MPLX Lp Q1 FY2026 earnings call

MPLX delivered over $1.7 billion of adjusted EBITDA, enabling return of over $1.1 billion to unit holders. 2026 is year of execution with multiple investments expected to transition from construction to operations and EBITDA generation, with Secretariat I coming online in April, Harmon Creek III in third quarter, and Titan gas treating complex reaching over 400 million cubic feet per day of treating capacity in fourth quarter. Underlying fundamentals in natural gas and NGLs remain strong. In Delaware Basin of Permian, treated over 150 million cubic feet per day of committed producer sour gas at recently acquired Titan facility, third acid gas injection well in Delaware Basin expected to be completed in third quarter, expansion of Titan complex on schedule. Downstream, Secretariat I processing plant with 200 million cubic feet per day entered service, intention to further expand gas processing footprint with Secretariat II (additional 300 million cubic feet per day capacity expected online in second half of 2028) announced, total processing capacity in basin to reach approx. 1.7 billion cubic feet per day once in service. Blackcomb natural gas pipeline expected to enter service in fourth quarter. Expansion of Bengal pipeline to 300,000 barrels per day expected online in fourth quarter. Construction across Gulf Coast fractionation and export facilities continues on time and on budget. LPG export terminal favorably located. Construction of Harmon Creek III in Marcellus remains on track for third quarter in-service date, increasing total processing capacity to 8.1 billion cubic feet per day in Northeast. Deploying 90% of $2.4 billion organic growth capital plan toward natural gas and NGL opportunities to drive continued mid-single-digit growth.

Crude oil and products logistics segment: Segment adjusted EBITDA increased $14 million compared to first quarter of 2025. The increase was primarily driven by higher rates across business units, partially offset by lower crude pipeline throughputs. Pipeline volumes decreased 4% year-over-year, mainly due to marathons, refining turnarounds and maintenance activities in Midwest and Gulf Coast regions. Terminal volumes also decreased 4% year-over-year, mainly due to less favorable market dynamics and refining industry turnaround activity in first quarter. Natural gas and NGLs segment: Segment-adjusted EBITDA decreased $42 million compared to first quarter of 2025. The decrease was primarily driven by a $45 million impact from divestiture of non-core gathering and processing assets in 2025, lower natural gas liquids prices and higher operating expenses. Excluding impacts of non-core Rockies divestiture, gathering volumes were up 10% year-over-year due to production growth in Utica and Permian including acquisitions. Processing volumes increased 2% year-over-year, primarily due to increased production in Marcellus and Permian. Marcellus processing utilization was 94% for the quarter. Total fractionation volumes decreased 3% year-over-year, primarily due to lower ethane recovery in Marcellus as a result of elevated regional gas prices in first quarter. Winter storm Fern in January impacted crude oil and natural gas production volumes, resulting in roughly $13 million headwind to first quarter results.

Year-over-year growth in 2026 will exceed that of 2025, with growth more back half-weighted. Secretariat I came online in April, Harmon Creek III in third quarter, Titan gas treating complex reaching over 400 million cubic feet per day in fourth quarter. Expect 2026 project-related expenses to be flat versus prior year but anticipate sequential increase of $50 million in second quarter. Confident in 12.5% distribution increase for 2026 and 2027 with coverage at or above 1.3 times. Secretariat II, an additional 300 million cubic feet per day of capacity expected online in second half of 2028.

Winter storm Fern in January impacted crude oil and natural gas production volumes, resulting in roughly $13 million headwind to first quarter results. Geopolitical uncertainty may impact energy business. Gas and NGL prices volatility may affect EBITDA, MPLX executed economic hedge on 80% of risk in first quarter, recognizing negative mark-to-market of $56 million during the quarter.

Q: John McKay with Goldman Sachs asked about EBITDA ramp through 2026 and getting to mid-single digit target.

A: Marianne responded that 2026 growth is more back half-weighted, Secretariat I in service, Harmon Creek III on track for third quarter, back half of 2026 expected stronger, confident in 12.5% distribution increase.

Q: John McKay with Goldman Sachs asked about Middle East disruptions and asset position.

A: Sean responded on asset utilization like Mount Airy, Loop, and export dock and fractionator complex on Gulf Coast on track for 2028-2029 in-service.

Q: Burke Sansevero with Wolf Research asked about distribution coverage and growing distribution.

A: Related人员 responded on coverage commitment and capital allocation strategy regarding buybacks.

Q: Manav Gupta with UPS asked about Titan Sour Complex and local gas markets in Texas.

A: Greg and Dave responded on Titan system progress, producer interest, and MPLX's net gas strategy including gathering, pipelines, and market connectivity.