Good day, and thank you for standing by. Welcome to the Targa Resources Corp. Q3 2023 earnings conference and presentation. At this time, all participants are in the listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Sanjay Lad, Vice President of Finance and Investor Relations. Please go ahead. Thanks, Brittany. Good morning, and welcome to the Q3 2023 earnings call for Targa Resources Corp. Q3 earnings release, along with the Q3 earnings supplement presentation for Targa Resources that accompany our call, are available on our website at targaresources.com in the Investors section. In addition, an updated investor presentation has been posted to our website. Statements made during this call that might include Targa Resources expectations or predictions should be considered forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Actual results could differ materially from those projected in forward-looking statements. For a discussion of factors that could cause actual results to differ, please refer to our latest SEC filings. Our speakers for the call today will be Matt Meloy, Chief Executive Officer, and Jen Kneale, Chief Financial Officer. Additionally, the following senior management team members will be available for the Q&A session: Pat McDonie, President, Gathering and Processing, Scott Pryor, President, Logistics and Transportation, and Bobby Muraro, Chief Commercial Officer. With that, I'll now turn the call over to Matt. Thanks, Sanjay, and good morning. We are very proud of the efforts of our employees across the Q3. While battling an extended stretch of hot weather, we continued to operate at a high level, demonstrated by record NGL pipeline transportation volumes, 6% higher sequential adjusted EBITDA, and completion of our expansion at our LPG export facility in Galena Park, increasing our propane loading capacity by an incremental 1 million barrels per month. We also continued to return an increasing amount of capital to our shareholders in the quarter with $132 million of common share repurchases. Since the end of the Q3, positive momentum continues across our organization, highlighted by: Commencement of operations of our new Greenwood Plant in Permian Midland ahead of schedule and on budget. The expected rebound in our Permian volumes, with current reported inlet about 150 million cubic feet per day higher than our Q3 average. Publishing our annual sustainability report, demonstrating our continued progress across ESG pillars as an operator of critical natural gas and NGL infrastructure. Receiving a 2-notch upgrade in our ESG rating from MSCI to AA. The announcement today that we expect to recommend to our board an increase to the 2024 annual common dividend to $3 per share, a 50% increase over the 2023 dividend level. The strength of our operational and financial outlook has resulted in consistent questions from investors and potential investors around how Targa will return additional capital to shareholders going forward, which is why we wanted to provide some clarity today around our expectations for our 2024 common dividend and our current thoughts around our return of capital framework. We believe that we offer a unique value proposition for investors, given the strength of our outlook for annual increases in adjusted EBITDA, reflective of an excellent integrated asset footprint that will continue to provide high return organic investment opportunities, increasing fee-based margin and cash flow stability from our continued progress around fee floor contracts in our G&P business, a strong credit and ESG ratings profile demonstrating our commitment to a stable balance sheet and sustainable operations, continued opportunistic share repurchases, further reducing our share count, a competitive common dividend with an expectation of meaningful best-in-class annual growth looking forward, and an outlook of significantly increasing free cash flow as some of our large fractionation and NGL transportation projects come online in 2024 and early 2025. Our return of capital strategy is informed by a lot of internal and external information, including leverage and balance sheet flexibility, along with our positioning relative to our midstream peers, S&P Energy, and broader S&P 500. Across our base scenarios, we are modeling the ability to return 40%-50% of adjusted cash flow from operations to equity holders. This is not a target or bright line as we place a high priority on flexibility, but it is a framework that we believe can be helpful in thinking through our return of capital, our return of capital proposition going forward. Let's now discuss our operations in more detail. Starting in the Permian, high activity levels continue across our dedicated acreage, despite lower than expected Q3 volumes, largely driven by the extended periods of heat across New Mexico and Texas. We also had about 200 million cubic feet per day of lower margin, high-pressure volumes move off our system in the Delaware Basin. Our Permian Midland volumes increased 2% sequentially and were offset by reduced Permian Delaware volumes, resulting in flat Permian inlet volumes. Through the first three quarters of this year, average reported inlet volumes across our system have increased over 300 million cubic feet per day in comparison to average Q4, 2022. Our Permian volumes are currently operating at about 150 million cubic feet per day higher than our Q3 average, as the growth we expected to see a bit earlier in the year is now materializing in the Q4. In Permian Midland, our new 275 million a day Greenwood Plant commenced operations in October and is quickly ramping up. A big thank you to our engineering and operations teams for bringing Greenwood online safely ahead of schedule and on budget, despite challenging operating conditions this past summer. Our next plant in the Midland, Greenwood II, remains on track to begin operations in the Q4 of 2024 and is expected to be much needed when it comes online. In Permian Delaware, activity and volumes across our footprint are also running strong. Our Wildcat II and Roadrunner II plants remain on track to begin operations in the Q1 and Q2 of 2024, respectively, and both plants are expected to be much needed at startup. In our Central region and the Badlands, our combined natural gas volumes increased 2% sequentially, and our systems are performing well. Shifting to our logistics and transportation segment, Targa's NGL pipeline transportation volumes were a record 660,000 barrels per day, and fractionation volumes remained strong, averaging 793,000 barrels per day during the Q3. Our Grand Prix NGL Pipeline deliveries into Mont Belvieu increased 6% sequentially as we benefited from higher third-party supply volumes. Our fractionation complex in Mont Belvieu continues to operate near capacity. The restart of GCF will provide much-needed capacity when it is fully restarted late in the Q1 of 2024, and we continue to expect our Train 9 fractionator to be highly utilized when it commences operations during the Q2 of 2024. Our Train 10 fractionator is also expected to be much needed, given the anticipated growth in our G&P business and corresponding plant additions, and remains on track for the Q1 of 2025. In our LPG export business at Galena Park, our loadings increased 15% sequentially due to improved market conditions. We loaded an average of 10.7 million barrels per month of LPGs during the Q3, even though our loading capability was reduced for part of the quarter due to a previously disclosed required 10-year inspection. Our low-cost expansion project to increase our propane loading capabilities by an incremental 1 million barrels per month of capacity, was completed at the end of the Q3, and we expect our loadings to ramp during the Q4, providing strong momentum for 2024. We are excited about the long-term outlook at Targa and remain focused on continuing to execute on our strategic priorities. Before I turn the call over to Jen to discuss our Q3 results in more detail, I would like to extend a thank you to the Targa team for their continued focus on safety and execution, while continuing to provide best-in-class service and reliability to our customers. Thanks, Matt. Good morning, everyone. Targa's reported quarterly Adjusted EBITDA for the Q3 was $840 million, a 6% increase over the Q2. Sequential increase was attributable to higher system volumes across our integrated NGL businesses, higher commodity prices, partially offset by higher operating and G&A expenses. With three quarters of the year completed, we are tracking towards the lower end of our 2023 Adjusted EBITDA range of $3.5 billion-$3.7 billion, but believe that our performance, through a lower commodity price environment and a tough operating environment relative to our guidance assumptions, is reflective of the significant progress that we have made adding fee floors to our G&P business, our successful hedging program, and the resiliency of our operations. For a good part of this year, we have benefited from margin associated with fee floor contracts as natural gas and NGL prices were below fee floor levels. We believe that 2023 provides an example of the financial durability of our business in a lower commodity price environment and the benefits of the fee floor structure, where we retain upside if commodity prices move higher. We are well hedged across all commodities for the balance of the year and continue to add hedges for 2024 and beyond. Through three quarters, we have spent approximately $1.6 billion on growth capital projects, and our current estimates for balance of year spending lead us towards the higher end of our $2 billion-$2.2 billion range. Our net maintenance capital spending is tracking a little bit higher than initial expectations, and our current estimate for 2023 is approximately $200 million. At the end of the Q3, we had $1.8 billion of available liquidity, and our pro forma net leverage ratio is approximately 3.7 x, well within our long-term leverage ratio target range of 3x-4x. Shifting to capital allocation, our priorities remain the same, which are to maintain a strong investment-grade balance sheet, to continue to invest in high-returning integrated projects, and to return an increasing amount of capital to our shareholders across cycles. Our major projects in progress are core to our business. Four new Permian gas processing plants, Train 9 and Train 10 fractionators, and our Daytona NGL Pipeline. While we continue to project 2024 growth capital spend to approximate spending levels similar to 2023, spending in 2025 is expected to be meaningfully lower as we will have completed the lumpier expansions in our downstream business. As Matt described, underpinned by the strength of our business outlook for 2024 and beyond, we plan to recommend to our board a 50% increase to the 2024 annual common dividend to $3 per share, and we expect to be able to grow the annual common dividend meaningfully thereafter. We also expect to remain in position to continue to execute opportunistically under our common share repurchase program. During the Q3, we repurchased $132 million of common shares at a weighted average price of $83.38, and have repurchased $333 million year-to-date through September. We had about $811 million remaining under our $1 billion share repurchase program at the end of the Q3. We remain excited about the long-term outlook at Targa. Our talented team continues to execute on our strategic priorities and safely operate our assets to deliver the energy that enhances our everyday lives. With that, I will turn the call back over to Sanjay. Thanks, Jen. For the Q&A session, we kindly ask that you limit to one question and one follow-up, and reenter the lineup if you have additional questions. Brittany, would you please open the line for Q&A? Yes, thank you. At this time, we will conduct the Q&A session. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. All right. Our first question comes from the line of Theresa Chen with Barclays. Your line is now open. Good morning. Thank you for taking my questions. It's great to see a very strong dividend increase in your new capital return framework, really a capital accountability framework, if anything. Can you talk about your view of dividend growth within all this? How did you arrive at the 50% increase over 2023? Is there a yield you would like to achieve? And how do you generally plan to balance dividend growth with share repurchases within that new, fifty percent cash from ops framework, while maintaining a healthy balance sheet? Good morning, Theresa. This is Jen. As we said in our scripted remarks, the most consistent question that we've gotten from investors, and especially potential investors, is related to how we intend to return capital to our investors, and we believe that we've got a really strong story there when we think about where we are today and where we are going forward. Clearly, this morning, you can see that we've got significant conviction in the underlying strength of our business, as evidenced by our continued activity under our share repurchase program. Our return on capital strategy begins with numerous multiyear scenarios, and hopefully it's becoming more evident that increasing G&P fees and fee floors are really positioning us to be able to invest in the business to support the activities of our upstream producers, despite a lower Waha and NGL environment, which are meaningful to us, while also increasing our cash flow stability and resiliency across lower commodity price environments. So as we look out across multiple years, we've got the flexibility to return an increasing amount of our adjusted cash flow from operations to shareholders. And that's where we're saying that we think we're in position over multi years to return, call it 40%-50% of CFFO. It's not a bright line, as we certainly continue to balance and really prioritize balance sheet strength and flexibility, but I do think it's part of how we're thinking about the world, and it's important for us to provide a little bit more transparency around how Targa and our board of directors look at the dividend. Beyond that, we start to look at our peers, broader S&P energy and S&P 500, and how they're returning capital, and then Targa's relative positioning across all of that. All of that is really, at the end of the day, informing a return on capital strategy that we believe can maximize shareholder value. We've been very transparent since we instituted the program in October of 2020, that we want to have an opportunistic share repurchase program, and hopefully, we are demonstrating a track record of activity when given that opportunity. As we look forward and move through time, we'll have to see what the opportunities present themselves in the market, and that will ultimately balance the approach to dividends and repurchases. But I think this is an important indication that clearly we are in position to return more capital to shareholders and can do that through a stable and meaningfully growing dividend, and then also can continue to supplement that with opportunistic repurchases. It continues to be that all of the above approach that I think you're really seeing us execute on. Thank you. On the topic of the continued volume growth, just with the recent announcements of upstream consolidation in the Permian, especially the news related to your Midland JV partner and anchor shipper, what do you think this all means for Targa in terms of volume growth trajectory and the duration of the resource underlying your acreage? Yeah, sure. Hi, Theresa, this is Matt. You know, with the announcements we've seen recently, I'd say consistent with the previous announcements, we have really good relationships with the parties involved in those transactions. So whether you're talking about Exxon or Chevron or others, we have good relationships and really growing relationships with them. We handle a lot of their volumes today. And, you know, as we think about it, at least in the short term, we have contracts in place with all those parties mentioned. So those contracts are typically long-term contracts, so we'll just have to see how it plays out over time. We think the outlook for growth in the Permian Basin continues to be very strong. When you look at some of those parties mentioned, they have pretty robust growth outlooks. So I think over the longer term, I think we're optimistic on what it ultimately means for our underlying business, but we'll just have to kind of see how that plays out. I think it's gonna play out over time. Thank you. Okay, thank you. All right. Thank you so much. One moment for our next question, please. All right. Our next question comes from the line of Michael Blum with Wells Fargo. Your line is now open. Thank you. Good morning, everyone. I wanted to just ask about your views now on the trajectory of Permian volume growth. Just want to understand that the Q3, would you say these were just really temporary operational issues, or are you seeing any real material change in producer activity, which would drive a change in the slope of future growth? Yeah. Yeah. Hey, Michael. Yeah, good, good question. No, we're seeing strong growth from the Permian. So talking about Midland first and on Delaware. Really, the Midland volumes are tracking in line with our guidance that we gave at the beginning of the year. Continued strong growth. It's really on track, and we've seen that even ramp here in the Q4. So it really kind of comes into the Delaware. We did have 200 million a day kind of roll off in between Q2 and Q3 when you kind of look at the averages. Now, that was. We knew that was going to happen, so that was factored in to our, to our guidance. But that just does illustrate, we had underlying growth in the Q3, but just not quite enough to offset the 200 that was rolling off. We're seeing a lot of activity in the Delaware. We've got a lot of compression that we're adding. Frankly, it's coming in a little bit later than we had thought, than we were going to have it in place at the beginning of the year. We've got 200 million a day scheduled to come online between now and year-end. So it's just coming in a little bit later, but the volumes are there. We're frankly still a little bit behind and trying to catch up and be there to handle all the volumes. But the underlying outlook, I think we're very confident that Permian volumes are going to continue to grow, both on the Midland side and on the Delaware side, not just for Q4, but as you look out, 2024, 2025 and beyond. Great. No, that's perfect. And then that actually just ties into my second question, which is, as I'm sure you're aware, you and, and many others have announced NGL pipeline takeaway expansions, and so it's clearly getting pretty competitive. So just wondering, you know, how should you think about your contracted position in that market? You obviously had the 200 roll off this quarter. Is there any other major roll-offs to flag in the future? And just in general, how are you thinking about your contracted position? Specifically to the Grand Prix pipeline, Michael? Yeah. Okay. Yeah. This is Scott. Sorry, I just wanted to clarify. You know, when we look at the quarter, the Q3, we had some volume improvements that came across in the quarter. Those were predominantly our third-party volumes. Our upstream volumes, as Matt indicated, were relatively flat, on the quarter, but we continue to see volume growth, overall. As we look into 2024 and really in the Q4 and into 2024, we would expect those volumes to continue, both from our upstream growth as well as some third-party volumes that will roll on to us as contracts mature into their, into the beginning. You know, with Daytona Pipeline, coming online in the Q4 of next year, we feel very comfortable with the timing of that, relative to the volume growth that we will have. We've seen a number of announcements in the marketplace, obviously, of late, but the operating leverage that we get with Daytona coming online for our west leg, the operating leverage we have on our pipeline moving into Mont Belvieu, gives us a lot of runway. That runway will allow us to basically evaluate what it looks like with our volume growth, whether or not there's opportunities to move on other people's pipes as our volumes grow. We've got a lot of time to evaluate what that looks like over time. Great. Thank you. Okay, thanks, Michael. All right. Thank you so much. Please stand by for our next question. Our next question comes from the line of Brian Reynolds with UBS. Your line is now open. Good morning, Brian. We can't hear anything. I don't know if anyone else can. Hello, Mr. Reynolds? Okay, we will- Brittany, would you go ahead and move to the next? Yes, we will. Person in the Q&A, please. Absolutely. One moment for our next question. Okay, our next line comes from... I mean, I'm sorry. Our next question comes from the line of Spiro Dounis with Citi. Your line is now open. Thanks, operator. Morning, guys. Maybe just coming back to- Good morning. Good morning. Maybe just come back to NGL pipeline volumes quickly. As you guys know, they've hit record levels, this quarter. Third-party volumes are coming onto the system. There's still a lot of time before Daytona comes online, so I'm just curious, between now and Daytona, any chance you guys could be offloading volumes, or you feel like you're pretty secure on that front? Sure. This, this is Scott again. We feel comfortable. I would say that from time to time, where we've seen maintenance on the pipeline or managing the startup of our pump stations along Grand Prix on the west side as well as on the south side, we have, from time to time, taken the availability of industry capacity where necessary to offload. But with the startup of pump stations, those getting fully energized, that gives us a long runway going into 2024. We'll certainly evaluate what, what that looks like, but we feel comfortable that with the timing of the ramp up of the volumes, how we can facilitate offloads where it, where it may be necessary, that we'll look forward to Daytona coming online in the Q4 of next year. Yeah, and just to add to that, too, of the 660 that we moved, you know, barrels per day, most of that is from the Permian, but there's still a significant amount of that, that is coming in from the north leg, kind of from the North Texas, Oklahoma segment. We can move, call it, up to when all the pump stations get on 650-ish, maybe low 600s, in terms of barrels per day from the west leg. So we still have some running room between now, and when Daytona comes on. Okay. Got you. Thanks, Matt. That's helpful color. And then switching gears a bit to LPG exports, seems like a real bright spot once again with the, with the arb open. Just wondering if you could just give us a sense of what that looks like today for you guys. You're passing inspection now. You've got the new capacity online. I imagine that's going pretty well. Yeah, our volumes in the Q3 certainly benefited from increased demand and improved spot opportunities. We were very pleased with the quarter-to-quarter volume improvement that we saw, despite obviously having to work around the planned outage for required inspections and the completion of our export expansion project. Now, with that expansion project online, we are already seeing benefits of that, and we'd expect to see that in and through the Q4. So our volumes in the Q4, we would expect them to be equal to or better than what we saw in the Q3 as the arb opportunities have improved. You know, first and foremost, we're gonna make sure that we're performing for our term contracts and taking advantage of spot opportunities that we can squeeze into our lineup relative to the schedule as we optimize around the facility. We are still learning, quite frankly, what the full capabilities will be of this expansion, and we will continue to look for ways to optimize in and around that moving forward through the Q4 and into 2024. Helpful color. I'll leave it there. Thanks, team. Okay, thank you. Thank you so much. Please stand by for our next question. All right, our next question comes from the line of Keith Stanley with Wolfe Research. Your line is now open. Hi, good morning. First- Hey, good morning. Hey, Matt. Want to make sure any of the constraint issues you saw in Q3 expected to have a sustained impact going forward? Or do you view this as a one-time event, and we should see a good bounce back in Q4? I just want to make sure there's an expectation that, you know, this was kind of a one-time thing, and there's no lingering kind of issues that could pop up in future quarters. Yeah, and I guess, are you referring to the just volumes on the G&P side, on the Delaware, or? Yeah, that's right. Just G&P volumes- Okay what you referred to in the quarter. Yeah, I think part of it goes back to when we made the acquisition last year of of Lucid, there was a lot of growth on the system, and you know, we were immediately offloading a lot of volumes onto Targa, and frankly, it was just kind of behind out in the field, laying pipelines and getting compression, and it's about a year you know, wait time to get more compression. So we were, frankly, just a little bit more behind than we wanted to be, and those volumes are coming in a little bit later in the year. I don't want to make it sound like come 30 days, everything's fixed. We're adding a lot of compression, but we're going to be adding a lot of compression next year, too. So we are trying to handle and resolve the pressure issues that we're seeing out in the Delaware, out in the field. We're going to be adding a lot of compression, not only in this quarter, but next quarter and throughout next year. So, part of that was exacerbated because of the heat and operational issues and upsets that we had. So we're really trying to, you know, address and kind of get ahead of where the producers are going. So, yeah. So, Scott, anything you want to add to that? Well, I think, you know, we show the level of confidence in what we think our volume is going to be. We've got, you know, two plants under construction in the process of clearing a third plant site, and we're not building because, you know, we don't think the volume growth is there. Certainly, you know, through the producer discussions that we have and what we're seeing getting done, and as Matt alluded to, we're behind getting compression in place, et cetera. Some of the producers lag a few weeks, you know, there's equipment delays, et cetera. So I would look at the Q3 as an anomaly. Certainly, you know, when you walk into a winter, you don't know what weather expectations and what impact that has on production. I think the key answer there is the underlying business is solid, the activity levels are high, and we have a lot of confidence, as indicated by what we're investing in, in the Delaware for future volume growth. That, that's helpful. The second, just, just want to clarify that the capital return framework. So 40%-50% of operating cash flow to equity holders, which could be buybacks and, and dividends. It, it's it sounds like the frameworks effectively allows the company to meet its growth objectives and still keep you in that leverage target of 3x-4x, overall. I'm asking just because it seems it just feels like a pretty big step change. You have this 50% dividend hike, and 40%-50% would also imply a pretty big step-up in buybacks as well. So just want to make sure I'm understanding that right. ... Keith, this is Jen. I think what we're trying to do is just provide some visibility into some of the Targa-specific metrics that we look at. If you look at our LTM return of capital as a percent of cash flow from operations, here over the last 12 months, you'll see that we're lower than peers, lower than the S&P 500, lower than the S&P energy average. And so part of this is indicating we've had really strong total return performance and believe that we will have strong total return performance going forward, which is really based on the value proposition that we think we provide. Significant EBITDA growth, continued ability to return in high return, organic growth, capital projects, and because of that, and having a strong balance sheet, the ability to also return more capital to shareholders. So one of the big questions we get is, well, how much more, and what does that look like, and how are you thinking about it? And that's why we're really trying to articulate that this isn't a bright line and this isn't a, we must. It's really just instructive as we look out over our multiyear forecast across a number of different scenarios. That's one of the important elements or quantitative metrics that we are looking at. And I think as we think about a multiyear framework, so 2024, 2025, 2026, 2027, 2028, five-year planning horizon, we look across those multiple years and believe that it's reasonable to say that we will have the business that could support returning that much capital to shareholders. Ultimately, we've made one decision that we've announced today, which says this is our expectation, that we'll recommend a $3 dividend to our board for approval, effective the Q1 of 2024, and then we'll continue to evaluate. It is one of the important metrics that I think we are looking at to inform how we believe we can return capital over multiple years. Got it. Thank you. Thank you. Thank you. Thank you so much. One moment for our next question, please. All right, our next question comes from the line of Tristan Richardson with Scotiabank. Your line is now open. Hey, good morning, guys. So may have missed it in the prepared remarks, but can you talk about any updates you're seeing broadly in the market on the gas solution side? Maybe how that market has evolved since you first planted a flag with your potential solution, and then maybe any updates on commercial development of your specific project. Yeah, this is Bobby. So what I'd tell you is, the message around Apex and the effort on Apex, and residue solutions for the Permian Basin does not change for Targa. Our priority is to make sure that, solutions for the basin get built. You know, we've talked about a solution needed in the 26-ish timeframe, which is why we have been pushing Apex. And I say, why we have been pushing Apex. It's really been a group of, you know, investment-grade counterparties, shippers, and markets, that has driven the design of that. But what I'd tell you is, some of the changes which are positive, is, there I think are multiple options that have started to come to fruition, maybe be too strong of a word, but opportunities for other solutions. At the end of the day, Targa has one priority, and that's to make sure that the gas gets out of the basin. Whether it ends up being Apex or another pipe and whether we or they need our help to back another pipe or not, that's where we'll be, is to make sure that pipe gets built or Apex gets built or something gets built for the 2026 timeframe. Again, if Apex goes, it'll be because it's in a framework that works for us and works for the counterparties that are out there. But if Apex doesn't go, we stand ready to make sure another solution goes in 2026, and that the basin has that takeaway such that gas can continue to flow in our plants and NGLs down our integrated system. Appreciate that context, Bobby. And then, you know, I know we've just now gotten the export expansion online, but, you know, as we think about Daytona and third-party volumes coming into the frac, do you see the export market starting to tighten up? And then does your capacity today really allow for headroom, assuming a reasonable utilization at Daytona once we begin ramping on that asset, you know, late in 2024 and into 2025? Hey, Tristan, this is Scott. Yeah, I would say that, you know, today the market feels tight. We were very pleased with the timing of our most recent export expansion coming online because we are seeing benefits. And again, as I stated earlier, we will continue to look for ways to optimize around that capacity and better ways to facilitate movements across the dock. So we're very pleased with that being online. With that said, as we look to, you know, as we look at further expansions at our facility, we continuously explore opportunities in the form of small projects or debottlenecking projects at our Galena Park facility that will provide meaningful capacity improvements while being capital efficient. We are very fortunate to have an existing facility today that we have a lot of runway to add projects to, that are very capital efficient, that will provide us capabilities moving forward. So we'll continue to watch the volume growth in and through our system, and we'll time those various projects accordingly. But again, we're very fortunate to already have an existing facility that we can kind of bolt on to very effectively. Appreciate it, Scott. Thank you, guys, and congrats on the capital allocation plan. Okay, thank you. All right. Thank you so much for that. Please stand by for our next question, everyone. All right. Our next question comes from the line of Neel Mitra or Mitra, I, I apologize, with Bank of America. Your line is now open. Hey, good morning. Thanks for taking my question. Matt, I think you alluded to 200 million cubic feet rolling off in the New Mexico, Delaware. I know there's another probably smaller contract roll-off in 2024. Can you speak to the dynamics in that area just because it's so competitive? Are competitors kind of undercutting you on price to try to win some acreage dedications, or is kind of the Red Hills complex just so big that some producers want to diversify away and have a few players versus a very big concentrated player in the area? Sure. Yeah, sure. No, good, good, good question. Let me just clarify. I think I did say roll-off. It's really contracted volumes that we have coming to us that it was really contracted for it to move, and we're not losing to third-party midstreams. That's not where that went. So, Bobby, you want to... Yeah, this is Bobby. For clarity, a producer-owned plant came online, and that 200 million a day moved to that producer-owned plant. And when that plant fills up, we get more gas. So it's part of our planning all along, and its contracts didn't change, contracts didn't expire, contracts didn't roll off. A producer plant that takes no third-party gas came online. Yeah. The reason we're highlighting the 200 is just 'cause we were, you know, down $75 million, you know, quarter- to -quarter. So there was an underlying 125 of growth from the quarter. It's kind of why we see strength, we see growth in that business. It was just contractually, as Bobby said, it moved off the system. Frankly, we're backfilling. We're backfilling high-pressure, low-margin gas with low-pressure, higher-margin gas, which is kind of what our bread and butter are, right? Yeah. Perfect. And then, maybe just a follow-up on potential Apex opportunities. Could you maybe bookend the spend you would look at, just in terms of 2025 being a lower CapEx year than 2024 and kind of the maximum you would be willing to undertake in that investment for Apex, if needed? Would you be the operator? Would you take a small equity interest? How would you go about looking about that to keep the capital down? Yeah, sure. I'll... Well, let me kind of start here, and then if others want to jump in. Yeah, I think Apex or I'd say the next pipe out of the Permian is going to likely be a joint venture between either multiple midstreams, midstream, and producers. So there will be a partial ownership. So if we participate in something, we could have an ownership interest in the JV, or we could move volumes on it and frankly, not have an ownership interest if it gets a pipe done. So I'd say the bookend, the low end, we could be putting no capital into the next pipeline. I think we'd like to have our options open, where we could have an ownership interest. We've seen that that creates value for Targa. GCX is a good example. We own 25%. We invested in it and then ultimately monetized it. So I think we're trying to be open to opportunities like that, that give us the ability to invest in that project and whether we end up holding it, whether we operate it, what percentage level, those are all discussions, and it depends on which pipe ends up going, whether it is Apex or it is another pipe led by someone else. As Bobby said, our primary focus is getting a pipe built where our ownership is and what and how we would finance that. If we project finance it, it would be very little capital out the door, right? So we have all those options to us. I think as we look forward on our capital spend, as, you know, Jen's mentioned in the past, is we see 2024 being kind of in a similar area, and we see 2025, you know, spending coming down. I think the trajectory of our capital should be kind of down once we get past 2024, and we'll look to kind of optimize how much spending and how that all works in that framework. Okay, perfect. Thank you for the answer. Okay, thank you. All right. Thank you so much. Please stand by for our next question. All right. Our next question comes from the line of Jeremy Tonet with J.P. Morgan Securities, LLC. Your line is now open. Hi, good morning. Hey, good morning, Jeremy. Good morning, Jeremy. Hey. So with the caveat up front, granted, you're not giving 2024 guidance here, and you've talked about a number of moving pieces. You know, talked about, I think, some volume trends and maybe the LPG outlook, but just wondering if there's any other big moving pieces that we should think about when we're shaping our 2024 thoughts, from where we sit, and maybe just at a high level, how you see Targa's EBITDA growth being able to trend organically from where you are. Would Targa largely track kind of Permian growth trends in general, or are there other kind of pieces to the puzzle we should think about? Yeah. Hey, Jeremy, good, good question. You know, as we look, you know, out into 2024, I think we're optimistic that not only 2024 is going to be, you know, have good EBITDA growth, but 2025 and beyond. And it's really just kind of the timing, you know, as you mentioned, what's that, you know, shaping going to look like? I think it does for us start in the Permian G&P business. What volumes are moving through both the Delaware and the Midland, that's going to provide then more volumes into NGL transport fractionation and available for export. So I think it kind of starts with what is overall Permian look like, and I think we see a pretty strong outlook for 2024, 2025, and really five plus years. I'd say five to 10 years, and even longer, on, on the gas side. So I think short term, it looks good, and longer term, it looks good. I'd say the only other things to think about is we do have a lot of fractionation coming on in 2024. We have GCF coming on the end of the quarter. We'll have Train 9 and then Train 10. So that's a outsized amount of fractionation relative to just kind of normal volume growth that we're seeing. We have the export expansion just done. I think we're set up well for exports in 2024. But ultimately, it kind of comes back to Permian gathering and processing growth will be the primary driver. Got it. That makes sense there. And you talked about upstream consolidation earlier in the call and just want to shift the focus towards midstream. We have seen a bit of an uptick in consolidation in the industry and just wondering, you know, from where Targa sits right now, do you feel comfortable with, I guess, you know, how the business is right now, or do you see how do you see Targa's role, I guess, in industry consolidation going forward at this point? Yeah, sure. I'd say where I think we sit as our internal business prospects look very good. We have a very good case just to continue to operate in our core business. Gathering and processing in the Permian, largest G&P footprint in the Permian Basin, is going to afford us multiple years of growth. So I think we just sit in a very fortunate position to just focus on Targa. We're going to invest in G&P, we're going to invest in transport like we are with Daytona, invest in fractionation. We're bringing three fractionators on and continue to invest in export. So, you know, in terms of us, you know, looking at bolt-ons or tack-ons, I think that's really kind of far down our capital, you know, priority list. I think we want to execute on the organic growth projects we have in front of us, and then increase and then distribute an increasing amount of that to our shareholders, as Jen talked about, another 40%-50% over time. It's not in any one exact year, but we see being able to do all of those things, distribute 40%-50%, lower our leverage, invest in our business. So I think we're focused on Targa right now and just executing our plan in front of us. Got it. Makes sense. That's helpful. I'll leave it there. Okay, thank you. All right. Thank you so much. One moment for our next question, please. All right. Our next question comes from the line of Sunil Sibal with Seaport Global. Your line is now open. Yeah. Hi, good morning, everybody, and thanks for taking my question. So my first question related to, you know, some of the operational issues, et cetera, in the Q3 that you talked about. In addition to, I think, the weather and compression, some of the operators have also talked about, you know, higher CO2 concentration in the gas streams. I believe that's an issue Targa is pretty familiar with. So I was curious, you know, how do you handle that going forward? And also, does it kind of accelerate your CO2 sequestration solution? So this is Pat. CO2 wasn't really a major contributor to operational issues for us in the Q3. We have a lot of capabilities and are adding capabilities to handle CO2 and frankly, H2S sour gas. We do see CO2 production growing in the Delaware Basin. Specifically, there are a lot of producers that do things at the wellhead that are capital inefficient and expensive for them to do. So as we move forward, we are putting infrastructure in place that allows us to handle, handling high CO2 volumes, sequestering CO2, dealing with sour gas, H2S, and other components. But as far as the operational issues, I mean, you hit it. It's weather, a little late on compression, residue gas pipeline issues, which is more felt in the Delaware because we don't quite have the system fungibility in the Delaware that we do in Midland. We're building that infrastructure, as you can see from our capital spend. We've gotten a lot of benefit from integrating our northern Delaware or Lucid system with our other two Delaware systems. But over time, when we have issues on specific plant sites and/or compressor sites, we'll have that fungibility where we can move gas around and keep production flowing. It's a little more exacerbated right now, and, you know, as we move forward, that'll get better. So that's kind of where we're at right now, and it looks better forward. And then this is Bobby. On the CO2 sequestration side, we've been pushing a bunch of projects forward. I think people have seen public filings relative to MRV plans that are already in place and wells that we have permitted out there, and that continues to move forward. Those businesses are not predicated on an increasing amount of CO2 being in the stream, but to your point and/or question, if the concentrations do come up over time, that would be additive to the CO2 business. We expect to start getting 45Q this coming year. And again, if over time, composition starts to go up in the CO2 stream, and we've already got those assets and wells and injection capability in place, that'll just up the 45Q credits and profitability of that business that we're putting together. Okay. Thank, thanks for that. And then on the capital allocation front, thanks for providing that clarity. I was just curious, you know, now that you put some guardrails around that, does that impact also your, you know, targeted returns on investments? I know previously we talked about 5-7x kind of multiples. Does that range change in any way with the guardrails that you're putting around? I think that we have a lot of organic growth capital investment opportunities at high returns as we look out across our footprint. That's part of why the fee floor structure has been so important, allowing us to continue to invest, to support our producers' activities, even in lower and across lower commodity price environments. So as we look forward, I wouldn't say that anything that we've described today around return of capital is changing how we think about investments or investment opportunities. We've described it as a multiyear approach where we believe we can distribute, call it, 40%-50% of cash flow from operations. But ultimately, we'll be assessing everything across the business, including balance sheet stability, organic growth opportunities, everything that is involved in a target forecast, and then sensitivities of those forecasts to ultimately drive the return of capital decisions each year. But that's one of the ways that we're certainly thinking about it. Got it. Thanks for that. Okay, thank you. Yeah. Thanks, Sunil. Thank you so much. Please stand by for our next question. All right, our next question comes from the line of Neil Dingmann with Truist Securities. Your line is now open. Hey, guys, this is Jake Nivasch on for Neil. Thanks for the question. I just had, you know, one, one quick one here. Just strategically, I know, you know, given how, you know, all of these fee-based contracts have been ramping up for you guys over the past several years. Just at a high level, I'm just curious, do you feel now that you're in a good state, you know, as a percent of your contracts being fee-based, or should we expect a little bit more of a ramp going forward? Have you? I mean, you know, if you can quantify that, that'd be great. But really just, yeah, you know, just, just thinking strategically, where are we at, you know, with that kind of, you know, transition here? Thank you. Yeah, sure. This is Matt. And then, Jen, if you want to add on. Yeah, we've made a lot of progress at adding or really having fee-based growth in both our G&P business and our downstream business, but also putting in fee-based floors and components into our G&P business as contracts come up. Yeah, as you look at the really through this year, where we've had fee floors and, and those hybrid contracts, we are kind of at or below the floors. So as you think about just kind of earnings, you know, power going forward, most of those are at or below. And so as we get some tailwinds, if we get some tailwinds from commodity prices, that would just be upside. But on those fee floor contracts, there's not a lot of downside from here. We think we're in a good spot. I'd just add that our commercial team has done a great job of putting ourselves in position to continue to invest for producers by getting those fee floors in place. But ultimately, if commodity prices are higher and our percentage of fee margin is going down from our gathering and processing business because commodity prices are higher, I think that will be a huge win for us and our shareholders, and that's one of the reasons that we really like the fee floor structure. Ultimately, where we'd like to get to is having fee floors in really all of our gathering and processing contracts, or have them be fee-based, because that, combined with our fee-based downstream business, just provides us with a lot more cash flow stability across commodity price environments. Ultimately, that's sort of the direction that we're heading in, and our teams have done a great job of pushing us towards that. Got it. Thank you. If I could just squeeze one more in, and I know we've touched on this a few times, but I just want to clarify something. So the compression issues that you guys have seen, you know, it sounds like things have improved, but does that mean that, you know, because things have been delayed, and I know you guys mentioned you have a good amount coming in 2024 as well, does that mean the delays pushed back the initial 2024 orders, or is it or should we just expect, I guess, more of an acceleration or just a little bit more in 2024, you know, given these delays here? Just, yeah, just trying to get clarification here. No, I mean, for the most part, those have been ordered. Part of it was delivery delays. So I don't know that the CapEx shifts. It necessarily shifts all that much. We're just really constantly kind of buying compressors and adding to inventory, so there's some flex there, but it just does take some time there. And then one thing to note, too, as we're, you know, kind of waiting on those compression, you know, delays, we're still coordinated, for the most part, with our producers such that we can capture the initial production from there. So we're working with them to make sure we're there for the IP and that we're getting that production. So it's not really lost, it's just kind of deferred and pushed into other periods. Got it. Yep, that makes sense. Okay, that's it for me. Thank you, guys. Okay. Thank you. Thank you so much. Please stand by for our next question. All right. Our final question comes from the line of Brian Reynolds with UBS. Your line is now open. Good morning, Brian. We can't hear you. Hello? Can you hear me? There you go, Brian. Yeah, there you are. We can hear you. Okay. Thank you. Sorry about that this morning. You know, just to follow up on the Permian, you know, at this point, it seems like Targa is not close to its potential full integration of G&P assets to NGL long haul at this point. So I know, you know, basically all the Midland volumes make it downstream on the Targa integrated system. But could you talk about maybe the amount of processed Delaware volumes that are not being transported on Targa's downstream? Is it, like, roughly 50%? And kind of how should we think about those volumes rolling on to, you know, Targa's long-haul system, you know, in 2024, 2025, to kind of get to that 100% number? Yeah, sure. I mean, I'd say we have a lot of our G&P business is pointing liquids into our downstream business. I don't know that we ever get to 100%. I don't. That's not really a goal. There's gonna be some amount of volumes that are going on third-party, you know, pipes. You know, the vast majority on the Midland side move, but it's not 100% on the Midland side. And the Delaware, I'd say it's a majority, but because of some acquisitions and just legacy, you know, dedications onto other pipes, that's going to take time. But as we grow, I'd say a disproportionate amount of the growth is tied to Targa, and I think that's going to continue. So I think we have a majority out there. I see that number moving north as we go forward. But I think we're in a really strong position of capturing the majority of volumes across the Permian and moving those into the downstream assets. Great, thanks. And as a follow-up, I know you talked about CapEx a little bit, but kind of curious if you could help sensitize us a little bit. If we think about G&P capital, you know, three processing plants and perhaps the need for Frac 11 as we look ahead to 2025, how would that look to 2024? Is it $1.5, $1.7, or something like that? And then, you know, ultimately, ethane exports is very intriguing part of the business and NGL value chain at this point. Seems to be getting more competitive based on announced projects. Is there an opportunity for Targa to participate as we look to the middle to end of the decade? Thanks. Yeah, you know, I think on CapEx, you know, we pointed to, with Daytona and multiple fractionation trains, we see 2024 being, you know, kind of similar-ish levels, which I'd characterize as kind of higher than a normal run rate levels because the downstream projects are a bit lumpier. So that's why we have some confidence as we get into 2025 and beyond, potentially having, you know, or in 2025, having it be lower and then, you know, maybe a more normalized rate thereafter. As you look at ethane exports, you know, there's a number of expansions and, you know, parties that do that. That is something we have talked about in the past. We have the capability to do that. You know, right now, what we're really focused on is increasing our connectivity to the domestic petc hem market and flexibility to other, I'd say, just other customers for ethane demand. I'd say that's, it's out there. I wouldn't put that on the front of our list as something we are, you know, looking at, you know, right now. But that is on the potential, that we kind of keep on the list. Yeah, and I would just add, Matt, this is Scott, that, you know, again, Matt alluded to the fact we are continuously improving our deliverability out of our system to the domestic petrochemical operators in and around Mont Belvieu and the surrounding area. So that'll, that will be a primary focus as we see volume growth continue over the course of the next several years. And given the increase in ethane consumption with those petrochemical plants, we believe we'll get a large proportion of that just based upon our own upstream growth in and through our assets. Great, thanks. Appreciate all the color, and enjoy the rest of your morning. Okay, thank you. Thanks, Brian. All right. Thank you so much for that. This concludes the question and answer session. I would now like to turn it back to Sanjay Lad for closing remarks. Thanks to everyone that was on the call this morning, and we appreciate your interest in Targa Resources. The IR team will be available for any follow-up questions you have. Have a great day. Mm-hmm. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.