ONEOK, Inc. (OKE) Earnings Call Transcript & Summary

Hello again, everybody. For those who don't know me, I'm Keith Stanley. I run our Midstream group here at Wolfe Research. And I'm very happy to have ONEOK's senior management with us as well today. We have Pierce Norton, CEO; Sheridan Swords, Chief Commercial Officer, sorry, Sheridan; and Walter Hulse, CFO. So thank you all for joining us. As I said in the last one, please feel free to throw your questions in. Just raise your hand and we're happy to have you participate in the conversation.

Maybe we could start just strategically with kind of a look back in time. The company has been probably one of the more acquisitive in the midstream space and roughly doubled the size of the company with M&A. So -- can you just talk through some of the strategic rationale on some of these transactions and how you're positioned looking forward if you expect to continue to be fairly acquisitive in the future?

So I'll start -- and Sheridan fill in on this. But I think our acquisitiveness actually goes back all the way to the early 2000s. We went through a period of time back there where we actually did quite a few acquisitions. The theory was is that you get yourself positioned acquisition-wise to expand and extend off those assets that you're collecting. So we did that and then we kind of went through a period of organic growth where we spent billions of dollars across the middle part of the United States, aggregating these different assets that we bought. And then we ran into a period here where we felt like that we needed to do more M&A on specific criteria. So we socialized that with the Board. We came up this list of criteria that we're looking for. We created some questions around that. And before we did any sort of looking at companies, and then we started putting these companies kind of through this filter. And then that's where we ended up doing Magellan, we did Easton. We did EnLink, we did Medallion and several of these companies, we've actually done, I think, 5 acquisitions counting NGP in 2 years. So we're very pleased with where we are right now. We feel like we're back in a position now where we can continue to expand and extend. So they're good projects that we're doing these extensions on, but they're also complementary because they're contiguously integrated to the assets that we have. So we're in a position now where we can be very patient about what we do next. And our focus right now is on integration.

Pierce, I think I recall a time in the past where you said there was actually a list of companies that you identified as ones that you could add value to. Is that list now smaller today, would you say, on potential opportunities that make sense?

Well, I would say they're different because the list is it morphs because of what it is the criteria that maybe you have satisfied currently, but you still need -- see the need of doing some other things. So I'll give you a couple of examples. One of the things that we wanted to do originally back in 2021 kind of time frame, it took us until 2023 to get it done, but is to diversify -- try to diversify a little bit out of the Bakken into some other areas. We wanted to go into businesses that were more what we call demand pull instead of demand push and which kind of get from supply and demand is another way to look at that. So having done that, we -- do we still want to diversify even more? Sure. But right now, expand and extend is our main focus. So as the criteria changes, so do the possibilities of the companies. But right now, we don't see anything out there that we can't be patient on. And so we're going to continue to do what we're doing, which is continue integration, continue to get through -- we'll talk about this probably in a little bit, but what is it that we need to do to prove to the market that we are -- we have the great assets that we have. So Walter, do you have any other comments on that?

No, I think that if you go back to that original criteria, we were looking for something that was going to be credit accretive that was going to give us scale. We clearly think that we achieved a couple of those and kind of took them off the list. And putting ourselves in a position, Pierce mentioned that we had spent a lot of capital growing the business originally. When we got to about a $4 billion mark in a 10-year period, we went from $1.4 billion of EBITDA in about an 8-year period to $4 billion. And then we saw that we really needed to do some things to reposition the business for the next couple of decades to get ourselves back in a position where we would have an asset base that we could expand and extend. So we did the acquisitions that we've done. Now you look at some of the projects that have come off of that, like the Denver expansion of the refined products pipeline to feed the Denver International Airport. That's a perfect example of taking the new assets that we acquired and using our model of extend and expand into a new market and continuing to grow those assets off of an existing footprint.

And Pierce, I think you mentioned kind of convincing the market of the strategy of the acquisitions. What do you think the market is misunderstanding or underappreciating about the ONEOK story these days?

I think it's just how to model the business that has done 5 acquisitions in 2 years. I think that's the biggest thing because we have gotten very predictable. We still actually are predictable. It's just that once we go through -- we don't give quarterly guidance. We gave an annual guidance. And when you look at kind of what we printed in the first quarter multiplied by 4, you come up short of what our guidance was for 2025. So I think there was some skepticism there. And as we went into the second quarter, we proved that, yes, second quarter is better than first quarter. We're about to print our third quarter numbers. You'll see what those are here shortly. So I think it's just a matter of proving to people here's what these assets can do together and seeing the different profile that these assets have together over a year and understanding what is it that changes from quarter-to-quarter that makes these earnings go up. And I think once we get through another couple of quarters here, I think a lot of that -- it's going to be well understood.

So with that backdrop, any commentary on how volumes have been tracking in some of your key basins relative to expectations through the summer months?

Yes. I mean, obviously, we always see an uptick in volumes through the summer months. We've kind of said for a period of time that the -- we get winter. I tell everybody, we get winter every year in the Bakken. So volumes do come off in the Bakken in the winter and it sometimes takes a little bit to come back on. Had a little bit winter weather earlier this year. And so our volumes are ramping to a level that we are getting back to where we thought they could get close to at this time of the year, a little bit delayed. There has been a little bit of dampening of volume on some of the producers, but we're still growing, still look to continue to grow into the future as we point in the Bakken. The one that's really been kind of a surprise to us here, not just this year, but the last couple of years has been the Mid-Continent. There's a Cherokee formation over on the western edge of the state that there's 4 or 5 different producers out there that have really been leaning into that and been growing that area out there that has actually -- for a long period of time, I thought the Mid-Continent would be kind of flattish standpoint. But now we are actually seeing growth from that area as we continue to go forward out there. And then the Permian is growing. We continue to grow in the Permian, continue to see those volumes come up, continue to hook up [ CDPs, ] continue to see the growth out of acreage that's been dedicated to us on the EnLink volume that continues to come on. So on the G&P side, all areas we're seeing growth even though admittedly a little bit tempered down from what we thought it would be when we had $75 crude oil versus $65 crude oil we're seeing today, but we still see good growth on that. And the NGLs kind of reflect that as well as we continue the we still continue growth across that. Our growth out of the Bakken has been a little bit more better than it has been good this year versus the G&P, and that's because of our discretionary ethane. We've seen a bigger opportunity this year to bring more ethane out at wider spreads than we have in the past. So we've been be able to put a lot more ethane. So you get a little bit of uptick on that side of it as we continue to go forward. So overall, I think we're sitting in a very good spot heading into the back half of this year.

A little more color on the Bakken as it relates to winter. There's 2 factors up there. One is, a, it gets cold, everybody knows that, right? But a producer will turn on what's called a heater treater during the coldest part of the winter to keep the oil flowing, which is where they -- most of their economics come from. Well, that actually takes away because they'll take that off the tailgate of where they're producing from and actually use that in a heater treater. So it actually turns our volume down about 10%. The other pieces are what is the severity of the winter events that you have. So the cold weather actually is not -- it doesn't move the needle as far as shutting in volumes or whatever, but a severe wind storm, ice storm, 4-foot snows that cover the road so that the producers can't get in there to service their wells. Those are the things -- those are the 2 main factors that happen in the Bakken.

Sheridan, any comments across your geographies on your expectations for 2026, understanding that producers haven't fully finalized their plans. Just assuming oil prices stay around where they are in kind of these mid-60 levels.

Yes. Where we see now in the producer activity in our -- in each one of our areas, we see -- in the Bakken, we see modest growth out there. On the gas side of it, there's enough activity to keep that going forward. Obviously, the producers, as you said, are in their budgeting time frame. Due to the quality of producers we have in that area, we really don't see them making a material change in what's going on in the Bakken. So we'll see -- we're really expecting to see some modest growth going into 2026. We talked about in the Mid-Continent. As I said, we're very pleased on that side. The one thing I always think about the Mid-Continent is almost like an option that we have on gas prices. We continue to see more LNG come online, if we see any more uptick in gas prices, you could see some people in the Mid-Continent. I talked about the Cherokee but in the SCOOP and STACK come in and go to more of the gas part of that play, which still is pretty NGL-rich going forward. The Permian is -- continues to be the Permian. I mean there's some people talking about there may be a little bit of slowdown on rigs in there, but we are seeing producers being much more efficient, drilling longer laterals, being able to get more out with less, and we still continue to see pretty good growth coming out of the Permian going forward. Overall, we see crude oil being fairly flattish, around 13 million a day out of the United States. But you still have to -- even to maintain 13 million, you're going to have to drill. You're going to drill in different areas. And so we think the Permian is going to continue to grow at the detriment of some other areas and we'll be able to keep up with their declines. People won't drill as much as there, but we definitely think that Permian is going to be one that's going to take up a lot of the slack on the oil side, which will mean much greater gas coming out of the Permian.

So with the volume growth you expect, so the company has a target of mid- to upper single-digit growth in 2026 EBITDA. Can you walk through what is the basis for that? Volume growth sounds like you're expecting modest volume growth kind of across the system. How important are some of the capital projects that you're bringing on? And then how meaningful are some of the remaining integration-related synergies to your '26 growth?

Sure. Well, it is kind of a different story this year than it has been historically over the previous years where it was very volumetric driven by producer activity. Clearly, we are 90% volume times rate based on a fee. So that's our key business. But we've got a number of projects, some of them synergy related that are being completed right now and will be completed as we go into the balance of the year or in 2026. Each of those kind of gives us an incremental stair step up. And a couple of examples. When we bought Magellan, we needed to connect our Mont Belvieu facility to the 3 distribution centers in East Houston. We were going to build a pipeline to do that. That was going to take us about 3.5 years. We had the opportunity to buy Easton. We bought Easton, but we still had to connect that to the other -- to all those entities. We're just now completing that kind of as we speak, and that now enables us to get that next wave of synergies out of the Magellan acquisition. And what it really is doing is it's providing us the opportunity to provide blend stock to not only our own assets, but to the customer assets at these various terminals out of our system. Up until this point of 2025, that opportunity didn't exist. So we now see that kicking in, and it will go forward and through '26 and beyond. We were doing a very similar thing where we connected our Conway frac facility to Kansas City, Tulsa and Cushing to enable us to vastly reduce the logistics of blending around the Magellan system in the Mid-Continent. That's going to be completed here in the fourth quarter. So we'll see that full benefit going into 2026. In 2026, we're going to complete the Denver project, where we're expanding the refined products line out to the Denver Airport. That's a fully backed project. There's enormous growth at DIA. And so that's been driven by jet fuel, but gives us an opportunity to serve all products because we can batch up that line. So that kicks in, in '26 as well. And then there are a number of smaller projects that we haven't even been out public with, but that are basically just taking either pinch points away or making connections. Another good example would be Medallion as we continue to make the connections to get Medallion volumes on to our long-haul crude pipes. We start to see that continue to fall in. So those are the incremental stair steps. We're still going to see nice volume growth across our system. And typically, in previous years, that would be what really kind of drove growth. But here, we've got some stair steps that they're going to take us up.

I guess what would you say are the key risks to executing on that 2026 growth outlook and your level of confidence in it right now?

Well, I think that everything I just described is completely in our control. So I don't think there's a whole lot of risk. Most of it's in the later stages of completion from a construction standpoint. So I really don't see that as an issue. Clearly, with crude in the low 60s, we're going to need to see what producer activity is across all basins. To the extent that, that slows a little bit, that could have a volumetric impact that could slow the growth. We do think we're going to continue to get growth in each of these basins, potentially maybe not at the rate that we thought it was going to be. So that to me is probably the biggest risk. But I think it's important to note that in '16 and in '20, when crude broke down into the 20s and in 2020, it went down to negative and came back up. When we were coming back up through the 40s, you would hear producers say, if we could only get to the 60s, we will coin money. Well, they got a taste of 75, 80, and that felt real good for all of us. I mean we all enjoyed that. My sense is that if we stay here in the 60s, that will go back to being the norm and they can make good money in the 60s, and they'll continue to press on. We have the benefit of having kind of the who's who of customers. Most of the majors or the large independents that are going to continue to drill through cycles. They want to maintain their crews. They want to continue to produce. So we don't expect them to really back off in this environment.

Any questions in the audience at all? Okay. I wanted to ask on the Sunbelt Connector project, definitely an interesting one that I think people probably weren't expecting. Big refined products pipeline that would run from El Paso, Texas to Phoenix. Just what you're seeing there as far as the opportunity level of customer demand at potential cost and returns for a project like that?

So really, when we think about the Sunbelt Connector, what we're seeing is that today, Phoenix is a growing market. It's growing from population, which is driving unleaded demand growth. And we're also seeing it growing from jet fuel as they expand their airport out there. Right now, Phoenix is fed by 2 pipelines. One pipeline is coming from El Paso into Phoenix, and that one is full. And the other one is coming out of California into Phoenix as well. And as we see rationalization of refineries in the California area, we see that more and more of that refined products is going to want to stay in California. I say we and that's a lot of the people we're talking to share this point of view on going forward. So we see an opportunity to be able to a line into Phoenix and be able to bring in not only refined products from the Gulf Coast through our system, but also from completely in the upper Midwest as well. And we've had people talk to us about being able to put on the system. So -- and definitely with the administration that we have in there right now, we think we have a unique opportunity to be able to get a pipeline like this in. And we saw enough interest as we talk to different people and done all the scoping and everything else to go out and do a binding open season. So we have a 2-month open season that we're talking to people and getting commitments and what that's going to be. On the cost and return is what we have is we've looked at under many different scenarios of how much people would sign up for. And depending on what they sign up for is going to drive what the capital cost can be. So we have some different scenarios where -- depending on where it is, larger or smaller, what capital we can put in there to go ahead and get this pipeline in, either put into a case where we could ramp up to it or put some optionality into it or upsize it a little bit in the beginning. So we really need to see what comes back from our customers and how much they're willing to sign up. We'll really tell you how what the capital is going to be on that. It will be -- we talk about, we think it will be a very nice return on this project. One is we will put a little bit bigger pipe in the ground. We've already said we're going to put a 24-inch line from El Paso to Phoenix. And that -- what we don't need, we've not seen the demand from our customers for a pipeline that big. One thing is if we get a lower level, we won't have to put any pump stations on that, so you won't have any power cost. It will be very easy to move it out there. But putting that bigger pipe in gives you the opportunity to expand it into the future. If you continue to see more rationalization in California or continue to see growth and you need more pipeline capacity and then we kind of see it as a onetime shot to be a pipeline in there. We want to be able to put additional pumps on there and to be able to expand the capacity. And if you do that as we've done on other pipelines, then the return on the project would be very, very nice.

And what's the time line and permitting look like on a project like this? I think we all know what a gas pipeline project would look like, but what does it look like on...

So on the liquids side, you don't have to go through the FERC process. You still have to go through the EPA and the Corps of Engineers and typical process they have to go through on any pipeline. But what we are seeing at this time is on some of our other projects that we are doing, whether or not that be the Denver expansion or our Texas City export dock is that we are getting permits a lot quicker than we were in the past. And so that time frame is really being shrunk down. So right now, we think it's under 2 years to get permitted.

Okay. And then about a year or 2 construction?

Right.

On CapEx, so it's a little -- I mean the company is $3 billion of CapEx this year, growth CapEx. What's interesting about ONEOK is you're actually still kind of like free cash neutral-ish at $3 billion of growth CapEx, whereas a lot of your peers are free cash negative in the current spending levels. How are you thinking about CapEx over the next few years for the company? Are you looking to really grow faster and potentially keep up $3 billion or higher of CapEx? Or is this going to turn into more of a free cash flow and capital return type of story?

Yes. No, we won't continue at that $3 billion. Next year, just given the carryover of the projects that we have, we'll likely be close to around where we are this year. But as you move into '27, '28, '29, we're going to see that tail down. Clearly, the Sunbelt Connector, if it was to come on as a large project, -- but we think that if we move forward with it because we get the appropriate contracting, we'll likely have a partner in that or we'll utilize project financing. So we won't take that fully on our balance sheet as we have in the past with some of the pipes. So I would expect to see a meaningful step down in CapEx as you get out to '27, '28. And that actually is interesting because it comes in at the same time that the new Big Beautiful Bill is going to give us the tax savings. We're going to have about $1.5 billion of incremental cash flow from tax savings because we're going to be able to utilize 100% bonus depreciation, which will move us out to not being -- we'll still be at that kind of no tax rate type of environment through '28, and we'll start to go up to the AMT in '29, which is 2 years later than we thought it would be.

So on the balance sheet, I think your target is to get to the 3.5x debt-to-EBITDA by the end of next year. So not quite there, but with clear visibility to get there. How do you think about stock buybacks right now? Because the stock valuation, in my view anyway, has gotten very attractive at this point, but you're still a little bit above the leverage threshold of where you want to be. So how are you weighing that? And how much flexibility do you have for buybacks?

Yes. Well, we clearly -- we're focused on getting that leverage down. We've cash called, I think, 4 of the last 6 bonds that have come due. And as we get more visibility, clearly, we -- our flexibility around stock buybacks increases. We are in a position where Moody's wants us to be at 4x for mid-BBB or Baa2. S&P wants us to be at 3.75. So our target is actually more conservative than the agencies. So as we get to that 3.6 -- and that's a 3.6 run rate at the end of next year. As we get visibility of that, we do have some flexibility. If we were to delay that ourselves because of some actions we took and still kind of got through the rating agencies benchmarks, we'd be fine. So I don't think anything that we would do necessarily change the trajectory of that reducing credit metrics. So our flexibility is increasing.

I wanted to ask about ethane and the market overall because the one thing that strikes me, you have still a fair amount of unrecovered ethane in some of your regions that you could benefit from. And it feels like we're getting a step change with some of the export projects just in terms of ethane demand in the U.S. If you look at EPD's Neches River project, Energy Transfer Flexport, it's a pretty meaningful step-up in total ethane demand in the country. How do you think that plays out in your regions as far as ethane recovery over the next few years? Are you expecting to have more opportunity to recover more ethane and ship it down to the market?

Yes. I definitely think there's going to be an opportunity. I think it's really going to come into the Mid-Continent range is where it is. We've always said that we think the Permian is always going to be an ethane recovery. The Bakken is always going to be an ethane rejection unless we decide to bring some ethane out on our integrated system. And so really, the Mid-Continent, we've always said it's going to be in and out of that. So the thing you have going is they bring those projects on, they're going to increase demand, that's going to increase the price of ethane spread it out. We should be able to give a little bit more in, you got to balance that with is how much more growth is going to come out of the Permian. The Permian grows more, that's going to bring more ethane on, so there's a balancing effect in there that's going to happen to support. But overall, you're right, it's very positive for us on the ethane that we're not extracting today at full rates and that's going to happen in Mid-Continent.

Would you ever consider ethane export projects yourself? From what I understand, the international demand is pretty high, but it seems like your path to exports has been to do it in a more brownfield way? How are you thinking about ethane exports?

So one thing we've looked at ethane exports for a period of time, just like we looked at LPG exports for a period of time. One thing we found out is that on the ethane exports, any export is beneficial to us. This as you said, because it increases the price of ethane increase the pull of ethane. If that pulls that out of the natural gas stream, we're going to get the pull-through effect on our system. So it doesn't necessarily have to be our ethane exports. The thing that has got us a little bit is just the period of time we were looking at it, most of these ethane exports are going to China. And that's something that becomes a little bit more difficult to wrap your hands around, which is much different than in LPG exports where we want to make sure our product moves across the thing. You don't -- when you're dealing with propane, propane has to come out of the gas, ethane, we at least have the toggle that you can't find a home for ethane on the NGL side, you put it into the natural gas -- we do have a way to clear the product. But we're very supportive of the 2 ethane projects coming on, and we think it will have a positive effect to us just how much, we'll wait to see.

The one thing I've been thinking about more just with, I mean, the LNG market right now and all these projects getting sanctioned, it's almost becoming a little overwhelming the amount of gas demand we're going to see from all the LNG, especially if it runs at full utilization in the early 2030s. How is the company positioned to benefit from this, whether it's the Louisiana gas system or even maybe a little more far out kind of concept of some of these basins like the gas areas of the Mid-Continent or the Barnett, are we going to see a call on some of those areas where your infrastructure might see greater utilization because of all the gas demand on the Gulf Coast?

Yes. Definitely, as you think about Louisiana, Louisiana, we are tied into some of the LNG down there today. We kind of see ourselves as the last mile in that area, and we do see some of the new projects coming online will be in Louisiana. So we're already taking advantage of that and growing on that side of it, not only for the LNG demand, but we're also seeing it for industrial demand around the river corridor. So we're very excited about Louisiana and that was one area when we bought EnLink, we didn't put a whole lot of money and -- a whole lot of value on the Louisiana natural gas assets, and that's been a really big surprise for us as we've got in there, we've really seen some opportunities to be -- we see that as a demand pull. Louisiana is a demand pull to us on our system on the LNG. But we didn't -- when you think about it, all that demand coming online, another 10 Bcf coming online is going to have an effect on the natural gas price as it comes up. And we think in the Mid-Continent, we've always had an -- I always thought of it as we have an option on natural gas. If the natural price gets up, you're going to see more people want to move into the gassier part of the SCOOP and the STACK more in the central part of the state and to produce that higher gas value because you can get some pretty big gas wells coming out of that, that still are pretty rich in NGLs. So we definitely think as this keeps coming online, you'll see be more pull out of the Mid-Continent as well. And then definitely, the Permian is going to have to carry the load on a lot of this coming out, see more demand -- more as prices rise, you're going to see more drilling into the Delaware. Delaware is a much more gassier area. Wells come on with a lot more gas, more of the return comes on the gas side. So we actually see there will be more coming out of the Permian, definitely in the Delaware. So we think that LNG is going to have an impact on the system as we continue to look out as these 10 Bcf of projects come online.

You announced that you get some dry gas drilling too...

Yes. I do think you'll get some dry gas drilling. I think Haynesville could be very much very close to Louisiana, and that's where our Louisiana natural gas assets could fit very well with that coming out of the Haynesville. And then as you know, those wells come on very -- can come on very strong, but have a pretty good decline on them as well. So it's kind of -- I think it's going to take all of them, but I definitely think Permian is probably going to take the bigger share of all that, but you will see coming out of that. The area that's going to be interesting is you see anything coming out of the Appalachia, can they get any more gas takeaway out of there? That's always been a struggle to get that happen. That would be the most logical place, big gas reserves out there. It just has not happened from a regulatory standpoint to be able to get something to come down there. But you will see -- that's why I think Oklahoma is interesting because you're going to get more gas here on the gassier side, you still get some of the liquids out and you still get some oil, but you get a lot more gas. That's why we really like that option, that option on the Mid-Continent.

The only thing I'd add about the Haynesville is if you look at how it's been in the past when we basically went from 0 LNG exports in 2016 to where we are today in, say, 2024, which was, I think, last year, maybe 12 Bcf or something like that a day, you had plenty of gas to put into those LNG exports. And what would happen is if the price of gas would rise, then rigs would go into the basin. And you could track it. You could see how the rigs were directly corresponding to the gas price. Gas price fell, rigs go down. But I think with this demand of that 10 Bcf a day, I do think it's going to take and have a little more consistency in the Haynesville area. Now what happens once you fill up another 10 Bcf, now maybe there's even more because there's more LNG facilities that have not been FID-ed yet, primarily in the Louisiana area. So we'll see what happens between 2030 and 2040. But I can see some positive news for natural gas in the last 5 years.

Are you guys looking at any gas storage investments on your system to help...

We actually have 2. One is called [ JISH, ] Jefferson Island. We're actually recompleting and doing an expansion project out there. Right now, we have a 2 Bcf a day gas storage field out there in Salt Dome, which, frankly, as far as gas storage goes, not that big, but we're expanding that to 8, we can continue to expand that even more. We have a second Salt dome area where we can expand just as high as the [indiscernible]. So we could have a significant amount of storage out there. We do think that's going to be necessary just because when you're flowing that much gas, you have maintenance interruptions and you need somewhere to put it, and it's going to be valuable to do that. Now it's not like traditional storage is mainly in the rest of part of the United States, which is primarily driven by utilities and especially natural gas distribution utilities where they take up the space. They put basically gas in there ratably every single month, and then they take it out during the winter because they have to have it because they have to have the additional volume to meet those peak demand. So you're not necessarily going to have all that peak demand stuff down there because of weather, but you can have it because of maintenance. And we'll see how that turns out. But we got 2 really nice locations down there that we're really -- we're excited about. We'll see what happens...

That's where our growth is. We have other storage facilities throughout Texas and Oklahoma. So we're very familiar with the natural gas storage. And we've expanded those -- after Winter Storm Uri, we got a big uplift on those, and we expanded those out to their max capability as well. So storage -- natural gas storage has been a good tailwind for us for a period of time.

Any other questions from the audience? Okay. I'm going to wrap up just on NGL competition. So you had one competitor -- you had one competitor proposed a project, but we haven't really heard too much. How -- I guess, at a high level, how competitive do you think alternative options can be with the ONEOK system, which is very established on bringing NGLs from the Bakken to market? And how impactful do you see competition being to your business in the Bakken?

So what I'd say when we think about the Double H pipeline coming out of the Bakken is that you got to go look at the competitive landscape in the Bakken. And right now, our G&P has about a 60% market share in the Bakken. That -- those NGLs are not going to go anywhere except we're on to a ONEOK NGL pipeline. That's continuing to be recontracted that. So you're really talking about competition on 40% of the basin. A lot of those gas plants out there today are contracted to us for a long period of time. The one gas plant is coming up next year is the Kinder Morgan plant. They had a pipeline that was -- that DAPL was taking over crude oil open pipeline. So they're bringing 18,000 barrels a day down that pipeline starting next year. So we will lose that. That's competition. But that volume is going to go into a P66 line that only has a 6-inch pipeline, only has about 20,000 barrels a day. So we think that's very much going to limit the competition on that pipeline. So obviously, as our contracts on certain ones come up, will we have some competition out there? Possible. Could be out there. We'll have to see what goes as we continue to go forward. But what I'd say, we've done a very good job with a lot of our customers as they come up and need things, we're going to be extending term on that. We typically never let a contract completely come to the end, unless we have something like this one with Kinder Morgan where they had another alternative that they were trying to use on that. So I don't think it's going to -- besides we will lose this 18,000. Could it have a little bit of impact us? Possibly, but I don't think it's going to be a major impact on our system up there. We are very integrated with two highly -- systems that work very well together and a lot of producers see the benefit of being tying into one customer that can take you all the way to the bottom instead of going to Kinder Morgan P66 and somebody else to frac it.

Great. Thank you very much, Pierce, Sheridan and Walter. Appreciate it.

Thank you. Appreciate it.