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RISK-MANAGEMENT AND HEDGING ACTIVITIES USING DERIVATIVES | 9 Months Ended
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Sep. 30, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
RISK-MANAGEMENT AND HEDGING ACTIVITIES USING DERIVATIVES | RISK-MANAGEMENT AND HEDGING ACTIVITIES USING DERIVATIVES Risk-management Activities - We are sensitive to changes in the prices of natural gas, NGLs, Refined Products and crude oil, principally as a result of contractual terms under which these commodities are processed, purchased and sold. We are also subject to the risk of interest-rate fluctuation in the normal course of business. We use physical-forward purchases and sales and financial derivatives to secure a certain price for a portion of our natural gas, NGLs, Refined Products, condensate and crude oil purchases and sales; to reduce our exposure to commodity price and interest-rate fluctuations; and to achieve more predictable cash flows. Additionally, we may use physical-forward purchases and financial derivatives to reduce commodity price risk associated with power and natural gas used to operate our facilities. We follow established policies and procedures to assess risk and approve, monitor and report our risk-management activities. We have not used these instruments for trading purposes. Commodity price risk - Commodity price risk refers to the risk of loss in cash flows and future earnings arising from adverse changes in the price of natural gas, NGLs, Refined Products and crude oil. We may use commodity derivative instruments to reduce the near-term commodity price risk associated with a portion of our forecasted purchases and sales of commodities. Our exposure to commodity price risk is consistent with that discussed in our Annual Report. Interest-rate risk - We may manage interest-rate risk through the use of fixed-rate debt, floating-rate debt, Treasury locks and interest-rate swaps. Treasury locks are agreements to pay the difference between the benchmark Treasury rate and the rate that is designated in the terms of the agreement. In the third quarter of 2024, we entered into $1.5 billion of Treasury locks to hedge the variability of interest payments on a portion of our forecasted debt issuances. In the same quarter, we settled all of our $1.5 billion Treasury locks related to our underwritten public offering of $7.0 billion senior unsecured notes associated with the EnLink Controlling Interest Acquisition and Medallion Acquisition. All of our Treasury locks were designated as cash flow hedges. At Sept. 30, 2024, and Dec. 31, 2023, we had no outstanding interest-rate derivative instruments. Fair Values of Derivative Instruments - The following table sets forth the fair values of our derivative instruments presented on a gross basis as of the dates indicated:
|  |  | Sept. 30, 2024 |  | Dec. 31, 2023
| Location in our Consolidated Balance Sheets |  | Assets |  | (Liabilities) |  | Assets |  | (Liabilities)
Derivatives designated as hedging instruments |  | (Millions of dollars)
Commodity contracts (a) | Other current assets |  | $ | 73 |  |  | $ | (23) |  |  | $ | 163 |  |  | $ | (78) |
Total derivatives designated as hedging instruments |  | 73 |  |  | (23) |  |  | 163 |  |  | (78) |
Derivatives not designated as hedging instruments |  |  |  |  |  |  |  |
Commodity contracts (a) | Other current assets |  | 7 |  |  | (3) |  |  | 14 |  |  | (6) |
Total derivatives not designated as hedging instruments |  | 7 |  |  | (3) |  |  | 14 |  |  | (6) |
Total derivatives |  |  | $ | 80 |  |  | $ | (26) |  |  | $ | 177 |  |  | $ | (84) |
(a) - Derivative assets and liabilities are presented in our Consolidated Balance Sheets on a net basis when a legally enforceable master-netting arrangement exists between the counterparty to a derivative contract and us. Notional Quantities for Derivative Instruments - The following table sets forth the notional quantities for derivative instruments held as of the dates indicated:
|  | Sept. 30, 2024 |  | Dec. 31, 2023
| Contract Type | Net Purchased/Payor (Sold/Receiver)
Derivatives designated as hedging instruments: |  |  |  |
Cash flow hedges |  |  |  |
Fixed price |  |  |  |
- Natural gas (Bcf) | Futures and swaps | (24.4) |  |  | (16.0) |
- NGLs, Refined Products and crude oil (MMBbl) | Futures and swaps | (10.2) |  |  | (14.5) |
- Power (GWh) | Futures and swaps | — |  |  | 22.1 |
Basis |  |  |  |
- Natural gas (Bcf) | Futures and swaps | (24.4) |  |  | (16.0) |
Derivatives not designated as hedging instruments: |  |  |
Fixed price |  |  |  |
- Natural gas (Bcf) | Futures and swaps | — |  |  | (0.7) |
- NGLs, Refined Products and crude oil (MMBbl) | Futures and swaps | (0.4) |  |  | 0.1 |
Basis |  |  |  |
- Natural gas (Bcf) | Futures and swaps | — |  |  | (0.7) |
- NGLs, Refined Products, and crude oil (MMBbl) | Futures and swaps | — |  |  | (0.1) |
Cash Flow Hedges - During the three and nine months ended Sept. 30, 2024 and 2023, we had no material changes in other comprehensive income related to our commodity derivative instruments. Credit Risk - We monitor the creditworthiness of our counterparties and compliance with policies and limits established by our Risk Oversight and Strategy Committee. We maintain credit policies with regard to our counterparties that we believe minimize credit risk. Our policies and related credit risk are consistent with those discussed in our Annual Report.

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480237/815-40-50-5 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-5C Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/815/tableOfContent + Details
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