Welcome to the MPLX third quarter earnings call. My name is Elon, and I will be your operator for today's call. At this time, all participants are on listen-only mode. Later, we will conduct a question and answer session. Press star one on your touch-tone phone to enter the queue. Please note that this conference is now being recorded. I would now like to turn the call over to Kristina Kazarian. Kristina, you may begin.
Good morning, welcome to the MPLX third quarter 2018 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, CFO; and other members of the management team. We invite you to read the safe harbor statement and non-GAAP disclaimer on slide two. It's a reminder that we will be making forward-looking statements during the call and 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 SEC filings. I will turn the call over to Gary Heminger for opening remarks.
Thanks, Kristina. Good morning, thank you for joining our call. I am pleased to report that MPLX once again delivered exceptional results with third quarter adjusted EBITDA of $937 million and distributable cash flow of $766 million. Our distributable cash flow was up 10% sequentially, which provided strong distribution coverage of 1.47 times. We also ended the quarter with a solid leverage ratio of 3.8 times. Our growth in earnings and cash flow continues to be driven by strong results in the Logistics and Storage segment, as well as record volumes in the Gathering and Processing segment. We also announced several strategic investments and acquisitions during the quarter. First, we plan to join the constructive Permian to Gulf Coast long-haul crude oil pipeline, which is expected to be operational in mid-2020.
Second, we acquired a strategically located Gulf Coast export terminal in Mount Airy, Louisiana, in close proximity to several large refineries to serve regional demands. These other planned investments demonstrate our team's ability to respond to market trends and build infrastructure that connects growing domestic supply sources to global demand. As we assess our business opportunities, we intend to maintain our focus on self-funding the equity needs of our organic growth projects with an emphasis on higher coverage and lower leverage. We believe this approach positions the partnership well to drive long-term sustainable shareholder value. With that, let me turn the call over to Mike to review our operational highlights.
Thanks, Gary. Slide four provides an overview of our Logistics and Storage segment. The L&S segment reported third quarter adjusted EBITDA of $547 million, which increased 24% year-over-year after adjusting for the impact of drop-downs. Total pipeline throughput averaged 3.39 million barrels per day, an approximately 7% increase over third quarter 2017. The increased throughput level was primarily driven by higher volumes on our recently expanded Ozark and Wood River to Patoka pipeline systems, which are now capable of transporting 360,000 barrels of crude oil per day. During the quarter, we also placed into service two 410,000-barrel crude tanks in Texas City, Texas. These tanks are expected to support export and logistics opportunities to MPC and other market participants. Slide five highlights two planned Permian long-haul pipeline investments that we announced during the quarter.
First, we plan to jointly construct with Energy Transfer, Magellan Midstream Partners, and Delek, a crude oil pipeline running from the Permian Basin to the Texas Gulf Coast, which we are calling the Permian to Gulf Coast or PGC Pipeline. The 600-mile PGC Pipeline is expected to have multiple Texas origins, including Wink, Crane, and Midland. The pipeline will have the strategic capability to transport crude to both Energy Transfer's Nederland terminal and Magellan's East Houston terminal for ultimate delivery through their respective distribution systems. The pipeline is expected to be operational in mid-2020. The expected 30-inch diameter pipeline has the potential to be expanded depending on the level of interest during the open season. We also plan to participate in developing the Whistler Pipeline, a 2 billion cubic feet per day natural gas pipeline.
Whistler is expected to provide an outlet for increased natural gas production from the Permian Basin to growing markets along the Texas Gulf Coast. The pipeline will have multiple upstream connections in both the Midland and Delaware Basins, including a direct connection to the recently completed Agua Blanca Pipeline, our joint venture pipeline with WhiteWater Midstream, WPX Energy, and Targa Resources. Whistler is expected to begin operations in the fourth quarter of 2020. Turning to slide six, we also announced the acquisition of a Gulf Coast export terminal in the quarter. The Mount Airy terminal is strategically located on the Mississippi River in close proximity to several refineries, including MPC's Garyville Refinery. The facility currently has 120,000 barrel per day dock and 4 million barrels of fully leased third-party storage.
Permits have already been secured to construct a second 120,000 barrel per day dock, and the facility has the ability to expand to 10 million barrels of storage. Moving to slide seven. On October 17th, we announced with Crimson Midstream the commencement of a binding open season for the Swordfish Pipeline. This project is all about using existing assets to meet changing market needs. By early 2020, Swordfish would enable large volumes of crude oil to flow south from St. James to the Clovelly storage hub, which is a key crude distributor to area refineries and the connection point for crude exports via the Louisiana Offshore Oil Port or LOOP. LOOP is the only Gulf Coast port that can fill a 2 million barrel VLCC without reverse lightering. The proposed pipeline would have the ability to transport up to 600,000 barrels per day of crude oil.
Leveraging existing infrastructure makes this project a more competitive supply option for regional refiners than alternatively proposed projects. The pipeline would also provide needed additional capacity for exporters of North American crude. In addition, we continue to progress the project to reverse the Capline Pipeline. The owners have been meeting frequently in an effort to provide the market with a reverse Capline solution that could include WTI sweet crude and heavy sour crude. Moving to our gathering and processing segment, slide eight provides an overview of our operations and some highlights for the quarter. Within GNP, we reported third quarter segment adjusted EBITDA of $390 million, a 22% increase over the same period last year. The increased EBITDA was driven by record gathered, processed, and fractionated volumes. We continue to execute on our robust organic growth capital plan for the GNP segment.
Through the end of October, we have commissioned six new processing plants, increasing our processing capacity by approximately 1.1 billion cubic feet per day. In addition, we expect to add 400 million cubic feet per day of additional processing capacity and 100,000 barrels per day of fractionation capacity by the end of the year. Slide nine provides an overview of our operations in the Marcellus and Utica shales during the quarter. Gathered volumes increased 35% over the same quarter last year to an average of 3.1 billion cubic feet per day, setting a record for the partnership. The increase was primarily driven by Utica dry gas and Marcellus wet gas volumes. Processed volumes averaged approximately 5.5 billion cubic feet per day in the quarter, representing a 10% increase over the same quarter last year.
The increase was primarily driven by ramping up volumes at the Sherwood 9, Houston I, and Majorsville 7 plants that we placed in service earlier this year. With utilization near 100% at our Sherwood Complex for the third quarter, we were pleased to commence operations of the Sherwood 10 plant at the end of October. We also remain on track to place Sherwood 11 plant in service by the end of the year, which will bring the capability of this complex up to 2.2 billion cubic feet per day. As disclosed last quarter, we continue with the development of Sherwood 12 and 13, as well as the new Smithburg complex, all of which support Antero Resources' growing production in the wet gas area of West Virginia. In Southwest Pennsylvania, we expect to place into service the first plant at our Harmon Creek complex in the fourth quarter.
This plant will help serve the needs of Range Resources, another one of our top producer customers in the Marcellus Basin. Slide 10 provides a summary of our fractionated volumes in the Marcellus and Utica regions. We produced a record 454,000 barrels a day of ethane and heavier NGLs in the quarter, up 24% year-over-year. We expect to add 20,000 barrels per day of new ethane fractionation capacity at Sherwood in mid-November. We also plan on completing a 20,000 barrel a day de-ethanization unit at Harmon Creek and a fourth 60,000 barrel per day propane plus fractionator at our Hopedale Complex in the fourth quarter. These capacity additions will further strengthen MPLX's position in the Northeast. Moving to our Southwest operations on slide 11, gathered volumes averaged 1.6 billion cubic feet per day for the third quarter, representing a 14% increase over the same quarter last year.
Processed volumes averaged approximately 1.5 billion cubic feet per day for the quarter, an 11% increase over the third quarter 2017. Much of this increase was driven by volumes at our recently completed Argo plant in the Delaware Basin and the Omega plant in the STACK Shale Play of Oklahoma. In Southeast Oklahoma, as part of our Centrahoma joint venture with Targa Resources, we expect to add two additional processing plants in the fourth quarter. These plants, called Hickory Hills and Tupelo, will add 270 million cubic feet of processing capacity that will support growing natural gas production from the Arkoma Woodford Basin. We will maintain our 40% ownership in the expanded joint venture. Before I turn the call over to Pam, I want to take a minute to summarize where we are strategically.
We've been communicating for the past year our desire to focus on growing our longer duration ratable earnings base. In a short period of time, our team has made great strides toward accomplishing this goal, and we are seeing the effect in our repeated record results, strong base business growth, and exciting new project announcements, including long-haul pipelines and export facilities. Most importantly though, is that throughout this year, we have focused on high grading our opportunity set and being selective toward the best return projects so that we can continue to execute a self-funding model and finance our approximately $2 billion of organic growth capital without issuing any equity, while maintaining an investment-grade credit profile and strong distribution coverage. I will now turn the call over to Pam to cover our financial highlights.
Yeah. Thank you, Mike. Turning to our financial highlights on slide 12, we reported adjusted EBITDA of $937 million and distributable cash flow of $766 million for the third quarter, both of which increased substantially versus the same quarter last year. Total logistics and storage segment adjusted EBITDA was $547 million, while the gathering and processing segment contributed $390 million in adjusted EBITDA. Through the first nine months of 2018, we've reported adjusted EBITDA of nearly $2.6 billion. Our strong third quarter performance puts us on a pace to reach approximately $3.5 billion of adjusted EBITDA for the year, which I want to highlight is over $100 million higher than the current Street consensus estimate. We plan to give 2019 EBITDA guidance during Investor Day in early December.
Keep in mind that if you used third quarter 2018 as a proxy, you would arrive at an annualized total adjusted EBITDA run rate of nearly $3.75 billion, which again, is also over $100 million higher than the current Street consensus estimates for 2019. That's without considering the incremental growth that we expect from our ongoing capital investments, which Mike just highlighted, which includes for the fourth quarter, the addition of 600 million cubic feet per day of processing capacity and 100,000 barrels a day of fractionation capacity for the quarter. Now I'll turn over to slide 13. Third quarter adjusted EBITDA. The bridge shows the change in adjusted EBITDA from the third quarter of 2017 to the third quarter of 2018. Since the prior year quarter, we increased adjusted EBITDA by $399 million.
The assets and services acquired from MPC in the third quarter of 2017 and the first quarter of 2018 generated an increase in adjusted EBITDA of $276 million. With each drop-down's contributions broken out separately on the waterfall. Excluding the impact of the drop-downs, the increase in Logistics and Storage segment was primarily driven by earnings from the expanded Ozark Pipeline, as well as EBITDA from other recently completed investments, such as the marine expansion and the Robinson Butane Cavern. Lastly, the increase in the Gathering and Processing segment was primarily driven by record volumes. We also benefited from higher commodity prices during the quarter. Slide 14 provides a summary of key financial highlights and select balance sheet information.
We had approximately $2.3 billion of liquidity at the end of the quarter, which is approximately $1.25 billion available on our bank revolver and $1 billion available on the intercompany facility with MPC. I want to highlight that during the quarter, we funded significant organic capital investments, and we completed the $451 million acquisition of the Mount Airy terminal without issuing any equity. At the same time, we maintained debt to EBITDA below 4 times. The growth in EBITDA and distributable cash flow supported 1.4 times coverage for the quarter. We're committed to maintaining a strong balance sheet, and we ended the quarter with a leverage ratio of 3.8 times, which is comfortably within levels appropriate for an investment-grade credit profile.
MPLX had a strong track record of returning capital to unitholders, and last week, the board of directors of our general partner declared a distribution of 63 and three quarter cents per common unit. The very strong performance in both the Logistics and Storage segment and the Gathering and Processing segment demonstrates our ability to execute our strategy to grow the business. With our strong balance sheet and the robust organic growth opportunities across a very broad asset base located in strategic markets, we remain confident in the long-term value proposition for our investors. Now let me turn the call back over to Kristina.
Thanks, Pam. As we open the call for questions, we ask that you limit yourself to one question plus a follow-up. You may re-prompt for additional questions as time permits. With that, we'll now open the call to questions.
Thank you.
Elon, we're ready.
We will now begin the question and answer session. If you have a question, please press star then one on your touchtone phone. If you wish to be removed from the queue, press star then two. If you are using a speakerphone, you may need to pick up the handset first before pressing the numbers. Once again, if you have a question, please press star then one. Our first question today is from Jeremy Tonet from J.P. Morgan.
Hi, good morning. Just wanted to start off with the growth over 2Q is quite robust, particularly in Northeast GNP. Just wondering if you could dive in a little bit more as far as what the drivers were quarter-over-quarter there. Is this kind of ratable as you were alluding to there? Are there any kind of one-time items we should think about?
Jeremy. I would say nothing was a one-time item that was significant, and the sequential increase in earnings on the gathering and processing segment really was attributed largely to volumes. Again, throughout the year, we've continued to get the benefit of higher commodity prices as well. It's really the fruits that we're reaping from the benefits of the investments that we've made really throughout last year and through this year, we've brought on significant capacity to support the producer customers in the area. That's really what was driving the increase in the quarter.
That's helpful. Thanks. As I think about some of your actions recently, the initiatives you announced between Swordfish, the Pin Oak acquisition, PGC, and Whistler, it seems like you're really building out the upstream and downstream integration for your platform. Do you see more opportunities to do this going forward? How do you think about that?
Jeremy, it's Mike. You're right on. We are trying to purposely diversify our cash flow base and put a little more concentration in the Permian, as well as all along the Gulf Coast. The way we look at it is, we have a really strong, solid refining support network, strong and growing foundation up in the Northeast, and we're trying to add to that along the value chain down in the Gulf Coast, starting with all the way out in the Delaware Basin with our PGC pipeline. We're concentrating on exports. We have a Texas City tank farm that we're starting to grow out. As you continue further east, as you mentioned, we purchased the Mount Airy terminal, and we're also just launching the open season on Swordfish.
We are trying to diversify ourselves from a cash flow standpoint, as well as concentrate in both long-haul pipes and export facilities.
Jeremy, this is Gary. When you look at Swordfish Pipeline, it goes all the way down to the LOOP, Louisiana Offshore Oil Port export facility. That capital's already been put in place. It's operational. All the permitting was done 30 years ago. This thing is up and running. This is the most efficient way to be able to move crude oil into the Eastern Gulf, either to be used within the Eastern Gulf's refining system, with St. James as the big manifold for the entire Eastern Gulf, or you can then take it on down and export it. The other thing is that LOOP is the hub of most of the offshore production in the Eastern Gulf.
You have tremendous flexibility to bring that production in, take it up into the refineries or to bring barrels all the way down, either from Cushing, Patoka, and eventually, the reversal of Capline Pipeline, which we think will be shortly coming, all the way to bring Canadian barrels in. Swordfish Pipeline just provides a tremendous option for the Eastern Gulf refining complex as well as export complex.
Thank you. Our next question is from Shneur Gershuny from UBS.
Hi, good morning, guys. Just a quick question to start off. You sort of had some interesting language today with respect to the MPLX and ANDX as to how it potentially could fall out. I realize you can't formally comment on which path you're going to take, but I was wondering if you can talk about end goal metrics from a financial perspective. Although you did outline them, I guess my question is: when do you want to get to those metrics? Does it have to be when the two entities combine, the metrics need to be there on day 1 on the coverage and on the leverage side? Or if there's a path to it within the next 12 to 18 months, is that acceptable?
Just trying to understand that in the context of, is there potential for cuts to both distributions if you need to be at the metrics immediately on day one, if you can sort of comment on that.
Yeah, Shneur. When we look at this, you're right, we have very little analysis. We've just embarked on this, and we can't comment on that analysis today. We did choose our words carefully, whether it's MPLX that may buy ANDX or vice versa of ANDX buying MPLX. That'll be determined over time. We have not set a calendar that it has to be done in a certain period of time. As I spoke this morning on the MPC call, in this type of business, now MPLX being one of the biggest MLPs in the space, scale matters, and scale leads to efficiency. We don't have any bright line test that has to be done in a certain period of time, it just makes sense that we go down that path. I'm not going to discuss any cutting of distributions at all.
We had put out in the ANDX announcement last week that we were going to keep the distribution flat. It didn't say anything in that release about a distribution decrease. We're doing our analysis, and we'll just continue to, in the meantime, operate as normal. We'll do this analysis and see where it takes us. I think that both opportunities are on the table, depending on who the acquirer is.
Great. As a follow-up question with the Swordfish announcement and so forth, and part of your answer to the prior question. What's the outlook for a Capline reversal? Is it finally going to come to fruition? I know that this has probably been asked about for numerous times over the past three years, are we finally there, especially with the ability to export and so forth?
Shneur, it's Mike. What I said in the prepared remarks is, the three owners have been meeting frequently because the market interest obviously is not to move from south to north any longer. There is a desire in the market, for both heavy sour as well as light sweet crudes to get to the Eastern Gulf market. The owners are looking at that as we speak. It's part of the overall strategy that we've deployed with the Swordfish Pipeline that says, we got to be involved in that activity from an infrastructure standpoint. It is an ongoing discussion. We'll give more color as it develops, but I can tell you that the market interest out there is for north to south, and not from south to north as the market has evolved.
Thank you. Our next question is from Spiro Dounis from Credit Suisse.
Hey, good morning, everyone. I just want to start off with a two-part question on Northeast that maybe gets the disparity you called out there in consensus estimates. I guess just starting in Marcellus, can you just tell us what you're seeing and hearing from the upstream customers like AR and Range just around the sustainability of that growth through 2019? Conversely, can you just provide some color around processing in the Utica? I think one of your competitors today said we should be seeing more or less a bottoming there with maybe a bias to the upside, and that segment seemed to be a laggard this quarter.
Yeah. I'll give you a comment, and I'll let Greg also comment. Overall, I would tell you, we feel really strongly about the growth potential up in the Northeast. If you look year-over-year, our GNP segment is up over 20%. We're seeing strong growth in Marcellus wet as well as Utica dry. I know sometimes people try to bifurcate the two and look at them, we kind of look at them holistically as producers optimize around the asset base. I think you're seeing in both Antero's and Range's and the other producers' disclosures there that we're pretty bullish about the opportunity set, and the actual data continues to be very strong year-on-year. I'll let Greg add to that comment.
This is Greg Floerke. To add on to what Mike said, in terms of the Marcellus growth and our anchors customers, we continue to build plants and fill those, and we've had steady growth. I think a proven track record over the years, NGL pricing is only driving more bullishness from that perspective. Likewise, with the Utica, we do have some customers that cross over. We sort of look at the Marcellus and Utica together in terms of how our systems are integrated and the opportunity. NGL pricing has been at excellent high levels, and that's driving rigs back over into Utica. We are seeing that, and we are bullish about the future on Utica processing as well.
I just want to add one other comment, Spiro. For this year up in the Northeast, we have put in place six processing plants, or we're in the process of doing that. We've already disclosed a couple for 2019. At the Investor Day in early December, we'll give more color as to what we look like. I can tell you ahead of time that we're still anticipating considerable growth up in that area.
Got it. I appreciate that. Then just going back to Capline. One of your peers announced pretty strong customer interest in potentially approaching FID in the next quarter or so on Seahorse, which obviously gets you down to St. James. Totally get you on the fact that you guys are brownfield and obviously very competitive, curious if you and your partners on Capline would view that data point as reason to maybe move faster on Capline reversal. Do you have the ability to do that, and would an FID on Seahorse change any of the math or equation for you?
I don't want to comment on the competitive projects other than I could tell you, inside the market right today, there's many projects that are competing for this infrastructure opportunity. We believe that the most competitive is gonna be existing assets, as Gary mentioned earlier. Swordfish is existing assets in the ground. Capline is existing assets in the ground. There's some connectivity that we can't talk about yet about these projects that we think will also enhance the competitive nature. We feel pretty strongly that with existing assets, we have a strong offering, a competitive offering that should be well-received in the marketplace. Obviously, the alternative projects will be presented to the market as well, we just feel pretty confident that ours is a strong offering.
Thank you. Our next question is from Jaron Holder from Goldman Sachs.
Thanks. Good morning. Mike, would love to get your views on the ongoing NGL pipeline and fractionation constraints. How long do you think they last, and what does this mean for MPLX?
If you're talking about up in the Northeast, Jaron, is that what you're referring to?
Gulf Coast, Midwest, how that impacts what's going on in Northeast as well.
Well, it's starting up in the Northeast. The market is anticipating the ME2 startup, which we believe is coming shortly. We are in constant communication with Energy Transfer there. We're in the process of getting ready for a startup in the near term there. The Northeast system is pretty bottled up at this point. We need some relief there. As you know, the rest of the market is also in a similar situation. Excess capacity is not available in most areas. New builds are being deployed. We are active marketing our projects in a lot of different areas. I can't comment on everything, but I will say that we're attentive to the situation, and we're looking to be part of the solutions there. In the Permian, we have announced a crude project and a natural gas project.
We have not announced an NGL project to date, but we continue to work on that as a potential for the future as well. As you heard us say along the lines earlier, we're attentive that all of these markets need export capability, whether it's crude or NGLs or gas. We're continuing to put a focus on export activity as well.
Great. My follow-up, recognizing the common strong third quarter and how that probably implies that consensus may be a bit low into 2019, what do you think the Street is missing that has us a bit low?
Yeah. It's Pam. I think, the question that was asked earlier, not only did we have a strong quarter compared to a year ago, but strong sequential growth. We see that that's sustainable and growing. We think maybe the Street is missing some of the strength in the market on the gathering and processing side, as well as the fact that we are growing many of the segments within the logistics and storage of the business. We've been focused on not just the assets that are in place and the escalations in rates, but also looking for ways to get higher utilization out of those assets, drive more volume through the existing assets that we have, which is your lowest form of capital and return improvement. We've seen good growth really in both gathering and processing and logistics and storage.
Mike highlighted some of the long-haul pipeline opportunities that will further propel the logistics and storage business well into the future.
Thank you. Our next question is from Michael Blum from Wells Fargo.
Thanks. Good morning, everyone. First question is just more of a clarification. Is the Whistler Pipeline project, is that now a fully sanctioned FID project? Should we consider that going forward?
We haven't announced that yet, Michael. Our goal obviously is to be online by fourth quarter 2020, so we're working hard at that. In order to meet that, it won't be too much longer where we have to decide whether we've reached FID or not. We haven't disclosed that as a fully go project yet, but we're pretty confident in the interest in it, but we're continuing to work it to try and meet the timeline that we've discussed.
Okay, great. A question about drop-downs, actually. I recognize you have a pretty robust organic slate, you don't really need drop-downs anytime soon. Correct me if I'm wrong, I think there are still assets, at least at the ANDV level, there were assets that could still get dropped down to the MLP. The question is kind of what is still available upstairs? Should we assume that those assets would be dropped to MPLX or ANDX, or will that just be deferred until after you merge the companies?
Yeah, that's going to be deferred until we really get our analysis done around the companies. That's part of the analysis that we have ongoing. By the time we get to the Analyst Day meeting, we're really going to, I would say, detour around a lot of questions on ANDX and MPLX because we won't have completed the work and have that direction complete yet by that time. When it does, we will let you know what the drop-down inventory is at ANDV. We have limited drop-down inventory still at MPC. I guess it's kind of a high-grade issue because we have so many outstanding or organic projects that Mike and his team have been developing. I think with projects like this Swordfish, it just makes all the sense that it's absolutely the best project for the producers to have the lowest transportation cost.
We'll see where it plays out over time.
Thank you. Our next question is from Thomas Abrams from Morgan Stanley.
Thanks, great quarter. I had a follow-up to that last question on ANDX choice, one by the other, vice versa. Is there a third choice in there somewhere? Because not every ANDX asset really fits with MPLX as it's structured today. Could you actually bring some of those assets up into the parent, the sponsor, and just buy the remainder into MPLX?
Well, we'll see, I think that's really probably a small part of the equation. When you look at any assets that really, if there are any assets that will go up into the parent, we already own them. I don't know about anything else. We aren't looking at anything else today along those lines.
Fair. Then on the Capline reversal, is there a chance that a portion of it, say, the Memphis to Patoka portion is bi-directional?
Yeah, we're looking at everything, Tom, at this point. Like I said, we're meeting and looking at the options that we have, I mentioned there's some connectivity possibilities that we're still kicking around. I think the important thing for the market to know is the interest to move south to north is much, much less than it was before, obviously. At this point, we're concentrating much more on north to south movements than south to north.
Thank you. Our next question is from Dennis Coleman from Bank of America Merrill Lynch.
Yes. Good morning. Thanks for taking my question. I'd like to just focus a couple of questions on the Mount Airy purchase and the terminal there and just make sure I understand some of the opportunity. The capacity there, it's third-party leased storage , so you don't actually own the tanks, but you're suggesting that you could expand tanks up to 10 million. Is that correct? Is that how that works?
No, Dennis, what we were saying is the existing tankage that's on the site today is about four million barrels, and it's fully leased to third parties. We own the facility, we own all the tankage there. We were just commenting that today, the tankage that's on site is leased to third parties. What makes us excited about this opportunity is, number one, it's an opportunity for us to synergize with MPC because of the vicinity is close to Garyville, so we know there's going to be some opportunity within the Marathon family. At the same time, we're also pointing out that there's a considerable amount of third-party business that we also plan to grow.
We bought this facility, just recently closed on it, obviously, it's already permitted for the second dock, and we're pointing out that we have four million barrels of storage with the ability to grow up to 10 million barrels. There's a lot of upside to it. We're pretty excited about it at this point. The growth will be obviously developing the additional business, both with MPC and with others. We're just trying to point out that we have both occurring at this point.
Okay. The 10 million barrels is defined by the land position or?
Yeah.
-permitting?
Yeah. We have quite a bit of acreage there. Right now, with the area that we have in the phase 1 of this project is another dock and up to 10 million barrels of storage. Obviously, we could look for further opportunities, but we're at four now, so what we're disclosing is the phases to try and take ourselves from four to 10.
As a reminder, if you would like to ask a question, please press star one. Our next question is from Matthew Phillips from Guggenheim Partners.
Hey, guys. I just wanted to pick up on Gary's comments around LOOP. Clearly, the Swordfish project will indicate you expect LOOP to be materially growing in terms of exports. What sort of reconfiguration, CapEx timeline do you think you'll need on LOOP to fully configure it to be a major export port? What is the process there with the other owners compared to, say, the Capline process?
Let me ask John Swearingen, who is the Chairman of LOOP, to talk about that.
Good morning. LOOP is obviously very well-positioned. They've done a fantastic job of trying to figure out how they can use their existing assets there and the existing main oil line to load the VLCCs. They've got really a number of plans. One, just with the existing main oil line, there's also potential investments down the road to add more. Just a tremendous capability that LOOP has to figure into some of these crude oil movements that Mike and Gary have talked about. Very exciting.
The capital is in. It's already operational that we can export from there today. We don't have much additional work to do. Right, John?
That's correct. They've already made some movements and continue to respond to the market on cargoes that are looking to get moved out. They've done, again, just a fantastic job of utilizing the existing capital and the facilities that are there.
Got it. That's helpful. Switching topics a bit. This is pretty preliminary, but if Newfield does get acquired, that's a pretty strong vote of confidence for the STACK. This hasn't necessarily been a huge featured area for you all. How do you expect something like that to change your plans or present opportunities for increased growth in that area?
This is Greg Floerke again. We've had a great relationship and continue to have a great relationship with Newfield. They're a great anchor customer in the STACK for us. We not only gather and process rich gas for them with our Omega plant, but we also gather crude oil for them. We continue to see growth there, and we would expect, regardless of what moves forward on the M&A side, to see that growth continue.
Thank you. I am showing no further questions at this time.
Great. Well, thank you for joining us today, and thank you for your interest in MPLX. Should you have additional questions or would like clarification on any of the topics discussed this morning, we'll be available to take your calls. Elon, with that, I'll turn the call back to you.
Thank you. This does conclude today's conference. You may disconnect at this time.