per opportunity. us saw in

to capability set by safely static So a real-time are able of how conditions do condition. rather under set dynamic technology assumed our innovative maximize knowing Leveraging we we points, operating the than do and of that? volume

As continuously it is automatically And to a systems maximize implement capital. of did single penny result, require these the flow. a smart beauty control needed changes incremental efforts not of that our

over even optimization to that began very real-time arsenal analytics. we these As allows we in plant from we of within the limited strategy weekly models, to contracts, our impactful optimization executing revealed to In make rely incorporate daily, immediate X,XXX which from approach. adding This SCADA, industry on incredible QX, financial better real-time mention improvement resulting data KPIs, functionality engineering from top as assessment the greater increased ability mirror we an In than rearview from decisions foundation as prices. operations SCADA, and operating operators predictive it operations, DCS, integrated or in us has center, that in profitability a market of but and quarter, gives simulations, the a drive different rather our our building in ICC plant comprehensive ICC, real-time for reliability. monthly, known data our put impact our the of ICC, the heavily and we’re to collaboration future. the our our current last in of Ultimately, not is continues as the is that

our of Beyond the include as compressors scope industry. a to entire advanced enhance and field has of entire to largest we now our plans, system we operations operates -- our work fleet the to our DCP work vast network as maintains in system. pipelines

year. continually next remote XX/X by to our reliability our competitive assets major to and our system into of edge, part all early commitment monitoring As we improve field plan incorporate

corporate robotics every utilized and streamline and Importantly, to value. we’re our are automation driving add innovation across being commercial Digitization and also function. process organization

have we We to people our are technology the improve workforce we and stepping tremendous how as pride processes, apply to our the transition how up in of internal future.

and investing organization and Our diligently why system outcome of Hills working those innovation. our of so entire build in to culture transformation dramatic Sand this and across are our exactly we're

all it up sum me let in final for you slide. So our

strong portfolio strong and QX has ample delivered Our coverage. liquidity results. DCP

We our chain approach our strategic integrated are every value to segment and business. a expanding comprehensive taking throughout of

X.X by Our our will We're XX increase in the and X accelerating growth adding basin plants, DJ tremendous Mewbourn multi-year O'Connor X up our existing per to program and capacity bcf adding base. day. to Plant dramatically

fully almost and commitment all to Hills’ of pipeline end our additional expand to takeaway transformation midstream year. the continued and continue critical have the confident cubic we're Permian a I'm takeaway Express adds to questions. NGL the per for and Additionally, within this investors. of close, The barrels track delivering in our executing lines XXX,XXX underpinning we on basin. gas space we DCP innovation. in and the XXX,XXX In Gulf through add we differentiate operations, DCP in X.X adding our growth as And our of is role our to per as which With to continuing day day value Gigi, through on barrels our to To customers that our to million XXX DCP move of per gas by playing Permian, the Logistics feet open please optimization and Sand culture record Coast subscribed, is for operational up accelerated of day capacity takeaway increase business.

Operator

our UBS. And from Instructions] from [Operator question Shneur first is Gershuni

line Your is open. now

Shneur Gershuni

takeaway takeaway White perspective. NGL it DCP's from other your options the volumes be start can sense received capacity. or to economics of talk was said the can to the cheapest going the conversion get options? for that towards Does from the the Do we to Mont wondering you you Cliffs with economics route option? from the DJ White redirect about versus off Maybe Cliffs if existing to make I Belvieu some differently, better is

Wouter van Kempen

Basin the looking five -- those, think with to two win-win is project. we were areas. White with options many basically I we into Express, of going opportunities do we’re to to our take that in the you of And going all Texas at Cliff Front been a DJ most and We've Range four out Cliffs. NGLs White different that talking true were I of you other different spoke likely, was and of

Hills has know, open you As Southern capacity.

a XX,XXX, about day have capacity. barrels of XX,XXX open We

solution. it be part what Southern to to was going that really Hills be was important the that solutions other was going of For to is us,

White D.J. going That comes their initially Basin. about have Hills Cliffs And think doing probably case So those of right industry do mile also million that was Southern thing. one lay expand $XXX million and together repurposing was so to where talking about, to with our -- XXX Kansas make We $XXX about that is into industry were in is I we base were basically we to group could the the line. some this with cost. from

pipe White happening you are If of connect building to is think in the what is XX about about this we Cliffs or miles into Colorado system. so

side, pipe from already Hills Cushing expanding we're that about is doing what the miles. the that’s There we're Southern we have actually on XX site ground is Cushing other in Panova. and to The

really massively, dollars to a do compared expanding is efficient it capital massively us to talking Southern the of way about Unlike on you’re for pennies alternative the So Hills. this.

So partners, to for some will outcome and it's group great be their they a Cliffs going because and their part. to utilize White fully are because they

good us, because it solution, very a tremendously For capital. it's low is

XX,XXX we going capacity fill utilize have Hills. We that to on that are and up Southern extra XX,XXX,

potentially an point and continues Hills. point. project, Southern gives view, future Now a us into base be of flowing Southern we also this Hills opportunity great Express economics that. a of own lot a And a From point expense Range in Front percentage from lot obviously barrels the as from Southern of view, Texas more we’re to an Hills and to

filling So DCP economically is very unit DCP the something up holders. to is holder, and unit for Hills the us Southern attractive that

think look this how I that. So is at should you

flow pretty barrels between We of barrels that I XX,XXX White be be same barrels White things Texas Range is Hills, expanded to Southern can think to going and Range capacity, Hills. Texas to priced that Cliffs Express. will on all that XXX,XXX and comfortable be But And on and feel Front the continue will you as on route -- is the Southern Express. can capacity Front of Cliffs that into going routes of

great about excess Southern customers, barrels which that any want. Hills many have Hills pipelines Southern times. For to Hills spoken can of truly flexibility, have Sand all our open flow I’ve that that systems producer Sand your means and you and pipeline, our you and The market

you can Mont any flow care of to if other you If take flow Sweeney, to to you want flow if want want to we Belvieu, to to that. market,

can your have use. that you fractionators You of choice

this So the for project. attractive producers, I win-win truly also a is a project, think very so

Shneur Gershuni

bit. little summarize paraphrase And maybe just to or a

more net the that. a perspective, a gallons you or perspective, have optimality. it then Cliffs White of to to they back sense barrels percentage be really increased because should you larger they from economically, and the effectively, And incremental put Hills, from producer's and own different on makes So for Southern in

Wouter van Kempen

it, saying great of way I Shneur. think it’s a

Shneur Gershuni

than away. secondly, was and we then in But curious of get And lot a squared X.X come if just did maybe the expected totally numbers didn’t lower seem to to so DCP -- I O&M project? related our maintenance. this have was and that

Sean O'Brien

X.X, We the Definitely of we’re hours, continues the on -- talked additional spent color function, showing with robotics use in and time to reducing today efficiencies. corporate reducing team miles our those overtime Wouter bots man some it things. how some drive We your driven. PAs and gave

we’re fourth continue So we be for across remind in to company. our had year cost seeing XX. or you a row, the in efficiencies driven the in third definitely lower than to guidance I'll that we continue to guide XXXX

wasn't I from And So reduced QX. defiantly quite they by surprised were the reduced cost.

our think a I QX seasonality. had we little

As little if But we’ve I more being and higher do you about to last about maintenance we’re year, to mentioned you’re ought got things in for some my think because QX similar shape, going good the online. by a very remarks, thinking coming enlarge company. bit QX to story

year. through that innovation helping are remainder continue of that I we’ll the to do and think drive the our efforts

Shneur Gershuni

maintenance mean, And in I of certain in parts has result? talk a Are mean, And replacing the your wondering less are still incremental at come where you opportunities I you it can finding other last consistently having over less expected. downtime mechanics as was earlier the all. experience you years, if you're of couple about I have later? parts people than

Sean O'Brien

and more the the to the into important is the of on to side that us. maintenance of we're trend logistics this -- definitely equation company We over Obviously, those the are for lower. think Couple the maintenance side through be of things extending newer tends assets equation, company. to

focus portion We a on have improving of internally improving had the reliability, that our big a massive maintenance is programs.

a A to for you we I That's areas, good higher Delaware. the Northern the long doing key think areas on in are efficient, course, than that. additional I product north and -- replacement been I little mentioned is this last it the about instance and was our seeing the we've guidance think year, XXX some will in a run. maintenance XXX tell think SCOOP like I little bit year. and pretty of at very that trend that's bit

that's So increases. that. that driven is you one some like see growth, volume again, we area may But by

are So we efficiencies, driving yes.

maintenance we moving And in little tend bit assets. and less a will to volumes then logistics Those increase move more on side, think I We intensive. see newer see and are you as be increase. to the

Wouter van Kempen

And not we’re taking absorbing as that. assets, we to cost And only down the so we still well. maybe continue overall obviously on also add to are add new those

So obviously, technology that’s the pretty got to team. picture. the by you and effort innovation took to higher a the also what gets tree, we’re around that’s And what’s where why higher so for why doing. the DCP and doing overall remarkable fruit one change no but That's you're up continue and is important

Shneur Gershuni

let's basis, Just say It newer seeing Is effectively that again. think assets. older on fair maybe legacy if I maintenance. paraphrase it about to say obviously, an general. to an yet on less to have understand that assets, trends you're But impact or apples-to-apples spending think in definitely downtime? assets, when I I you're maintenance less about it from

Sean O'Brien

effort just better. company our company part wisely. as the at money the we more of efforts, We Yes, innovation huge spending think years, the on our but as running also last of couple in I are place a maintenance over focused part of put

think the I what seeing So is, are short -- you think I answer yes.

We to into the play. And money. assets out our it more then plug are obviously comes trying technology where spending money times most run get better the make ICC us We're the in is that the wisely. of that

Shneur Gershuni

maybe me an give Shneur. example, Let you

was would And historically the that happen, little not smart you compressor through people fleet go what a a largest XXXX spending when or really the industry. have And We a XXXX, start decision. downturn, like in less. pushing out, maintenance

more money actually the major XX% what that is ’XX, that compressors gone spending much three have resulted over years. down started During And we on ’XX into and by over preventative on our failures last maintenance.

a major more take line more of that failures into our down. how then you spending down cost cost example upfront little continue running much, much bit to not actually So we and the is one

Operator

you. Thank

Bloom from question from Wells Our is Fargo. next Michael

now. is line Your

Michael Bloom

project. through just to White I Hills think Southern wanted the Cliffs

you’re is, question miles then into for Cushing. responsible miles first my guess the Cliffs the from White XX I and So XX building

I And that timing so of And cost of the the that and what's my first spend? that’s question. guess

Wouter van Kempen

really cost is. yet led haven't We what out the

million you probably going bit beyond. the projects a of DJ XXXX, over it all of take million $XX to for basin. numbers round and XXXX, variety the announced a better some We’re you in call end In little we the mile, different the that give insight I million, think capital if in expenditures bucks

interconnect that have we -- in On the diameter with we pipe the large we Hills Cushing, Panova where from already other you side, I told Southern to ground.

in are making out, this take type actually to of on we exactly works it lay that process or case two there. have up that tested, it’s That’s going for to that figure the month XX of miles pipe worse of another service. it sure we the pipe us to works, So

numbers, five is If you you get a rough can in done one-third XX, use Phillips around that and by two-thirds same the the And DCP one-third to by ballpark. pipe.

to you how Southern paying are Hills then capital their the for and roughly So into partners convert and Group outlay the pipeline. the should connect and look Sun at converting to capital

Sean O'Brien

There some we like think more And the the accelerations XXX gave some to capital just that's lot of you as is our we’re you would Plant then that, capital will even give I this said the in to ���XX, ’XX been year, I projects today, there listen the capital in talking is on about minimis some really And XXX what announced de new fairly projects. about of if and you a talked this is Wouter said which these ’XX. you ’XX. XX, clearly for of higher with holistic about. know, of guide We the Having range view. growth end range. towards

So fill that but range the are very end we’re is, to ’XX, ’XX. in good projects. in toward going higher and we’re of news the yes, starting our And pipeline ’XX accretive these

Michael Bloom

I’m to Just that all then that assuming piece and I And the you XX the thinking and clearly that it And want about into on Hills? touched so now Southern Does to if to correctly. to before. if need is you other that expand XXX. then basically White want the suggest think fill even have pipeline? just flow Cliffs through see But

Wouter van Kempen

absolutely You're correct.

only Cliffs is White from cliffs So white into flows into Hills. Southern connection -- point the

out go Cliffs will we and is out That project. Southern open combined. with So Hills season together, that the a of White an is beauty route from we when go this

You're absolutely right.

of Hills. XX,XXX barrels of Southern capacity XX,XXX into have miles today We or so

if XXX,XXX So the fill continue XX,XXX flow to Hills. I would the obviously up to me, that. -- Hills, To love Southern expand and Southern deal to problems. this or whole luxury we the to all we with goes category have of into that going are into

that. would be that think to I terrific have

that, not is at We have take 'XX. service into this because until look coming a ample QX, time to

a by bit the position time, we probably would at you're in So it or later. XXXX where a little get up, truly fills looking

and take Hills. time expense those at a of that look So Southern plenty have we to anticipate and volumes all

Michael Bloom

to up is XX turning like the question, think my is how just And flowing today full the fill today. a then it's Thanks. expanding you what to that Effectively last Sand get to capacity do Hills. to to? wanted for sense where you're full get pipeline of cadence to And the the

Wouter van Kempen

So we're 'XX. where full were XX% in that's today, QX we roughly

And you end can you prepared the And of unlike the tens additional we're XX,XXX take what this, there. is math a great times year the the without do roughly additional spending with on doing of we time. times barrels look a and we're day, So here Michael tens remarks data quarter, additional same so team margin on probably of put today penny. XX, millions to a times that in. XXX, you which that a in rate, opportunity gallons about the barrels capacity the gets another thing it's of files if I real XX,XXX spoke at how And

is great. that So

the onetime. expansion -- have is third expansion at then And we running in that now come all-in today. XXX,XXX about barrels of that to us thing to the not on versus we're quarter. working XX,XXX the going that great to the is we're XXX,XXX. The So gets in come somewhere going XXX,XXX as

the of XXX,XXX third to to a So and pump online. change we the And stations then XXX,XXX, come to that's from set in stations additional those step XXX,XXX quarter. quarters ramping we're capacity you XXX,XXX throughout pump when get and

it’s to exciting. feel really we continues about up and very good nicely, it, pretty really, fill So

Operator

you. Thank

from question Tonet Our from Jeremy next JPMorgan. is

now is line Your open.

Unidentified Analyst

Jeremy. for on Rahul is This

amount in comments million 'XX curious half potential still amount large if out on gas [stake] materializing Just your with interim upside I about see you coming to talked in I’m in just a of or second you're million his in context to expect recovery of it first here, and heavies, also think before. hedges ethane? around some worth touching up $XX earlier $XX about recoveries And quarter. mentioned Sean

Sean O'Brien

gave continued about came you a are to To we that we good about That signals, of on see to worth day to QX. the of seeing as DCP and last give rejecting towards do ethane We that that to million million quarter. anticipate uplift numbers, is that to is XX regarding some. news recovery we $X in the We're into year system down XX 'XX. QX. you, backend lot happens strong XX, our of to very continue. starting we was were the a round $X.X out the So XX first We're

increased the into off a put the really there to is at what's take probably is bunch. But the and gas of more that the come more assumption. to as driving assume now of weakening year, that current hung and driving out in barrels pipeline that are for and remainder pull that the could going that, you obviously the our ethane that that bunch So level continue ethane have hasn’t push the gas. prices driving that economics to that's What's it's

and moving the was hanging equation. of question last the Crude your correlation CX crude. think on pretty Obviously, strongly has fundamentals a I there. in very side is heavy with strong

seen So year. barrel the strong CX the and this NGL of correlate portion stay we have relatively

Unidentified Analyst

mean here, XQ of so pipe that for rest the your partners that unlike And -- year Keeping I but context, fact just flat Permian. focus the up. about was slightly the of JV potential slightly talked of shifting forecast is out down second bit one the a that in competitors

it or something in be you’ll interested equity thinking which Would have. you provide? you options can Just through be curious the guys just any there thoughts

Wouter van Kempen

think we of basin. a lot in Permian -- gas continue I control there’s to the

a side is to our we into or number So of subscribe from we there teams do that second to commercial inbounds to interest pipe. to do our a is think there continue come want significant an around,

sense. all We at continue look to and options what see makes

pretty excited work. make excited to that desperately. that’s And am we’re and project, needs to Coast Morgan market really we Kinder going early be project Gulf think up a very that the that to about teamed with great project and Express, I come the needs I online,

at to continue look we’ll So opportunities.

Operator

you. Thank

Holder question Our from next Goldman Jerren Sachs. from is

open. now is line Your

Jerren Holder

What that the do is expand Guadalupe capacity you Permian? in any the given price have and ability pipeline, just in to differentials

Sean O'Brien

helped business. comments in with The a little did physical capacity, asset widening that the that having and day. a Jarren, L&M our definitely [indiscernible] is we XXX I spread our mentioned bit that

In we to terms any of project not expand it. I’m on expand ability of it, aware to that deck have

sure year. we quite it that proving So get a so not if much far be to I’m but is its asset a can day XXX and good bigger, this

Jerren Holder

And based flow and online to. then as maybe Cliffs. the do Cliffs XX XX,XXX on and Southern you on that plants? likely incremental Should Hills that's those have volumes comes day that where White on White of X commitment then will primarily as most the switching O'Connor per And Mewbourn think volume Plant to and capacity barrels X we

Wouter van Kempen

it, XX,XXX O’Connor will you create X and barrels north day. of well Jarren Yes, a X -- got that’s absolutely Mewbourn

well. open on to And we’re into or we earlier basically said did Cliffs truly volumes may It’s then XX additional when their Southern a holders. we parties very asked of for well so do then it that DCP they into the going opportunity third and Southern top what the great White and bring -- So others come for our that the Shneur it’s I has think as into Gulf do Sun well Coast. project and Hills to Group the into a and see would great that are in we as win-win. for obviously question, as Hills anything well. pipe doing unit a and that partners, And season Plant it's when I Southern uncommitted Hills project barrels

Jerren Holder

guys seems Range you it Front be And would confident also then pretty are lastly, like expanded. that

I now. think that's season right an open

yet. expanded that confirm been that’s nothing so And

to plants are So come where are given effectively the going that Cliffs? like sending White just volumes of your from to new volumes all

Wouter van Kempen

Remember are the pipeline. that that the owners of the expansion also the parties announced

not we I know We confident think will would should that that into would open that expanded. wouldn’t you if enter highly an pipeline get this So expanded. feel season pipeline get

-- very the There and Express we’re system. both lot lot to very get are -- expand of So Enbridge, going between into is are ourselves, done. that confident a confident highly system Front between Western and putting putting that a these are and Anadarko between Enterprise, that into get done. will that we Range so is barrels to barrels of going projects well, confident Western Texas as

Jerren Holder

returns you And necessarily that, we for because on about more that not services processing. maybe providing one and should the would bypass the on CapEx How capacity. same you're think obviously

think that? we about should how So

Wouter van Kempen

to make really very without sure capital a And is bypass the gas. way to increase -- processing just So efficient that it's actually capacity people understand.

And can a fill efficient. So specs. so It very got that blend is the optimize meet unprocessed that we process we're obviously to we gas plant gas. then gate, what is doing and at we to capital pipeline

XXX and about in. from should X way of probably CapEx original goes we duplicate the this think a capacity the it plant us day think or to an to our I a with day, O'Connor XXX bypass customers, of X more we have arrangement XX% million and O'Connor great have cost solid the on you the O'Connor that expand is And And win-win. very million will flowing. of to as producers. with paid They capital crude for They us capacity. us producer get our paid we that, get get on and It’s well. for provides their put how returns it’s it in the we will get another

Operator

you. Thank

Elliott from Chris is question next Our Barclays. from

Your line is open. now

Chris Elliott

for into we dig if had nice pretty in year-over-year, I the was could increase a you a second wondering volumes there. uptick just frac

guess all -- wondering guys assets some Sand and if to that Just Hills that’s volumes related that at I particular you if have increase saw of reported? in the growing which

Sean O'Brien

Gulf related have Mont the on That to investments that Coast those fracs. we Belvieu increase was and in predominantly

assets. those interests percentage in ownership have We

from year, trending last volumes QX. and there that you’re maintenance lowered in year some some occurred last that if think downtime was I our

of wasn’t huge wasn’t our earnings, It up. see volumes it on saw we you -- a par but driver like obviously back back, So more to I that huge mean rebounding and back the a go online.

industry I of the increased it the terms increase the and demand is Hills NGL overall the the think and Sand driving, driving export. In for for

Operator

Thank you.

Our Tonet next is from question from JPMorgan. Jeremy

line is open. now Your

Jeremy Tonet

to that volumes want check Range directing Southern just you to But Express, the talking here. reason JV Is push to you just own can't Can was prevented versus you equity Hills. given there and volumes your any of about you that many volumes want line? new as as anything Texas Southern out that there if Cliffs, from Front you there White that Hills -- you're all

Wouter van Kempen

But So we Texas number have commitments. there and have very obviously, honor commitments a Front and system. Express going that to will dollars view, the yes, to obviously, those White pennies Range but on we’re it is all significant we’re we continue Cliffs from do the of get we significantly barrels to do transportation Hills this, at, do we barrels what more all spending the continue opportunity is that Southern the what we have the optionality. where we best dollars looking and than same why of we’re way and have our just that under expand capital intense way are on the control now that’s to point DJ the coming And of of still where that a capital Basin, out into convert but very attractive ourselves currently should

So absolutely direct comfortable around the into we if There why out and want very reason capacity, going even right. potentially more can because system. yes, take we’re XX,XXX we’re we a out you're barrels that to we that of to, is took

Jeremy Tonet

duration to the really quick roll later share could or flavor Express is it term able Are of any things a you just contracts that’s that just of commitments and part follow-up Front the there. Texas if those as to Range get there? And near

Wouter van Kempen

No, we’re you make that here some important to great you express shorter this thinking like you they a they shelf need of the on that is about the all you pipe to capacity, In Front we is next continue it, put it’s the anchor outlet. do it’s shut we commitments got think don’t when into fact of where And what the into to were can’t the to to of up. the of producers kind to to today. we do that and to pipe. great, love commitments. through And in a in. have think new long-term go, I outlet. sure Range have well think end, they I with is think what go gas way start one It’s Permian shippers Basin great is want or trying and place DJ really that basically get the Whether take flaring, about People will having your flaring to decade

NGL see the the on side time. You same over may

all absolutely What Front problems partners like Connector you up on XX, we expandable why additional we alleviate decade. Cheyenne on deep something with partners the on. BCF. to together the to do We the our created. knew Range million that and that's of to express. we We gas why one gas been and DJ the That’s we’ve the producers. capacity DJ Connector, So Plant was takeaway of a work needed going we It’s all knew doing is into those these talking worked day Basin our to bottlenecks Basin, in our capacity were full that working Cheyenne in adding swoop residue XXX Texas That's are one with that are out next of that big have expanding

building O'Connor, by and that’s of we’re of DJ having outlets, the to that, Hills to a announcing again available build while Mewbourn the top basically having the and the multiple and up manner. -- taking And that, Basin then land accelerating one plant capital on once came have to the BCF. accelerating all the the processing that all is fact efficient that capacity by into very opportunity increasing of permits, way massive and filing getting why solution a to Southern want we extending You in

our is an give continuing can stop shop we DJ attractive So to the which to solution Basin, one integrated producer basin. customers grow a very unbelievably

should look a really much this think that's of how you strategic more point So from at view. broader I take a

Operator

closing Thank further of VP Irene this Relations, no question. would back time, you. for I remarks. turn I’m At showing Lofland, to over the to call Investor like

Irene Lofland

Gigi. for Thanks joining everyone us today. Thanks

follow If call. a you great have any Have me please questions, give up a day.

Operator

in for Ladies and gentlemen, thank your you conference. concludes program. This today's participation the

disconnect. may You now