Lisa Wilson - Director, Investor Relations Gary Heminger - Chairman and Chief Executive Officer Pam Beall - Executive Vice President and Chief Financial Officer Mike Hennigan - President.

Shneur Gershuni - UBS Eric Genco - Citi Investment Research TJ Schultz - RBC Capital Markets Tom Abrams - Morgan Stanley Michael Blum - Wells Fargo Jeremy Tonet - JPMorgan Corey Goldman - Jefferies Justin Jenkins - Raymond James Brian Zarahn - Mizuho Jerren Holder - Goldman Sachs Barrett Blaschke - MS MUFG.

Welcome to the MPLX Third Quarter Earnings Call. My name is Ellan and I will be your operator for today’s call. At this time all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] Please note that this conference is being recorded. I will now turn the call over to Lisa Wilson.

Lisa, you may begin..

Thank you. Good morning, and welcome to the MPLX Third Quarter 2017 Earnings Webcast and Conference Call. The synchronized slides that accompany this call can be found on mplx.com under the Investors tab.

On the call today are Gary Heminger, Chairman and CEO; Mike Hennigan, President; Pam Beall, Chief Financial Officer; and other members of the management team. We invite you to read the Safe Harbor statements and non-GAAP disclaimer on Slide 2.

It’s a reminder that we will be making forward-looking statements today during the call and during the question-and-answer session that follows. Actual results may differ materially from what we expect today. Factors that could cause actual results to differ are included there as well as in our filings with the SEC.

Now I will turn the call over to Gary Heminger for opening remarks..

Thank you, Lisa, and good morning to everyone. I’m pleased to report that MPLX delivered another exceptional quarter continuing its track record of operational excellence and strong financial results.

This outstanding performance was driven by record volumes in our Gathering and Processing operations, and solid contributions from our Logistics and Storage assets.

We’re also pleased with the progress we are making related to the strategic actions announced earlier this year, consistent with our plans, the partnership acquired joint interest ownership in certain pipelines and storage assets from MPC, the total consideration of $1.05 in the third quarter.

MPC has also offered the remaining identified dropdown to MPLX, that offer is currently under review by the board’s independent complex committee. This last dropdown includes refining logistic assets and fields distribution services which together are projected to generate $1 billion in annual EBITDA.

We expect this acquisition to close in the first quarter of 2018. Once the terms of dropdown are finalized, MPC will immediately initiate the offer of its GP economic interest, including its IDR rights to the partnership in exchange for newly issued LP common units. Both transactions were then closed in the first quarter.

These strategic actions are intended to reduce our cost of capital and support an attractive distribution growth rate over the long-term. All of these transactions are subject to requisite approvals market and other conditions including tax and regulatory clearances.

As you know we are in an environment where many of our competitors are having to choose between maintaining their distributions or growing their coverage. MPLX is in a different situation, because we don’t have to choose.

The dropdowns we’ve already executed and the one that we will complete shortly position us to not only support an attractive distribution growth profile over the long-term, but it will also maintain strong distribution coverage.

With visibility to strong growth opportunities to a robust portfolio of organic projects, strong distribution coverage and investment grade credit profile. The partnership is well positioned to be a source of significant long-term value for our investors which will be further enhanced once the IDR obligation is eliminated.

With that, let me turn the call over to Mike to review our quarterly financial and operational highlights.

Mike?.

Thanks Gary. As Gary mentioned, we reported record financial results with adjusted EBITDA of $538 million and distributable cash flow of $442 million. The partnership ended the quarter with the strong distribution coverage of 1.33 times. Yesterday we announced our 19th consecutive increase in our quarterly distribution to $58.25 per common unit.

In line with our previous guidance we expect to deliver distribution growth of approximately 12% on a calendar year basis for 2017 and we continue to target double-digit distribution growth in 2018. Turning to Slide 4, we provide an update on our Logistics and Storage segment.

Gary mentioned, we completed the acquisition of joint interest ownership in certain pipeline and storage assets from MPC on September 1st. The assets include ownership interest and explore pipeline, Southern Access Extension Pipeline or SAX, the Louisiana Offshore Oil Port or Loop, and the low cap pipeline.

These assets are expected to generate approximately a $138 million in annual adjusted EBITDA adding further scale and diversity to the partnership. The third quarter marked the first full quarter of earnings from our indirect interest Bakken Pipeline System which includes Dakota Access Pipeline.

We are also pleased to receive our first cash distribution during the quarter. We continue to make progress on our expansion of Ozark Pipeline System and connection with this expansion, we announced the successful finding open season for the expansion of our Wood River-to-Patoka Pipeline. Both expansion projects are expected to complete in mid 2018.

Moving through our Gathering and Processing segment, Slide 5 provides an overview of our operation in the Marcellus and Utica Shales. For the third quarter, gathered volumes averaged over 2.3 billion cubic feet per day, a new record for the partnership.

We experienced significant growth in our gathered volumes at 25% increase over third quarter 2016 and 22% increase over second quarter 2017. Higher Utica gathering activity drove this increase and we expect to sustain these volumes in the fourth quarter.

Moving to process volumes, we averaged approximately 5 billion cubic feet per day in the quarter, also a new record for the partnership.

As reported in the second quarter call, we placed the Sherwood plant service in July raising the size of this complex to approximately 1.6 billion cubic feet per day among the largest gas processing complexes in the United States.

We continue to be encouraged with how quickly the volumes have ramped up at the complex, as we operate near full utilization for the quarter within three months to start out. In addition to Sherwood, we continue to see growing volumes that are Houston and Majorsville complexes.

The support needs of our producer customers on a just in time basis, we have plants under construction at Sherwood, Houston, Farming Creek, and Majorsville, all scheduled to be in service in 2018. Over utilization for the Marcellus and Utica Shales were strong at 8% for the quarter.

We expect to maintain this high utilization rate for the balance of the year and anticipation on the new plants coming online. Slide 6, provides a summary of fractionated volumes in the Marcellus and Utica regions.

We again produced a record 365,000 barrels a day of ethane and heavier NGLs in the third quarter representing a 16% increase over the same quarter last year. The third quarter marked the first full quarter of operations that are new 20,000 barrel per day de-ethanization plant at Bluestone.

We are the largest fractionated in Northeast and this plant add further scale to the strong position. We are also encouraged by the large scale takeaway projects under development and growing in basin and global demand for purity ethane.

The partnership is well position to capture this opportunity by leveraging our current and expanding de-ethanization system and remain the service provider of choice in the region. On Slide 7, we provide an overview of our Southwest operations.

We continue to make progress on new plant construction in the Southwest, we expect the Argo plant in the Delaware Basin and come online in the first quarter of 2018, well the Omega plant in the STACK shale play of Oklahoma is expected to enter service by mid 2018.

For the quarter Southwest volumes were solid at 1.2 billion cubic feet per day with the utilization rate of 78%. We were fortunate and are pleased to report minimal damage to our system from Hurricane Harvey or heavily planted Corpus Christi did have some limited downtime it was related to refinery outages in the area.

I want to applaud and commend to our employees for their teamwork and dedication during the challenging condition caused by the hurricane. The strong testaments for the focus and care of our employees exhibit every day. Before we move to the financials, let me summarize where we are strategically.

As I mentioned previously, we plan to deliver on our stated 2017 distribution growth guidance and provide investors with 12% year-over-year distribution growth. We plan to remain at a high level of coverage following the dropdown and IDR elimination and forecast double digit calendar year distribution growth in 2018.

As Gary mentioned, the combination of significant transactions with our sponsor provides a unique opportunity for the partnership to target a high level of distribution coverage while maintaining an attractive and sustainable distribution growth rate for the long-term, all done while utilizing appropriate leverage to fund the partnerships growth.

Additionally we expect to continue to growing the partnership through organic capital expenditures. For 2018, we forecast approximately $2 billion of organic growth capital and intend to fund this capital with retain cash and debt and not issue any public equity.

In summary for 2018, we plan to position the partnership with strong coverage double-digit distribution growth, a competitive cost of capital growth, IDR elimination and not issue public equity to fund our organic capital.

We believe MPLX has one of the most attractive offerings in the MLP space and remain committed to driving value for our investors. I will now turn the call over to Pam to cover some financial highlights.

Pam?.

Thanks Mike. On Slide 8, we provide some financial highlights for the partnership in the third quarter. And, as Mike indicated we reported adjusted EBITDA of $538 million and distributable cash flow of $442 million both of which are quarterly records for the partnership.

Total segment operating income was $562 million with approximately 60% generated by the Gathering and Processing segment. The bridge on Slide 09, it shows the change in adjusted EBITDA from the third quarter of 2016 to the third quarter of 2017. Adjusted EBITDA increased by $163 million from the third quarter of 2016 driven by several items.

First, distributions related to our investment in the Dakota Access Pipeline as well as earnings from our recently acquired Ozark Pipeline accounted for approximately $21 million of the change in the Logistic and Storage segment EBITDA.

Second, the terminal pipeline and storage assets acquired from MPC in the first quarter generated an additional $64 million of EBITDA this quarter. Next, the joint interest pipeline and storage assets dropped on September 1st contributed an additional $13 million of EBITDA.

And, lastly higher gathered process and fractionated volumes accounted for the majority of the change and the Gathering and Processing segment which also experience the benefit of higher commodity prices versus the third quarter of last year. Slide 10, provides the summary of key financial highlights and select balance sheet information.

At the end of the third quarter, we had approximately $1.8 billion available on our bank revolver and $298 million available on our intercompany facility with sponsored MPC.

We remain committed to a strong balance sheet and we ended the quarter with the leverage ratio of 3.6 times which is comfortably within levels appropriate for an investment grade credit profile. On Slide 11, we provide some commentary on our 2017 forecast.

With one quarter remaining, we did not update the financial forecast provided during the second quarter earnings call. We delivered strong earnings and cash flow this year, and we’ve demonstrated a discipline approach to our capital investments.

As a result of this performance we now expect to finish the year above the high end of the previously provided guidance ranges with the exception of capital expenditures.

For organic growth capital expenditures, we expect to finish the year below of our previously provided range and we anticipate maintenance capital to come in below the previous guidance as well.

As a result of this performance we’ve increased our capacity to fund organic growth with debt and retain cash, other than the settlement of second quarter commitments there were no new ATM issuances during the third quarter.

And, looking into 2018 as Mike mentioned, our current plan is to fund our approximate $2 billion of organic growth capital with retain cash and debt and no public equity, although maintaining a strong balance sheet and investment grade credit profile.

We have a strong record of growing distributions to unitholders, and yesterday the Board of Directors of our general partner declared a distribution of $58.75 per common unit. Consistent with our prior guidance, we expect calendar 2017 year distribution growth of approximately 12%.

And, we continue to forecast double-digit distribution growth for the calendar year 2018. As we are near completion of the strategic initiative strong balance sheet and attractive growth opportunity, we remain confident in the long-term value proposition for our investors. And, now I’d like to turn the call back to Lisa..

Thanks Pam. As we open the call for questions, we ask that you limit yourself to one question plus the follow-up. You may re-prompt for additional questions as time permits. With that, we will now open the call to questions..

Thank you. We will now begin the question-and-answer session. [Operator Instructions] And, our first question today is from Shneur Gershuni from UBS..

Hi, good morning guys. Just starting off, obviously I appreciate your pewit towards self-funding. But just before I ask my questions, I just wanted to confirm some discussion you had on the MPC call earlier today. You sort of talked about IDRs and the multiple is just for illustrative purposes and it’s implied.

I was just wondering if you can confirm if that’s the case and it’s really just a function of a premium on IDR cash flows and whatever the MPLX stock price will imply the value and multiple; is that correct?.

Yes Shneur, this is Mike. What we said on the previous calls very consistent before we said in the past that the multiple out there is an illustrative example of where the market was back when it was first brought out.

And, I think Tim pointed out very correctly that the goal here for the partnership and for MPC is to find a place where both parties are happy and that’s what the goal will be for MPC and the goal for the partnership.

One of the things it’s really important obviously is once this is accomplished, this transaction is accomplished, MPC will own approximately 65% of the units in the partnership, so they have the most best in interest in the success with the partnership.

So, I think we are really aligned and look forward to get in that transaction completed in the near future..

Right, but just to confirm, you sort of had talked about how the multiple is just an implied number and it’s really just what the IDR cash flows are in a premium on that and so it’s more of a function where MPLX stock price is trading at the time?.

Yes, that’s correct Shneur. So, at the end of the day you hit on the head. The sponsor is entitled to premium to those cash flows, and the stock price will be taken into account in the process from both party sides, so that will all come into the process.

And, I think everybody knows this, the process itself will be an engagement between the independent directors on the MPLX committee as well as with the sponsors, and all those factors come into play and the goal is to find that spot where everybody feels it’s a good transaction..

Shneur, this is Gary. And, it’s not only the unit price at the time, you have to look at the growth profile, the confidence on the growth profile, the other factors as well, we are not going to get into the multiples or level that we think it would be. But I think the illustration we provided earlier gives you a framework..

Perfect. And, just a few follow up questions. Given the cap line discussion, when we sort of look at the flow hydrocarbons in the United States sort of seems to be trend of refined products moving towards exports.

Do you envision that potentially being refined product pipeline instead of crude?.

No, we expect this will be crude.

If you look at the refined products, there’s 3.5, 4 million barrels a day of refining capacity in the Gulf Coast and certainly have a distinct transportation advantage over refineries that will be coming out too, that pipeline it certainly could go into light product service, mechanically, technically, there’s nothing, but keep it from that, but it would not make sense to turn that pipeline into refined products at this time, because of the tremendous refining capacity in the Gulf Coast, and the Gulf Coast refiners - the refiners that are heavy users of heavy crude that really are dotted across the entire Eastern Gulf, need a stable supply of heavy crude that would certainly can be supplied from the Canadian in all sense..

Great.

And, just one final question, has the boards of both entities discussed, what MPCs final expectation is with its holding of MPLX, do you sort of envision in IPO of this [indiscernible] tracker of MPLX at some point is kind of next step down the road to sort of unlock value for MPC and create this an up see for MPLX?.

Shneur as we look at the business right now we have tremendous growth opportunities as Mike just outlined. We have very strong coverage. So, we certainly understand how that could be put in place, but it’s not necessary at this time to take that any further, but we certainly understand that.

But what the growth potential that we have, we think we’re in a pretty good shape as we today..

Perfect. Thank you very much guys. I’ll jump back in queue..

Thank you. Our next question is from Eric Genco from Citi Investment Research..

Hi, good morning.

I just wanted to ask, I think it was touched on a little in the MPC call, but on a absolute different way and your talk in the past about your desire to be a consolidator within the midstream space and one concern has come up amongst investors is the possibility that you might execute sort of large third-party transaction at the MPLX level ahead of IDR exchange, can I ask what is the probability that you would do a very, very third-party transaction that will require a lot of issuance before the IDRs are handled?.

Eric I would find that, first of all difficult to do, yes, we are in the process right now, we’ve already stated that the next dropdown has been given to the complex committee and that simultaneous we are closing that transaction, we are going to, get on with the IDR exchange, so that is our goal and our plan right now..

I appreciate that and thank you, because I figure that was the case, but I felt it was worth asking because I heard it once or twice before from people. And, then I guess in the spirit of continuing to beat the dead horse.

I noticed in the release you committed to 12% growth for 2017 as opposed to sort of 12% to 15%, you covered just really strong and this decision appears pretty prudent from MPLX perspective.

But once again to the people who kind of think that perhaps MPC is sort of maximize its short-term gain from MPLX, isn’t this an illustration like wouldn’t MPC have incented to push the distribution as high as it could go ahead of the IDR exchange if you were going to go along those lines, I know it’s not what you’re looking to do.

But I just feel like that, am I going too far and saying, this is yet more evidence of MPC is sort of long term perspective on MPLX and sort of making this work for both entities?.

Well, Eric I think you answered the question yourself.

We’ve said many, many times this transaction has to work for the long-term, MPLX has to trade well the day after the IDR exchange there has to balance in this equation, because if it doesn’t trade well the day after with MPC being by far the largest owner of those units, they will be detrimental to MPCs income stream long-term.

So, there has to be a fine balance, some say, you kind of thread the needle and as you do this analysis, but it’s going to be balanced for both sides. And, as I said I think you answered your own question, but it’s a good dialogue to have..

Hey Eric, it’s Mike. I just want to also add that right today the market is not really rewarding growth as much as it’s rewarding coverage and stability. So, part of the reason that we target lower end of the previous range was for that very fact.

And, I think we’re showing that we’ve moved the partnership to actually towards what we believe investors are looking for, we finished the quarter at 1.33 coverage, which we think is a very strong level.

And, we’ve also publically stated that we have no plans for issue of public equity for organic program for the remainder of this year or into the 2018 program. So, I think we are positioning the partnership in a place we’ll provide a very attractive place for investors..

It sounds like you are doing all the right things. And, I apologize for leading questions, but [indiscernible]. So, thanks and keep up with your work..

Thank you..

You’re welcome..

Thank you. Our next question is from TJ Schultz from RBC Capital Markets..

Great, thanks.

So, obviously setup well for 2018 for distribution growth and turning out the equity market, but just generally as you think longer term for your business model, how do you want to manage distribution coverage and distribution growth first, any views that you would want to slow growth to a level that allows you to completely internally find growth CapEx longer term or to say really another way or are you really intimidating to sell funding long-term or to take way here just that you don’t need change your view on growth right now and still you have the ability to finance from retain the cash flow for the next year at least?.

Yes TJ, we are activating for the long term, we’ve run the partnership for the long-term; we are not doing anything for just short-term gain. So, we believe the sector is looking for that activity as you call it.

So, our view is coverage stability, solid balance sheet, all those things are being rewarded, whereas growth isn’t being rewarded, but we do want to do what we said we would do. So, we previously guided for double-digit growth in 2018, we are going to honor that commitment.

But over the long-term as you stated, distribution growth will probably be coming down in the sector, at the same time we believe we are going to be at a very strong level of growth and I think that’s real important for us to differentiate ourselves from everybody else, because we do have a very strong level of growth for the future as well..

It’s Pam Beall and I just would like to add, we are going to generate substantial amount of cash flow in the partnership, our size and scale and diversification of earnings in cash flow will be significant. So, when we talk about self-funding, we will still have a significant capacity to fund our needs with debt as well as retained our cash.

So, we are really just focused on not being that serial issuer of public equity..

Got it, I guess for me just last one on operations in the gathered volumes, if you could just expand there on the large increase what we may just expand there on the large increase what we may expect into 4Q and 2018 as it relates to producer activity..

This is Greg Floerke. I would say with regard to the Utica, is I had mentioned in prior quarters, a lot of the rig activities moved into the dry Utica but we are still seeing activity in the rich areas as well. A big driver, is Rover coming online which is connected our caddice facility and to other pipelines that gather into that dry area.

So, I think there we continue to be variation between Marcelles and Utica. Drilling we're seeing activity and growth in both areas though at this time..

Okay, thanks everybody..

Thank you. Our next question is from Tom Abrams from Morgan Stanley..

Thanks. GMP operating compare. I think you said that the majority of that was a volume.

Does that mean roughly 25 million say from commodity margins?.

No. what we said on the commodity margins is that that real sum that we given is every $0.05 move is about 18 million after tax, not that there's a lot of tax in the business. But we did see that strong move in commodity prices year-over-year. So, it seem kind of did a map on that..

All right. And then the changes the increase in equity earnings and distribution that was primarily Dapple.

The vast majority of that?.

Well, I wouldn’t say the vast majority. It certainly is a combination, we mention both the code access pipeline Dapple and those are pipeline that we acquired earlier this year. And then of course we had the drops that we have made throughout the year as well..

All right.

And then what's driving the lower maintenance CapEx and the growth CapEx for the year?.

Hey Tom, this is Mike. Two things. One is we're trying to employ capital discipline in this environment and two is timing. Both of those factors together are impacting our maintenance capital as well as organic.

We stated that we have previously guided to 1.82 on the organic side, same factors in a little bit of timing, little bit of discipline of the capital side and we project will come in lower than those numbers for this year..

Right.

And lastly, any implications from potential delays at Rover and Mariner systems?.

No, we don’t believe so. Obviously, we're supportive of both of those projects and we'll like to see them get up but in the short term we don’t see any impact to our system at this point..

Great. All right, thanks a lot, guys..

You're welcome..

Thank you. Our next question is from Michael Blum from Wells Fargo..

Hi, good morning, thank you.

First question, just what is in 2018 I guess long term your target leverage? Do you have any updated thoughts there, obviously I think you've put a range out in the fast but given the pivot that's been talked about in the market, do you have any updated thoughts or where you think that can be either in 2018 or long term?.

Yes, this is Pam. So, I should have added when I was talking about leverage capacity earlier that everything that we do will be in the context of maintaining an investment great credit profile. So, we do I think we do will have the capacity to burrow a little bit more than we have in the past. But we're probably focused around the low fours.

Four times, that's EBITDA..

Got it. And then just one question on cap line, that I don’t think was asked on the prior call. Just why go out in open season for 300,000 barrels a day when the capacity of the line is significantly larger? Yes, I did cover that before, Michael. It really comes out to as I stated earlier, there are three owners of this and it takes three to tango.

We have an agreement that 300,000 barrels a day and the timing is all around the commercial aspects of the partners to agree to put out this opportunity for an open season. So, that's how we derived that, you're absolutely correct, it will flow much more than that.

Now won't flow 1.2 million barrels a day, heavy crew just because of viscosity of that product moving through. But it certainly will flow much more than 300 down the road. But that's a commercial decision on the front end here that was made. But I will say that we're getting a lot of interest in this opportunity down the road..

Great, thank you..

You're welcome..

Thank you. Our next question is from Jeremy Tonet from JPMorgan..

Yes, this is Troy for Jeremy. I think most of the questions have been addressed. I guess is that looking at the Permian gross, any commentary or interest maybe on in Argo too, I mean just giving consistently high utilization rates there.

And then more broadly looking at current basis there, any interest in build out projects take away part anything of that nature?.

Yes. Obviously we're excited about getting our next plan up in early 2018. So, that's a primary focus. And yes, we continue to put more emphasis on our South West operations in the Permian in general.

And yes, I think you hit on the head, we're going to look for other opportunities that could be downstream to the plans and we'll continue to look at those. Because it's an area that still has quite a bit of growth and we believe we provided an opportunity to participate in that growth..

All right, great. Thank you..

You're welcome..

Thank you. Our next question is from Corey Goldman from Jefferies..

Hey guys. Just one more and I need too.

I understand it doesn't impact your current system but does that at least how to explain the lower 2017 CapEx spend, just given the fact you guys targeted just in time to startup?.

Now Corey, it doesn't have any impact on our spend at this point. Obviously we support the project and we like to see it up as soon as possible but it doesn't have a direct impact on our situation..

Okay, great. And then just a last follow-up. I think you discussed and basically I just want to confirm on cap line.

Is the, is your interest on the asset included in the next drop down, was it ever before the open season?.

No. cap line is still resized with an MPC and it will for some time..

Okay.

And just that been suggested, are there any other assets here that could be view to the potential drop down candidate that we don’t know about?.

Once we complete this big drop down, we have left a $1 billion. I think we have maybe 50 million or so of EBITDA over some time that we could drop in but it's that would include some joint venture shipping and some things that they aren’t quite ripe yet to be able to be considered to drop down. But the majority of the assets will be done..

Got you, okay.

And the 50 million I assume that's pretty cap line reversal?.

That would be correct..

Got you. Okay, thanks guys..

Thank you. Our next question is from Justin Jenkins from Raymond James..

Great, thanks. I guess maybe starting with a follow-up to TJ's question. It seems like maybe someone note on the EMP side heading into the next year and maybe that was exacerbated by some commentary from one of your customers in the North East yesterday.

I guess I'm just curious maybe a little more detail on how things are progressing on your discussions with producers into '18?.

Yes, continues to be very constructive. As you know we believe that the Marcellus Utica area is the best area for development on a natural gas side. And as you're referring to one of our producer customers, a very important customer. We're totally in sync with what their plans are at this point.

It should point out and I think this that the high majority of the capital continue to be spend in the North East and we remain in a roll part of that development. We have two major plan activities occurring, our expansion of our Houston complex and also the development of our Harmon Creek complex that will come online.

The first it'll come online in early '18 and the second will come online towards the backend of 2018. So, continue to feel really good about the area, continue to feel really good about the long term potential in the Marcellus Utica. So, I think we're still in a very good position..

Perfect, I appreciate that color Mike and maybe thinking taking a stab at the Bakken Pipeline system here.

Great to see a cash distribution coming in but can you give us a sense of what level of distribution that might have been in terms of partial versus full?.

No, I'll make sure Mike doesn't reveal that information. Now we're as you know we're a minority indirect owner of the pipe but we don’t disclose that separately..

Fair enough, had to try. Thanks, guys..

You're welcome..

Thank you. Our next question is from Brian Zarahn from Mizuho..

Good morning..

Good morning, Brian..

Just be helpful, have a little more color on the equity self-running time for next year. And then how should we think about the drop down financing mix of that equity. You got only more in equity to keep ourselves out of the market next year. And this is mean that MPC won't take any equity for CapEx.

And also, how should we think about the unit price assumptions, you've got a significant amount of drop downs in the volume which are fairly sensitive to where the inner price is and how that impacts here excess coverage?.

Yes. Couple of things there Brian. First of all, our positioning is predicated on the fact that we believe investors are looking for us to be in a self-funding model and that's exactly where we are.

Gary mentioned it we're in a unique position because of the strategic actions with the sponsor, we're in a very unique position where we're able to have high coverage solid distribution growth compared to the peers and put ourselves in a position where we are not going to issue public equity and we're going to plan to spend about $2 billion in organic growth capital.

And just a quick summary of that. We're going to put on about 1.5 BCF of processing next year, 40,000 of DF capacity and 60,000 of C3+ frac capacity. So, to be able to do that, we believe we're in it in a very unique position. So, feeling very good about that and think that offering to the MLP spaces is very strong.

And your second question was?.

The mix up on it..

Yes..

Yes. So Brian, on the drops from the beginning of the discussion about the strategic actions. MPC and MPLX have been aligned that we would strike a balance of roughly 50/50 when you look at all the drops in composite. And it's moved around on either side of that 50/50.

But when we get on the other side of these transactions you'll see that it still will be roughly 50/50..

And then just to confirm on the self-funding for equity, MPC is not expected to, no units are expected to issued MPC next year for?.

No, not for our growth capital spending, no. that's we're not trying to be queue saying we're going to issue equity at MPC and then they fund our capital spending program.

No, we think that as has already been said, just the unique opportunity where the drop of this $1 billion into the partnership, on the fields distribution has no maintenance capital. So, it's all at all free cash flow for the partnership.

It's a significant slug of capital that we can use to fund the business and maintain a high coverage and still have an attractive distribution growth rate..

Want to get sideway to my next question on maintenance CapEx since I appreciate the preliminary outlook for '18 on expansion CapEx but can you refine your 2017 maintenance CapEx expectations and what's a reasonable range for 2018 for maintenance CapEx?.

Hey Brian, on 2017 we haven’t given an absolute number. Just we're telling the market that we're going to come in below that $150 million due to two things, capital discipline and timing. The team has done a very nice job. Don's who has the team, great focus team who've done a nice job.

Looking at our capital program and we're going to come in reasonably well below that but we haven’t guided it to a number. And as far 2018, we haven’t gotten through our full process there yet either, so we don’t have a number to disclose at this point..

Okay, fair enough. Thanks, Mike..

You're welcome, Brian..

Thank you. Our next question is from Jerren Holder from Goldman Sachs..

Hi, good morning. Just wanted to start maybe on third party M&A and obviously you guys have commented that you believe that midstream needs to be consolidated at some point.

Can you just remind us in terms of how active you guys would like to be and is this more of a post IDR restructuring event that you will be more aggressive in exploring opportunities?.

It's not Jeremy that -- excuse me, Jarren that I think it will the midstream is consolidating. We have been active in looking at some opportunities but nothing has come up of any size yet that has very set us well.

But as such stated earlier, we've already turned over our dropdown to the accomplish committee and they're assessing that and that simultaneous will that close or we'd expect to get the IDR exchange done. So, that is first and foremost in our mind right now.

So, you're going to see us get that done straight away, then we'll see what opportunities there might be..

Thanks. As a follow-up, obviously we didn’t see any higher NGO prices propane particular any update in terms of how you guys will think about hedging.

Have you been doing more as far as 2018 is concerned given where prices are and then also in terms of your customers, British customers, have you seen a bit of a shift from there dry acres to wet acres as a result from this higher NGL prices?.

This is Greg Floerke again. We are seeing as you can see about our growth of rich drilling is here in the Marcelles is robust. We are happy to see propane prices above $0.90. We see propane as a percent of crude oil disconnect for the first time since the shale revolution started in the Marcelles.

So, all good signs and really driven by exports and storage. So, I think as we look at the forward curve, it's not necessarily reflected in the forward curve yet. In terms of pricing we're not seeing $0.80 or $0.90 pricing there yet. So, that will have obviously an impact on your strategy towards hedging. But it's really a being primarily fee based.

It's really a good sign for our customers who get the most benefit out of the pricing moves. And does provide positive economics to move to the rich side we believe into the near future..

And Jerren, it's Mike. The only thing I would add is we're seeing a lot of constructive signs as Greg mentioned robust activity on the wet side. We also mentioned in our prepared remarks that the dry activity in Utica has picked up which is encouraging to us.

And to your last point, we're getting support from the commodity price which is strong for the producers as well. So, all the factors are looking positive and constructive for the activity that we're seeing..

All right, thank you..

Yes, that's had good reasons..

Welcome..

Thank you. And our final question today is from Barrett Blaschke from MS MUFG..

Hey guys, a lot of mine have been answered. But just looking out for growth sort of beyond what's already on the list.

Do you guys see any desire to more I guess vertically through the supply chain for NGL's in particular?.

Yes, I think one of the things we're going to do is diversify our portfolio. We have a terrific GMP business that goes well ahead to the plan. And we're going to look to investigate our opportunities to be downstream of that. We're open to a lot of different things.

In general I would say the way I think about it is we have a great foundation on both the GMP side and the L&S side. So, we're in a unique position with a terrific foundation and now our opportunity is to take advantage of the assets we have and try and diversify from there..

Okay, thank you.

Is there a preference for kind of what type of product you'd be looking for maybe like a long haul system on, would it be more for the NGL's or would it be more for to let the side?.

We're closer to the NGL systems at this point from where we are. But we're open to anything really to be honest with you. One of the things that we want to do is expand our thought process and be able to be a service provider in some of the other services that are out there that we haven’t participated in at this point..

Thank you..

You're welcome..

Thank you for joining us today and for your interest in MPLX. Should you have additional questions or like clarification on any of the topic discussed this morning, Doug Wendt, Denise Myers and I will be available to take your call..

Thank you. And this does conclude today's conference. You may disconnect at this time..