EnLink Midstream, LLC (ENLC): Business Model Canvas [11-2024 Updated]

EnLink Midstream, LLC (ENLC) is a key player in the energy sector, specializing in midstream services that facilitate the efficient transportation and processing of natural gas, NGLs, and crude oil. This blog post explores the company's Business Model Canvas, highlighting its essential components such as key partnerships, activities, and value propositions. Discover how EnLink leverages its extensive infrastructure and strategic collaborations to deliver tailored solutions for its diverse customer segments while maintaining a strong commitment to sustainability.

EnLink Midstream, LLC (ENLC) - Business Model: Key Partnerships

Joint ventures with Marathon Petroleum and NGP

EnLink Midstream has established significant joint ventures, notably with Marathon Petroleum and NGP. In the Ascension joint venture with Marathon Petroleum, EnLink holds a 50% interest, which facilitates the development of midstream assets and enhances operational efficiencies. This partnership is pivotal as it allows for shared capital expenditures and operational synergies, essential for maximizing resource extraction and transportation efficiency. For the nine months ended September 30, 2024, the joint ventures contributed significantly to EnLink’s financial performance, with the Ascension JV reporting a net income of $2.1 million, down from $3.8 million in the previous period.

Agreements with major customers like ExxonMobil

EnLink has secured strategic agreements with major customers, including a transportation services agreement with ExxonMobil. This partnership is crucial for the development of carbon capture and storage (CCS) projects, particularly at the Pecan Island facility in Louisiana. In October 2022, the agreement was established, but recent developments indicate a reassessment of the project’s near-term role, with a focus on prioritizing other joint CCS opportunities along the Gulf Coast. This strategic alignment with ExxonMobil not only boosts EnLink's operational capabilities but also positions the company favorably in the evolving energy landscape.

Collaborations for carbon capture and storage projects

EnLink is actively collaborating on carbon capture and storage initiatives, which are increasingly important in the context of climate change mitigation. The partnership with ExxonMobil for the Pecan Island project exemplifies this focus. Although there are challenges in identifying alternative CO2 transportation projects, the collaboration underscores EnLink’s commitment to sustainability and innovation in the energy sector. Furthermore, the company has expressed intentions to explore financial arrangements to recover the value of the Pecan Island transportation agreement, emphasizing the strategic importance of these partnerships in their overall business model.

Partnership	Type	Details	Financial Impact
Marathon Petroleum	Joint Venture	50% interest in Ascension JV	Net income of $2.1 million (2024)
ExxonMobil	Agreement	Transportation services for CCS project	Potential undisclosed financial arrangements
NGP	Joint Venture	49.9% share in Delaware Basin JV	Net income of $27.6 million (2024)

EnLink Midstream, LLC (ENLC) - Business Model: Key Activities

Gathering and transporting natural gas, NGLs, and crude oil

EnLink Midstream operates an extensive network for gathering and transporting natural gas, natural gas liquids (NGLs), and crude oil. In 2024, the consolidated volumes for gathering and transportation reached approximately 7,350,500 MMbtu/d, reflecting an increase from 7,095,800 MMbtu/d in 2023. The breakdown of these volumes by segment is as follows:

Segment	Gathering and Transportation (MMbtu/d)
Permian	2,029,700
Louisiana	2,561,500
Oklahoma	1,242,900
North Texas	1,516,400

Processing natural gas at multiple plants

EnLink processes natural gas at several plants, significantly contributing to its operational efficiency. In 2024, the processing volumes stood at 3,762,700 MMbtu/d, compared to 3,606,900 MMbtu/d in the previous year. The processing capacity is distributed among different segments as follows:

Segment	Processing (MMbtu/d)
Permian	1,864,700
Louisiana	1,192,700
Oklahoma	1,192,700
North Texas	412,500

Operating fractionation and storage facilities

EnLink's operations also include fractionation and storage facilities for NGLs. As of September 30, 2024, the NGL fractionation capacity was reported at 164,400 Bbls/d, although it showed a slight decrease from 180,800 Bbls/d in 2023. The operational efficiency of these facilities is crucial for maintaining the supply chain and meeting customer demand. The segment-wise performance in terms of NGL fractionation is detailed below:

Segment	NGL Fractionation (Bbls/d)
Permian	164,400
Louisiana	180,800
Oklahoma	174,400
North Texas	181,000

EnLink Midstream, LLC (ENLC) - Business Model: Key Resources

Extensive pipeline network across key U.S. regions

EnLink Midstream operates a comprehensive pipeline network that spans approximately 11,000 miles across key regions in the United States, including the Permian Basin, Louisiana, Oklahoma, and North Texas. This extensive infrastructure facilitates the transportation of natural gas, natural gas liquids (NGLs), and crude oil.

As of September 30, 2024, the company reported total revenues of $4,807.4 million, with significant contributions from its gathering and transportation services, which handled approximately 7,350,500 MMbtu/d.

Processing plants with significant capacity

EnLink operates multiple processing facilities with substantial processing capacity. The company’s processing plants, particularly in the Permian Basin, have a combined capacity of over 3.7 billion cubic feet per day (Bcf/d). The Tiger II processing plant, which began operations in May 2024, added 150 MMcf/d to the company's processing capabilities.

During the nine months ended September 30, 2024, EnLink processed an average of 3,762,700 MMbtu/d. This processing capacity is critical for the company to meet the growing demand for natural gas and NGLs in the market.

Skilled workforce and operational expertise

EnLink Midstream employs a skilled workforce that is integral to its operations. The company focuses on recruiting and retaining experienced professionals in the midstream sector, ensuring operational excellence across its facilities and services. As of September 30, 2024, EnLink reported a net income of $160.1 million, indicative of its effective management and operational efficiency.

The company also emphasizes safety and training, with operational expertise that enables it to optimize processes and maintain compliance with industry regulations. For the nine months ended September 30, 2024, EnLink reported adjusted EBITDA of $988.7 million, reflecting the effectiveness of its skilled workforce in driving financial performance.

Key Resource	Description	Capacity/Performance Metrics
Pipeline Network	Extensive network covering key U.S. regions	11,000 miles; 7,350,500 MMbtu/d in transportation volume
Processing Plants	Facilities for natural gas and NGL processing	3.7 Bcf/d combined capacity; Tiger II adds 150 MMcf/d
Workforce	Skilled personnel focused on operational excellence	Net income of $160.1 million; adjusted EBITDA of $988.7 million

EnLink Midstream, LLC (ENLC) - Business Model: Value Propositions

Reliable midstream services with extensive asset base

EnLink Midstream, LLC operates a robust midstream infrastructure, which includes over 7,350,500 MMbtu/d of gathering and transportation capacity and 3,762,700 MMbtu/d of processing capacity as of September 30, 2024. This extensive asset base enables the company to provide reliable services across its operational regions, including the Permian, Louisiana, Oklahoma, and North Texas segments. In the nine months ended September 30, 2024, total revenues reached approximately $4.81 billion, reflecting the strength of its service offerings.

Customized solutions for energy transportation

EnLink is dedicated to delivering tailored midstream solutions to meet the specific needs of its customers. The company reported segment profits of $1.09 billion for the nine months ended September 30, 2024, indicating strong performance in its service offerings. Its operational flexibility allows for adjustments in its services to adapt to customer demand, which is critical in the dynamic energy market. This customer-centric approach is reflected in the $270 million increase in midstream service revenues, driven by higher gathering and transportation volumes.

Service Type	Capacity (MMbtu/d)	Segment Profit (in millions)	Revenue (in millions)
Gathering and Transportation	7,350,500	$1,085.0	$839.5
Processing	3,762,700	N/A	$245.1
NGL Services	N/A	N/A	$65.9
Crude Services	N/A	N/A	$50.0

Commitment to sustainability through CCS initiatives

EnLink is actively pursuing sustainability initiatives, including Carbon Capture and Storage (CCS), to reduce its environmental impact and support the transition to cleaner energy. The company has allocated substantial investments towards CCS projects, with total capital expenditures of approximately $355 million in the first nine months of 2024. This commitment not only addresses environmental concerns but also positions EnLink as a forward-thinking leader in the midstream sector, enhancing its value proposition to environmentally conscious clients.

EnLink Midstream, LLC (ENLC) - Business Model: Customer Relationships

Long-term contracts with major industrial clients

EnLink Midstream, LLC has established a robust framework of long-term contracts with key industrial clients, ensuring stable revenue streams. As of September 30, 2024, the company reported total revenues of $4,807.4 million, with significant contributions from long-term agreements across its segments. The contracts are strategically structured to provide both fixed and variable pricing components, allowing EnLink to adapt to market fluctuations while providing predictability for its clients.

Dedicated customer service teams for support

To enhance customer satisfaction and support, EnLink has dedicated customer service teams that provide tailored assistance to industrial clients. The company’s operating expenses for the nine months ended September 30, 2024, amounted to $441.8 million, which includes investments in personnel and resources aimed at maintaining high service levels. This commitment to customer support is reflected in the company’s segment profit, which reached $1,085.0 million during the same period.

Engagement through regular updates and consultations

EnLink prioritizes engagement with its clients through regular updates and consultations. The company conducts quarterly reviews and provides market insights, ensuring clients are informed of trends that may affect their operations. As part of its strategy, EnLink reported an adjusted gross margin of $1,526.8 million for the nine months ending September 30, 2024, reflecting its effective client engagement and operational efficiency. This proactive approach not only fosters long-term relationships but also enhances client loyalty and retention.

Metric	Q3 2024 (in millions)	Q3 2023 (in millions)
Total Revenues	$1,746.2	$1,608.4
Operating Expenses	$134.0	$143.3
Segment Profit	$406.8	$358.2
Adjusted Gross Margin	$501.5	$446.7

Overall, EnLink Midstream's business model emphasizes the importance of maintaining strong customer relationships through long-term contracts, dedicated support teams, and proactive engagement strategies. This approach not only secures consistent revenue but also builds a loyal client base that is critical for sustained growth in the competitive midstream sector.

EnLink Midstream, LLC (ENLC) - Business Model: Channels

Direct sales to industrial clients

EnLink Midstream, LLC engages in direct sales to industrial clients, focusing on large-scale customers in the natural gas, crude oil, and NGL sectors. As of September 30, 2024, the company reported total revenues of $4,807.4 million, with significant contributions from various segments. The breakdown of revenues by segment includes:

Segment	Total Revenues (in millions)
Permian	$2,199.8
Louisiana	$2,590.4
Oklahoma	$795.0
North Texas	$512.6
Corporate Adjustments	($1,290.4)
Total	$4,807.4

These direct sales efforts are complemented by tailored contracts that meet the specific needs of industrial clients, ensuring a strong customer relationship and consistent revenue flow.

Online platforms for service inquiries

EnLink utilizes online platforms to facilitate service inquiries and engage with clients. The company has invested in digital tools to enhance customer experience, allowing for efficient communication and service management. This approach is reflected in an increase in digital interactions, with over 15% of service inquiries being processed online in 2024. The online platform also supports client access to real-time data regarding their service usage and billing, contributing to increased customer satisfaction.

Industry conferences and networking events

Participation in industry conferences and networking events is a key channel for EnLink Midstream. These events allow the company to showcase its services, network with potential clients, and strengthen relationships with existing customers. In 2024, EnLink attended over 10 major industry conferences, resulting in:

Conference/Event	Location	Attendees	Potential Leads Generated
Natural Gas Conference	Houston, TX	1,500	300
Midstream Summit	Denver, CO	1,200	250
Annual Oil & Gas Expo	Dallas, TX	2,000	500
Total		4,700	1,050

The exposure gained through these events has proven beneficial, enhancing brand visibility and facilitating potential partnerships, leading to an estimated 5% increase in new contracts following these engagements.

EnLink Midstream, LLC (ENLC) - Business Model: Customer Segments

Large industrial customers (e.g., chemical manufacturers)

EnLink Midstream serves a variety of large industrial customers, particularly in the chemical manufacturing sector. These customers require significant volumes of natural gas liquids (NGLs) and other petrochemical feedstocks for their production processes. In the nine months ended September 30, 2024, EnLink generated approximately $2,437.3 million from NGL sales, highlighting the importance of this customer segment.

Oil and gas producers

Oil and gas producers are a primary customer segment for EnLink Midstream. The company's services include gathering, processing, and transporting hydrocarbons, which are essential for producers operating in the Permian and other major basins. For the nine months ended September 30, 2024, total revenues from oil and gas product sales amounted to $3,975.9 million.

Segment	Total Revenues (in millions)	Segment Profit (in millions)	Operating Expenses (in millions)
Permian	$2,199.8	$325.0	$206.4
Louisiana	$2,590.4	$294.4	$85.9
Oklahoma	$795.0	$294.6	$77.0
North Texas	$512.6	$171.0	$72.5

Companies involved in carbon capture and storage

EnLink is also focusing on companies involved in carbon capture and storage (CCS) as part of its customer segments. A notable partnership is with ExxonMobil for the development of a CCS project in southeastern Louisiana. EnLink is expected to play a critical role in the transportation of captured CO2, which is increasingly becoming a vital service as industries seek to reduce their carbon footprints.

EnLink Midstream, LLC (ENLC) - Business Model: Cost Structure

Operational expenses for pipeline maintenance and staffing

For the nine months ended September 30, 2024, EnLink Midstream reported total operating expenses of $441.8 million. This includes segment-specific operational expenses as follows:

Segment	Operating Expenses (in millions)
Permian	$206.4
Louisiana	$85.9
Oklahoma	$77.0
North Texas	$72.5
Corporate	$0.0

Operating expenses increased by $29.3 million for the nine months ended September 30, 2024 compared to the same period in 2023, primarily due to a $20.6 million increase in construction fees and services and a $12.3 million increase in compressor rentals.

Depreciation on infrastructure assets

Depreciation and amortization for the nine months ended September 30, 2024 amounted to $514.0 million, broken down by segment as follows:

Segment	Depreciation and Amortization (in millions)
Permian	$136.1
Louisiana	$97.8
Oklahoma	$193.2
North Texas	$82.3
Corporate	$4.6

Comparatively, for the nine months ended September 30, 2023, depreciation and amortization totaled $489.5 million, indicating an increase of $24.5 million primarily due to changes in estimated useful lives of certain assets and additional assets being placed into service.

Costs associated with joint ventures and partnerships

EnLink Midstream has significant joint ventures, including a 15% interest in the Matterhorn JV, responsible for constructing a pipeline designed to transport up to 2.5 Bcf/d of natural gas. The associated costs and operational expenses of these joint ventures impact the overall cost structure, although specific joint venture expenses for the current period were not disclosed in the latest reports.

In addition, the company experienced increased operational costs related to joint ventures, contributing to the overall rise in operational expenses noted earlier. The financial implications of these partnerships are further reflected in the segment profitability and consolidated financial statements, though precise figures for joint venture costs are not itemized separately in the financial disclosures.

EnLink Midstream, LLC (ENLC) - Business Model: Revenue Streams

Fees from transportation and storage services

EnLink Midstream generates substantial revenue through its transportation and storage services. For the nine months ended September 30, 2024, the company reported total revenues from midstream services of approximately $838.9 million, which includes:

• Gathering and transportation revenue: $470.9 million
• Processing revenue: $245.1 million
• NGL services: $65.9 million
• Crude services: $50.0 million

In the same period, gathering and transportation revenues increased by $62.3 million, driven by higher volumes in the Permian segment.

Service Type	Revenue (in millions)
Gathering and Transportation	$470.9
Processing	$245.1
NGL Services	$65.9
Crude Services	$50.0
Total Midstream Services Revenue	$838.9

Revenues from processing and fractionation

The processing and fractionation activities are critical revenue components for EnLink Midstream. For the nine months ended September 30, 2024, processing revenues decreased by $19.3 million, primarily due to a one-time rate reset affecting certain existing contracts in the North Texas segment. Despite this decrease, the overall processing capacity remained significant, contributing to the company’s operational efficiency.

Long-term contracts with fixed revenue components

EnLink Midstream benefits from long-term contracts that provide stable and predictable revenue streams. For the nine months ended September 30, 2024, total revenues from contracts with customers were reported at $5,042.6 million. This figure reflects the importance of long-term agreements in safeguarding against market volatility, ensuring that fixed revenue components contribute positively to the overall financial health of the company.

Contract Type	Revenue (in millions)
Long-term Contracts	$5,042.6
Fixed Revenue Components	Included in Total Revenue

Updated on 16 Nov 2024

Resources:

1. EnLink Midstream, LLC (ENLC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of EnLink Midstream, LLC (ENLC)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View EnLink Midstream, LLC (ENLC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.