Core Viewpoint - MPLX, a master limited partnership (MLP), offers a nearly 8% yield but possesses a strong financial profile and visible growth through 2029, making it a reliable investment despite its high yield [1][2]. Financial Performance - In the last year, MPLX generated $5.8 billion in distributable cash flow, covering its distribution by 1.4 times, and produced $1 billion in free cash flow after distributions [3]. - The company invested over $5.5 billion in growth investments, including a $2.4 billion acquisition of Northwind Midstream, while maintaining a leverage ratio of 3.7 times, below the 4.0 times threshold supported by its stable cash flows [4][5]. Growth Prospects - MPLX plans to invest an additional $2.4 billion in growth capital projects this year, with ongoing expansions including two new NGL fractionators expected to be completed in 2028 and 2029, and a Gulf Coast LPG export terminal in partnership with Oneok, also set to come online in 2028 [6]. - The company has approved the construction of the Secretariat II gas processing plant and the Marcellus Gathering System Expansion, both expected to enhance growth visibility with in-service dates in 2028 [7].

Encouraged by the US president’s support for fossil fuels, Kinder Morgan, Oneok and others are prepping ambitious pipeline projects, writes @nathanrisser1 https://t.co/TkHo75tCJo ...

Core Insights - MPLX has achieved significant milestones in 2023, including new organic expansion projects and accretive acquisitions, enhancing its growth profile through the end of the decade [1][9] Group 1: Growth Projects - MPLX has a robust backlog of growth capital projects, including the Secretariat and Harmon Creek III gas processing plants, expected to be completed in Q4 2023 and H2 2026 respectively [3] - The WPC joint venture is constructing the Blackcomb and Rio Bravo natural gas pipelines, which are on track for commercial service in H2 2024, providing growth visibility through 2026 [3][4] - Additional projects include the Traverse Pipeline, expected to enter service in 2028, and the Eiger Express Pipeline, which will begin shipping gas in mid-2028 [4][5] - The company is also building two new NGL fractionators near Marathon Petroleum's Galveston Bay refinery, set to enter service in 2028 and 2029 [5] Group 2: Acquisitions - MPLX has completed four acquisitions in 2023, strategically enhancing its geographic footprint and increasing system capacity [7] - Notable acquisitions include Whiptail Midstream for $237 million, the remaining 55% interest in the BANGL NGL pipeline for $715 million, an additional 5% interest in the Matterhorn Express Pipeline for $151 million, and Northwind Midstream for $2.4 billion [10] - These acquisitions are expected to provide immediate cash flow and support long-term growth, with embedded growth opportunities in the BANGL pipeline and Matterhorn projects [7][10] Group 3: Financial Position - MPLX maintains a strong balance sheet, ending Q2 with a leverage ratio of 3.1 times, allowing for strategic debt acquisition for growth [8] - The company is also recycling capital by selling gathering and processing assets in the Rockies for $1 billion, which will enhance financial flexibility for future growth opportunities [8] Group 4: Distribution and Returns - MPLX has extended its growth outlook, providing visibility through the end of the decade, which supports continued distribution increases [6][9] - The current distribution yield stands at an attractive 7.5%, positioning the company for strong total returns for investors [9]

Market Dynamics - US pipeline operator Oneok and BMW are leading six companies selling investment-grade bonds [1] - Issuers are squeezing in more sales before the typical summer slowdown likely brings issuance to a halt later this month [1]