CEO Message

Dear Valued Stakeholders,

I am proud to share Crestwood’s fifth annual sustainability report, outlining our progress and ongoing efforts to create long-term value for our stakeholders through responsible growth and authentic advancement. We remain committed to integrating sustainability into every aspect of our business and enhancing our environmental, social and governance (ESG) goals as a key part of our growing midstream portfolio. For us, sustainability is a strategic imperative that drives our success as a company.

Responsible Growth, Authentic Advancement

During 2022, the energy and commodity markets were exceptionally volatile, with impacts felt across the globe. Russia’s invasion of Ukraine caused a humanitarian crisis and sent shockwaves through the world’s finely balanced energy system, disrupting supply and fueling extreme price fluctuations. The U.S. energy industry responded to the challenge by continuing its efforts to increase oil and gas production, year over year, with a renewed focus on improved capital efficiency and disciplined, responsible growth to support improvements in global energy security.

To capitalize on long-term midstream opportunities while delivering stable unitholder returns, Crestwood executed a regional consolidation strategy from 2021 to early 2023 that included a series of transactions focused on responsibly acquiring synergistic midstream assets to build scale in our core basins. During the same period, we divested many of our legacy, low-growth assets, using cash proceeds to reduce debt and maintain a strong balance sheet for future growth opportunities. As a result, we delivered strong growth with record earnings in 2022, and we achieved our goal of becoming a top-tier gatherer and processor in the Williston, Delaware and Powder River Basins.

Throughout our strategic repositioning, we remained focused on progressing our ESG goals.

We took a proactive approach to integrating ESG risks into our transaction underwriting process by creating a comprehensive ESG due diligence risk register that allows us to better understand and manage potential ESG risks associated with the acquisition of an asset or company.

Transparent Carbon Management

As energy demand continues to grow, reducing emissions and addressing climate change becomes increasingly complex. As an industry-leading midstream company, we recognize the magnitude of this challenge and are committed to being part of the solution.

We believe that all forms of energy, including oil and natural gas, will play a role in the future. We also understand that mitigating climate change requires a pragmatic approach based on what is feasible today, and we are focused on promoting cost-effective, practical emissions reduction practices that deliver long-term value to our unitholders. As an industry and a society, we strive to improve the quality of life for everyone around the globe by increasing access to effective energy solutions, and we believe we can continue to do so while decreasing emissions across the energy value chain through optimizing operational practices today and identifying and implementing innovative new technologies that advance the energy transition for the future.

In 2022, our absolute greenhouse gas (GHG ) emissions and emissions intensity rate increased due to the acquisitions of Oasis Midstream and Sendero Midstream assets, which substantially expanded the size and scale of our Williston and Delaware Basin operations. Despite these increases, we decreased our methane emissions intensity rate by five percent from 2021 levels and 58 percent from 2018 levels. We remain resolute in our efforts to reduce our GHG emissions intensity rate as we responsibly grow our business. To that end, we immediately took steps to identify and reduce emissions from our newly acquired assets. For example, within 180 days of the acquisitions, we performed methane detection flyovers on each new asset, and we installed continuous methane detection devices at our acquired Oasis Midstream assets in North Dakota. Our focus on reducing our GHG emissions intensity rate has continued into 2023 and we are working to meet our goals through improved operations.

Strengthening Governance and Accountability

We also continue to strengthen our approach to corporate governance. In 2022, we further evolved our Board structure with several new highly qualified, independent director appointments and became one of only three master limited partnership midstream companies to voluntarily transition to a publicly-elected Board.

Additionally, we released our inaugural Proxy Statement, held our first Annual Unitholder Meeting and formed a Nominating and Governance Committee which led efforts to further improve Board and management governance standards.

These steps improved Crestwood’s alignment of interests with our common and preferred unitholders and greatly enhanced transparency around our long-term business goals and objectives.

To maintain accountability for our progress, we continue to align employee and executive compensation with our safety and sustainability performance. In 2023, we increased the percentage of compensation tied to key sustainability metrics from 10 to 15 percent.

Our People and Communities Drive Our Progress

We know that our people and the communities we serve are integral to our success. Our employees are our most valuable asset, and their skills, expertise and commitment to excellence are unmatched. We also believe in establishing and nurturing relationships with the communities we serve, and we support them through strategic investments, partnerships and volunteer programs. I am very proud to report that during 2022, we donated approximately $1.5 million to community organizations and our employees volunteered nearly 3,000 hours of their time to support community organizations.

Looking Ahead

As we reflect on 2022 and look ahead towards the future, we are committed to ensuring that Crestwood remains a responsible and sustainable partner for years to come. We have and will continue to focus on integrating ESG into our business at every level, developing innovative and sustainable solutions that address the evolving demands of the energy market and prioritizing operational excellence and long-term value creation for our stakeholders. Our efforts continue to be recognized by third-party organizations including an upgraded A rating from MSCI and inclusion in the Bloomberg Gender-Equality Index for the third consecutive year.

I am incredibly proud of what our team achieved in 2022. I also recognize that there is more work to be done. We are committed to listening to your feedback and engaging in ongoing dialogue about our sustainability journey. As always, we value and appreciate your continued support and trust in our company.

Sincerely,

Bob Phillips 

Founder, Chairman and Chief Executive Officer