CEO Message

To Our Stakeholders,

Our commitment to build a best-in-class midstream company remains as focused as ever. As we continue to define Crestwood’s history, we will look back on 2021 as a transformational year with changes to our corporate governance structure, which now better aligns with our sustainability strategy, growth in our portfolio to achieve market relevance through increased size and scale and being the first master limited partnership (MLP) in the midstream sector to roll out clear, achievable carbon management practices. With this broader platform, our continued success will be possible due to Crestwood’s dedicated and talented group of employees and by building sustainable, long-term relationships with our stakeholders.

Crestwood Voice

As we deliver on our goals of connecting fundamental energy supply and demand while providing our stakeholders with long-term value, we are mindful of the challenges ahead. Competitive and volatile markets, climate-related risks, supply chain disruptions, lingering COVID-19 impacts and changing workforce dynamics drive us to focus on real change, in real time. Crestwood will meet these challenges by continuing our ESG journey to deliver energy affordably, responsibly and sustainably.

Bob Phillips
Founder, Chairman and Chief Executive Officer

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Leading the MLP midstream sector in carbon management practices

In January 2022, we issued our first Carbon Management Plan which highlights our commitment to actionable annual emission intensity reductions through safe and efficient operations of our midstream assets. We are also focused on identifying and mitigating climate-related risks to our business. Through collaboration with our business partners, we can demonstrate the critical role of energy within society, develop pathways for emission reductions and help mitigate business risks associated with a changing climate. 

Published our first Carbon Management Plan and continue our steadfast commitment to carbon management which remains an integral component to our business strategy

I am proud that in 2021, the organization reduced greenhouse gas emissions intensity by 19 percent and our methane emissions intensity by 30 percent as compared to 2020 levels. In addition, our methane emissions intensity rate witnessed a 52 percent reduction from 2019. These significant reductions are a credit to the hard work of our operations and environmental departments. These teams work tirelessly to find operational optimizations and improvements that result in real-time impacts.

Historically, Crestwood has been at the forefront of ESG development in the midstream sector by taking a proactive industry leadership role in the Energy Infrastructure Council and through membership in climate- focused groups like ONE Future and The Environmental Partnership. This year, we are advancing our commitment to climate leadership through participation in Cheniere’s Quantification, Monitoring, Reporting and Verification (QMRV) Project. The goal of this select group of midstream companies is to improve the understanding of greenhouse gases through the natural gas value chain resulting in meaningful improvement in carbon management practices going forward.

30% reduction in methan emission intensity + 19% reduction in CO2 emssions

Integrating sustainability into every aspect of our business

As an industry leader, I am often asked how we continue to make ESG a priority with all the changing circumstances centered around the ever-evolving energy landscape. The answer is that we live by our ESG values and embed deliverables into individual and corporate goals that are directly linked to employee and executive compensation. Every day our team works to identify and manage risks as opportunities, which differentiates Crestwood from other midstream companies.

A clear demonstration of this approach is the recently updated materiality assessment we performed in Q4 2021. This is our second assessment since 2018, which evaluated 14 material focus areas. The exercise provides feedback from internal and external stakeholders, refines key strategic focus areas and prioritizes the associated risks and opportunities relevant to our business activities. This process allows us to drive continuous improvement, more effectively evaluate our business performance and informs the context of this report as we embark on our next three-year sustainability strategy.

Superior growth opportunities while maintaining financial strength

At Crestwood, we often speak of our vision to create long-term value for our stakeholders by continuously positioning the portfolio for success. This requires both a long-term view of growth with a consistent midstream strategy and the ability to build, acquire, divest and optimize complementary midstream assets in a constantly changing environment. Most importantly, we will achieve these long-term goals only by maintaining fiscal discipline and financial strength. It was an exceptional year in 2021, delivering on this strategy, as we executed three independent, transformational transactions:

To deliver on our annual operational and financial targets, we know the importance of being the employer of choice. Our employees continue to challenge the status quo and drive for innovation. I could not be prouder of what they have achieved. By integrating the Oasis Midstream assets and employees into our operating culture and sustainability practices, our capabilities and opportunities are growing, making for a very exciting time at Crestwood. As a leading midstream operator, we will continue to strive for excellence in safety, diversity, equity and inclusion, customer service, community engagement and environmental responsibility. 

visual representation of Crestwood process

In this report, we provide a look-back at the incredible year we had at Crestwood. Our resilience and momentum gives me confidence that our best years remain ahead as we drive forward financially strong with a business strategy, asset portfolio and corporate governance structure that positions us well into the future. We look forward to an ongoing dialogue with our stakeholders on our ESG performance and what we can do together to improve.

Sincerely,

Bob Phillips 

Founder, Chairman and Chief Executive Officer