EnLink Midstream, LLC Stock

EnLink Midstream, LLC focuses on providing midstream energy services.

The company’s services include gathering, compressing, treating, processing, transporting, storing, and selling natural gas; fractionating, transporting, storing, and selling NGLs; and gathering, transporting, stabilizing, storing, trans-loading, and selling crude oil and condensate, in addition to brine disposal services.

As of December 31, 2022, the company’s midstream energy asset network includes approximately 13,600 miles of pipelines, 26 natural gas processing plants with approximately 6.0 Bcf/d of processing capacity, seven fractionators with approximately 320,000 Bbls/d of fractionation capacity, barge and rail terminals, product storage facilities, purchasing and marketing capabilities, brine disposal wells, a crude oil trucking fleet, and equity investments in certain joint ventures. The company’s operations are based in the United States, and its sales are derived primarily from domestic customers.

The company’s natural gas business includes connecting the wells of producers in its market areas to its gathering systems. The company’s gathering systems consist of networks of pipelines that collect natural gas from points at or near producing wells and transport it to its processing plants or to larger pipelines for further transmission. The company operates processing plants that remove NGLs from the natural gas stream that is transported to the processing plants by its own gathering systems or by third-party pipelines. In conjunction with its gathering and processing business, it may purchase natural gas and NGLs from producers and other supply sources and sell that natural gas or NGLs to utilities, industrial consumers, marketers, and pipelines. The company’s transmission pipelines receive natural gas from its gathering systems and from third-party gathering and transmission systems and deliver natural gas to industrial end-users, utilities, and other pipelines.

The company’s fractionators separate NGLs into separate purity products, including ethane, propane, iso-butane, normal butane, and natural gasoline. The company’s fractionators receive NGLs primarily through its transmission lines that transport NGLs from East Texas and from its South Louisiana processing plants. The company’s fractionators also have the capability to receive NGLs by truck or rail terminals. The company also has agreements pursuant to which third parties transport NGLs from its West Texas and Central Oklahoma operations to its NGL transmission lines that then transport the NGLs to its fractionators. In addition, the company has NGL storage capacity to provide storage for customers.

The company’s crude oil and condensate business includes the gathering and transmission of crude oil and condensate via pipelines, barges, rail, and trucks, in addition to condensate stabilization and brine disposal. The company also purchases crude oil and condensate from producers and other supply sources and sell that crude oil and condensate through its terminal facilities to various markets.

Across its businesses, the company primarily earns its fees through various fee-based contractual arrangements, which include stated fee-only contract arrangements or arrangements with fee-based components where it purchases and resells commodities in connection with providing the related service and earn a net margin as its fee. The company manages and reports its activities primarily according to the nature of activity and geography.

Segments

The company operates through five segments:

Permian: The Permian segment includes the company’s natural gas gathering, processing, and transmission activities and its crude oil operations in the Midland and Delaware Basins in West Texas and Eastern New Mexico.

Louisiana: The Louisiana segment includes the company’s natural gas and NGL pipelines, natural gas processing plants, natural gas and NGL storage facilities, and fractionation facilities located in Louisiana and its crude oil operations in ORV.

Oklahoma: The Oklahoma segment includes the company’s natural gas gathering, processing, and transmission activities, and its crude oil operations in Cana-Woodford, Arkoma-Woodford, northern Oklahoma Woodford, STACK, and adjacent areas.

North Texas: The North Texas segment includes the company’s natural gas gathering, processing, fractionation, and transmission activities in North Texas.

Corporate: The Corporate segment includes the company’s unconsolidated affiliate investments in the Cedar Cove JV in Oklahoma, GCF in South Texas, and the Matterhorn JV in West Texas, as well as its corporate assets and expenses.

Business Strategies

The company operates a differentiated midstream platform that is built for long-term, sustainable value creation. The company’s integrated assets are strategically located in premier production basins and core demand centers, including the Permian Basin, the Louisiana Gulf Coast, Central Oklahoma, and North Texas. The company expects to grow certain of its systems organically over time by meeting its customers’ midstream service needs that result from their drilling activity in its areas of operation, or growth in supply needs.

Assets

The company’s assets consist of gathering systems, transmission pipelines, processing facilities, fractionation facilities, stabilization facilities, storage facilities, and ancillary assets.

Permian Segment Assets

The company’s Permian segment assets include gas gathering systems, crude oil gathering systems and storage, gas processing facilities, and a fractionation facility, which assets are primarily in West Texas and New Mexico.

Gas Gathering Systems: The company’s gas gathering systems in the Permian segment consist of the following:

MEGA System Gathering Facilities: This gathering system in the Midland Basin serves as an interconnected system of pipelines and compressors to deliver gas from wellheads in the Permian Basin to the MEGA system processing facilities.

Delaware Gas Gathering System: This rich natural gas gathering system consists of gathering pipeline and compression assets in the Delaware Basin in Texas and New Mexico. These gathering systems are connected to the company’s Lobo processing facilities and Tiger processing plant, which are owned by the Delaware Basin JV.

Crude Oil Gathering Systems: The company’s crude oil gathering systems in the Permian segment consist of crude oil and condensate pipelines and above ground storage, including:

Avenger: Avenger is a crude oil gathering system in the northern Delaware Basin that is supported by a long-term contract with Devon on dedicated acreage in their Todd and Potato Basin development areas in Eddy and Lea counties in New Mexico.

Greater Chickadee Gathering System: Greater Chickadee delivers crude oil for customers to Enterprise Product Partners L.P.’s crude oil terminal in West Texas. Greater Chickadee also includes multiple central tank batteries with pump, truck injection, and storage stations to maximize shipping and delivery options for producers.

Gas Processing Facilities: The company’s gas processing facilities in the Permian segment consist of the following:

MEGA System Processing Facilities: The company’s MEGA system natural gas processing facilities are located in Midland, Martin, and Glasscock counties, Texas and operate as a connected system. These assets consist of the Bearkat processing facility with a capacity of 75 MMcf/d, the Deadwood processing facility with a capacity of 48 MMcf/d, the Midmar processing facilities with a capacity of 193 MMcf/d, the Riptide processing facility with a capacity of 255 MMcf/d, and the War Horse processing plant with a capacity of 105 MMcf/d. In the fourth quarter of 2022, the company completed the relocation of its Phantom processing plant with a capacity of 235 MMcf/d.

Delaware Processing Facilities: The Delaware processing facilities include the company’s Lobo natural gas processing facilities and the Tiger processing plant. The company’s Lobo natural gas processing facilities are located in Loving County, Texas and include Lobo I, Lobo II, and Lobo III processing plants which account for 35 MMcf/d, 140 MMcf/d, and 220 MMcf/d of processing capacity, respectively. The Lobo I processing plant is not operational. The company’s Tiger processing plant is located in Culberson County, Texas, and accounts for 240 MMcf/d of processing capacity. The Lobo processing facilities and the connected gathering system and the Tiger processing plant are owned by the Delaware Basin JV.

Fractionation Facility: The Mesquite fractionator has an approximate capacity of 15,000 Bbls/d and is located at the company’s Midland gas processing plant complex. The Mesquite fractionator is not operational.

Louisiana Segment Assets

The company’s Louisiana segment assets consist of gas and NGL gathering and transmission pipelines, gas processing facilities, gas and NGL storage, and its ORV crude logistics assets.

Transmission and Gathering Systems: The gas pipeline system in the Louisiana segment includes gathering and transmission systems, processing facilities, and underground gas storage.

Gas Transmission and Gathering Systems: The company’s transmission system consists of a portfolio of large capacity interconnections with the Gulf Coast pipeline grid that provides customers with supply access to multiple domestic production basins for redelivery to major industrial market consumption located primarily in the Mississippi River Corridor between Baton Rouge, Louisiana and New Orleans, Louisiana. The company’s natural gas transmission services are supplemented by fully integrated, high deliverability salt dome storage capacity strategically located in the natural gas consumption corridor. In combination with the company’s transmission system, its gathering systems provide a fully integrated wellhead to burner tip value chain that includes local gathering, processing, and treating services to Louisiana producers.

Gas Processing and Storage Facilities: The company’s gas processing facilities and storage facilities in the Louisiana segment consist of the following:

Gibson Processing Plant: The Gibson processing plant has 110 MMcf/d of processing capacity and is located in Gibson, Louisiana. The Gibson processing plant is connected to the company’s Louisiana gathering system.

Pelican Processing Plant: The Pelican processing plant complex is located in Patterson, Louisiana and has a designed capacity of 600 MMcf/d of natural gas. The Pelican processing plant is connected with continental shelf and deepwater production and has downstream connections to the ANR pipeline. This plant has an interconnection with the Louisiana gas pipeline system allowing the company to process natural gas from this system at its Pelican processing plant when markets are favorable.

Belle Rose Gas Storage Facility: The Belle Rose gas storage facility is located in Assumption Parish, Louisiana. This facility is designed for injecting pipeline quality gas into storage or withdrawing stored gas for delivery by pipeline.

Sorrento Gas Storage Facility: The Sorrento gas storage facility is located in Ascension Parish, Louisiana. This facility is designed for injecting pipeline quality gas into storage or withdrawing stored gas for delivery by pipeline.

Jefferson Island Storage Facility: The Jefferson Island storage facility and pipeline header system is located in Iberville and Vermilion Parishes in Louisiana. In December 2020, the company acquired the Jefferson Island storage facility, which includes natural gas storage capacity that is connected to its extensive Louisiana natural gas system.

Non-Operational Processing Plants

Blue Water Gas Processing Plant: The company operates and owns a 64.29% interest in the Blue Water gas processing plant. The Blue Water gas processing plant is located in Crowley, Louisiana and is connected to the Blue Water pipeline system. The company’s share of the plant’s capacity is approximately 193 MMcf/d.

Plaquemine Processing Plant: The Plaquemine processing plant has 225 MMcf/d of processing capacity and is connected to the Plaquemine fractionation facility.

Eunice Processing Plant: The Eunice processing plant is located in South Central Louisiana and has a capacity of 350 MMcf/d of natural gas.

NGL and Crude Oil Pipeline Systems: The company’s NGL and crude oil pipeline systems in the Louisiana segment consist of NGL pipelines, crude oil and condensate pipelines, underground NGL storage, and its ORV crude logistics assets.

Cajun-Sibon Pipeline System: The Cajun-Sibon pipeline system transports unfractionated NGLs from areas such as the Liberty, Texas interconnects near Mont Belvieu, Texas, and, from time to time, the company’s Pelican processing plant in South Louisiana to either the Plaquemine or Eunice fractionators or to third-party fractionators when necessary.

Ascension Pipeline: The Ascension JV is an NGL pipeline that connects the company’s Riverside fractionator to Marathon Petroleum Corporation’s Garyville refinery and is owned 50% by Marathon Petroleum Corporation.

Napoleonville Storage Facility: The Napoleonville NGL storage facility is connected to the Riverside facility and consists of two existing caverns. The caverns provide butane storage.

Ohio River Valley: The company’s ORV operations are an integrated network of assets consist of a crude oil and condensate barge loading terminal on the Ohio River, a crude oil and condensate rail loading terminal on the Ohio Central Railroad network, crude oil and condensate pipelines in Ohio and West Virginia, above ground crude oil storage, a trucking fleet comprised of both semi and straight trucks, trailers for hauling NGL volumes, and brine disposal wells. Additionally, the company’s ORV operations include condensate stabilization and natural gas compression stations.

Fractionation Facilities: There are four fractionation facilities located in the Louisiana segment that are connected to the company’s processing facilities and to Mont Belvieu, Texas and other hubs through its Cajun-Sibon pipeline system.

Plaquemine Fractionation Facility: The Plaquemine fractionator is located at the company’s Plaquemine gas processing plant complex and is connected to its Cajun-Sibon pipeline. The Plaquemine fractionation facility produces purity ethane and propane for sale to markets via pipeline, while butane and heavier products are sent to the company’s Riverside facility for further processing. The Plaquemine fractionator, collectively with the Riverside Fractionation Facility, has an approximate capacity of 136,800 Bbls/d of raw-make NGL products.

Plaquemine Gas Processing Plant: In addition to the Plaquemine fractionation facility, the adjacent Plaquemine gas processing plant also has an on-site fractionator.

Eunice Fractionation Facility: The Eunice fractionation facility is located in South Central Louisiana. Liquids are delivered to the Eunice fractionation facility by the Cajun-Sibon pipeline system. The Eunice fractionation facility fractionates butane and heavier products from the company’s Riverside facility and is directly connected to NGL markets and to a third-party storage facility.

Riverside Fractionation Facility: The Riverside fractionator and loading facility are located on the Mississippi River upriver from Geismar, Louisiana. Liquids are delivered to the Riverside fractionator by pipeline from the Pelican processing plants or by third-party truck and rail assets. The loading/unloading facility has the capacity to transload 15,000 Bbls/d of crude oil and condensate from rail cars to barges.

Oklahoma Segment Assets: The company’s Oklahoma segment assets consist of gas processing facilities, gas gathering systems, and crude oil gathering systems and storage in Southern and Central Oklahoma.

Gas Gathering Systems: The company’s gas gathering systems in the Oklahoma segment consist of the following:

Central Oklahoma Gathering System: The Central Oklahoma gathering system serves the STACK play and adjacent areas.

Northridge Gathering System: The company’s Northridge gathering system is located in the Arkoma-Woodford Shale in Southeastern Oklahoma.

Gas Processing Facilities: The company’s gas processing facilities in the Oklahoma segment consist of the following:

Central Oklahoma Processing Facilities: The Central Oklahoma processing facilities include the Chisholm processing plants, the Cana processing plant, and the Redcliff and Carmen processing plants acquired in the Central Oklahoma Acquisition in December 2022 (collectively, the Central Oklahoma processing system), which account for 600 MMcf/d, 400 MMcf/d, 220 MMcf/d, and 60 MMcf/d of processing capacity, respectively.

The unprocessed NGLs from the Chisholm processing plants are transported by ONEOK, Inc. (ONEOK) to NGL transmission lines, which then transport the NGLs to the company’s fractionators in Louisiana.

Devon is the primary customer of the Cana processing plant. The company has approximately six years remaining on a fixed-fee gathering and processing agreement with Devon, pursuant to which it provides processing services for natural gas delivered by Devon to the Cana processing plant.

Northridge Processing Facility: The company’s Northridge processing plant is located in Hughes County in the Arkoma-Woodford Shale in Southeastern Oklahoma and accounts for 200 MMcf/d of processing capacity. The residue natural gas from the Northridge processing facility is delivered to CenterPoint Energy, Inc., Enable Midstream Partners, LP, and MPLX LP.

Crude Oil Gathering Systems: The company’s crude and condensate assets in the Oklahoma segment have crude oil and condensate pipelines and above ground storage in Central Oklahoma. These assets consist of the following:

Central Oklahoma Crude Oil Gathering Systems: The company’s Central Oklahoma crude oil gathering systems include Black Coyote and Redbud. Black Coyote operates in the core of the STACK play in Central Oklahoma and was built primarily to service acreage dedicated from Devon, which is the anchor customer on the system. Redbud also operates in the core of the STACK play and is supported by a contract with Marathon Oil Company.

North Texas Segment Assets

The company’s North Texas segment assets include gas gathering systems, a gas transmission system, gas processing facilities, and a fractionation facility in the Barnett Shale.

Gas Gathering Systems: The company’s gas gathering systems in the North Texas segment consist of the following:

Bridgeport Rich Gas Gathering System: A substantial majority of the natural gas gathered on the Bridgeport rich gas gathering system is delivered to the Bridgeport processing facility. BKV was the largest customer on the Bridgeport rich gas gathering system contributing the majority of the natural gas gathered for the year ended December 31, 2022. BKV acquired Devon’s Barnett Shale assets in October 2020. As a result of this acquisition, the company extended a fixed-fee gathering agreement with BKV and has approximately ten years remaining on the fixed-fee gathering agreement pursuant to which it provides gathering services on the Bridgeport system.

Bridgeport Lean Gas Gathering System: Natural gas gathered on the Bridgeport lean gas gathering system was primarily attributable to BKV for the year ended December 31, 2022 and was delivered to the Acacia transmission system and to intrastate pipelines without processing. The company is a party to a fixed-fee gathering and processing agreement with BKV that covers gathering services on the Bridgeport system.

Johnson County Gathering System: Natural gas gathered on this system is primarily attributable to one customer with whom the company has a fixed-fee agreement that currntly has approximately one year remaining.

Silver Creek Gathering System: The company’s Silver Creek gathering system is located primarily in Hood, Parker, and Johnson counties, Texas, and connects to the Silver Creek processing system.

Gas Transmission System: The Acacia transmission system is a pipeline that connects production from the Barnett Shale to markets in North Texas accessed by Atmos Energy, Brazos Electric, Enbridge Inc, Energy Transfer Partners, Enterprise Product Partners, and GDF Suez. BKV was the largest customer on the Acacia pipeline for the year ended December 31, 2022. The company has approximately one year remaining on a fixed-fee transportation agreement with BKV that covers transmission services.

Gas Processing Facilities: The company’s gas processing facilities in the North Texas segment consist of the following:

Bridgeport Processing Facility: The company’s Bridgeport natural gas processing facility, located in Wise County, Texas, is one of the largest processing plants in the U.S. with seven cryogenic turboexpander plants. BKV was the Bridgeport facility’s largest customer, providing the majority of the natural gas processed for the year ended December 31, 2022. The company extended a fixed-fee processing agreement with BKV and has approximately ten years remaining on its agreement with BKV pursuant to which it provides processing services for natural gas delivered to the Bridgeport processing facility.

Silver Creek Processing System: The company’s Silver Creek processing system is located in Weatherford, Azle, Fort Worth, Cleburne, Granbury, and West Johnson County, Texas, and includes six processing plants: the Azle plant, the Silver Creek plant, the Goforth plant, and the Cowtown, Corvette, and the West Johnson plants, acquired in the Barnett Shale Acquisition, which account for 50 MMcf/d, 200 MMcf/d, 30 MMcf/d, 200 MMcf/d, 125 MMcf/d, and 100 MMcf/d of processing capacity, respectively. The Azle, Goforth, Corvette, and West Johnson processing plants are currently not operational due to decreased volumes. In early 2023, the company plans to move equipment and facilities associated with the Cowtown processing plant to the Delaware JV in the Permian segment. The processing capacity at the Silver Creek plant is sufficient to process all gas on the Silver Creek processing system.

Fractionation Facility: The company’s Bridgeport processing plant in North Texas also has fractionation capabilities that provide operational flexibility. Under its contracts, the company owns the NGLs that are allocated to BKV and it generates adjusted gross margin by selling the fractionated NGL products.

Corporate Segment Assets

The company’s Corporate segment assets primarily consist of its 38.75% ownership interest in GCF, 30% ownership interest in the Cedar Cove JV, and 15% ownership interest in the Matterhorn JV.

GCF: The company owns a 38.75% interest in GCF, with the remaining interests owned 22.5% by Phillips 66, and 38.75% by Targa Resources Partners, LP. GCF owns an NGL fractionator located on the Gulf Coast at Mont Belvieu, Texas. Targa Resources Partners, LP is the operator of the fractionator. GCF receives raw mix NGLs from customers, fractionates the raw mix, and redelivers the finished products to customers for a fee. Beginning in January 2021, the GCF assets were temporarily idled to reduce operating expenses. In January of 2023, the company began the process to restart the GCF assets and expect operations to begin in 2024. The company expects to make capital contributions during 2023 associated with the restart of these assets.

Cedar Cove JV: The company owns a 30% interest in the Cedar Cove JV, which operates gathering and compression assets in Blaine County, Oklahoma that tie into its existing Oklahoma assets. Kinder Morgan, Inc. owns a 70% interest in, and is the operator of, the Cedar Cove JV. All gas gathered by the Cedar Cove JV is processed by its Central Oklahoma processing facilities.

Matterhorn JV: The company owns a 15% interest in the Matterhorn JV, with the remaining interests owned by WhiteWater Midstream, LLC, Devon Energy Corporation, and MPLX LP. The Matterhorn JV is expected to construct a pipeline designed to transport up to 2.5 Bcf/d of natural gas through approximately 490 miles of 42-inch pipeline from the Waha Hub in West Texas to Katy, Texas (the Matterhorn Express Pipeline). Supply for the Matterhorn JV will be sourced from multiple upstream connections in the Permian Basin, including direct connections to processing facilities in the Midland Basin through an approximately 75-mile lateral, as well as a direct connection to the 3.2 Bcf/d Agua Blanca Pipeline. The Matterhorn Express Pipeline is expected to be in service in the third quarter of 2024, pending the receipt of customary regulatory and other approvals.

Key Customers

For the year ended Year Ended December 31, 2022, the company’s customers included Devon (6.4%), Dow Hydrocarbons and Resources LLC (14.2 %), and Marathon Petroleum Corporation (14.7%).

Regulation

Natural Gas Pipeline Regulation

The company owns an interstate natural gas pipeline that is subject to regulation as a natural gas company by the Federal Energy Regulatory Commission (FERC) under the Natural Gas Act. Certain of the company’s intrastate natural gas pipelines also transport gas in interstate commerce, and thus, the rates, terms and conditions of such services are subject to FERC jurisdiction under Section 311 of the Natural Gas Policy Act of 1978 (NGPA).

Liquids Pipeline Regulation

The company owns certain liquids and crude oil pipelines that are regulated by FERC as common carrier interstate pipelines under the Interstate Commerce Act (ICA), the Energy Policy Act of 1992, and related rules and orders.

As the company acquires, constructs, and operates new liquids assets and expands its liquids transportation business, the classification and regulation of its liquids transportation services, including services that its marketing companies provide on its FERC-regulated liquids pipelines, are subject to ongoing assessment and change based on the services it provides and determinations by FERC and the courts.

Gathering Pipeline Regulation

The company owns a number of natural gas pipelines that meet the traditional tests FERC has used to establish that a pipeline is a gathering pipeline and therefore not subject to FERC jurisdiction.

Natural Gas Storage Regulation

The company is in substantial compliance with Pipeline and Hazardous Materials Safety Administration (PHMSA) rules. Certain of the company’s field injection and withdrawal wells and water disposal wells are subject to the jurisdiction of the Railroad Commission of Texas. In addition, its underground gas storage caverns in Louisiana are subject to the jurisdiction of the Louisiana Department of Natural Resources (LDNR).

The company also operates brine disposal wells that are regulated as Class II wells under the federal Safe Drinking Water Act (SDWA).

Employee Safety

The company is subject to the requirements of the Occupational Safety and Health Act, and comparable state laws that regulate the protection of the health and safety of workers.

Pipeline Safety Regulations

The company’s pipelines are subject to regulation by PHMSA pursuant to the Natural Gas Pipeline Safety Act of 1968 and the Pipeline Safety Improvement Act of 2002 (PSIA).

Environmental Matters

The company also generates, and may in the future generate, both hazardous and nonhazardous solid wastes that are subject to requirements of the federal Resource Conservation and Recovery Act (RCRA) and/or comparable state statutes.

The company’s operations are subject to the federal Clean Air Act and regulations promulgated thereunder and under comparable state laws and regulations.

The company is in substantial compliance with the Federal Water Pollution Control Act permitting requirements, as well as the conditions imposed by its permits. It operates brine disposal wells that are regulated as Class II wells under the SDWA. Its brine disposal wells are also subject to comparable state laws and regulations, which in some cases are more stringent than requirements under the SDWA, such as the Ohio Department of Natural Resources rules that took effect October 1, 2012.

History

EnLink Midstream, LLC, a Delaware limited liability company, was founded in 2013. The company was incorporated in 2013.