Dax leads Kinder's M and A program, their strategy formation as well as capital allocation decisions. So he will be presenting a few slides, and then we'll carry on with a few questions and then eventually open up for more questions from the audience.
Thank you. Very good. Thanks a lot. Well, I'm just going give you a couple of slides here, just an overview. I know some of you are probably pretty familiar with Kinder Morgan, some of you may be less so.
So just a little bit of an orientation towards the company, who we are, what we're all about and to get things going and then we'll go into the far side. So this is kind of our typical map overview. If you look up in the top right corner, you see we really have four main business segments: natural gas, which is everything from long haul natural gas pipes to gas storage to a midstream business, which is of just over 60% of a contribution on earnings before DD and A basis. We've got refined products pipelines business and a terminals business, both of which are about 15% of overall EBD and A. And then we've got our fourth business segment, we refer to it as CO2, but it's an enhanced oil recovery segment, which is together in aggregate about 10%, and it really consists of two different businesses.
One is enhanced oil recovery, which is actually extracting oil through tertiary recovery out of the ground, which is about 6%. And then the CO2 in transport, which is pulling CO2 out of the ground in Colorado, transporting it into the Permian and using it both for our own account as well as selling it to third parties. And so those two together account for about 10%. And just a couple of highlights here again, on the natural gas front, 70,000 miles of natural gas pipelines, six fifty seven Bcf of gas storage capacity. We have the largest gas storage network in North America as well as the largest network of natural gas pipelines.
We've got key connectivity to really all the major basins, all the major supply demand hubs and are well connected both from domestic consumption, domestic supply as well as an international consumption perspective. Largest independent transporter of refined products, 1,700,000 barrels a day of refined products, 6,900 miles of refined products pipelines and a good chunk of other liquids, which are mainly crude and natural gas liquids. On the terminal side, largest independent terminal operator in The U. S, 157 terminals, 16 Jones Act tankers. And I think very notably on that, we'll talk about I'm sure we'll talk about exports a little bit.
But we've got in the Houston Ship Channel kind of alone, which we consider to be a hub, 40,000,000 barrels of storage and 11 ship docks, which gives us tremendous optionality. And
then on
the CO2 front, as I mentioned, we do 1.2 Bcf a day of CO2. Just a couple of highlights here. Market cap over $40,000,000,000 one of the 10 largest energy companies in the S and P 500. The next bullet point, I think, is very important. 15% of the company is owned by management.
And obviously, Rich has by far the biggest stake, but he's not the only one. I think all there is significant insider ownership, both from a management and a Board perspective. So we have really very much a principal mentality versus an agent mentality running the company. Based on our current dividend, which is $1 a share, a 5% yield, we have telegraphed that we will raise that dividend to $1.25 in 2020. That's sort of the last a bit of dividend guidance, specific dividend guidance we've given, but we have we are on record as saying we will raise the dividend to $1.25 run rate next year.
So that's 25% growth above where we are right now. We've got a $2,000,000,000 share buyback plan in place that we announced a couple of years ago that we've used about a quarter of. So we've got that in place and absolutely available. Just looking at this slide, just talking about I think one thing is really important. A lot of people talk about fee based cash flows and take or pay cash flows.
66% of our cash flow is take or pay. And you add on another 25%, which has some volumetric exposure to it, that gets you to about 91%. But I think very importantly, we have, again, 91% fee based and 66%, which is take or pay. And then on our from our customer perspective, we've got roughly 77% of our customers are either investment grade rated or there has there is some element of substantial credit support associated with them. So this is just the last slide I want to cover before we go into the conversation, and we'll delve more into this in the conversation, I think.
But from a balance sheet perspective, balance sheet is incredibly important to us. We've got $4,100,000,000 of available cash and liquidity, and we've got a target net debt to EBITDA of about four around 4.5 times. As we said publicly on the last call, based on where we look right now, we'll end the year at about 4.6, although if the Canadian acquisition or Canadian divestiture closed early, we would be if it closed and we used all the proceeds from Cochin U. S, we would be in about 4.4 times. But we have we fought hard over the last two or three years to get to 4.5 times.
We're solid BBB credit, and that is a very salient goal of ours. From a dividend perspective, I already talked about that, dollars $1 going to $1.25 From a capital project perspective, capital projects are a high priority of ours. We spend $2 to $3,000,000,000 a year on capital projects, and we think that's going to continue certainly for the foreseeable future. But we also had, as I said, we've got a buyback in place and the ability to execute on that to the extent that we find ourselves in a position where that's more attractive than other alternatives. So with that, I will we can transition on over to the
fireside Great. Thank you, Dax. So maybe I'll throw you a couple and then we'll open it up to the audience. Sure. But first, just at a high level, throughout this year, we saw that the production growth outlook and sort of the commodity demand outlook as well sort of moderate throughout the course of the year.
And looking into next year, sort of the outlook is still I think we're still getting clarity on where producers stand. And I think beginning this year, when you have the Analyst Day, we sort of had like a longer term outlook to 2020, 2025 and beyond and how KMI sees the growth ahead. Just given what has transpired throughout the year, has do you have any updated thoughts on what midstream growth opportunities that you
Yes. So I mean if you look at our backlog right now, we've got $4,100,000,000 in the backlog. About $2.8 of that is from the natural gas segment. We think that and as I said, we think that we're going to be able to invest somewhere in the neighborhood of 2,000,000,000 to $3,000,000,000 a year in expansion projects. We've been able to do that historically.
As we look at things right now, we think that we believe that, that will continue. I mean there could be a little bit of softening on that, but we do believe that in the near term, but not in a big way. We believe that we're going be able to continue. I think that a good chunk of it will come from the natural gas segment. I mean natural gas continues to have both supply push and demand pull dynamics that are favorable to incremental projects.
Now again, obviously, we're going to be very we're going be very deliberate about making sure that we have the deals that we need. We're not going to force investment. We're not going to drop our return criteria, but we do believe that the need will continue.
And maybe just to follow-up on the progress of your Permian takeaway projects in general, and you have been sort of the leader there in providing the takeaway capacity for gas. So obviously, you have two pipelines, one already that has assorted and second one starting in 2021. And then the third one, Permian Pass, which is still, I think, under development. So in general, what is your outlook for the demand for Permian takeaway looking ahead? And then if you can touch on some of your conversations with producers with regards to the third pipe?
Yes. Yes. So the first pipe, as you say, was GCX, which we put into service in September. That was two Bcf a day of takeaway capacity. We've got in progress right now our Permian Highway pipeline, which previously we had scheduled to be in service by the end of this year.
And that's $2,100,000,000 and two Bcf a day of takeaway capacity out of the Permian into the Katy hub. That on our last call, we obviously updated and said that we were pushing that forward by a quarter. So it'll be first quarter of twenty twenty one. And I think we are there haven't really been any further developments on that. We've got 85% roughly of the as we said on the call, 85 of the right of way procured.
We're working on we've got construction underway on Spread 1. We have some of the regulatory permitting stuff was such that that's really kind of what drove the one quarter delay, but we've got a very good line of sight to getting it completed and online as we suggested. With respect to the third pipe, as we said on the call and then obviously, the third pipe to the market is the Whistler pipeline, which has been FID. That's not a pipeline of ours. That's been FID ed, and we obviously don't have any specific insight into that.
Our pipe would be the third for the P3 pipe would be the third for us, the fourth for the market. And we're still having conversations with producers. As we said on the call, the market may not be ready for it into 2022. It may be further. I mean, screen still suggests the spreads are still there and the market still suggests that the production is coming.
But the ultimate arbiter of whether or not it's needed is whether people sign up for it. And we're clearly going to be very disciplined about whether we do it or not and not going forward without the commitments. But we're continuing those conversations and that would be and we're also very cognizant of the fact that you've got to be more considerate of the ultimate terminal value of the a fourth pipeline coming out of there. So the Whistler pipeline is roughly two Bcf a day. So that's six Bcf a day.
This would effectively be eight Bcf a day coming out of the Permian. And so anyway, we're going to be we're thinking about all those. But it goes kind of part and parcel to your first comment about people being very cognizant of the amount of balance sheet space they have and what turning up.
Maybe if we can delve into that a little bit. You mentioned the current spreads seem to support it. The last I checked, Waha Henry Hub forward spreads in 2020 to 2023, it's roughly in the $0.60 to, call it, $0.07 5 per MMBtu. And if you consider your gas transportation cost in the $0.05 0 to $0.60 per MMBtu, It seems like there is based on market pricing, there is need for the fourth pipe. But if you can maybe provide a bit more color on what is the hesitation on customer's parts?
Is it really just on being more capital disciplined and not wanting to enter into contracts at this stage? Yes, I think
it is. I mean I think it's I think it is knowing that I mean, again, I don't spend a lot of time talking to our customers. We spend a lot of time working to understand them. But at the end of the day, I think it's finite capital resources and realizing that there's six Bcf of egress capacity out there. And the screen the one thing the screen doesn't necessarily tell you is what the spark market is going to be like when you actually get to that point and what the depth and what the liquidity is when you actually put the steel on the ground.
So again, I think that the most important thing for us is to be in front of our customers, to talk to our customers, to understand what their needs are and to be ready for them when they're ready. And if the market is ready for it, they'll sign up for it and but not until then. So
And maybe switching gears a little bit and thinking further downstream and LNG. Obviously, I think everyone is happy that Elba Island is finally
in service. As are we, yes. Yes.
And so I really wanted to touch a little bit more on that. And if you can comment on some of the learnings Kinder had from that project. And maybe thinking ahead, you have the Gulf LNG project that you have talked about and maybe a bit more update on where that is. And just in general, thinking about what your perspective is on thinking return economics in just supplying to a facility versus supplying and then partnering other project as well?
Yes. So we've got our finger in LNG and specific with respect to plants in two different places. Elba, the one you mentioned, the one that's kind of closest in front of us, is in Elba Island, Georgia, and we are we just completed the first MMLS unit of 10 that we're doing for Shell. We placed that into service recently. We've got nine more units to put into place.
The next three units will come into place by the end of the year. The remaining six will be in place by the first half of next year. And that's a liquefaction project that we own half of. We brought in a private equity partner, EIG, several years ago, and they own the balance of it. Just to refresh your memory, we had with respect to the project economics, 70% of the economics on the actual LNG were triggered with the first unit coming into place.
And when you factor in the other ancillary infrastructure pipeline and terminals and stuff, it actually is 80% of the overall economics. So we're already getting sort of 80% of the economics from that. But it was a complicated process. I think we learned a lot in terms certainly in terms of getting the next trains getting the next MML units in place. I mean, these are this is a Shell technology that is manufactured by a company that in Texas that is a subsidiary or was a subsidiary of GE.
They're manufacturing to Shell's standards, transporting it up to Elbow Island, Georgia. And then we have a Japanese EPC contractor under our supervision assembling them. So there are a lot of cooks in the kitchen and a lot of pieces to sort of get together. But we got the facility up and running, and we learned a lot of lessons that we're applying on the next ones. Again, that will be fully in service by the middle of next year.
There's a possibility of a smaller expansion with Shell at some point, but that will be totally up to Shell. But those are twenty year take or pay contracts we've got on this facility. The other facility that we've got is Gulf LNG, and that was a legacy El Paso facility, regas facility that was completed in 2011. That's in Pascagoula, Mississippi. And it is a it's a brownfield site.
It's one of the last, not the last permitted brownfield sites. It's got a full permit associated with it, it's right for LNG development or liquefaction development. As it stands right now, we've got some legacy regas contracts that were that we've got some disputes we've got to settle before a liquefaction project is really viable. And I think whether or not if we get those kind of work through, whether we actually get that developed into a viable liquefaction project, I don't know. I will say there may be better people out there to do that than we are.
I mean, I think we're we don't have a really deep history of developing LNG projects. So there may be people we may look do that with somebody else. We may look to monetize that with somebody else if that opportunity ever sort of brought itself out. And just to your I think your final question was regarding specific projects or our infrastructure around it. I mean we've seen tremendous opportunity for our network surrounding the other projects and to be able to deliver molecules to other projects.
We've had several projects expansion projects to be able to deliver. I think we're always looking at different opportunities. I think that for us to and we certainly looked at plenty of other incremental LNG projects. But I think that the real sweet spot for us is to continue to deploy capital on our network, around our network, supplying other facilities that are coming in place.
But if I may, to the question about whether we would see Kinder do more of JV projects like Elba Island. Just trying to marry that with how you reviewed your participation in the offshore oil terminal project. You give us more clarity on how you review your expected project economics and whether a new project like Elba would fit that exercise? Yes.
No, no, good question. I think well, Elba JV that we did, the deal, that was a unique situation. I mean, look, we're always willing to JV something with somebody to the extent that they bring something to the table. Clearly, we've both of our Permian pipelines recent Permian pipeline, both GCX as well as Permian Highway have partners have equity partners. With Elba, it started out as 50% being owned by Shell, and we bought Shell.
Shell decided they wanted to sell out, so we bought Shell's 50%. And then we ran a process and brought in some private equity money to fund the other piece. And that was a time several years ago when we were balance sheet capacity was incredibly precious. And so I think any new project that we look at, we're going to look at it first and foremost through the lens of our hurdle rate, our 15% hurdle rate. And if we can if we've got all the capital available to be able to deploy it at that rate, I think we would prefer to do it.
Now to the extent that there's a project that's larger than we're comfortable with or something where a partner brings something to the table that we don't have, we absolutely will look to bring partners in. And we most of our partnerships have worked out well and we've I think we do a pretty good job of bringing in good partners and people we can work with well. So we're always open to doing that.
Got you. Got you. And maybe switching to your products segment. Thinking about the refined products business, that's been fairly stable, fairly supportive of your free cash flow growth efforts. In terms of exports of gasoline and distillates of Gulf Coast, you have a chunky market share of U.
S. Exports. What is your outlook with regards to that exports? And do you expect your business to grow along with the market? Or do you plan on trying to grow your market share?
Yes. Well, I mean, I think both. And I think and so that the area that, that touches us the most is in our terminals business segment and along the Texas Gulf Coast. I mean, we have as I mentioned up there, we've got roughly 40,000,000 barrels of storage and 11 ship docks, some additional barge docks. The ship docks are the ones that are most relevant.
But we've got we've had over the past right now, we're doing roughly 350,000 barrels a day or something along those lines. We've got we've had roughly a load of kind of mid teens CAGR over the past, whatever, ten to fifteen years, something like that. We still got 25%, I think, all in all, 25% available additional capacity for exports. We see it we think that and the thing about the Gulf Coast, I think, that's always that's incredibly important is you have obviously a lot of crude coming into the area. And you've got the most important refining complex, certainly in North America, if not the world right there.
And so you have a lot of it's kind of just ground central for refined products production and exports. So no, we think that we think it's right for additional growth.
Just a quick follow-up on that. How much do you think you have signed to benefit from IMO to you guys?
Yes. I'm not sure that we've totally quantified that. I mean, clearly, I think there will be some benefit. I mean, we've got some heavy some bunkering business, but I think the overall I think the overall benefits will be there'll be some benefits, so.
Right, right. I do have a list of questions. Can keep going. But if you do have questions, feel free to raise your hand.
Thanks for the time.
Yes. Thanks for coming.
You mentioned the 2,000,000,000 to $3,000,000,000 a year in CapEx, and you said that may soften in the near term. If we play out the scenario where that does soften, would you guys look to do perhaps some more share buybacks? You mentioned that you have a $2,000,000,000 program, you used a quarter of it. And maybe or would you look at perhaps M and A? Anything else there would be great.
Yes. The answer is both, all the above. I think the way that we sort of think about it is, as we sit here, so you kind of start with you start with the balance sheet. And as we've said, approximately 4.5 times. Now to the extent that we found ourselves in a situation, somebody asked earlier and somebody said, well, what if you had a whole bunch of like money that fell out of the sky or something on something, would you use it to delever?
I think we're our view is we want to stick 4.5 is sort of the number. But if we had you could see us, certainly with potentially the Canadian proceeds, hang some on the balance sheet for a bit for some opportunity, drop down a little bit lower for potentially M and A dislocation, better buyback opportunities, that type of thing. I think our as we sit here right now, our first priority is are the projects. And so to the extent that we can invest $2 to $3,000,000,000 a year in projects that are 15% return, we would prefer to do that. Now we are absolutely not going to force that.
We will never sit back and say, well, told people 2,500,000,000.0 so my God, the next project is only an 8% return, so we got to get it done. We'll never do that. We'll stick to our return targets. After that, I think, certainly, buybacks or the ability to create additional optionality on the balance sheet. Now we obviously talk about dividends at the right time.
Dividend, obviously dividend policy is obviously the thing that is you're least able to sort of change or make any adjustments to. The 1.2 dollars is the farthest we've gone out. And after that, it will be a KMI Board decision. The KMI Board has not made a decision on that yet. I would expect that it's probably something that approximates the growth in the business over time.
And then sort of everything else will fall out of that as I articulated it.
So Maybe just a quick one on the nat gas pipe dynamic out of the Permian. You mentioned the fourth one, the market is not ready for it. Instead of having a brand new sort of fourth pipe, would it be possible to do more compression on the two that you would have or in the third or would it actually need to be?
Yes. With our two, I can't speak about I can't speak totally about Whistler, but on our two, they're both 42 inches and they're fully basically horsepower them all the way up. We did look at larger pipe at 46 inches putting a 46 inches out there. But the once you get to that size, sourcing it becomes difficult and much more it's much more difficult to source it in the tariff issues that we kind of went through made that sort of path that we didn't want to go down. So the short answer to your question is those pipes are both 42 inches and fully horsepower up.
So it would need to be either a new pipe or don't it would probably be a new pipe versus all new pipe in the ground, same right of way.
And maybe just one last one. It sounds like M and A is not the top priority, but if you are looking at the spectrum of opportunities, any sort of indication of interest in certain types of assets or geolocation?
Yes. I would say so well, the first thing I would say, and I'm sorry, I didn't that was a part of your question that I didn't address. M and A, we have always had, as we like to say, on the field. We've never taken it off. We spend a lot of time thinking about M and A, different opportunities.
But I think that where we are, we have obviously two different ways to pay for something, cash or equity. And I think that for us to go do something and look, obviously, we do you just saw the South Cross small acquisition we did, dollars 76,000,000, which is very small, but highly attractive. We absolutely I mean, again, we spend a lot of time looking at this, but First, you got to like the assets, the valuations kind of line up and you got to get past the social issues. And anything we do, though, is going to be and we certainly don't sit back and say, we got to have this kind of asset or this or this basin, that leads you to a bad deal.
So we will focus on financial metrics. And if we do something, it will be something that we're very confident is highly attractive. That's a philosophical question on your target net debt to EBITDA The oil and gas world is changing, and it's slowing down. And we heard over the last two days that things are really changing.
Why is 4.5x the optimal of the target range? Why not lower? How are you thinking about it philosophically again? Yes. I'd say a few things that kind of went into it.
Our calculus tells us that and again, we could certainly have what we've said is around 4.5%. And as I said, from a we could certainly temporarily drift kind of below that. I think a big part of it is credit rating driven. I mean we have as a goal to be, as we say, a very solid BBB credit. I think that our view is we want to manage the optimal place from a credit from a debt capacity perspective, debt credit perspective, such that we don't think that we would get that much incremental benefit from a cost of debt perspective by taking another, whatever, I mean, it $8,000,000,000 of EBITDA, call it another paying down another $4,000,000,000 worth of debt out of the chute to get to, call it, four turns with and putting that completely on the balance sheet.
So we feel like where we are, we are very solid. We're not on the edge from a BBB perspective. We are solid BBB perspective. We're solid BBB. We just obviously went through the upgrade process.
And so I guess the short way to say it is we believe the spot that we're in is has an optimal amount of risk, balances the risk, balances return to equity holders versus debt holders. And we don't get a whole lot by going further from that. And look, we certainly think about potential stress tests and downside cases. And as Anthony always points out back in the credit issues we went through in back in 2016 off of roughly the EBITDA, we've got $7,800,000,000 of EBITDA. The bankruptcies, the whatever 100 of bankruptcies that happened during that time, we took a hit of $10,000,000 So that's really kind of the way we think about it.
But we do think about it a lot. We have and we continue to.
Maybe one more from me on exports again and to Mexico your natural I think recently, I think the Mexican government had some requests in terms of contracting, and I think there was some news headlines around that. But obviously, Mexico is still a big market for you guys. What is your current outlook in terms of what the incremental growth opportunities are there? And just in terms of downstream and storage infrastructure wise, do you have any concerns there?
Yes. So what we have right now in terms of presence with Mexico is we have one pipeline into Mexico that we built circa 02/2003. It's called our Mira Monterrey pipeline. It goes into goes South Texas into Monterrey. Aside from that, the strategy that we've generally adhered to that's worked really well for us, and we've looked at plenty of stuff Mexico, but we've never really gotten there on incremental stuff in Mexico.
But we have built a decent bit of capacity both off of EPNG as well as our intrastate midstream network in Texas and further westward to the border, to pipelines there, where we've had people build to us and effectively connect and take the capacity. That's a strategy that's worked well for us. We like that. I think that we don't really have any concerns. I think there is an initiative in Mexico to work towards consuming a lot more of their own natural gas, which from their perspective certainly makes sense.
If that happens, I think we'll deal with it. It hasn't happened thus far today. But I mean, we like our position. I don't see us going in deploying much capital in the country of Mexico, and I don't see much downside, at least at this point, to the infrastructure that we have that goes and connects to the border. Got it.
Got it. Then on the CO2 business, I'm sure you have been asked this a lot in the past and the questions have sort of died down recently. But thinking about your longer term strategy there, where do you stand today? And second follow-up to that is, since you have already been moderating spending there, should we expect that to continue over time before you make a big strategy change?
Yes. So I would say so first and foremost, that's a business that we've acquired and built up over time. It is there is no question that it is a business that certainly on the UR piece, the S and T piece is different. It's not a it's a business that doesn't look just like the rest of our businesses. It's obviously it truly is oil production.
And I think it's a business where we like to spawn, we're very comfortable with. The way that we think about that business is we don't in terms of putting additional capital into it, we don't sit back and ever think about it through the lens of replacing production. We don't say, well, we've got to maintain 50,000 barrels a day of production and we need to do whatever. We look at it purely on a return of a return on capital and our hurdle rate in that business is substantially higher than it is anywhere else. I mean, generally, it's a minimum of 20% on every dollar deployed in that business, and we've got to feel very comfortable that we're going to get it.
So now historically, those opportunities have presented themselves. I mean, SackRock is where the majority I wouldn't expect that you would see much growth going forward from Katz, Goldsmith or those fields. Gates is kind of steady Eddie. Sackrock is a field that has been just steady for us over time. And most of the really attractive projects we found have been sort of around sack rack like Hawaii and Bullseye and some of the other projects we found.
Now Tall Cotton is a project that we were hoping was going to go. And the oil that we the oil is still there. The oil that we found is still there. But at the current price, we weren't getting the returns that we were hoping to get from it. So that's where the lion's share of the capital reduction came from.
But we're going to always be disciplined about the business. We're not going to invest for production. We're going to invest for return on capital. Longer term, again, we are absolutely happy to own that business. There's a lot of talk that comes up about it every now and then.
I would say and I don't this is not just sort of smart rhetoric. Truly, everything we own is for sale every day at the right price. And that business is something that again, we are perfectly happy if the right thing came up, we'd be happy to entertain it. But are perfectly happy to own and operate that business, and we think we've got a great team that does a very good job of it.
So And since you brought it up, in terms of asset sales, Mr. Kinder had some comments around the multiples that you could trade some assets at, especially given the private equity capital that's out there. So first question, is there any color you can provide on any sort of inbounds you have received on particular types of assets? And secondly, given your size in the industry and given the private equity capital that is out there, what's your perspective on that? And how long you think that would last?
Yes. There's certainly a lot of capital out there. There's a lot of capital floating around looking to be deployed certainly in the infrastructure space. And yes, just dovetailing off from Mitch's comments on the call, we have I mean, we're in pretty constant dialogue with different people about different things. We receive lots of inbounds and he's exactly right on that.
You could see us do potentially a couple of different things. And look, I will say, having a whiteboard spitballing conversation with somebody on the phone on the left bookend, getting into the right bookend of actually having ink on a piece of paper. I mean there's a of daylight between those places and a lot of so you never know if you're actually going to get anything done. And there's a lot of risk to getting something done when a conversation starts. But you could see obviously, we've done some small asset divestitures here and there.
You can see and we're generally looking I mean, we've got a generally a high bar. We see value in recycling capital, but we've got a generally a pretty high bar for selling assets. We generally need to find somebody that has a view on an asset that's substantially greater than what our view of it is. There's also, obviously, the potential for at some point, we could potentially do something larger where we take we take something larger than a single asset and sell a piece of it to somebody to a passive piece of it to passive capital, something like that. So that's another form that something that we might do could take.
So we
have a few minutes here, so. Hi,
guys.
Can I
ask you a quick one on just on recontracting? I'm not sure if there is there one, is there a big risk to that in your business? And if so, where are you seeing that? And are you seeing pressure on rates? Or do you feel like steel on the ground is very valuable and you
can still kind of Yes. There's nothing beyond what I would say is there's nothing beyond the stuff that we've disclosed with respect to some of the basis the point to point basis pipes like FEP and MEP and Ruby, I mean, of those contracts are rolling kind of this yearnext year. And obviously, the basis differentials between those places are substantially less than kind of what the contracts were, but that's stuff that we've talked about. We've talked about in the past.
I mean, Ruby, I mean, I think the market well knows what the opal to molyne spread is on Ruby. And those contracts are coming to fruition. Double H, the contracts on that roll next year, that's much, much smaller. But that pipeline is pretty heavily utilized. So that's really those are kind of the main places.
Obviously, in our refined products business, that's Energy Policy Act of '92. We don't have contracts there. In the terminals business, our contracts are rolling all the time. That's the that's kind of what I'd call the I think that's what you're getting at, those pieces. Yes.
Maybe a last quick one. So in terms of thinking about future growth, where do you think is the next marginal growth opportunities for KMI in Permian, Bakken, Haynesville?
Yes. Tough to call it by basin. I think that I mean, I think there we probably have a pretty high degree of confidence that it's going to be natural gas oriented. You could see and it's going to be probably it's probably going to have a demand consumption component to it. I could see something I mean, the betting money probably places it on the Permian if you had to be very, very basin specific, but it could be I think there's a more it's more likely that it's skewed towards natural gas that we can pick that and we can exactly the basin.
But probably has something to do with Gulf Coast Permian probably, if I had to guess, it's probably given the fact that the 70% of the incremental consumption growth in natural gas in The United States coming in Texas, Louisiana, it's probably natural gas and it's probably somewhere in Texas, Louisiana. If I had to guess.
Great. Thank you. Thank you for all the answers. I think that's all the time we have. Thank you so much, Taks.
Thank you. Thanks for having me.