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MPLX looks to grow Permian Basin presence, build or buy long-haul pipe

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MPLX looks to grow Permian Basin presence, build or buy long-haul pipe

MPLX LP will look to grow its presence in the southwestern U.S. and seek opportunities in the long-haul transportation business, executives with the midstream energy master limited partnership said on their earnings call for the fourth-quarter of 2017.

President Michael Hennigan said on the Feb. 1 call that one of the "big opportunities" the company has is to become more active in the Permian Basin in West Texas and the STACK play in Oklahoma, which he called "very highly competitive" areas.

Hennigan also said MPLX is eyeing ways to dip into the long-haul transportation business, whether shipping crude oil, natural gas or NGLs. In response to an analyst question on whether MPLX would build or buy long-haul pipelines, Hennigan said the company will look at both options. "We think there are going to be some assets that are for sale that we'll always evaluate," he said, adding that the plan is to grow organically. "The legacy [Mark West Partners LP] system has been terrific ... but we also think we should get involved in some of the takeaway projects that are applicable to this, as well."

Executives on the call affirmed 2018 distribution growth guidance of 10% and said the company does not have to issue equity for its 2018 capital growth plans.

Hennigan later clarified that M&A activity is not included in the company's base plan. "We'll be a disciplined investor," he said, "and if we find something that works, we'll finance it accordingly."

When asked about further delays of Sunoco Logistics Partners LP's Mariner East 2 natural gas liquids pipeline project across Pennsylvania, Hennigan said MPLX would not see any impact on its system if the pipeline were pushed back by an additional six months. "We're feeling pretty good about it, but we're also hopeful that [Mariner East 2] will come online as soon as it can."

Earlier in the day, MPLX posted fourth-quarter 2017 adjusted EBITDA of $569.0 million, up from $391.0 million in the prior-year period. The S&P Capital IQ consensus adjusted EBITDA estimate was $552.9 million.