Third Quarter (3Q) Update | Midstream - Transportation & Pipelines | Midstream - Gas Gathering | Midstream - Processing Plant

MPLX Talks Permian 1.3 MMBbl/d Oil Pipeline, Gas Pipeline

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MPLX today reported third-quarter 2020 results.

Wink-to-Webster Oil Pipeline Update (Permian 1.3 Million Barrels Per Day)

MPLX continues to advance its strategy of creating integrated crude oil and natural gas logistics systems from the Permian to the U.S. Gulf Coast. The Wink to Webster crude oil pipeline, in which MPLX has an equity interest, remains on schedule, with segments and assets expected to come on line throughout 2021. The main segment of the pipeline system started transporting Permian crude oil and condensate from Midland, Texas, to Houston in October. The 36-inch diameter pipeline, of which 100% of the contractible capacity is committed with minimum volume commitments, will originate in the Permian Basin and have destination points in the Houston market, including MPC's Galveston Bay refinery.

Natural Gas Pipeline

Also in the Permian, the Whistler Pipeline is being designed to transport approximately 2 bcf/d of natural gas from Waha, Texas, to the Agua Dulce market in south Texas, ultimately reaching MPC's Galveston Bay refinery. MPLX has an equity interest in Whistler, which is expected to be placed in service in the second half of 2021. Whistler is more than 90% committed with minimum volume commitments.

Summary

• Reported net income attributable to MPLX of $665 million, including a charge of $36 million, and adjusted EBITDA attributable to MPLX of $1.3 billion
• Generated $1.2 billion in net cash provided by operating activities and reported distribution coverage of 1.44x
• Maintained quarterly distribution of $0.6875 per common unit
• On-track to achieve forecasted 2020 reductions in capital spending of over $700 million and operating expense of approximately $200 million
• Reiterate expectation of achieving positive free cash flow, after capital investments and distributions, for 2021
• Announces Board authorization of a unit repurchase program for up to $1 billion of common units held by the public

Logistics & Storage

L&S segment income from operations for the third quarter of 2020 decreased by $36 million and includes a charge of $27 million related to a reimbursement of expenses associated with MPC's involuntary workforce reduction plan. Segment adjusted EBITDA for the third quarter of 2020 increased by $44 million. Both results are compared to the same period in 2019. Results for the quarter benefited from lower operating expenses, minimum volume commitments, and the completion of the Mt. Airy terminal and Utica butane expansion projects, and were partially offset by lower demand due to the COVID-19 pandemic.

Total pipeline throughputs were 4.7 million barrels per day in the third quarter, a decrease of 10% versus the same quarter of 2019. The average tariff rate was $0.93 per barrel for the quarter, an increase of 3% versus the same quarter of 2019. Terminal throughput was 2.7 million barrels per day for the quarter, a decrease of 18% versus the same quarter of 2019.

Gathering & Processing

G&P segment income from operations for the third quarter of 2020 increased by $9 million and includes a charge of $9 million related to a reimbursement of expenses associated with MPC's involuntary workforce reduction plan. Segment adjusted EBITDA for the third quarter of 2020 increased by $18 million. Both results are compared to the same period in 2019. Results for the quarter were primarily driven by higher volumes due to additional plants coming online, partially offset by production curtailments and shut-ins. In the third quarter of 2020:

• Gathered volumes averaged 5.4 billion cubic feet per day (bcf/d), a 14% decrease versus the third quarter of 2019.
• Processed volumes averaged 8.5 bcf/d, a 3% decrease versus the third quarter of 2019.
• Fractionated volumes averaged 567 thousand barrels per day, a 4% increase versus the third quarter of 2019.

In the Marcellus and Utica:

• Gathered volumes in Marcellus averaged 1.3 bcf/d in the third quarter, a 3% increase versus the third quarter of 2019, while gathered volumes in Utica averaged 1.8 bcf/d in the third quarter, a 24% decrease versus the third quarter of 2019.
• Processed volumes in Marcellus averaged 5.7 bcf/d in the third quarter, an 8% increase versus the third quarter of 2019, while processed volumes in Utica averaged 0.5 bcf/d in the third quarter, a 39% decrease versus the third quarter of 2019.
• Fractionated volumes in Marcellus averaged 477 thousand barrels per day in the third quarter, a 10% increase versus the third quarter of 2019, while fractionated volumes in Utica averaged 30 thousand barrels per day in the third quarter, a 39% decrease versus the third quarter of 2019.

Strategic Update

MPLX remains on-track to achieve forecasted 2020 reductions to capital spending by over $700 million and annual operating expenses by approximately $200 million. Incremental to these reductions, MPC implemented a workforce reduction plan to reduce cost structure across the combined enterprise.

The board of directors of MPLX's general partner has authorized a unit repurchase program for the repurchase of up to $1 billion of the outstanding publicly traded common units. MPLX may utilize various methods to effect the repurchases, which could include open market repurchases, negotiated block transactions, tender offers, accelerated unit repurchases, or open market solicitations for units, some of which may be effected through Rule 10b5-1 plans. The timing and amount of repurchases, if any, will depend upon several factors, including market and business conditions, and repurchases may be initiated, suspended or discontinued at any time. The repurchase authorization has no expiration date.

In August, MPLX, WhiteWater Midstream, and West Texas Gas, Inc. (WTG) announced the formation of a joint venture (JV) to provide natural gas liquids takeaway capacity from MPLX and WTG gas processing plants to Sweeny, Texas. The JV utilizes existing infrastructure with limited new construction and is a capital-efficient solution to support producer customers.