MPLX plans to continue expanding in the Permian Basin in 2024 by following a growth pattern that may not make a lot of headlines.

Key to the growth is the company’s strategy of acquiring smaller assets in the region, even as other energy companies seek out major deals in a sector awash in rapid consolidation.

“If you're going to get involved in M&A, and to a large extent if you get into [bigger companies], the returns are going to be much more competitive because a lot of people are going to be involved in that process,” MPLX Chairman and CEO Michael Hennigan said in an earnings call. “The ones that we like better, as long as they continue to be there for us, is where we can just organically invest and get a much higher return than the M&A market will typically give you.”

In 2023, MPLX reported strong performance in its operational sectors and “organic” growth projects that added almost 9% growth to the midstream company’s EBITDA over 2022 along with 7% growth in cash flow, Hennigan said during the fourth-quarter earnings call Jan. 30.

As part of its earnings report, MPLX reported the complete acquisition of a joint venture partner’s assets for $270 million in the Delaware Basin. The deal closed in December. Hennigan said the acquisition shows MPLX’s ability to increase cash flow for the company and stick to a process of strict capital discipline.

“A large majority of it we don't talk about on earnings calls, or press releases, or things like that, because they’re smaller projects, but they're much higher returns,” he said.

The Ohio-based company is planning for continued growth in the Permian Basin and also sees plenty of opportunity coalescing in the Marcellus Shale.

For 2024, MPLX announced a capex of $1.1 billion, with growth capital anchored in the Marcellus and Permian.

“The market is underappreciating the growth potential up in the Marcellus,” Hennigan said. “It's been talked about being in maintenance mode for some amount of time but, if you look recently, there's starting to be a growth spurt occurring up in that area as well. And I think if people look at it over time, eventually (the Mountain Valley Pipeline) will come online and it's going to unlock some more growth.”

For the company’s 2023 accounts, operations provided a distributable cash flow of $5.3 billion. MPLX returned $3.3 billion of capital to unitholders for the full year, reflecting a 10% quarterly distribution increase for a second consecutive year.