Enterprise Products Partners L.P. (EPD) Earnings Call

Operator

Thank you for standing by, and welcome to Enterprise Products Partners LP's Second Quarter 2026 Earnings Conference Call. I would now like to hand the call over to Joe Theriac, VP of Finance and Investor Relations. Please go ahead.

Joseph Theriac

Thanks, Latif. Good morning, and welcome to the Enterprise Products Partners conference call to discuss second quarter 2026 earnings. Our speakers today will be Co-Chief Executive Officers of Enterprise's General Partner, Jim Teague and Randy Fowler.

Other members of our senior management team are also in attendance for the call today. During this call, we will make forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 based on the beliefs of the company as well as assumptions made by and information currently available to Enterprise's management team. Although management believes that the expectations reflected in such forward-looking statements are reasonable, can give no assurance that such expectations will prove to be correct.

Please refer to our latest filings with the SEC for a list of factors that may cause actual results to differ materially from those in the forward-looking statements made during this call. And with that, I'll turn it over to Jim.

A. Teague

Thank you, Joe, and good morning, everyone. Enterprise reported strong volumes, earnings and cash flow for the second quarter. These results were driven by strong global demand for U.S. Energy, which was particularly strong during April and May.

Our export facilities, pipelines, storage assets and fractionation complexes altogether to provide our customers with the reliable access to both domestic and international markets. Our teams responded exceptionally well to the elevated demand levels. In the second quarter, we generated a record $2.8 billion of EBITDA, a 17% increase over the second quarter of last year, and that provided 1x coverage of our distributions.

We handled record pipeline and marine terminal volumes direct during the quarter. Total pipeline volumes were up 8%, and our marine terminals were up outstanding 33% compared to the second quarter of last year. We moved 14.7 million barrels a day of oil equivalent.

I remember being ecstatic when that was 10 million barrels a day. Now we're knocking on the door of 15, and we moved 2.8 million barrels per day across our docks. I think it's important that we recognize our engineering and operations teams for their outstanding execution during the quarter.

Their efforts enabled Enterprise to accelerate construction activities and begin commissioning the expansion of our Neches River NGL marine terminal ahead of schedule. The team demonstrated exceptional responsiveness and operational excellence while meeting customer -- strong customer demand, maintained high standards of safety and reliability to define Enterprise. Natural gas processing, inlet volumes increased to 8.1 billion cubic feet a day.

In the Permian, we saw a 14% increase over the second quarter of last year, bringing our total inlet volume in the basin to 4.3 billion cubic feet a day, reflecting continued gross growth in producer activity across both basins. To support this growth, we recently approved the construction of Plant 11, new 300 million a day natural gas price [indiscernible] in the basin and Plant 13 a new 300 million a day plant in the Delaware. Beyond providing additional processing activity for our upstream customers, these plants will supply incremental wide grade volumes into our basin under our NGL pipeline systems.

Those systems are currently operating at 86% of capacity. Those volumes would then move through our NGL value chain supporting additional throughput across our fractionation, storage and export assets. We also approved the construction of [indiscernible], a new 150,000 barrel per day facility located in Mont Belvieu.

We expect Delaware plant 13 will be placed into service in the third quarter of 2028, plant 11 in the Midland Basin in the first quarter of 2029 and plant 15 in the first quarter 2028. These are exactly the type of projects creating value, we're at our system and generate attractive long-term returns. One of the themes that continue to shape energy markets today is the growing importance of reliability and flexibility.

Global energy markets remain highly dynamic and international demand patterns continue to be volatile, rather than [indiscernible] every market movement, we continue to focus on what we do best. Optimizing our assets around changing conditions, our network of assets provide connectivity to the well -- from the wellhead to domestic and end markets. We are well positioned to capture value across multiple points along our best value chains.

That flexibility continues to be one of Enterprise's greatest competitive advantage. With that next major project scheduled for completion -- scheduled for completion is our LPG export terminal expansion on the Neches River channel. That should be in service by the end of this year.

We're excited about the opportunities this will create as global demand for U.S. hydrocarbons continues to grow. Our outlook remains very constructive. Demand for U.S. energy, natural gas liquids, petrochemical feedstock, export services continues to support utilization across our system.

Combined with a strong balance sheet, substantial retained cash flow and a disciplined capital program, we're well positioned for growth. And finally, I think it's important to thank our employees for an outstanding quarter. Their commitment to safety, operational excellence, customer service and execution continues to drive our success.

With that, I'll turn it over to Randy.

W. Fowler

Okay. Thank you, Jim. Good morning, everyone.

Starting with cash flow. The partnership's adjusted cash flow from operations, which is our cash flow from operating activities before changes in working capital increased 19% to a record $2.5 billion for the second quarter of 2026 compared to $2.1 million for the same quarter last year. We increased our declared distribution to $0.56 per common unit for the second quarter of '26, which is a 2.8% increase under the distribution declared for the same quarter in 2025.

But this distribution will be paid August 14 to common unitholders of record as of the close of business on July 31. The partnership repurchased $159 million of its common units during the second quarter of '26 and $275 million for the first 6 months of the year. Total repurchases for the last 12 months were $404 million, bringing the cumulative utilization of our $5 billion buyback program to 34%.

In addition to buybacks, our distribution reinvestment plan and employee unit purchase plan purchased a combined 1 million common units on the open market of $40 million during the quarter. For the 12 months ending June 30, 2026 Enterprise paid out approximately $4.8 billion in distributions to limited partners. Combined with the $404 million of buybacks over the same period, Enterprise's total return was $5.2 billion resulting in a payout ratio of adjusted cash flow from operations of 56%.

Total capital investments were $1.2 billion in the second quarter of '26, which included $1 billion of growth capital projects and $140 million of sustaining capital expenditures. We currently believe our expected range of gross capital expenditures for 2026 will net to $2.9 billion to $3.4 billion after applying approximately $600 million in proceeds from asset sales we already received. The increase in 2026 capital investment since the beginning of the year primarily reflects the initial spending on long lead items for the 11th natural gas processing plant in the Midland Basin, the 13th natural gas processing plant in the Delaware Basin as well as NGL frac 15 in Mont Belvieu, and capital for natural gas gathering, compression and power generation facilities to support our growth in the Permian Basin.

For 2027, we expect our growth capital expenditures to be in the $3 billion area. Sustaining capital expenditures for 2026 are expected to be approximately $600 million. On both the fourth quarter 2025 and first quarter 2026 earnings calls, we stated that discretionary cash flow for '26 had the potential to be in the $1 billion area.

Even though our estimate for growth capital expenditures for '26 has increased by over $700 million as a result of investment sanctions since the beginning of the year, we still believe discretionary free cash flow for '26 has the potential to approach the $1 billion area. Our total debt principal outstanding was approximately $33.5 billion at the end of the quarter. Assuming the final maturity date for our hybrids, the weighted average life of our debt portfolio is approximately 17 years.

Our weighted average cost of debt was 4.7% and approximately 97% of our debt was fixed rate. At the end of the quarter, our consolidated liquidity was approximately $4 billion, including availability under our credit facilities and unrestricted cash on hand. Recently, we closed on an incremental $1 billion short-term credit facility, which brings total liquidity to approximately $5 billion.

We elected to add this incremental $1 billion of credit capacity due to the ongoing volatility in commodity prices and the impacts -- higher commodity prices may have our need for working capital. At the end of the quarter, our consolidated leverage ratio decreased to our 3.0 target on a net basis after adjusting debt for the partial equity treatment of the hybrid debt and also reduced by our partnerships on restricted cash on hand. Our leverage target remains at 3x plus or minus 0.25.

Joe, before we turn it over to you, Jim. I guess we need to address the elephant in the room.

A. Teague

You're talking about my retirement?

W. Fowler

Yes.

A. Teague

Yes, I've always said in Enterprise, retirement is a 100 or death, whichever comes first. Well, I'm not 100, and I'm not dead. But at 81, 50 years in this business, 22 at Dow, 28 at Enterprise, it comes a time when you have to turn it over to the next generation.

And we've got some unbelievable talent in this company. What I think I'm going to miss the most is big interaction with the people, even with Tug. And we just have some special people here.

I've known Randy -- I've have worked with him for 28 years, the last [indiscernible] I think we've been a hell of a team, and I'm this working with him. But it's been unbelievably rewarding to be with a company that when Randy and I were first year at an Enterprise value of $1.8 million and now is over $120 billion. It's been a hell of a ride.

And the last thing I'll miss is all the poking Randy does with me throughout the day. And hopefully, Randy picks that [indiscernible]. Over to you, Joe.

Joseph Theriac

Thank you, Jim. And Latif, with that, we're ready to open up the call for questions.

Operator

Our first question from Jean Ann Salisbury of BofA.

Jean Ann Salisbury

Congrats to you, Jim, on your retirement. I hope you get to doing some really nice whiskeys with your newfound time, and thank you for all the help over the years. So my question is probably for Corey, LPG listing rates have fallen as you brought on Neches River, did this surprise you?

A lot is obviously going on in the market at the same time. But I guess my question is, is LPG export capacity already overbuilt? And as my follow-up in a related vein, would you expect to see the 300 kt expansion that you're coming -- coming on later in the year to be more fully utilized since it's more take or pay?

Tyler Cott

Jean, This is Tyler Cott. I will take that one. Yes, you're correct.

There's a fair amount of export capacity that's come online and will be coming online, including our project and some other projects in the market over the next 12 to 18 months. And obviously, it will take the market a little bit of time to absorb that capacity. So we may see a period of time where we have less volatility in terminal fees and just overall lower rates than we've seen in the last couple of years.

From our standpoint, we've been very intentional about contracting our capacity. So our EHT expansion and really all of our system-wide capacity around LPG export, as we've said, we're about 90% contracted. So we have relatively limited exposure to that scenario.

So we feel good about where we're at given how things look for the next couple of years. Terrance Hurlburt And Jean, this is Terry. I'll just add that NRT has additional ethane volumes come online and [indiscernible] that capacity, we going to ramp up to ethane transitioning propane PDH.

Operator

Our next question comes from the line of Spiro Dounis of Citi.

Spiro Dounis

Jim, congrats as well on the upcoming retirement. First question, maybe just starting with the fundamental one. If we go back to your fundamental update earlier this year, you suggested a meaningful amount of natural gas and NGLs for being curtailed beyond the system just due to Waha prices.

Obviously, those pipelines are coming online now. So curious to have a sense for how much of that portal volume has come back to the market? What's still left to come?

And maybe what that means for your 2027 outlook?

Unknown Executive

This is Corey. When we had our forecast, I would say that our forecast really hasn't changed all that much, looking at producer cadence, not a lot has changed for the large public and to the privates that come online are a little bit more given some of the price volatility that we've seen and to add racks on natural gas because the pipelines have come up a little bit faster than I think the market expected. So we've had some pretty strong Waha prices.

As time goes on, I think we're going to end up filling those prices with gas that comes online as we did some of that to back at that I had spoken about earlier in the year to show up and then also some of these gas benches over time, we'll start to fill pipeline capacity.

Spiro Dounis

Great. Second one, maybe just going to CapEx, specifically around 2027. Curious how much of that $3 billion is sanctioned versus potential, and to the extent there's still more or less to fill there.

Should we assume it's largely sort of natural downstream extensions, more maybe more export or could it be something else? And maybe more broadly, should we think about that $3 billion as a new baseline for growth CapEx? Or are you still anchoring that $2 billion to $2.5 billion longer term?

W. Fowler

Spiro, this is Randy. I think in the near term, the $3 billion might be the new level, and some of it is just the pace of growth that we continue to see in the Permian and what we need there. In terms of when we think about natural gas gathering, but also compression in power gen.

It seems like especially in the Delaware, whatever you're going to build, you got to burn your own power with you. So I think that increases levels as well. As far as when we look out into 2027 of that $3 billion, probably 80% plus is probably already spoken for, just with the projects that we've sanctioned and have announced.

Operator

Our next question comes from the line of John Mackay of Goldman Sachs.

John Mackay

Congrats from us as well, Jim. I want to go back to Spiro's first comment on the Waha picture. More specifically, you've been talking about kind of 2 Bcf a day of potential production when these places come.

Can you frame up for us just from an operator perspective, what that actually looks like? Are these existing wells being choked back. Are these maybe wells that have been completed but not actually turned in line yet.

And maybe more specifically what these producers might be looking for from a Waha price or something else perspective to really bring those volumes on?

W. Fowler

Natalie, go on.

Natalie Gayden

John, it's Natalie Gayden. When we were estimating the amount of gas shut in, it was a combination of what producers we knew were shut in. It's typically the higher GOR producers that are exposed to Waha.

And so as that gas comes back online and you asked the question, have it not been tracked, et cetera. A lot of it has just been choked back. But I would say as that volume comes back online, we see that as more positive long term than the short-term volatility is greater than spreads.

Not all producers need a positive Waha gas price to bring out 2 Bcf a day online. They need a healthy gas price, a healthy Waha gas price that is still exposed to Waha. [indiscernible] we've been in processing margins and that's true. We benefit in spread value...

Unknown Executive

We benefit with our equity gas production we have. So all good.

John Mackay

Yes, absolutely. That makes a lot of sense. And maybe just taking some of those latter comments, certainly, the second quarter benefited from some of these spreads.

Just curious, your outlook for the back half of the year or into '27, your ability to kind of keep holding some of those, whether it's been through hedging it out or maybe the kind of market environment staying constructive? Maybe just walk us through the next couple of quarters on a couple of those fronts.

Unknown Executive

[indiscernible] speak to the next couple of quarters, but what I can highlight is what we saw in the second quarter. So during the month of April and May, we saw an acute global demand for U.S. energy. There was a significant demand pull across the barrel crude, LPG, ethane and olefins ER docs.

We saw in the form of additional volume and higher margin. And for the quarter, it resulted in around $200 million associated with that global need for energy. So you break that $200 million down, call it 1/3 NGL, 1/3 crude and then 1/3 petrochemicals and others.

So if you look at today, those cash -- those strong cash differentials have largely normalized.

A. Teague

And in the next couple of quarters [indiscernible] when does the stride open?

Unknown Executive

Yes. And look, I mean, we've spoken to it in the past, time and time again, but if volatility is there, the team will execute on it and recruitment time and time again.

Operator

Our next question comes from the line of Julien Dumoulin-Smith of Jefferies.

Unknown Analyst

This is Andrew on for Julien. And Jim congrats on your Retirement. Just 2 quick questions from my front.

The first one being, we're seeing a sequentially stronger quarter in crude, I think, both from a volumetric and a per barrel margin standpoint. Can you maybe kind of like unpack a bit more in terms of how much of that is driven by equity barrels are benefiting from the current crude volatility versus how much of that is long-term contracts? And maybe an extension of that, like how much extra barrels -- what the extra barrels moving from Midland to ECHO 1 to 2 [indiscernible] -- how much of that -- how is the recontracting conversation been on the spare capacity on Midland to ECHO 1?

Unknown Executive

Yes. This is. I'll try to give you a little color on it.

But if you look at the crude numbers at a high level, we benefited from higher Midland to Houston's pipeline spreads, and we also benefited from higher margins we're able to charge across the dock to that strong cash premiums. And then on the contracting side, Jay and his team has done an amazing job continuing to remain highly contracted on our Midland ecosystem and continuing to get additional contracts.

Unknown Analyst

Yes. That's very clear. And I guess the second question I have is just we've talked about a better outlook at the Permian from a gas perspective.

Has that kind of changed your expectation around potentially recontracting the volumes on ATEX around volumetrically as well as from a margin standpoint. And maybe can you help like frame your latest perspective on the magnitude of exposure here?

Justin Kleiderer

Andrew, this is Justin Kleiderer. On ATEX, it's still a dynamic conversation with our shipper customers, really just evaluating on a high level, what's the highest and best use of the pipe. But that's also not high from the fact that the tariffs in place today often exceed the value of the product that it moves.

So there's going to be some degree of a rate reset. And we're just working with our customers to figure out what's the best and highest use of the pipeline, what gives them the assurance that they desire. And so we're engaging in those discussions.

So more to come as that unfolds.

Operator

Our next question comes from the line of Keith Stanley of Wolfe Research.

Keith Stanley

Randy, wanted to start by clarifying your free cash flow commentary for the year. So you raised the CapEx by $600 million to $800 million, you said you still expect free cash flow to approach $1 billion. So free cash flow is only slightly lower than last quarter.

Is that just simply much higher EBITDA than you previously expected? Or are there any other items like working capital or other items that are driving that?

W. Fowler

Keith, we really don't include working capital in that when we think about discretionary free cash flow because working capital is going to slow around commodity process, but also the opportunities are there from a comp standpoint. It really comes into the 2 moving pieces are really EBITDA and growth CapEx. And if you would, the -- while we've seen over $700 million increase in growth CapEx just because of excellent project opportunities.

At the same time, our cash flow is up that much, even not that much, which basically almost offset all that we've seen in growth.

Keith Stanley

Great. Okay. That's a big number.

Second question, so you're building now 5 Permian plants at one time. I think your historical cadence was more like due at a time. Would you characterize the driver of that as a faster growth outlook for the basin?

Are you having more commercial success and winning market share? And what do you expect as a planned kind of run rate cadence from here?

Natalie Gayden

Natalie Gayden, I would expect trending closer to 2 is probably the right answer. And of course, as producers changed their -- either cadence or maybe they hit higher GOR zones that obviously changes our assumptions. But 5 in the next, let's just call it 3 years because 1 starts up in 4Q 2026, puts us at around 1.7 per year cadence.

And then we haven't even talked about anything in '29 yet.

Keith Stanley

Okay. So more of a heightened period right now and then back to 2 per year after that?

W. Fowler

Yes, I think one thing to note, since 2022, we've probably been increasing our capacity by a CAGR of 15%. And then really, if you look at from the end of '25 to the end of '28, we're going to be growing it by about 11%. And just like you saw this second quarter this year versus second quarter last year, our Permian inlet volumes were up 14%.

So this is -- I mean, this -- again, this just, as Jim said earlier in his comments, is coming in and bringing more of that inlet extract in each one of the plants track 45,000 barrels a day of liquids that flows into [indiscernible] Bahia and right into our frac complex and then into our downstream assets beyond the frac. So really good positive development.

Operator

Our next question comes from the line of Theresa Chen of Barclays.

Theresa Chen

I want to go back to the export topic. And looking past the recent volatility on export ARBs, but focusing more on the long-term rate of strategic reliance on U.S. energy exports in general. Are you seeing much by the way of changes in customer behavior contracting activity or interest from individual customers that have not come across your commercial footprint before?

Any color around that would be helpful.

Tyler Cott

Theresa, Tyler Cott. Yes, I think we said last time we had strong interest before this conflict, and we still have very strong interest. But to your point, there has been a bit of increased interest from countries that maybe were typically a little bit more dependent on the Middle East looking to shift some of their long-term supply sourcing to the U.S., that's a function of that exposure and just the fact that U.S. exports are growing, and we're clearing to some new markets as well.

Theresa Chen

Got it. And with the multiple refined products infrastructure assets under development, maybe closer to FID and not across your competitors? How does this change your view of product flows on both assigned products within your coprint, but also heavier molecules within the NGL footprint between Gulf Coast, Mid-Con and you're regional bodies?

Justin Kleiderer

Theresa, this is Justin. I'll take the product side of that question. I mean I think in general, you look at our TE system, we move products from the Gulf Coast to the Mid-Con in Chicago.

So the trend there has been -- as the icon has gotten weaker, that volumes on that system have continued to get pushed further south. And so anything that debottlenecks or clears the overhang in that Mid-Con and Chicago area with the projects currently under development, I think our system is going to benefit from. So directionally, we want to see prices support more product movements from the Gulf Coast to further into markets.

Operator

Our next question comes from the line of Gabe Daoud of Truist.

Gabe Daoud

Jim, congrats to you as well. I was hoping you can maybe just curious to get an update on the sour gas side of things, it looks like you're drilling your third AGI well currently, which should bring treating capacity to $750 million a day. Are you seeing any incremental growth opportunities beyond that on the sour gas side?

Natalie Gayden

Natalie Gayden. I'd say demand has remained strong. I'd say the system was essentially full prior to branching or into service.

We have turned 5 under construction. As you know, we have third AGI well underway, and we're currently evaluating Train 6 mainly because producer activity and interest continue to build there. So given that, I would expect that volumes and margins continue to grow.

Gabe Daoud

Got it. And then I guess just as a follow-up, last quarter, you had quantified the EBITDA uplift in '26 of the outperformance. So given the strength year-to-date, could we maybe just get an update on the thoughts around the EBITDA outperformance this year and how we should think about the trajectory into 2027?

W. Fowler

Yes, we were -- we talked about this really on the first quarter call. And I think Jim introduced the word modest. We were really expecting modest EBITDA growth from 2025 into 2026.

But that expectation was really on a oversupplied energy market with benign pricing. Obviously, this conflict in the Middle East had a lot of volatility and it tugs a lot of demand for U.S. energy. Really any comment about 2026 and 2027, we would need a crystal ball what happens with this conflict going forward.

So really hard to come in and really come in and I guess, try to predict or speculate on what it might be. Again, when I go back to the comment that we made at the beginning of the year was modest EBITDA growth this year, and that was really just going to be volume growth going across our system. And then into what we said going from, again, '25 into '27, we saw the potential for 10% area growth in EBITDA.

And again, that was largely as a result of more volumes coming on through the system, whether it was volumes coming into new assets or whether it was coming in, we had done an acquisition of Oxy Rock system that we really weren't seeing any volumes. Since the acquisition through the end of this year, we'll be picking up volumes at the beginning of 2027 on that. So that also helps.

So really, we were really coming in -- when we said modest in '26 with a potential of 10% up in '27, that was, again, not any margin or benefit from commodity prices, that was strictly volume. I mean I think that's still where our thoughts are as far as that trajectory and then any volatility or incremental demand across the dock or any optimization opportunities that we have is really on top of that. Long-winded answer, but that was a difficult question.

Gabe Daoud

Yes. Thanks, Randy. I understand it's difficult to predict at this point.

But I appreciate the thoughts.

Operator

Our next question comes from the line of Jeremy Tonet of JPMorgan.

Jeremy Tonet

Jim, wishing you the best in retirement. We have appreciated your perspective over the years.

A. Teague

Thank you, Jeremy.

Jeremy Tonet

Just wanted to turn back to the Permian and Waha if I could -- pricing there. Turning positive, I guess, and staying positive for a bit here. Just wondering, I guess, how long you see this persisting Waha positive territory?

It seems like there's a lot of gas that is ready to be connected. So just kind of curious how you think that plays out. And then if I look out further, I guess, when do you see constraints in the basins emerging after the last -- after the current round of pipeline additions?

Does the industry need another pipe in '29 or '30 or how do you think about that?

Unknown Executive

I'll start [indiscernible] and maybe Tyler can chime in. I don't think we try to predict Waha price, but we probably could see Waha tighten again before '27 as some of that shut-in gas returns and some backloaded production comes online. But again, we'd rather see a healthy Waha that supports our producers' economics, volume growth, some of that long-term infrastructure development for us because sustained volumes growing across our integrated system is really more valuable than short-term outside basis dislocations.

Tyler Cott

Yes. I think there's obviously a lot of gas in the Permian and the pricing will reflect how the infrastructure comes to market and the timing and probably will continue to be a little bit of volatility.

Jeremy Tonet

Got it. And I guess as far as future expansion, when do you see the need for that?

Unknown Executive

[indiscernible] about the more extension?

Jeremy Tonet

Future egress needs out of the Permian post kind of like the current announcement of pipes? Would it be needed for '29 or '30?

Unknown Executive

Yes. I think that's depends on your belief of your wet gas forecast, it's our belief that higher GORs are absolutely true. So it really depends on the producer community and what do they decide to drill and where they put the rig, allocate the routes to you [indiscernible] doing any other pipes built that hasn't been announced.

Jeremy Tonet

And just curious, I guess, PDH operations, how that -- it seems like it's running better this quarter or how it looks in the third quarter so far?

Graham Bacon

This is Graham. So second quarter was a good run for us on the PDHs and PDH 2 ran that design conditions throughout the quarter had a good run. On PDH 1, 1 minor issue on PDH 1 in the second quarter.

As far as the third quarter outlook, we did have an issue in July where PDH2 was down. It is back up and running. And PDH 1 is running stable as expect for the quarter.

Operator

Our next question comes from the line of [indiscernible].

Unknown Analyst

Congrats on your retirement, Jim. Most of my questions have been asked already, but I do have one, this might just be directed at Natalie. Looking at natural gas processing volumes of 8.1 Bcf this quarter, they were up slightly like 4% year-over-year even as the Permian inlet grew 14%, relative to kind of Q1, they were down a little bit.

So I was just wondering if you could provide some additional context on maybe what's going on as far as processing volumes outside of the Permian and how you expect those to look over the rest of the year?

Natalie Gayden

I would say if your question is volumes outside of the Permian, I would say, relatively muted, if that's even a word. Growth in the -- capacity in the Permian is still slightly tight, but there's a significant amount of processing capacity coming online in the basin, not just with our projects, but with some of our competitors. As mentioned, there is quite a bit of shutting gas due to Waha price that was spread across the basin.

So I think as some of that returns, you'll see some of ours and some of other people come online and through our plants.

A. Teague

In [indiscernible] should think it pretty just steady.

Natalie Gayden

[indiscernible] pretty steady, Eddie. There's ebbs and flows, of course. But typically, it is a very stable basin.

Operator

Our next question comes from the line of Manav Gupta of UBS.

Manav Gupta

You are somewhat unique because you're one of the biggest exporters of ethane. Can you talk a little bit about what you're seeing out there in terms of VLEs availability, that ramp and that how that increases your ability to export even more end to the global markets given the destruction we are seeing on NAFTA side, this could be something major [indiscernible] going ahead, if you could talk a little bit about it?

Tyler Cott

Manav, this is Tyler Cott. Yes, you're right, there's a pretty big uptick in VLECs coming to the market a few more this year and quite a bit more next year, and you should see our volumes correlate pretty strongly to those CLECs coming online as our customers get their vessels and begin lifting on the contracts that we've executed against our capacity. There's certainly more demand out there beyond our capacity.

And so we're in conversations with a lot of different people in a lot of different parts of the world that are seeing what you're talking about with the attractiveness of U.S.

Manav Gupta

Perfect. Given the demand growth from both sides of power as well as LNG, we're starting seeing people say, look, [indiscernible] would become more of a core basin besides the Permian and the Marcellus. And you have a lot of leverage in that basin.

Can you talk a little bit about your leverage to the Haynesville basin, what you see in terms of growth and if the things will just become a much more effective based on how does it benefit your company?

Natalie Gayden

I'm thinking about your question, are you really asking for what we see for the Haynesville?

Manav Gupta

That's correct.

Natalie Gayden

Okay. I think [indiscernible] to, as you know, the dry gas basin, it really depends. It's very price dependent [indiscernible].

And yes, we will see peaks when that basin steps into the market on reside supply. But we also know that Permian is a growing [indiscernible] so I think you just see Haynesville being basin as we've always been.

W. Fowler

This is Randy. One thing I would add is in our Louisiana [indiscernible] system for the Haynesville extension. We're just seeing -- continue to see large demand for that pipe and that pipe sold out.

And then the same thing for, if you would, the lateral that goes down to deals to serve the LNG markets, that's running, call it, between 800 million and 1 billion cubic feet a day, and that's sold out. So again, seeing good demand pull across that intrastate system, but as Natalie said, Haynesville is going to be really cost dependent.

Unknown Executive

Manav, one thing I'll add, this is Corey, we have seen production growth for natural gas on Haynesville slowly creep its way up over the year. We're getting pretty close to 16 Bcf. And if that trend continues, I think our forecast is pretty online.

So it's very constructive what the producers are doing in the Haynesville right now.

Operator

Thank you. I would now like to turn the conference back to Joe Theriac for closing remarks. Sir?

Joseph Theriac

Thanks, Latif, and thank you to our participants for joining us today. That concludes our remarks. Have a good day.

Operator

This concludes today's conference call. Thank you for participating. You may now disconnect.

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Enterprise Products Partners L.P. Earnings Calls | EPD

Earnings Calls

Date

Enterprise Products Partners L.P. Earnings Call Transcript - Q2 FY 2026

Operator

Joseph Theriac

A. Teague

W. Fowler

A. Teague

W. Fowler

A. Teague

Joseph Theriac

Operator

Jean Ann Salisbury

Tyler Cott

Operator

Spiro Dounis

Unknown Executive

Spiro Dounis

W. Fowler

Operator

John Mackay

W. Fowler

Natalie Gayden

Unknown Executive

John Mackay

Unknown Executive

A. Teague

Unknown Executive

Operator

Unknown Analyst

Unknown Executive

Unknown Analyst

Justin Kleiderer

Operator

Keith Stanley

W. Fowler

Keith Stanley

Natalie Gayden

Keith Stanley

W. Fowler

Operator

Theresa Chen

Tyler Cott

Theresa Chen

Justin Kleiderer

Operator

Gabe Daoud

Natalie Gayden

Gabe Daoud

W. Fowler

Gabe Daoud

Operator

Jeremy Tonet

A. Teague

Jeremy Tonet

Unknown Executive

Tyler Cott

Jeremy Tonet

Unknown Executive

Jeremy Tonet

Unknown Executive

Jeremy Tonet

Graham Bacon

Operator

Unknown Analyst

Natalie Gayden

A. Teague

Natalie Gayden

Operator

Manav Gupta

Tyler Cott

Manav Gupta

Natalie Gayden

Manav Gupta

Natalie Gayden

W. Fowler

Unknown Executive

Operator