Equitrans Midstream Corporation (NYSE:ETRN) Q3 2023 Earnings Call Transcript

John Mackay: Hey. Good morning, everyone. Thanks for the time. I wanted to just touch on some — on the last couple of answers you have given. Could you confirm that, if, let’s say, we got very wet weather and construction slipped into second quarter, what is the incremental quarter of construction work equal the same cost increase that we saw for this last kind of quarter delay?

Diana Charletta: No. So what you are going to see is we are at 4,500 workers in the field right now, which I think Tom mentioned in his opening comments. We will step down in December — at the end of December to 1,500 people. And as we keep completing work, we get to January and we are at 560 people, right? So if we have some weather issues and we have less and less people on location then there is less risk of that same type of cost increase.

John Mackay: All right. That’s awesome. Maybe a quick follow up, just on EQT’s announcements of their new firm sales agreements now starting in 2027, obviously, they still hold the capacity until we got there. Could you just share any updated thoughts you have on and I know it doesn’t matter necessarily for the pipe earnings itself, but it could matter for the rest of your gathering and Transmission footprint, just what you are expecting for kind of flows on the MVP once it’s in service, and again, maybe how that 2027 timeline for them impacts that?

Diana Charletta: Yeah. So I think, first of all, it’s great news, right? It’s evidence — those contracts are evidence of the long-term appetite and the support for demand in the Southeast. It also supports the data points we have been seeing for both producer and demand-pull interest in MVP expansion like we just talked about and extensions on Southgate. The market dynamics initially are going to dictate the flows on MVP, but our fundamental view is that Appalachian volumes will grow and displace that Northeast more expensive gas coming from the Northeast giving the Southeast demand customers access to the lower cost gas in Appalachia. So even if there is just modest growth in the Basin, we are uniquely positioned with the only access into the inlet of MVP to capture a disproportionate amount of that growth on our pipes.

So, I think, they were — that announcement was really good and it’s just another data point that adds to the fundamentals that are going to happen on the pipe.

John Mackay: Very clear. Appreciate it.

Operator: [Operator Instructions] Your next question will come from the line of Brian Reynolds with UBS. Please go ahead.

Brian Reynolds: Hi. Good morning, everyone. It looks like E-Train is appearing to have line of sight to free cash flow inflection at E-Train. So kind of curious if we can think about, you know, future return of capital opportunities. First debt reduction is clearly the first priority, but kind of curious if you can just refresh us on whether four times is the right leverage target and if you can provide us a timeline on when you expect to reach this leverage target, which could open up the door for further return of capital opportunities down the road? Thanks.

Kirk Oliver: Yeah. Brian, this is Kirk. I would say, two years after MVP in service will be crossing that 4 times threshold and 4 times remains kind of the target for us and as we approach and we can see that glide path, we will be evaluating what the different allocation of capital opportunities are at — to us at the time and we will be considering what we might do.