DT Midstream, Inc. (NYSE:DTM) Q3 2025 Earnings Call Transcript

DT Midstream, Inc. (NYSE:DTM) Q3 2025 Earnings Call Transcript October 30, 2025

DT Midstream, Inc. beats earnings expectations. Reported EPS is $1.13, expectations were $1.03.

Operator: Welcome to the DT Midstream Third Quarter 2025 Earnings Call. As a reminder, today’s call is being recorded. I will now turn it over to our speaker today, Todd Lohrmann, Director of Investor Relations. Please go ahead.

Todd Lohrmann: 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’ll go ahead and turn the call over to David.

David Slater: Thanks, Todd, and good morning, everyone, and thank you for joining. During today’s call, I’ll touch on our financial results, share details on the latest commercial activity and provide a status update on our key growth initiatives. 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 had another strong quarter financially, and our year-to-date performance is enabling us to increase the midpoint of our 2025 adjusted EBITDA guidance range to $1.13 billion, an 18% increase from the prior year adjusted EBITDA guidance. We are also reaffirming our 2026 adjusted EBITDA early outlook range. The third quarter was another active quarter for us commercially, and the team continues to advance incremental organic opportunities that support our future growth.

We are announcing today that we’ve reached FID on a larger G3+ expansion on Guardian Pipeline. This upsized expansion increases the total capacity of Guardian by approximately 537 million cubic feet per day, which is a 40% increase in the total capacity of the pipeline, and the overall project is anchored by 5 investment-grade utilities under 20-year negotiated rate contracts. This investment is supported by strong fundamentals as there is robust gas and power demand growth throughout the region. We are also advancing potential upstream network opportunities given the connectivity to DTM’s broader portfolio, including pathways from Vector and Midwestern pipelines as well as supply options from our natural gas storage facility and NEXUS in order to offer our customers greater flexibility and reliability to meet their growing demand.

Turning to our construction activity. Our LEAP Phase 4 expansion facilities were placed into service early and on budget, increasing the capacity from 1.9 to 2.1 Bcf per day and providing reliable, timely access to rapidly growing Gulf Coast LNG markets. This expansion is underpinned by long-term demand-based contracts that will start in the first quarter of 2026. And I’d like to take a moment to recognize and thank our construction team for delivering another project early and on budget. During the quarter, we also placed our Clean Fuels Gathering project into service and initial volumes are ramping as planned. I’d also like to address our Louisiana CCS project that remains pre-FID. As we’ve disclosed in prior quarters, we have progressed this project to be shovel-ready while minimizing capital investment.

Q&A Session

The Louisiana Department responsible for reviewing permit applications has recently reorganized and a moratorium has been announced on accepting new applications. Our project remains under formal technical review and is not subject to the moratorium. But at this point, the permit time line is too uncertain to provide an updated date when we expect to reach FID. It remains an attractive project economically and strategically, leveraging our existing Haynesville assets and expertise. We will keep you updated as our application advances through the review process. Finally, I’d like to take a moment to address the current natural gas market fundamentals and why I feel DTM is so well positioned. We have seen a positive shift in the Haynesville over the last few quarters and the record high throughput on our Haynesville system this quarter demonstrates the ability of producers to respond quickly to LNG demand signals.

With the recent commercial announcements of multiple LNG terminals, we certainly see opportunity for future expansions of our Haynesville network, including LEAP, which is in a strong competitive position given our connectivity to both basin supply and downstream demand markets. In addition to the growing momentum in the LNG market, we continue to have a very constructive view on gas and power demand growth in the country, fueled by increasing power generation needs from AI computing and data centers, along with industrial demand growth from onshoring of manufacturing. Moving to the regulatory framework. The recent Senate confirmation of 2 new FERC members was an encouraging sign and continued government agency initiatives that streamline approval processes while maintaining high-quality reviews give us increased confidence in a constructive permitting process for our key interstate growth projects.

I’ll now pass over to Jeff to walk you through our quarterly financials and outlook.

Jeffrey Jewell: Thanks, David, and good morning, everyone. In the third quarter, we delivered adjusted EBITDA of $288 million, representing an $11 million increase from the prior quarter. Our Pipeline segment results were in line with the second quarter. Gathering segment results were $10 million higher than the second quarter, driven by higher volumes on our Haynesville system, where production ramped faster than expected. Operationally, total gathering volumes for the Haynesville averaged 2.04 Bcf per day, setting an all-time record throughput for a quarter and a 35% increase over the third quarter 2024. In the Northeast, volumes averaged 1.09 Bcf per day, driven by the timing of maintenance and producer activity, primarily on our Appalachia gathering system.

As expected, we are seeing Northeast volumes ramp higher into the fourth quarter with September averaging 1.17 Bcf per day, driven by incremental production on our Tioga system. And we continue to expect average fourth quarter volumes to be in line with the first quarter. As David stated in his opening remarks, following our strong year-to-date performance and considering our expectations for the fourth quarter, we are raising our 2025 adjusted EBITDA guidance midpoint to $1.13 billion and narrowing the range to $1.115 billion to $1.145 billion. In addition, we are reaffirming our 2026 adjusted EBITDA early outlook and plan to provide our formal 2026 guidance on our year-end call. We are also raising our distributable cash flow guidance range to $800 million to $830 million, a midpoint increase of $45 million due to lower maintenance capital, interest and cash taxes.

On the capital front, due to capital efficiency and project timing, we are reducing our 2025 growth capital guidance range to $385 million to $415 million, which represents a $30 million reduction to the midpoint of our range. With the improvements in our distributable cash flow and capital expenditures, we expect lower year-end leverage of approximately 3.1x for on balance sheet and approximately 3.8x for proportionally consolidated. For 2026, we are increasing our committed capital to $280 million, which reflects the upsized Guardian G3 expansion reaching FID. For our upsized Guardian expansion project, we expect to invest a total of $850 million to $930 million at a 5 to 6x build multiple with the project expected to be in service in the fourth quarter of 2028.

So overall, our committed capital has increased for the ’25 to ’29 time period to $1.6 billion, which reflects 70% of our $2.3 billion backlog advancing to execution within just 9 months. We will provide an updated look at our overall backlog on our year-end call. Finally, today, we also announced that our Board of Directors approved our third 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.

David Slater: Thanks, Jeff. So in summary, we are very pleased with how the year is continuing to progress and are confident in our increased guidance for 2025, early outlook range for 2026 and long-term organic growth target of 5% to 7%. We are excited about the future opportunities ahead for the company as we remain focused on execution of our pure-play natural gas pipeline strategy and are well positioned with a strong balance sheet to fund incremental investments in this favorable market environment. And with that, we can now open up the line for questions.

Operator: [Operator Instructions] We’ll go first to Jeremy Tonet at JPMorgan.

Jeremy Tonet: I wanted to kind of maybe dive into the details a little bit more, if we could. Louisiana has been a hot for data center activity. And just wanted to know if you could expand a bit, I guess, on the potential for your network to support some of this demand as it comes together for gas-fired gen in the upcoming years?

David Slater: Yes. Thanks for the question, Jeremy. There’s a lot of demand materializing in Louisiana right now. I think the data center is one piece. The LNG demand is manifesting and lots of announcements this past quarter with incremental LNG demand. So we just see a robust market demand growth across the state, like just holistically. We’re obviously pursuing all of those markets, Jeremy, as you’d expect. So again, like I’ve said in the past, we expect to get our fair share of the market there. There’s competition in the region, as we all know, but there’s extremely robust demand growth in that region. And we’re aggressively pursuing that right now.

Jeremy Tonet: Got it. That’s helpful. And I was just wondering if you could provide maybe a little bit more color on Haynesville and growth trajectory there, the volume jump. Just do you expect that to continue? What could that mean for LEAP expansions and particularly, I guess, West Haynesville potential?

David Slater: Yes, there’s lots of development happening there. We’re really excited to see some of our customers getting excited about Western Haynesville. So that’s an emerging play that’s going to add, our view, it will add significant runway to the Haynesville basin, which I think is strategically important for long-term LNG sourcing, supply sourcing. So we’re excited about that. It’s very new, Jeremy. So I think that’s going to be an area of focus over the next 12 to 18 months as we start to get a better sense of how those producers plan to develop that acreage and how the existing infrastructure fits into that plan. So more to come on that. In terms of our volume ramp, I think we had been foreshadowing to our investors that we were expecting volume ramps in the second half of the year.

To be honest with you, I was expecting it to come maybe a month or 2 later than it came, but I think it’s a good example of the producers’ nimbleness to respond to physical market realities on the ground. And we certainly saw that response in the third quarter. I expect the fourth quarter to have a similar volume as the third quarter. But yes, the nimbleness and quickness of the response I think it’s just a reflection of the new era that we’re in and how producers have readjusted their business to be very responsive to demand signals.

Jeremy Tonet: Got it. That’s very helpful. And one last one, if I could. As you speak to upstream Chicago opportunities, are you — is this more of a Vector or NEXUS or Midwestern? Just wondering, I guess, if you could provide a bit more color on what that would look like and what type of time line scope this would be? And just lastly, gas storage, if you could expand more on what that looks like? Is that Gulf Coast or Ohio?

David Slater: Yes. So there’s just lots of positive fundamentals unfolding in the upper Midwest right now. I’ll just start there. Certainly, the upsized Guardian expansion has moved a significant amount of demand into that Chicago hub region. And I think that’s going to draw incremental supply to that location. So we’re obviously looking at Midwestern, Vector and NEXUS, like I said in my opening remarks, as potential free ways to bring in incremental supply to that market. As you may know, Vector is actively communicating an expansion, a $400 million a day expansion westerly to Chicago out of the, what I’ll call the Greater Michigan area. So that’s been shared with the shippers. That is under active discussions with potential shippers.

The Vector program, we expect that will go to open season probably in — measured in weeks, sometime probably in the next month. So that’s just probably the most advanced. We are on those 3 different pathways, but we’re clearly looking at what can Midwestern do to bring more volumes into Chicago and then how does our storage business fold into that demand. And in addition to that, looking at NEXUS as well. So we can offer our customers here kind of a wellhead to market solution, and that’s really what I’ll call the next phase of that growing demand in the upper Wisconsin region. So very excited about it. But I don’t want, Jerry, to think that there isn’t a whole plethora of other opportunities outside of what I’ll call Wisconsin that are also percolating around the assets.

There are some announcements this morning that I think are favorable. So there’s just a lot going on right now. We’re extremely focused on our core business, which is our Pipeline business. And really — we’ve really got our head down and focused on disciplined execution here. The market is offering sort of a generational opportunity for expansion, and we certainly want to make sure that we participate in that.

Operator: We’ll go next to Spiro Dounis at Citi.

Spiro Dounis: I want to pick up on some of those comments just around Wisconsin, David. It seems like there could be some more opportunities there just with some utility announcements. And so curious how you’re thinking about Guardian’s ability to maybe even push further north into Wisconsin. And are you sort of separately seeing any sort of increased interest to connect Guardian with Viking?

David Slater: Spiro, good question. And yes, I think if you’re following the utility disclosures, there’s a tremendous amount of activity and market growth occurring in that the Minnesota, Wisconsin, Iowa corridor, that upper Northern Midwest corridor. I think the — the positive that we have right now is that Guardian is very expandable. So there’s incremental ability for us to continue to expand Guardian sort of in a similar fashion as what we’ve announced to date. Viking sits in a very strategic corridor as well in the upper part of Minnesota, where there’s also some activity occurring. So again, this is just that very positive demand fundamentals that we’re observing in these core areas where our key assets are located. So very focused on this market right now, Spiro. And again, head down, disciplined and looking to expand these pipelines beyond where we’ve announced, again, in a very disciplined fashion, so…

Spiro Dounis: Great. I appreciate that color. Second question, maybe just going to the sanctioned backlog. I think you had another $500 million of projects to your backlog here. So I want to see another, what, $600 million or more so coming. Curious on 2 fronts. One, it looks like the recent addition increased the amount of, I guess, gathering projects within the sanctioned list. But just curious on that sort of last $600 million or so, is that mostly pipeline Gathering mix in between? Just curious to get some color on what’s left to be sanctioned here.

David Slater: Yes. Good question. I’ll start with the highest level message, which is we’re incredibly pleased that we’re as deep into the backlog 9 months into it as we are, right? I think you alluded to that in your question. So we’re feeling very positive with where we’re at and a disproportionate amount of that backlog is in the pipeline segment, the FERC pipeline segment, which, as we all know, is the most valued segment in our business. So we’re incredibly happy about that. I’m feeling super confident in the balance of that backlog, and we won’t get into all the unannounced projects. But the fact that we’re this deep into FIDing that backlog this early, I think, is simply a reflection of the market environment that we’re operating in right now.

This is coming quicker than expected. And again, I’ll just — I’ll answer your next question before you ask it, which is we will update the backlog on our year-end call and sort of refresh it to reflect sort of the success to date and the fundamentals that are playing out around our assets.

Operator: Next, we’ll move to Michael Blum at Wells Fargo.

Michael Blum: I wanted to ask about the change in CapEx for the year. I think both on growth and maintenance, how much of the growth is timing versus real efficiencies? And then for maintenance capital specifically, I’m just wondering if we should be assuming a lower run rate going forward because the pattern every year seems to be that you put a number out in guidance, then you end up landing either at the bottom of that range or even below in this case. So I just wanted to understand what’s going on there.

David Slater: Yes, I’ll start and Jeff can chime in as well. But at the highest level, I’m just super happy with our construction team. I think I called them out in my opening remarks, not only on timing, but also on capital efficiency. And I think, generally speaking, across all of our projects, including our maintenance projects, the team has had exemplary performance this year. And as we all know, that’s highly accretive to our plan, right? That’s capital that we thought we would spend. The team is able to perform and extract efficiencies out of that capital program. And those efficiencies are very valuable to us. There’s a small amount of timing, but there was some timing going in both directions, right? We had LEAP Phase 4 come in early, right?

And there were some of that, that we thought was going to come through in Q1 of next year. So both timing — and timing usually also helps you reduce capital. So those things kind of come hand in hand. But yes, very happy. And Jeff, I don’t know if you want to add more color around that.

Jeffrey Jewell: No, David, you’re spot on — yes, no, spot on. It predominantly is efficiency, and you’re right, a little bit of timing back and forth on the pieces. And then the other piece of your question is around the maintenance. And so I think our guidance there, you’re right, we’re able to do some efficiencies, optimize around that, but no — I would plan sort of a flat run rate. And again, we’ll update that on the year-end call. But today, I’d assume a flat run rate on that maintenance capital.

Michael Blum: Perfect. And then I just wanted to ask if you had any updated thoughts on the Millennium open season and where that project stands?

David Slater: Yes. That’s an area of focus for the Millennium team. We continue to work our way through it. As you know, it’s complex, and there’s lots of moving parts in New York. There’s an evolution happening in New York in terms of recognition of supply needs. So that’s taking hold, and we have to let that process unfold. Both R2R, the team is working on both these projects, and I want to make sure we don’t confuse the investors. R2R is being actively worked and Pro is being actively worked. R2R is a much more near-term, what I’ll call low-hanging fruit opportunity for Millennium and Pro is going to be a heavier, bigger lift and will involve what I’ll call the regulatory complexities of New York and New England. And we talked about that in the past.

So I won’t repeat all that on the call here. But it’s still moving, but it will move at a very patient pace. And again, when I talk about disciplined execution, this is a good example of we have to have all the boxes checked and all your ducks in a row here before we would be comfortable FID-ing these projects given the history with New York. So stay tuned and be patient, and we’ll keep the investors apprised as we hit significant milestones here.

Operator: Our next question comes from Theresa Chen at Barclays.

Theresa Chen: David, going back to your comments on the extremely robust demand growth, this generational opportunity, especially related to the gas-to-power theme as a tailwind for your Northeast and upper Midwest Pipeline assets. Across these regions, your customers do have other transmission options. For the incremental expansion opportunities under development across your regions right now, how do you think your assets and projects compare versus your competitors’ assets? What will it take to win these projects? Is it the wellhead to market solution? And how do you plan to sustain the strong returns and keep the build multiples low? How much economically efficient expansion opportunities are there within your assets?

David Slater: Theresa, that’s a big question. I’ll try to unpack it and answer it. So let’s just start with, yes, there is competition in this region. There’s many other pipes. But again, I think the opportunity set is significant, and there’ll be plenty to go around, I’ll say it that way. In terms of our competitive posture for these markets, a lot of it is geographical. A lot of it is going to be a function of the proximity that our assets have to the demand and that, in some cases, will favor us, in some cases, may favor some of our competition. But again, I think the market opportunity set is so robust, there’ll be plenty to go around. So when I look at all the opportunities we’re pursuing, it’s a really strong, robust, deep opportunity set.

In terms of returns, again, these are all FERC-regulated assets. Let’s just remind ourselves of that. The returns have to be at a level that it attracts the capital and competes with other opportunities in the portfolio. So I think the markets understand that. We’ve been very happy with the return profile of what we’ve announced to date. And — and maybe I’ll just leave it at that because, again, this is a competitive market situation that we’re in right now. So we’re obviously going to be looking to find the right projects with the right return profiles and contract structure profiles that fit with our strategy. And I think you understand that we are very particular about that and very disciplined around that. So that’s not going to change going forward.

And I think I’m going to stop there. I think I answered most of that question, but if I didn’t, give me a follow-up so…

Theresa Chen: Understood. Maybe pivoting to NEXUS specifically. On the heels of some of the recent developments out of Northwest Ohio, for example, what is your appetite and outlook for additional DTM opportunities off of NEXUS?

David Slater: Yes. NEXUS is in a great spot for that Northwestern Ohio corridor. There’s lots of activity there. There may have been some announcements recently that may have just come out. But yes, I feel really confident that NEXUS is going to pick up some market share on the data center/power demand side. And it’s concentrated in that area of the state, and we’re very well positioned in that area of the state. Just reminding everybody, it’s a new pipeline. It’s a high-pressure pipeline. All these power demand facilities want high-pressure gas, and they want a corridor back into the basin, which obviously NEXUS provides. So I think NEXUS is in a really strong position to compete for that business.

Operator: We’ll go next to Manav Gupta at UBS.

Manav Gupta: My question here is that you — in your prepared comments said you’re looking to raise the dividend somewhere in that 5% to 7%. And I’m just trying to understand what could be the blue sky scenario where that number comes in closer to 7% than 5%. If you could talk about it, what could drive the dividend growth closer to 7% for the next couple of years?

David Slater: Manav, I’ll start, and Jeff, you can chime in if you — if I missed some of the details here, but — so maybe we’ll start by looking in the rearview mirror. So when we did the acquisition, we bumped up that dividend, right? So when we went through a period of growth year-over-year that was significantly in excess of our long-term targeted growth rate of 5% to 7%, we adjusted the dividend accordingly. So when you ask the question, what would take us to the high end of that range, I think what would take us to the high end of that range is if we had a year where we had really strong growth and busted through the top end of that range, I think it would be reasonable to expect that we would — that, that would reflect in the dividend growth rate. And Jeff, I think you would agree with that.

Jeffrey Jewell: Yes, David, you’re spot on, right. And our guidance has been as we’re going to grow the dividend in line with our cash flows, EBITDA growth. The other statement we’ve made is that we want to make sure that we maintain a very strong coverage above the 2x, which we are. So I think that’s the guidance is, really look at our EBITDA growth and what we’ve communicated there, the 5% to 7% long term. That’s how we’ll drive the dividend.

David Slater: And last year, we had really exceptional growth, right, between the combination of the acquisition and the organic growth. I mean, delivering that 18% growth was — that was a big year for us. So stay tuned and we’ll see what the future holds. But we obviously hunt for the high end of our range and beyond as we’ve demonstrated in the past.

Manav Gupta: Perfect. My quick follow-up here is you have been involved with data center providers for both front of the meter and behind the meter. I think at points of time, you indicated given the quality of the customer, there’s a slight preference for front-of-the-meter solutions, but we’re seeing this massive explosive growth from behind-the-meter solutions now with even fuse cells coming in. And I’m just trying to understand for the right customer and the right guarantee, would you be more open to behind-the-meter solutions also? And I’ll turn it over.

David Slater: Yes. The short answer is yes. And the art of that transaction is in how it’s structured and the quality of the counterparty and having the right commercial structure. And yes, we are open to both in front of and behind-the-meter opportunities. And I am sure that we are going to bring home some behind-the-meter opportunities in addition to what we’ve done to date, which is predominantly in front of the meter, so…

Operator: Our next question comes from Keith Stanley at Wolfe Research.

Keith Stanley: Wanted to ask on Vector. David, I think you alluded to discussing a 400 million cubic feet a day expansion opportunity with customers. Would that primarily go to serve Guardian? Or how much of that might be needed to serve Indiana power demand? And then separately, how much could you ultimately increase capacity by on Vector?

David Slater: Yes. Thanks for the question, Keith. So yes, Vector has revealed that project to its customer base in the last couple of weeks. It’s generic. I’m going to use the word generic. It can serve a number of egress options in the greater Chicago area. So yes, it can serve directly to Guardian. It can directly serve Midwestern, and it can directly touch all the big utility loads in that greater Chicago area. And it can touch some of our competitor interstate pipelines in the Chicago area that can project that supply across the state per your question. So we’re — we’re testing the entire market in the Greater Chicago area, Keith, would be the best way to say it. There’s obviously customers that are interested in this capacity.

And I think the team will progress through what I’ll call a standard process here where they communicate the project to customers. There will obviously be discussions about rates and terms and tenor and all that good stuff. And the goal will be fairly quickly to get out with a binding open season.

Keith Stanley: Okay. Great. Second one, just a quick one with Haynesville volumes up so much in the quarter. Is it fair to say at this point, we’re now past the MVC levels completely. And so incremental volume growth on your Haynesville system should boost EBITDA on a one-for-one basis?

David Slater: Yes, Keith, we don’t disclose the MVC levels anywhere in our Gathering business. But I think — I mean, if you look back over the last 4 or 5 quarters, and we tell you the volumes and you can see the Gathering segment EBITDA, you can probably answer that question closely just by doing the math, so…

Operator: We’ll take our next question from Jean Ann Salisbury at Bank of America.

Jean Ann Salisbury: I wanted to zoom in on Midwestern pipeline. You mentioned, obviously, that it could be one option for feeder to Guardian going northbound. I believe you’ve also mentioned before that it could theoretically support a southbound expansion of a third-party Appalachia pipeline. Can you just talk about if those opportunities could potentially both happen, which would obviously be amazing or if they would be mutually exclusive, I guess, based on how much gas you could source?

David Slater: Jean Ann, that’s a good question. So Midwestern is somewhat of a bidirectional pipe depending on the time of the year and where the demand manifests on the system, it can move northernly or southernly. And we’ve announced already that we’re building a lateral to a new power plant off of Midwestern. There’s lots of power plant activity occurring right now on and around Midwestern. So it’s in a very unique situation where it can — we can expand that northernly into Chicago and potentially be expanding it southernly down towards the Nashville neighborhood where a lot of this power load and is manifesting. So the short answer to your question is both, both — it can go in both directions. So like I said in my opening remarks, there’s just lots of market presenting across the footprint right now. So we’re pursuing all of these. And yes, I think we’re really excited about the opportunity set. It’s our — we have to go commercialize it now.

Jean Ann Salisbury: That’s great. And then I guess, sorry, one more just about the Haynesville volumes. I wanted to follow up on your comment earlier that Haynesville volume in the 4Q would probably be similar to 3Q. I guess was the massive outpacing of your Haynesville volumes versus the basin over the last year, like mainly leg pull-through, but that would kind of — like that’s happened now and you wouldn’t expect to outpace the basin unless you built more leg, I guess?

David Slater: I think the outpacing of the basin is really a reflection of our underlying customers and the quality of the resource that we’re attached to. That’s probably the way I would describe it. That’s probably — yes, so we kind of — we outpaced the basin and it’s just a function of the resource. The resource was some of the best resource in the basin. So it was the first resource to be drilled. And we had this combination of private and public companies. And I think — like I’ve said earlier, that the privates moved fairly quickly in the year and then the publics pivoted on a dime quickly between the second and third quarter, as you see in our numbers. So just — it’s that new behavior that I alluded to earlier that all the producers are much more disciplined, monitoring physical demand much — more closely and are building capability to be very nimble. And I think that’s reflecting in our numbers.

Operator: We’ll take our next question from John Mackay at Goldman Sachs.

John Mackay: I want to spend some more time talking about some of the projects up in the upper Midwest. One of them you guys have been kind of alluding to a little bit as a broader answer maybe via Nexus, a couple of other pipes to get gas down to the Gulf Coast. It looked like a Wave 3 LNG project or a couple of projects that needed to be kind of the anchors on something like that. I’d love to hear any color from you on if you’re seeing that kind of shipper engaging with you in that market right now.

David Slater: Yes, that’s a good question. That’s kind of what I’ll call the over-the-horizon question, where — in 5 years, where is that incremental 15 to 20 Bcf coming from and getting down to the coast. So there’s a couple of people that have put their ore in the water to try to run up the flag pull some big projects. I’m not sensing at the moment, John, that they’re getting traction. The one thing that I think is changing kind of in the moment is this demand manifesting itself in the Midwest proper. And that demand is going to want to grab incremental Appalachian gas first. It’s going to be cheaper, I think, to build and serve that demand than it is to try to pull that Appalachian gas all the way to the Gulf, at least in the near term.

So I do expect we will continue to be testing the market on this longer-term golf demand that is going to need to be served. I just don’t think the market is ready yet, John. That’s just my opinion at the moment. But it is being actively discussed. As you’d expect, we’re part of those discussions. But it feels like it’s a ways off yet before people get really serious about that.

John Mackay: That’s clear. That makes sense. My second one would just be a quick follow-up. I think it was to Manav’s second question. When you guys are talking about getting involved in the behind-the-meter side, makes sense. It’s in line with what you guys have talked about before. Are you exploring any potential projects where you’d be providing the power there as well? Or is your line still on, hey, we want to provide the gas and the pipe to get it there?

David Slater: Yes, John, we’re not going to change our strategic focus, right? I think we’re really focused on our core business right now, and we have this generational opportunity in our core business, and I want to be 100% focused on that right now. And I want the entire organization focused on it, and I don’t want to distract the organization with a similar but different line of business that we would embark into. My whole organization is very familiar with that business, John, given that we spun out of DTE. As you know, DTE, we built lots of generation, utility and behind-the-fence generation. So we’re resisting the temptation to go there because we have such a robust opportunity set in our core business, and we’re going to stay focused on that right now.

So yes, we will go to a behind-the-meter opportunity, but our role will be expanding the freeway to that location or building the pipeline lateral from our big freeway pipes to the site, but we won’t go behind the meter into the power generation component of that.

Operator: Next, we’ll go to Gabe Moreen at Mizuho.

Gabriel Moreen: I just had a quick question on the next potential LEAP expansion here. And to the extent that you view the recent egress project completions, including LEAP 4 as maybe satisfying this next round of LNG projects that are basically going into service? Or do you think there’s still more that needs to be gas that needs to go down south? And then also strategically speaking, there’s been some consolidation, I guess, of gathering systems. Do you think there maybe need to be some inorganic growth to drive volumes in order for another expansion to occur?

David Slater: Gabe, yes, there’s more egress required to go down to the Gulf than exists in the network today. So even with LEG and NG3 coming into service, and they’re ramping as we speak. Once those systems are full, and I expect they’re going to be full very quickly here, more capacity is required down there. And that’s part of the reason why we’re proactively expanding our connectivity to the future loads. So if you thumb through the deck, you’ll see what I’m referring to here, expanding into the Woodside header system and additional expansion to Cameron for their additional expansions. So we’re just prepositioning ourselves to be the preferred freeway down into these load centers. And again, there’ll be some competitive tension in the process of chasing the new load.

But like I’ve said in the past, and I think we’ve demonstrated, we’ll win our fair share. I think we’ve disproportionately won our fair share to date. And we’ll continue to win. And I’m sure some of our colleagues around us will win some incremental demand as well. But it’s such a large growth area that there is — it’s just a really strong opportunity set right now. So like most things, it’s just a matter of timing and when those facilities feel comfortable making those commitments and then the dominoes kind of fall back up into the basin and people line up capacity, so…

Gabriel Moreen: Great. And then maybe if I could just follow up with a small one on the MVP expansion, which itself just got upsized. I was wondering if there’s any implications for your Stonewall expansion?

David Slater: Yes. We view that very — as a very positive fundamental event for the Stonewall expansion. And that’s — we view that as a strategic independent supply source into Mountain Valley for all the shippers. And we’re in flight right now under construction on that project. So we view that as a very positive outlet and what we view will be a valuable outlet for the long term for all those Mountain Valley shippers.

Operator: Our next question comes from Zack Van Everen at TPH.

Zackery Van Everen: Maybe shifting over to the Tioga flows. Maybe a quick reminder. That system after the expansion is 210 million cubic feet a day, correct? And then is the expansion connecting to a new Gathering system/customer, and that’s where these volumes are coming from?

David Slater: So we’ll level set here with Tioga. Tioga is anchored by Seneca. Seneca is the customer of ours. And this ramp was really Seneca getting in and drilling in the third quarter. So — in terms of who their customers are, I don’t know the answer to that, Zach. That would be a good question maybe for them. But they’re our customer, our Gathering customer. And yes, we’re really happy with the expansion. And I’m not sure you had the right number there on the expansion, and that may be something that you may want to follow up with Todd after the call on.

Zackery Van Everen: Okay. Sounds good. Appreciate the color there. And then maybe a quick one. I know we talked a little bit about the AI demand in Louisiana, but we’ve also seen a few upstream names as well as midstream talk about the industrial demand that’s showing up there. Do you guys have connectivity? Or is that an opportunity you guys would also pursue if industrial demand was able to connect into your system?

David Slater: Yes. The industrial demand doesn’t get talked about a lot, Zach. So I’m glad that you’re bringing it up on the call. There’s significant domestic industrial demand in that corridor, that Louisiana corridor that is now sort of competing or battling for the molecules with the LNG terminals. So that’s also become a pretty attractive market. I think one of our customers may have talked about that on their recent call. So yes, the short answer to your question is yes. We are very aware of that. One of our previous expansions was sending gas to the system that predominantly serves those industrial markets. So yes, it doesn’t get talked about. I’m glad you’re bringing it up. That’s a good load for LEAP, and I’m glad you’ve asked the question.

I’d say the other thing, and I’m going to maybe deviate from your question and add in a little more color here, is that some of those markets are interested in what I’ll call lower carbon molecules. So whether it’s our Clean Fuels project business ramping up or whether it’s our Louisiana Carbon Capture project, sort of the strategic rationale for those investments is fundamentally driven by this emerging market here domestically and internationally. Customers desiring a lower carbon footprint molecule. And those that are long-term strategic fundamental value plays, I’ll say it that way. And that’s another benefit of our network with the Carbon Capture module that will eventually turn on once we get through the process with the state of Louisiana.

It’s going to position LEAP as we, I think, discussed years ago, we want to position LEAP to be — have a low-carbon pathway wellhead to water. So I’ll stop there, but the same holds true for industrials. There’s industrials in the country that are beginning to become more sensitive to that topic and are expressing a desire for that lower carbon molecule as well.

Operator: Our final question comes from Julien Dumoulin-Smith at Jefferies.

Robert Mosca: This is Rob Mosca on for Julien. Just one for me. Maybe revisiting the Haynesville outlook in terms of your market share in serving that downstream LNG demand in the Louisiana corridor. Can you maybe talk through how you see that market share trending over time given the pipelines that are coming online and some of the new announcements in Louisiana and East Texas? And does your connectivity into Carthage allow you to maybe maintain or even grow that market share? It just seems like even maintaining with the amount of growth would allow you to reach the upper bound of that expansion potential on LEAP.

David Slater: Yes. Rob, thanks for the question. And I think you might be batting cleanup right now. So it’s always an enviable position to be in on the call. Yes, I think our market share — I think I’ve been really pleased with the commercial team’s ability to compete. And if you kind of look at how things have evolved over the last 2 or 3 years, we’ve gotten more than our fair share of the market. So our market share has actually, I think, grown from — like if you roll the clock back 2 or 3 years ago to where we are today. So that’s encouraging. I expect to, at a minimum, maintain that market share going forward. So I think that’s the math that you were alluding to is that if the market grows by X, our goal is to hold the same percentage of that incremental that we currently hold today.

So that’s going to require some work and confident that the team is positioned and you alluded to Carthage, and that’s why those moves we made a year ago to create that connectivity to Carthage, I think, was so important strategically for where we think this market is going in the next 2 to 5 years is we wanted to have really strong connectivity across the basin and likewise, have really strong connections across the markets on the southern end of the network so that we can compete effectively for that incremental growth, but I’ll stop there.

Operator: And that concludes our Q&A session. I will now turn the conference back over to David for closing remarks.

David Slater: Well, thanks, everybody. We certainly appreciate all the questions today. I appreciate your interest in the company and look forward to seeing everybody at the next conference. Take care.

Operator: And this concludes today’s conference call. Thank you for your participation. You may now disconnect.