Sandy Segrist, senior editor of natural gas and midstream, Hart Energy: Hi, this is Sandy Segrist. I'm the gas and midstream senior editor at Hart Energy and with me today is Jamie Welch of Kinetik Midstream out of Houston, and I was talking to him today. Something that we just talked about was the progress of the current price of oil and where it is and if that is affecting the gas markets right now coming out of the Permian.

Jamie Welch, president and CEO, Kinetik Holdings Inc.: So Sandy, what we are seeing immediately and all the feedback that we're getting from our customers is there's no, there's a very much a measured wait and see type of approach, no impact on immediate activity. But I think people need to have their eyes wide open. We obviously have a lot of volatility, we have a lot of uncertainty with each passing day. There may be some new headline that obviously captures attention either positively or negatively as the case may be. We've gone from this past weekend of the positive of effectively a suspension of tariffs from China and the U.S. to obviously overnight the potential of Iranian sanctions being lifted and that being a negative on crude prices. So I think for now everything seems on track and it's realistic to think that there will be some measured impact. I think if we're still in this high fifties, low sixties kind of price where people are going to say it is more valuable to preserve the inventory option than it is to drill at current pricing levels. That will then have an impact on the natural gas side.

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The expectation I think going into this year was [200,000 bbl/d] to 300,000 barrels a day of overall crude growth for the Permian. If we just say, “look, it's flat.” You're going to go from about 2 Bcf/d of gas growth for this year. It'll probably be about half—be about 1 Bcf/d. That's still significant, don't get me wrong, but it's not quite the avalanche that obviously people have lived through over the passage of the last several years, and therefore this ongoing crying need of more and more egress out of the basin will still be there, but maybe not as palpable as we've lived through.

SS: Okay, thank you. Last year Kinetik made a move into New Mexico. Could you tell me how that's been going?

JW: So it's been fantastic. I mean, New Mexico was a really interesting opportunity for us. One where we could see the lack or the starvation of infrastructure on the gas midstream side had really created an opportunity set that we thought we could come in, we could help complete the construction of King's Landing 1, which is a 220 million cubic feet a day cryo, which is scheduled to commence commissioning in about five weeks, and we'll be in service probably shortly thereafter.

And so in all the conversations that we've had with the various producers up there, both on what's called the Northwest Shelf and the Northern Delaware Basin, as I said, there's been this overwhelming need for our additional gas infrastructure. We see the opportunity set, we continue to commercialize the opportunities and what we see as far as new gas packages, and that gave us the conviction to announce in November of last year that we would do some of our pre-FID work and long lead critical path items for Kings Landing 2, which would be another 220 million cubic feet a day cryo that we would develop up there. And so I really think this is an opportunity that we will look back five years from now and say it's probably one of the best and most strategic transactions that we as a company Kinetik ever do.

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SS: Great. Just changing the subject a little bit, tariffs have obviously been in the news a lot lately. I was curious as far as from a regional company standpoint, how do you see that affecting you?

JW: Well, I think the short answer is it affects everybody, and our supply chain is no different. So much of our product, our raw material is steel, it's casing, its valves, and unfortunately we've been in an industry where we've actually imported so much of that particular component, those component pieces. And it therefore means that we're elevating the overall cost. We're also impacting now the supply chain side as far as timing is concerned—nowhere near to the same extent as we saw back in COVID, but nonetheless, there will be an impact. And whether it's measured in a month or two or three or whatever the case may be, it will have an impact. What I'd like to see out of this administration is, it's clear to us that tariffs are a baseline way for, to in fact address fiscal deficits, trade imbalances and obviously continue to increase the amount of revenues into the treasury. And obviously as part of the overall fiscal policy for this administration around its tax cuts.

And what I think we, from an oil and gas industry standpoint would obviously like to … the increasing costs means you're now jeopardizing projects and that means you're jeopardizing continued job growth.  And obviously the amount of tax revenues that we as an industry pay, whether it's into Texas, into New Mexico or whether it's into the Federal Treasury. And therefore you would like to think that we should qualify for some exemption because this is being used for really, I would say, homegrown manufacturing in the United States. That's what the U.S. oil and gas industry reflects, right? I mean, this is born and bred and raised and grown in our backyard. And if we want to continue to foster that, which I think fits within the parameters of this administration and its policies, then you would think that we should get some exemptions as we utilize materials that we need, that we just have no export replacement capacity within this country.

SS: Okay. All right. Well thank you. That was a great answer. This is Sandy Segrist. This is all the time that we have. We're at SUPER DUG in Fort Worth. Thank you for joining us.

JW: Thank you.

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