EnLink Midstream, LLC (NYSE:ENLC) Q3 2023 Earnings Call Transcript

Unidentified Analyst: Okay. Understood. And just following up, you highlighted some commercial opportunities in Louisiana tied to LNG demand, and I believe that includes storage. Just — how meaningful could this opportunity set be in regards to CapEx? And how are you thinking about timing of these opportunities?

Dilanka Seimon: Look, I think our assets in Louisiana, the footprint we cover is quite attractive. We are connected not only to existing industrial demand, but also to expanding industrial and LNG demand. There are many opportunities there to have bolt-on projects to expand our delivery capability on the gas pipeline side. But as you alluded to, storage, it’s kind of percolating to the top. If you look at natural gas volatility and the demand pull from LNG that is coming, that has resulted in storage valuations, touching kind of levels of value that we haven’t seen probably in a decade also. So, that we think is an attractive near-term opportunity. We have about 15 Bcf of storage in our portfolio today, and we think we can expand that. Now, we’re doing the engineering studies and thinking through how quickly and at what scale, we can bring that to market. But we expect that to be one of the first things out of the gate.

Unidentified Analyst: Okay, that’s helpful. Thanks for the time today.

Operator: Thank you. Our next question comes from the line of Gabriel Moreen with Mizuho Securities. Please proceed with your question.

Gabriel Moreen: Hi, good morning. I had two-parter on the Permian. One is, were you at all impacted by the extreme weather during the quarter in the Permian and whether higher OpEx, lower efficiencies? I don’t think I heard much commentary on that. So I don’t know if that cost you anything. And then just a bigger picture question, on the next plant relocation, what your latest thoughts are on that and as far as timing? And when do you think that might be?

Walter Pinto: Hi Gabriel, this is Walter. I’ll take the question on heat and then maybe Ben can expand on the additional capacity. Of course, we saw significantly high ambient temperature compared to last, I would say, three years in all of our basins, especially Permian and North Texas. But I would say we benefited from our strong operational excellence program and — has it really well. Also, a lot of our technology programs that we implemented really helped us run the assets. And it’s a reflection of our leadership team out there in the field and the people out there. So, we didn’t see any impact on the high end in temperature, but that ran pretty well.

Ben Lamb: Yes. And Gabe, on the timing of another plant expansion, I’ll start by just reminding you that we’ve been on a pace for the last several years of adding about a plant a year. This year, the Phantom plant next year will be the Tiger 2 plant in the Delaware Basin. And so we are watching carefully as our customer plans develop to understand when the right time to take the next step will be. I do think there will be an additional plant expansion promise in the Permian. But at this point, I don’t think it’s in 2024. I think it’s beyond. And so no announcement today. When the time does come, though, the good news is we’ve got great options, including more options to move existing plants because it has worked extremely well for us. The first three times we’ve done it.

Gabriel Moreen: Thanks Ben, thanks Walter. And then maybe if I could just have a quick follow-up. I realize that you’re not down directly commodity sensitive, but the presentation did not aggressively hedging your 2024 exposure. Can you just speak to what percentages you are, maybe how you’re ahead of schedule, so to speak, and where you’re hedged out relative to this year as far as price levels?