Enterprise Products Partners Q3 2024 Earnings Call Transcript

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Provided by Quartr
October 29, 2024

Key Takeaways

  • Enterprise reported adjusted EBITDA of $2.4 billion for Q3 2024 (up from $2.3 billion a year ago), distributable cash flow of $2.0 billion (1.7× coverage), net income of $1.4 billion (8% increase), and declared a 5% higher distribution of $0.525 per unit.
  • The company set five volumetric records in Q3, including 7.5 Bcf/d of inlet natural gas processing and 12.8 Mbpd of crude oil equivalent pipeline volumes, fueled by three new Permian gas plants and wide Waha price spreads.
  • On track to complete multiple growth projects by 2025—two additional Permian processing plants, Bahia Pipeline, Frac 14, Phase 1 of the Natchez River NGL export terminal, and the Morgan’s Point expansion—and expanded its Permian footprint via the Pinion Midstream acquisition.
  • Signed a potential CO2 pipeline contract with Occidental for the Houston industrial corridor and highlighted strong inbound interest from Texas data centers and new gas-fired power plants, positioning Enterprise as a preferred midstream provider.
  • Advancing digital transformation with a dedicated big data and data science team using predictive maintenance and real-time profit optimization tools to drive higher utilization, lower costs, and improved margins.
AI Generated. May Contain Errors.
Earnings Conference Call
Enterprise Products Partners Q3 2024
00:00 / 00:00

There are 18 speakers on the call.

Operator

Thank you for standing by, and welcome to Enterprise Products Partners LP's Third Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen only mode. After the speaker presentation, there will be a question and answer session. I would now like to hand the call over to Libby Strait, Senior Director of Investor Relations. Please go ahead.

Speaker 1

Good morning, and welcome to the Enterprise Products Partners conference call to discuss Q3 2024 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, it can give no assurance that such expectations will prove to be correct.

Speaker 1

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

Speaker 2

Thank you, Libby.

Speaker 3

Today, we reported adjusted EBITDA of $2,400,000,000 for the Q3 compared to $2,300,000,000 for last year's Q3. We generated $2,000,000,000 of distributable cash flow, providing 1.7x coverage. In addition, we retained $808,000,000 of DCF. Our retained DCF totals $2,300,000,000 year to date. Operationally, we set 5 volumetric records, including 7,500,000,000 cubic feet per day of inlet natural gas processing volumes and 12,800,000 barrels a day of crude oil equivalent pipeline volumes.

Speaker 3

We benefited from contributions from the 3 new natural gas processing plants and wide natural gas price spreads between Waha and other market hubs. We're on track to complete construction of 2 additional processing plants in the Permian, our Bahia Pipeline, Frac 14, Phase 1 of our Natchez River NGL export terminal and the last phase of our Morgan's Point terminal flex expansion in 2025. And we'll have one additional process plant coming online in the Delaware in 2026. These projects provide visibility to new sources of cash flow for our company and enhance and expand the NGL value chain at the core of our business. We also announced yesterday that we completed the acquisition of Pinion Midstream.

Speaker 3

These assets are highly complementary to our Permian processing footprint by providing treating services to a prolific area of the basin that generally is an infrastructure limited to the lack of sour natural gas treating and acid gas injection capacity. The Pinion assets are also a very strategic addition to our NGL value chain that touches everything from the wellhead to the water. I'd be remiss if we didn't recognize the tireless efforts of over 200 of our employees at Mont Belvieu, who roll from our most comprehensive turnaround for the PDH-one plant right into a turnaround for our PDH-two plant. Our employees completed these 20 fourseven turnarounds with extreme diligence and without any lost time accidents. We believe this time and investment will result in higher utilization rates and performance for both of these facilities going forward and we look forward to their contributions in 2025.

Speaker 3

We're excited about the number of inbounds that we're getting related to new natural gas demand in Texas from both data centers, the new gas fired power plants that would be built under the Texas Energy Fund. There are a lot of people talking about exposure to data centers. It seems that it's a very sexy thing to say and everybody who has a piece of pipe in Texas is talking it up. The reality is there is a very small list of companies with pipeline and storage assets best positioned to benefit from this build out and enterprise is one of them. It is difficult to quantify the ultimate demand and timing at this point, not knowing which projects will go forward.

Speaker 3

That being said, it is one of the most promising signals we've seen in natural gas in a long time and we're looking forward to serving this new influx of demand. In Enterprise, we take pride in the fact our organization is not siloed. Everyone is important. We all pull in the same direction every day. The dedication, commitment and creativity of all our employees has always been the key to our success.

Speaker 3

We always strive to get better. We operate an integrated value chain, providing a wide range of services from the wellhead to the water. Our systems are highly automated and provide us with billions of data points. Each leak in that chain presents an opportunity to provide a service, earn a fee or enhance profitability by enhancing our margins or reducing our costs. Over the last 5 years, we have developed a very talented big data and data science team that works closely with all areas of our company.

Speaker 3

We're now using big data for everything from predictive maintenance, market analytics, to asset optimization. One of the many examples is our pipeline controllers now use real time profit optimizer programs to help determine when and how they run compressors and pumps based on real time power and fuel cost. Data and the insights it can provide in many respects is the new currency and our proprietary data will forever be an opportunity for enterprise. As we sit in the final quarter of 2024 and head into 2025, our work is not done. Each year presents new opportunities and new headwinds.

Speaker 3

We've built a network of assets and a culture that delivers strong results throughout business cycles, administrations and market conditions. Our company is built for the long run. As always, we've never been more excited for what the future will bring for our company. With that, Randy?

Speaker 4

Thank you, Jim, and good morning. Starting with income statement items, net income attributable to common unitholders was $1,400,000,000 or $0.65 per unit for the Q3 of 2024. This is an 8% increase over the Q3 of 2023. Our adjusted cash flow from operations, which is cash flow from operating activities before changes in working capital, increased 4% to $2,100,000,000 for the Q3 of 2024 compared to $2,000,000,000 for the Q3 of last year. We declared a distribution of $0.525 per common unit for the Q3 of 2024, which is a 5% increase over the distribution declared for the Q3 of last year.

Speaker 4

This distribution will be paid November 14 to common unitholders of record as close of the business on October 31. In the Q3, the partnership purchased approximately 2.6 1,000,000 common units off the open market for $76,000,000 Total repurchases for the trailing 12 months were $252,000,000 or approximately 9,100,000 enterprise common units, bringing total purchases under our buyback program to approximately $1,100,000,000 In addition to buybacks, our distribution reinvestment plan and employee unit purchase plan purchased a combined 6,500,000 common units on the open market for $181,000,000 during the last 12 months, and this includes 1,600,000 common units on the open market for $47,000,000 during the Q3 of 2024. Of note, 48% of our employees participate in the unit purchase plan. At Enterprise, we really do eat our own cooking. For the 12 months ending September 30, 2024, Enterprise paid out approximately $4,500,000,000 in distributions to limited partners, combined with the $252,000,000 of common unit repurchases over the same period, our total capital return was $4,800,000,000 resulting in a payout ratio of adjusted cash flow from operations of 56%.

Speaker 4

We returned roughly $1,000,000,000 more than our growth capital expenditures were for the same period. Total capital investments in the Q3 of 2024 were $1,200,000,000 which included $1,100,000,000 for growth capital projects and $129,000,000 of sustaining capital expenditures. Our expected range of growth capital expenditures for 2024 remains unchanged at $3,500,000,000 to $3,750,000,000 We have received overwhelming interest from our producer customers following our recent acquisition of Pinion Midstream. As Jim noted, these assets not only enhance our processing footprint, but allow us to attract more acreage in the Delaware Basin. Additionally, yesterday, we announced a contract with Oxy to potentially build a CO2 pipeline that would serve the Houston industrial corridor.

Speaker 4

We are updating our 2025 estimated growth capital expenditure range to $3,500,000,000 to $4,000,000,000 to encompass potential growth opportunities in connection with these announcements. Sustaining capital expenditures are expected to be approximately $640,000,000 in 2024, which is higher than our original estimates, primarily due to costs associated with the turnaround of the 2 PDH facilities. As of September 30, 2024, our total debt principal outstanding was approximately $32,200,000,000 Assuming the final maturity of our hybrids, the weighted average life of our portfolio was approximately 19 years. Our weighted average cost of debt is 4.7% and approximately 98% of our debt was fixed rate. Our consolidated liquidity was approximately $5,600,000,000 at the end of the quarter.

Speaker 4

This includes availability under our credit facilities and unrestricted cash flow. Our adjusted EBITDA was $2,400,000,000 for the Q3 and $9,800,000,000 for the 12 months ended September 30, 2024. As of that date, our consolidated leverage ratio is 3.0x on a net basis when adjusted for the partial equity treatment of our hybrids and reduced by the partnership's unrestricted cash on hand. Our leverage target remains our range remains 2.75 to 3.25 and at 3.0 times, we're in the middle of that range. Libby, with that, we can open it up for questions.

Speaker 1

Thank you, Randy. Operator, we are ready to open the call for questions.

Operator

Thank you. Our first question comes from the line of Theresa Chen of Barclays. Your question please, Theresa.

Speaker 2

Good morning. I wanted to follow-up on Jim's comments about the data center and power demand theme. Just how do you see enterprise participating in this? And if you have any color or details on commercial discussions to date?

Speaker 5

Hi, Theresa. This is Natalie. We've as Jim said, we've been inundated with data center demand infrastructure players that have likely exceeded the Bcf a day of demand in the next several years. And I think that's probably a couple of different for a couple of different reasons. Some of them have shared with us that no longer bringing power to data centers, rather data centers going to power sources.

Speaker 5

And as you know, we've got several pipelines in the Dallas, Fort Worth area and San Antonio. And just a couple of facts that I think are interesting, if you think about it, Dallas area data centers ranked 4th in power today, but they're 2nd in the most planned power. And then San Antonio is even more impressive, it's 17th in power, but 9th in most planned power. So if you think about it that way, there's some regions that are probably losing market share to San Antonio and Dallas and we stand in a good spot to be able to serve those centers.

Speaker 2

Thank you. And then related to the recent Pinion acquisition, can you provide some details on how you plan to integrate it across your NGL assets and the ability you have to roll out treating services beyond the immediate to in the stream acreage and just a long term value creation you see from these assets, please?

Speaker 3

Natalie, you're still up. Yes.

Speaker 5

I think you can think of it this way. We won't Pinion any differently than our integrated G and P assets. There won't be many trading deals behind Pinion that don't come with processing deals to serve the integrated value chain.

Speaker 3

It leads to more organic growth through processing.

Speaker 6

Yes. Thank you.

Operator

Thank you. Our next question comes from the line of Jean Salisbury of BofA. Your question please, Jean.

Speaker 7

Hi, good morning. Ethane storage is full. There's no new demand until you and ET's export facilities come online next year. Can you kind of talk about how you see this resolving? Do you see a big step down in ethane recovery?

Speaker 7

Would that change your growth rate in the next few quarters? And is there kind of a positive offset to that for enterprise in your portfolio?

Speaker 4

Hi, Jan, this is Tug Hamley. As

Speaker 8

far

Speaker 4

as recoveries and rejection, that will balance the market. Regionally, there's other places other than the Permian Basin where the gas base, it doesn't make sense to recover necessarily or further to transport to market. As far as opportunity set for us, it's going to lead to some positive storage opportunities on collecting contango.

Speaker 7

Okay. That makes sense. And then my follow-up is about the TW products line. Is this the final state of the TW product system? I think you said in the release that it's 20,000 barrels a day of truck loading capacity in Utah.

Speaker 7

Can the pipe do more than that if you add truck loading capacity? Or should we think about this as being the end state of the system?

Speaker 9

Hey, Jean Ann, it's Justin. No, we have more capability to add truck locks. In fact, we're doing that right now in our Permian terminal because our terminal is full. So as we identify additional demand and our demand further up system continues to ramp, we'll look for those debottlenecking opportunities to take advantage of it.

Speaker 7

Okay, great. Very clear. I'll leave it there. Thanks.

Operator

Thank you. Our next question comes from the line of Spiro Dounis of Citi. Your question please, Spiro.

Speaker 10

Thanks, operator. Good morning, everybody. I want to go back to Pinion really quickly. Maybe if you could just walk us through your decision to buy versus build there. Just curious if that was in any way reflective of some sort of bottleneck on the treating side in the basin?

Speaker 3

I guess I'll start Natalie. First of all, if we had to build Greenfield, we're looking at 3 years. If I'm not mistaken, we've missed some opportunities because we didn't have this service. So we didn't get the platform and it was the easiest, quickest way to get it.

Speaker 6

Yes, that's it.

Speaker 3

That answers, Bill.

Speaker 10

It does. I appreciate that. Second question, just maybe sticking with New Mexico. I guess last week, there was some news headlines just around a new setback rule that could come into play. I know this can pop up from time to time and it sounds like at least for now there's not much to do around it.

Speaker 10

But just curious maybe to get your all's view on how you think about the potential impact there if something like that comes into play?

Speaker 3

I don't know. I didn't hear the question, Tony, did you?

Speaker 5

Setbacks in New Mexico?

Speaker 8

Yes, setbacks in New Mexico. I'll speak for myself and then Yes, I'll speak for myself from a fundamentals standpoint and then, Natalie, you address it. I think the industry is very firm and as always said, tell us what the rules are and we'll figure out how to adjust to them. Natalie, I haven't heard and maybe you have or have not anybody say that they're doing anything other than studying these rules. It's certainly from the meetings I've been in hasn't changed people's plans at this point.

Speaker 8

I think the other thing to add to that is remember that we drill horizontally laterals that may be 3 or 4 miles. So I'm confident from a fundamental standpoint that the industry is going to be able to adjust once they know what the rules are. Are you hearing anything different?

Speaker 5

Nothing different. I think it's early to speculate on what impacts it will have, and nothing more than commentary from a few New Mexico producers.

Speaker 10

Great. I appreciate the color. I'll leave it there. Thanks, team.

Operator

Thank you. Our next question comes from the line of Jeremy Tonet of JPMorgan. Your question please, Jeremy.

Speaker 2

Hi, good morning.

Speaker 1

Good morning.

Speaker 2

Just wanted to touch base with Toni here on, I guess, more on the macro outlook and I guess producer customer conversations as well as what the macro team sees as far as production trends at this point in time given the volatility we've seen in commodity prices?

Speaker 8

Yes, this is Tony. I'll start with it.

Speaker 4

I

Speaker 8

think as long as we've been publishing forecast, this is maybe the 2nd or third time that we've actually republished midyear. And that's because what we're seeing both in traditional benches and new targets to gassier benches. When you look at EIA numbers, I'll kind of go ahead and go there. I understand that's a very hard thing to set your watch to. That's not what we use.

Speaker 8

They're trying to get better at it, but it's they're making slow progress. What we said in the Permian Basin, there's been a lot of noise also relative to weather in the Bakken and in the Gulf of Mexico relative to Alachus. So let's go to what's stable and what's the large thing that moves the number and that's the Permian Basin. We said that over a 3 year period just looking at black oil that we would have about 1,500,000 barrels a day of growth over that 3 year period. For 2023, we're at about 750,000 barrels.

Speaker 8

We think that that number for 2024 will be 350,000 to 400,000 barrels. And from what we're seeing as far as turn in line from our producers, it's likely that when it's all said and done, that number is going to be very heavily weighted towards the second half of the year. So it's not a long put, as a matter of fact, is what we expect that we will still the Permian will meet that goal of, call it, 1,500,000 barrels in 2025. That said, you can look at our forecast and the one thing that is changing and likely to change is the commitments that producers are making to gassier basins. And Natalie, I'll let

Speaker 3

you take it from there.

Speaker 5

I agree. I think we often we see it in our production plans from our producers and either PDP isn't coming off as expected or let's just say some of the declines are holding a little bit longer. But definitely gassier, even if on the order of 10%, sometimes they miss it by that order of magnitude. We see it time and time again. Not large numbers, but definitely something to keep up with.

Speaker 2

Got it. That's helpful there. Thank you for that. And maybe shifting gears a little bit here with Bahia. It looks like the timeline shifted a little bit there.

Speaker 2

So just wondering if you could update us on project development there. And also just current thoughts on Permian NGL pipeline egress, how you see that shift?

Speaker 9

Hey, Jeremy, this is Justin Kreider. So just minor delays in our expected timing on permit to construct, causing the delay from the first half into this into third quarter. On the commercial development front, I would say as you saw in our latest deck, Tony's updated NGL forecast paint a very different picture for overall industry utilizations. I think by 2028 now, the updated supply numbers have us upwards of 90% utilized as an industry. So we're still working the same playbook as we talked about in prior quarters around how we're developing commercially there.

Speaker 9

But it really just comes down to how that incremental supply gets contracted, whether that be a combination of additional GMP assets, that Natalie alluded to earlier or continuing to pursue 3rd party NGLs.

Speaker 2

Got it. That's helpful. Thank you.

Operator

Thank you. Our next question comes from the line of Michael Blum of Wells Fargo. Your line is open, Michael.

Speaker 11

Thanks and good morning everyone. I wanted to ask

Speaker 4

about the announcement yesterday on the

Speaker 12

CO2 pipeline project

Speaker 11

with yesterday on the CO2 pipeline project with Oxy. I wanted to just confirm this is new pipe, you're not repurposing and get a sense for how many miles of pipe are we talking about? And And would you expect to get your kind of typical midstream contract structure and typical midstream return on a project like this?

Speaker 9

Good morning, Michael. This is Bob Sanders. So the contract with 1.5 is a fairly straightforward transportation agreement. When 1.5 goes to FID, they will tell us what emitters to connect to, so we know what to design for. It is new pipe because it is ANSI 900 pipe.

Speaker 9

It's a high pressure pipeline system. We expect 1.5 to FID sometime in the first half of twenty twenty five. And at that point, we'll know what the capital is and the fee will be set accordingly.

Speaker 11

Great. Thanks for that. And then I just wanted to ask about LPG export dock spot rate dynamics. I guess rates have increased in recent months. I want to get a sense how full of the docks and your docks specifically from that perspective, are you able to capture any of these higher spot rates or are you basically fully contracted?

Speaker 4

Yes, this is Tug. So we've talked about it in the prior earnings call that we did a debottlenecking project at the Ship Channel, which provided us higher capacity. So right now, we're having anywhere between 2 to 3 spot cargoes per month and we are capturing those higher values, call it, mid $0.20 per gallon.

Operator

Great. Thank you. Thank you. Our next question comes from the line of Neal Dingmann of Shwist. Please go ahead, Neal.

Speaker 13

Good morning. Thanks for the time. My first question is on your petrochem specifically. Are you all continuing to expand the ethylene and propylene systems? And I'm just wondering if you guys do you continue to believe more export capacity will be needed there?

Speaker 14

Hey Neil, it's Chris, Dana. We are continuing to grow particularly our ethylene pipeline system. So if you remember that pipeline system didn't exist before 2019 And we've built a pretty substantial system and we plan to continue to grow that. And then in terms of our exports, we have an expansion underway. It's at our Morgan's Point dock and that will come online the first phase of that will be online at the end of this year.

Speaker 3

Chris, talk about real quick what you're seeing in Europe and what you think that creates for us?

Speaker 14

Yes. I think one of the growth opportunities that we see for ethylene exports in particular is Europe with the economics that those crackers have, one, they're quite a bit smaller, so they don't have the economies of scale that we have here in the U. S. And then secondly, just the overall feedstock, it's a whole ethane versus naphtha or natural gas versus crude kind of fundamentals there. So we expect to see and we've heard from a lot of the chemical companies that they're doing strategic reviews of their European assets.

Speaker 14

So we expect to see some closures and we expect that to lead to additional ethylene exports going that way.

Speaker 13

Great details. Thanks, Frank. And then my second is just on marketing specifically. It seems like Waha continues to be quite volatile. So I'm just wondering based on that, can we assume the marketing business continues to remain strong for you all?

Speaker 4

Yes. We have roughly 370,000,000 a day open on that West to East Waha spread. So do expect that to continue to contribute.

Speaker 13

Great to hear. Thank you.

Operator

Thank you. Our next question comes from the line of Keith Stanley Wolfe Research. Your question please, Keith.

Speaker 15

Hi, thank you. Good morning. First, just curious for an update on commercial conversations on the spot project. I think there was a quote a week or 2 ago from a conference of trying to get a 1st customer to sign up for that project. Just an update on any momentum you're having there?

Speaker 3

You want to take it, Jay?

Speaker 14

Hey, Keith. This is

Speaker 16

Jay Baney. Yes, just related around commercial conversations, they're quite extensive and in various degrees of conversation, anywhere ranging from we're working through definitive agreements, changing term sheets. I'd say a large portion of our customer base are currently just evaluating the cost inefficiencies related to ship to ship transfers and how that affects their business both their call it netback as American producer expenses or ultimately delivered price for international customers. And so we expect to hear some of that feedback here call it the end of this quarter, early Q1.

Speaker 15

Thanks for that. Second question, admittedly not sure there's a great answer to this necessarily, but the valuation gap between the C Corps in the space and the MLPs is at a record high above anything I can recall. Are there any potential ways the company could capitalize on that? I don't know if it's selling assets at higher valuations or other ways to respond to the market seemingly valuing C Corps much more highly than MLPs these days?

Speaker 4

Keith, this is Randy. I don't think there's any quick solution or answer there. I think coming in and trying to play the game of selling assets at a higher valuation is somewhat shortsighted, especially when you come in and you look at the depreciation recapture that comes and it gets pushed down to all your limited partner. All it becomes is a tax event for your limited partners and I don't know what actually you've accomplished. So we've seen 2 or 3 years ago, I think it was near these levels and then we saw the 2 compressed.

Speaker 4

But generally, when there's this big of a difference in asset classes, normally the market solves it one way or the other. Thank you.

Operator

Thank you. Our next question comes from the line of John McKay of Goldman Sachs. Please go ahead, John.

Speaker 17

Hey, thanks for the time. I just want to maybe do 2 quick clarifications. First one is, Randy, this is to you, I guess, just on that last comment, is the Upsea idea still out there? Or is there any reason you guys have kind of permanently put that to

Speaker 4

the side at this point? I appreciate the thought there. Again, I think that's another sort of the devil's in the detail there. Number 1, now you've got you would have 2 securities outstanding. You need to build liquidity up in that second security.

Speaker 4

And by the way, then what do you do with use of proceeds? So I think

Speaker 12

and if I come in

Speaker 4

and look over time, there's not really been and there's been examples, whether it's the UPCs or whether it's been the I units that were done way back 20 years ago. And you really never saw that much differentiation, whether it was the institute the I units, the institutional class units of partnership that was more institutional investor friendly or whether it was the Upsea and the underlying MLP. So to us that adds a lot of complexity and really you don't get that much bang for your buck.

Speaker 17

That's clear. Appreciate that. 2nd quick follow-up, appreciate the comments and all the work done on the PDHs. I just want to clarify, are both up and running fully now? Is this like a 4th quarter run rate going forward?

Speaker 17

Is this a Q1 of 'twenty five? And then maybe if you could just remind us maybe what those 2 assets in aggregate could add from an ongoing cash flow basis, that'd be great.

Speaker 3

They're up and running both of them, running at full rates, if not higher.

Speaker 4

Correct.

Speaker 3

And Chris, I'd say it's in the neighborhood of $200,000,000 That's correct.

Speaker 4

All right. That's it. Congrats on

Speaker 17

your notes, Don, and thanks for your time.

Operator

Thank you. Our next question comes from the line of A. J. O'Donnell of TPH. Your question please, A.

Operator

J.

Speaker 4

J. O'Donnell:]

Speaker 12

Hey, good morning. Thanks for taking my questions. Just a quick one on Matterhorn. With that pipeline now running about a Bcf or over a Bcf a day, curious if you guys have seen a jump in flush production into your system in Q4 or if majority of the pipeline volumes are just flow shifting around the basin or redirected gas?

Speaker 3

I don't think we've seen a flush production yet, have we, Natalie?

Speaker 12

Okay. Maybe just going back to the capital budget then. Just trying to understand on the increase in the 20 5 budget. I was hoping maybe you could provide just a little bit of additional color on the types of the projects you're seeing with Pinya. And I'm just curious if there's any more of that to potentially be announced in the 2025 budget or does that seem a little bit further off?

Speaker 3

Ed, will you going to have pinion projects next year?

Speaker 5

Yes. We do our job, we will.

Speaker 3

Natalie says yes.

Speaker 12

Okay. Thanks guys.

Operator

Thank you. Our next question comes from the line of Manav Gupta of UBS. Your question please, Manav.

Speaker 6

Hi, good morning. You guys did a very good job of explaining some of the 2025 growth projects. Help us understand the product pipeline is pretty strong whether it's Menton, West 2 or Nature's River. How should we think about the key growth projects for 2026 at this stage?

Speaker 4

Yes. Manavas, thanks for the question. I think we're still at the point where and we try to point this out in our supplemental slides for earnings. When you come in and you look at the projects that have been FID ed, I want to say that the runoff in 2026, what we have remaining to spend on currently FID projects is probably about $1,000,000,000 $1,200,000,000 If you would, in 2026, we have room that we put in there that we think will probably be in the range of $2,000,000,000 maybe it's upward of $2,500,000,000 but we have room for development of other growth oriented projects between now and then. And that's where we think 2024 and 2025 is really a period of elevated CapEx, and that will come back in more on a longer term basis, see that come back down to around 2%, 2.5%.

Speaker 6

Perfect. Thank you, Paul.

Speaker 4

And you saw this and again, I'll come back in, I'm sorry. You sort of saw the same thing in 2018, 2019. In those years, we were about $4,000,000,000 in growth CapEx. And again, those had some large projects and some step changes in capacity. And then you saw our growth CapEx moderate back down and we think the same thing will happen once you get out to 2026.

Speaker 6

Perfect. My quick follow-up is there was a little bit of a step up in buybacks in 3Q versus 2Q. And again, as you're going through this build out, how should we think about shareholder returns for the rest of the 2024 or even 2025?

Speaker 4

I think, again, with 2024 and 2025 CapEx being at elevated levels, you'll probably continue to see buybacks in that $200,000,000 $300,000,000 range. I think once we get out to 2026, we'll need to reassess what the opportunities are at that time and we'll go from there.

Speaker 6

Thank you for taking my questions.

Operator

Thank you. I would now like to turn the conference back to Libby Strait for closing remarks. Madam?

Speaker 1

Thank you. 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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