Derivative liability, netting

  
Fair Value MeasurementsThe following table presents the Company’s derivative assets and liabilities measured at fair value on a recurring basis:

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | Fair Value Measurements Using |  |  |  |  |  |  |
|  |  | Quoted Price in Active Markets(Level 1) |  | Significant Other Inputs(Level 2) |  | Significant Unobservable Inputs(Level 3) |  | TotalFair Value |  | Netting(1) |  | Carrying Amount |
|  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | (In millions) |
| June 30, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |
| Assets: |  |  |  |  |  |  |  |  |  |  |  |  |
| Commodity derivative instruments |  | $ | —  |  |  | $ | —  |  |  | $ | —  |  |  | $ | —  |  |  | $ | 1  |  |  | $ | 1  |  |
| Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |
| Commodity derivative instruments |  | —  |  |  | 54  |  |  | —  |  |  | 54  |  |  | 1  |  |  | 55  |  |
| Foreign currency derivative instruments |  | —  |  |  | 7  |  |  | —  |  |  | 7  |  |  | —  |  |  | 7  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |
| December 31, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |
| Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |
| Commodity derivative instruments |  | $ | —  |  |  | $ | 10  |  |  | $ | —  |  |  | $ | 10  |  |  | $ | —  |  |  | $ | 10  |  |
| Pipeline capacity embedded derivative |  | —  |  |  | 46  |  |  | —  |  |  | 46  |  |  | —  |  |  | 46  |  |
| Preferred Units embedded derivative |  | —  |  |  | —  |  |  | 57  |  |  | 57  |  |  | —  |  |  | 57  |  |

(1)    The derivative fair values are based on analysis of each contract on a gross basis, excluding the impact of netting agreements with counterparties.The fair values of the Company’s derivative instruments are not actively quoted in the open market. The Company primarily uses a market approach to estimate the fair values of these derivatives on a recurring basis, utilizing futures pricing for the underlying positions provided by a reputable third party, a Level 2 fair value measurement. Derivative Activity Recorded in the Consolidated Balance SheetAll derivative instruments are reflected as either assets or liabilities at fair value in the consolidated balance sheet. These fair values are recorded by netting asset and liability positions where counterparty master netting arrangements contain provisions for net settlement. The carrying value of the Company’s derivative assets and liabilities and their locations on the consolidated balance sheet are as follows:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | June 30,2022 |  | December 31,2021 |
|  |  |  |  |  |
|  |  | (In millions) |
| Current Assets: Other current assets |  | $ | —  |  |  | $ | —  |  |
| Other Assets: Deferred charges and other |  | 1  |  |  | —  |  |
| Total derivative assets |  | $ | 1  |  |  | $ | —  |  |
|  |  |  |  |  |
| Current Liabilities: Other current liabilities |  | $ | 41  |  |  | $ | 4  |  |
| Deferred Credits and Other Noncurrent Liabilities: Other |  | 21  |  |  | 109  |  |
| Total derivative liabilities |  | $ | 62  |  |  | $ | 113  |  |

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