Higher Volumes, Acquired Assets Drove MPLX’s 3Q17 Earnings Growth



MPLX’s Gathering and Processing segment

MPLX’s (MPLX) Gathering and Processing segment contributed 62% of MPLX’s 3Q17 operating income. The segment’s operating income rose 19% over 3Q16 and 12% over 2Q17.

The segment’s Northeast processing capacity has increased to ~5.8 Bcfpd (billion cubic feet per day), an increase of 7% since the start of 2017. MPLX expects to add ~1.5 Bcfpd of processing capacity in 2018—an increase of 19%.

MPLX’s gathering volumes in the Marcellus and Utica shales rose 25% year-over-year in 3Q17. Its processing volumes in these plays increased 15% year-over-year in 3Q17 while fractionation volumes rose 16%.

Higher gathering, processing, and fractionating volumes, as well as increased product margins, contributed to the segment’s income growth in 3Q17.

The chart above shows MPLX’s segmental operating income over the last three years.

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MPLX’s Logistics and Storage segment

MPLX’s Logistics and Storage segment’s operating income grew 72% in 3Q17 over 3Q16. The segment increased 2% over 2Q17. This increase was primarily driven by newly acquired assets, including MPLX Terminals and Hardin Street Transportation. The increase also encompassed the Woodhaven Cavern businesses acquired from Marathon Petroleum (MPC) and the acquisition of the Ozark pipeline.

The segment also benefited from the first full quarter of earnings from its indirect interest in Energy Transfer Partners’ (ETP) Bakken Pipeline system, which includes the Dakota Access Pipeline.

MPLX also benefited from its recently acquired Ozark pipeline. MPLX is working on expanding the pipeline’s capacity, and the project is expected to be completed in 2018.

In the final part of this series, we’ll see what Wall Street analysts currently recommend for MPLX.


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