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What’s Driving the Jump in MPLX LP’s Capital Spending?

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MPLX LP’s capital expenditure

MPLX LP (MPLX) expects its 2018 capital expenditure to be ~$2.4 billion, which represents a 47.0% increase compared to the previous year. This is still significantly higher than the five-year average. The huge jump is mainly due to recent dropdowns from MPLX LP’s sponsor, Marathon Petroleum Corporation (MPC).

MPLX

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Where would MPLX spend?

MPLX is focused on the expansion of its gathering and processing expansion infrastructure in 2018. Its 2018 growth plans include eight processing plants and 100,000 bpd (barrels per day) of additional fractionation capacity in the Northeast region and the Permian Basin.

The partnership is expected to focus on the expansion of its crude oil pipeline infrastructure, which includes the Ozark and Wood River–to–Patoka pipeline systems.

How MPLX plans to fund 2018 capex

Similar to other big midstream companies, MPLX expects to fund its capex from internally generated cash flow in 2018 and debt. It doesn’t expect to raise money from equity markets.

In the final article in this series, we’ll look into MPLX LP’s distribution plans for 2018.

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