Business Strategy and Outlook| Stephen Ellis |
We like MPLX's portfolio of refining and Appalachia-based gathering and processing assets, given the propensity for fee-for-capacity and minimum volume commitment contracts, which present a highly secure stream of income over the long run. Further, MPLX still has plenty of opportunities to unlock in its newly enlarged portfolio of assets following drop-downs from its parent and the Andeavor Logistics deal, which has taken the partnership to $5.7 billion in expected 2022 EBITDA compared with just over $550 million in 2015. Already, it has sliced billions in spending from the portfolio as 2022 growth capital spending is just $700 million from the $2.6 billion initially announced at the time of the merger, demonstrating commendable focus on unitholder returns. We expect MPLX to generate over $750 million in excess cash flow after capital spending and distributions in 2022. The management team has prioritized unit buybacks; 2021 buybacks totaled $630 million with another $135 million in 2022 and $1.2 billion in capacity available.