Related Party Transactions | Related Party Transactions Related party transactions include transactions with SPLC and Shell, including those entities in which Shell has an ownership interest but does not have control. Acquisition Agreements For a discussion of related party acquisition agreements, see Note 4—Related Party Transactions in the Notes to Consolidated Financial Statements of our 2016 Annual Report. Commercial Agreements Omnibus Agreement On November 3, 2014, in connection with the IPO and the acquisition of Zydeco, we entered into an Omnibus Agreement with SPLC and our general partner concerning our payment of an annual general and administrative services fee to SPLC as well as our reimbursement of certain costs incurred by SPLC on our behalf. This agreement addresses the following matters: • our payment of an annual general and administrative fee of $8.5 million for the provision of certain services by SPLC; • our obligation to reimburse SPLC for certain direct or allocated costs and expenses incurred by SPLC on our behalf; • our obligation to reimburse SPLC for all expenses incurred by SPLC as a result of us becoming and continuing as a publicly traded entity; we will reimburse our general partner for these expenses to the extent the fees relating to such services are not included in the general and administrative fee; and • the granting of a license from Shell to us with respect to using certain Shell trademarks and trade names. Indemnification for any unknown environmental liabilities is limited to liabilities due to occurrences prior to the closing of the IPO and that are identified before the third anniversary of the closing of the IPO. SPLC will indemnify us for tax liabilities which are identified prior to the date that is 60 days after the expiration of the statute of limitations applicable to such liabilities. We have agreed to indemnify SPLC for events and conditions associated with the ownership or operation of our assets (other than any environmental liabilities for which SPLC is specifically required to indemnify us as described above). There is no limit on the amount for which we will indemnify SPLC under the Omnibus Agreement. Under the Omnibus Agreement, certain costs are indemnified by SPLC. The legal and environmental indemnifications are subject to individual $0.5 million deductibles, while we have an aggregate limit of $15.0 million , of which $10.7 million is remaining. As of March 31, 2017 , only the environmental indemnification remains and it will expire in November 2017. During the three months ended March 31, 2017 , we did not make any claims for indemnification under the Omnibus Agreement. Tax Sharing Agreement For a discussion of the Tax Sharing Agreement, see Note 4—Related Party Transactions in the Notes to Consolidated Financial Statements of our 2016 Annual Report. Other Agreements In connection with the IPO and our acquisitions from Shell, we have entered into several customary agreements with SPLC and Shell. These agreements include pipeline operating agreements, reimbursement agreements and services agreements. Noncontrolling Interest Noncontrolling interest consists of SPLC's 7.5% retained ownership interest in Zydeco as of March 31, 2017 and December 31, 2016 . During the three months ended March 31, 2017 and 2016, SPLC owned a 7.5% and 37.5% noncontrolling interest in Zydeco, respectively. Other Related Party Balances Other related party balances consist of the following: March 31, 2017 December 31, 2016 Accounts receivable $ 13.3 $ 10.1 Prepaid expenses 3.6 2.7 Accounts payable (1) 5.7 5.2 Deferred revenue 14.2 7.9 Accrued liabilities (2) 6.2 5.1 Debt payable (3) 685.3 686.0 Lease liability – related party 24.7 24.9 (1) Accounts payable reflects amounts owed to SPLC for reimbursement of third-party expenses incurred by SPLC for our benefit. (2) As of March 31, 2017, accrued liabilities reflects $ 2.9 million accrued interest, $ 1.4 million fuel accrual and $ 1.9 million other accrued liabilities. As of December 31, 2016, accrued liabilities reflects $ 2.6 million accrued interest, $ 1.6 million fuel accrual and $ 0.9 million other accrued liabilities. (3) Debt payable reflects borrowings outstanding after taking into account unamortized debt issuance costs of $1.6 million and $0.9 million as of March 31, 2017 and December 31, 2016 , respectively. Related Party Credit Facilities We have entered into three credit facilities with Shell Treasury Centre (West) Inc. (“STCW”), an affiliate of Shell: the Five Year Revolver, the Five Year Fixed Facility and the 364 -Day Revolver. Zydeco has also entered into the Zydeco Revolver with STCW. For definitions and additional information regarding these credit facilities, see Note 6—Related Party Debt . Related Party Revenues and Expenses We provide crude oil transportation and storage services to related parties under long-term contracts. We entered into these contracts in the normal course of our business and the services are based on terms consistent with those provided to third parties. Our transportation services revenue from related parties was $21.0 million and $23.3 million for the three months ended March 31, 2017 and 2016, respectively. Revenues related to storage services from related parties were $1.9 million and $2.1 million for the three months ended March 31, 2017 and 2016, respectively. During the three months ended March 31, 2017 and 2016, we converted excess allowance oil to cash through sales to affiliates of Shell and recognized a gain of $0.3 million and a loss of less than $0.1 million , respectively, from such sales in Operations and maintenance expense. During the three months ended March 31, 2017 , Zydeco, Bengal, Odyssey, Mars, Poseidon, Proteus, Endymion, Colonial, Explorer and Cleopatra paid cash distributions to us of $91.0 million , of which $39.8 million related to Zydeco. During the three months ended March 31, 2016 , Zydeco, Bengal, Mars, Poseidon and Colonial paid cash distributions to us of $49.7 million , of which $20.6 million related to Zydeco. For a discussion of services performed by SPLC and Shell on our behalf, see Note 1—Description of Business and Basis of Presentation—Basis of Presentation . During the three months ended March 31, 2017 and 2016, we were allocated $1.9 million and $1.3 million , respectively, of indirect general corporate expenses incurred by SPLC and Shell which are included within general and administrative expenses in the condensed consolidated statements of income. Beginning July 1, 2014, Zydeco entered into an operating and management agreement (the “Management Agreement”) with SPLC under which SPLC provides general management and administrative services to us. We no longer receive allocated corporate expenses from SPLC or Shell. We will continue to receive direct and allocated field and regional expenses, including payroll expenses not covered under the Management Agreement. In addition, beginning October 1, 2015, Pecten entered into an operating and management agreement under which we receive direct and allocated field and regional expenses from SPLC. These expenses are primarily allocated to us on the basis of headcount, labor or other measure. These expense allocations have been determined on a basis that both SPLC and we consider to be a reasonable reflection of the utilization of services provided or the benefit received by us during the periods presented. For a discussion of these agreements and other agreements between Pecten and SPLC, see Note 4—Related Party Transactions in the Notes to Consolidated Financial Statements of our 2016 Annual Report. A portion of our insurance coverage is provided by Shell with the remaining coverage by third-party insurers. The related party portion of insurance expense for the three months ended March 31, 2017 and 2016 was $1.7 million and $0.9 million , respectively. The following table shows related party expenses, including personnel costs described above, incurred by Shell and SPLC on our behalf that are reflected in the accompanying condensed consolidated statements of income for the indicated periods: Three Months Ended March 31, 2017 2016 Operations and maintenance - related parties $ 8.5 $ 5.4 General and administrative - related parties (1) 6.4 5.7 (1) For the three months ended March 31, 2017 we incurred $2.0 million under the Management Agreement and $2.1 million under the Omnibus Agreement for the general and administrative fee. For the three months ended March 31, 2016 we incurred $1.9 million under the Management Agreement and $2.1 million under the Omnibus Agreement for the general and administrative fee. Pension and Retirement Savings Plans Employees who directly or indirectly support our operations participate in the pension, postretirement health and life insurance, and defined contribution benefit plans sponsored by Shell, which include other Shell subsidiaries. Our share of pension and postretirement health and life insurance costs for the three months ended March 31, 2017 and 2016 were $0.8 million and $0.6 million, respectively. Our share of defined contribution benefit plan costs for both the three months ended March 31, 2017 and 2016 were $0.3 million . Pension and defined contribution benefit plan expenses are included in either general and administrative expenses or operations and maintenance expenses in the accompanying condensed consolidated statements of income, depending on the nature of the employee’s role in our operations. Equity and Cost Method Investments We have equity and cost method investments in entities, including Odyssey, Mars, Colonial and Explorer in which Shell also owns interests. In some cases we may be required to make capital contributions or other payments to these entities. See Note 3 – Equity Method Investments for additional details. Reimbursements from Our General Partner During the three months ended March 31, 2017, we filed claims for reimbursement from our Parent for our proportionate share of Zydeco directional drill project costs and expenses of $6.4 million . During the three months ended March 31, 2016, we received reimbursement from our Parent for our proportionate share of Zydeco directional drill costs and expenses of $0.1 million . |