PAA - Earnings call transcript Q3 2019 | Plains All American Pipeline, L.P.

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Operator

Good day and welcome to the PAA and PAGP Third Quarter 2019 Earnings Call. Today's conference is being recorded.

At this time, I'd like to turn the conference over to Roy Lamoreaux, Vice President of Investor Relations and Communications. Please go ahead, sir.

Roy Lamoreaux

Thank you, Walter. to American's welcome earnings quarter and call. conference afternoon, Plains third All XXXX Good is the posted & presentation slide Today's on of website Events Investor our at plainsallamerican.com. section News Relations

and important regarding includes contains consolidating information sheet PAGP. balance measures. X Slide condensed forward-looking statements The non-GAAP disclosures appendix for financial

Today's and Executive Officer. Chief and call by Swanson, Al Chief be Chiang, hosted Financial Executive will Willie Officer; Vice President

and Goebel, are Chandler, senior Pefanis, Harry President President Operating Additionally, Executive Vice Chris of Commercial; and management the Commercial with Jeremy and along portion President, Executive Officer; our Vice call. other available Chief Officer of today's Q&A Chief members for team

With call the that, now turn over to I'll Willie.

Willie Chiang

thank for everyone Roy. call. afternoon, Thanks, joining you Good and our

the solid afternoon. pleased information we Let quarter by third me begin released to We're of hitting report results. points the earnings this high

As our in strong logistics exceeded outlined fee-based continuation these in segments or our Slide on of results a and supply segment. performance reflect expectations X, S&L and

will detail I minus more in by we billion. billion. million, $XXX plus to growth program million our EBITDA adjusted by have we've guidance And capital discuss XXXX $X.XXX our or year $X.XX XXXX $XXX As full decreased increased

competitive for estimated $X.X $XX XXXX businesses, million of of an preliminary is our impacts billion growth EBITDA environment. of the to fee-based reflecting Additionally, guidance billion for $X.XX which million, billion. offsetting includes approximately composed is fee-based This adjusted $X.X our approximately from $XXX expected

EBITDA adjusted guidance S&L is million. preliminary Our $XXX our million segment $XX for to

beyond complete current and capital programs reduction our growth XXXX investment we we $X.XX capital our and expect XXXX preliminary guidance meaningful program. billion, Our is capital in on as

XXXX the production our growth. Permian respect context XXXX with into put guidance me -- our preliminary Let to

a And X production million day. approximately grew we barrels XXX,XXX by day. During XXXX, XXXX growth Permian of expect a barrels approximately

as and year activity. than a a we XXX,XXX full estimates about grow average our XXXX, day on less average which producer production to day, impact capital the calibrated Permian completion barrels we anticipated barrels on on prior the of expect drilling have is further For approximately XXX,XXX discipline

that year barrels would day XXXX. XXXX expect production Permian XXX,XXX year-end higher to end than the I a note we to XXX,XXX

preliminary of includes competitive capacity well Accordingly, earnings level takeaway more reflects of rate service. environment growth. impact as the XXXX guidance as of a new It the a fee-based into as year-over-year is our lower moderated S&L placed Permian

haul capacity infrastructure strong release takeaway spot utilization which high new supported and The long volume, have systems. constraints, on our throughput Permian

from that fee-based efficient is Beyond we with and the in as our existing partners XXXX, service highlight slides strategic, XXXX. through and our XXXX. growth aligning four These outlined projects multiple are phase solid wave our by next late underpinned contracted highly growth seven of value supported XXXX projects visibility by capital provide on and for optimizing through chain. fee-based long-term the third-party strategic systems These and commitments focus throughout are enter on

meet Additionally, in dilutive per we projects return or fund providing exceed DCF sources thresholds XXXX these strong in common our with non plan and unit beyond. growth them and to targeted

deliveries is demonstrated Ingleside and Taft, capacity is currently complete, and With and these a Christi. respect projects. Permian as its The we share five, barrels mechanically on in comments Corpus day customer to to to XXX,XXX shown initial the II meeting into Cactus Slide on connectivity established mid-August, pipeline me the several has of haul for brief let markets. long Now, and pipeline of service have some design projects placed nominations

the to end. expect Webster, advancing pipeline project our On the year and before with Wink expectations begin construction to we're consistent

the we're who Wink We in the in ownership an pipeline's with Webster an targeting the third-party has XX% undivided the early have long right JV the acquire away The Webster project. in joint majority the of XXXX. to Midland segment undisclosed lead ordered of completed continue arrangement we of capacity to and service to has equipment, acquired

owners the our the owns of estimate now cost Wink this remains respective directly conference net line accounted at project the JV which not described that of interest undivided JV in but previous interests segment, joint The XX% to arrangement. cost on the with I note already have our Webster for changed. this call, JV would level earnings

and Beyond Cushing our shown on as upstream optimization the that systems quarter range where land and our Permian, potential number to of downstream. Western leverage systems we pull six our to systems pipeline hub that through benefits we continue are to Slide provide the of terminals, projects advance a on advancing existing and expansion have potential opportunities

service announced, line per expansion. completing White as a advancing is previously Cliffs and a fully is day capacity NGL Additionally, Saddlehorn XXX,XXX conversion to committed

provided we option hire through third in previously, to of quarter interest the a from JV. first announced party us As Saddlehorn an XX% a to the XXXX

the Moving advancing are to project. downstream Slide seven, Oak Cushing, Red we of JV pipeline

XXXX. We Oak first the continue bringing and to target of international Red half service

and expansion reversal is line progressing. diamond the Additionally, cap

equipment have the diamond first line service long estimates to secure We volumes. establishing and for lead into XXXX our of timing the to the for extended required better order we continue are that service committed connectivity the for to half reflect efforts note to preparing system. project advance cap full the will current additional of in I to food light

the by October. Energy also call progressing mention in schedule River systems JV expansion these that pull to on announced underpinned are JV Al, that Connect third is Both commitments. party Partners the progressing we're of and would with demand we Before our Cushing long-term turning over I Red Holly

With that I'll to it Al. turn over

Al Swanson

Thanks, Willie.

additional quarter our recap and review for preliminary XXXX of guidance of metrics. leverage my and third results a our liquidity guidance and portion current capitalization, During the XXXX share call, our I'll provide information on brief our

million a $XXX adjusted solid and by third increase of Our based performance. EBITDA represents quarter driven S&L strong of XX% year-over-year performance fee

early based and a an volumes expectations increase of of XXXX. slide to a on represent Permian our the startup sequential of exceeded the eight, II. quarter we're higher million X% XX% in quarter of results These increase based by over $XXX anticipated third year-over-year second driven Moving than basis Cactus fee and gathering results

Permian Our oil S&L crude in performance favorable differentials reflects Basin. the

our XXXX, overview guidance updated base estimated fee for fee our of an X Slide and CapEx XXXX our for guidance years. growth preliminary base both for provides

generate common We full than expect XXXX, resulting distribution $X that in coverage expectations. of unit flow unit exceed year for excess of than billion and distributions in cash results our more of prior to per more XXX%

reflecting XXXX start some and adjusted well capital we XXXX, billion lower by optimization shift plus EBITDA respect to costs. as our of preliminary guidance. of to or project $X.XX Additionally, to as With capital $XXX million XXXX program minus investment some scope

comments. XQ averaging through our approximately doubled build Permian we per 'XX, Let 'XX day. me volumes, From of tariff on a nearly growth Willie's of quarterly XQ barrels few XXX,XXX

the XX% includes effectively first than quarters This have more operated for at which three systems, our haul utilization. long for of XXX% XXXX growth on

Our mid-August. XXXX in results benefited initial also service the from accelerating II pipeline Cactus into

Cactus to Permian to continue volumes total in expect and our tariff XXXX. We grow II

adjusted minus Permian. In competition XXXX oil and and $XXX the guidance in total, our long with public fee margins narrowing million our year-over-year expectation reflects of S&L preliminary differentials, particularly held gathering plus lease regional for crude consistent EBITDA and or based growth increased

on long partially Investor fee based offset Day As XXXX capacity presentation Permian lines several is be Basin. June, haul in of our spot we primarily to expected by growth at in the utilization lower indicated our

Accordingly, million $XX factors. these our impact primarily absorbs from XXXX fee bass estimated adjusted EBITDA an guidance

renewals amount impact the do several competition, for Furthermore, this next years. the forward, for we and narrowing systems, changing of including meaningful contract of several we we captures the support have across differentials material believe large not years. our have expected Looking flows majority contractual and

Our XXXX preliminary the $XXX guidance sales. impact includes of approximately also asset of million

XXXX in that Saddlehorn. an complete the We option is which assumption exercised the purchase expect early includes from

With minus our billion the consistent via approximately net XXXX is CapEx included project CapEx is million within Red therefore of targeted JV preliminary structure. $XXX respect of entity. to our plus with program, our $X.XX not amount, billion our or in financing that the assumes capital And Oak $X.XX guidance funded

Our conditions. capital equity XXXX distributable program, not consider and and cash funding balance sales is with common funded additional long-term to market preferred requirements may program access asset to equity issue We depending and to expected flow fund debt. we expect the on do our XXXX capital be with

last moving of capital sales have the we over X, performance. Before over out years, S&L Slide point the asset and from over billion I $X that with investments funded would several

we previously, to capital continue $XXX we incorporated million additional with opportunities. And investors. our evaluate fund our down to sales guidance. or XXXX mentioned our of return successful have debt As into policies asset leverage, capital If capital in used, pay divestiture consistent our investment, allocation be would

over Moving on times, we of S&L end, had over Slide liquidity which months. our ratio the long-term adjusted to as XX XX. on to X.X from At performance illustrated EBITDA a quarter last debt benefited capitalization has and

leverage our expect earnings in As described a we our on bit last take higher XXXX. call, to

to long-term debt remain S&L our but adjusted targeted continuing complete program, capital times. contributions moderated we migrate a leverage we As on X.X our down with of within focused to range X.X EBITDA to

our As reminder, the leverage adjustments to midpoint objective levels The with leverage agency to times roughly add X.XX ratings over for basis. so preferred consistent our X.X certain for is the including equate calculations, target a these Reducing on roughly agencies range of of time. adjustments of mid our current would achieving rating a currently X.XX times credit BBB their make equity securities. our rating a turn

in the notes notes outlook XXXX, rating offering on we X.X%. an X.XX% $XXX XXXX. of to of due also positive January made. progress note reflecting we retire unsecured intend of We million that stable changed and use have of fourth one December $XXX In completed proceeds our due agencies in in rate public notes due interest had the a rating I million the September, average credit $X to quarter their which billion from a together would to mid-October, December senior

forward an XXXX continue on and significant progress end well in XXXX. our year-end our providing during to February. conference expect positioned in our to committed XXXX growth We guidance provide finance full with to to call and look liquidity investments We update

With that, the to Willie. I'll turn back over call

Willie Chiang

results execution strong in delivered of Al. solid Thus in S&L conditions. XXXX, favorable Thanks a period far enhanced by fee based we've market

reliability to efforts performance continued safety advance we've with those in ongoing improve and year-to-date. addition, operations In areas our strong our of to

remain Looking our allows that maintaining needs, continuing efficient business and the optimize and with fee-based and industry secure focused industry exceed capital. sheet projects, partners cost a average solve the capital returns current long on value weighted optimization forward, we've aligned We efforts to strong our our and across help capital through or which ongoing our term to grow completion credit rate program, profile. of hurdle of balance above meet us ourselves chain, build while

we potential for positioned well the the XXXX at portfolio additional throughout will which reduction, program, mentioned, call Al throughout will also us asset balance described capital our capital leverage, beyond. believe the allow to and to flow optimization our and headwinds as sales. to described we're including we Acknowledging our we complete allocation and leverage As continue years. capital look to call, next cash few Initiatives returning in further current our unitholders

A versus look We call forward summary updating XXXX of our XXXX is XX, full Slide with as performance as included key XX. well February guidance. shown takeaways our in on from and today's to you goals our

Before II The to Cactus design of our I correct is a clarification barrels make design do turn is I capacity. about complete. day a want a I when demonstrated capacity. XXX,XXX it barrels to of it have as mechanically over pipeline, referred Roy, XXX,XXX to it may number I day talked

you, With to back that, Roy. I'll it turn

Roy Lamoreaux

Thanks Willie.

to follow-up time the additional as in us ups. will as Q&A return you the we from session, this question allow to As question one to limit available and queue practical our have then questions top follow enter yourself one This afternoon. participants address the please many if

be available evening Brett this to address additional Additionally, to questions. tomorrow I Magill and and plan

for Eduardo, open the we're ready now to call questions.

Operator

question Tonet [Operator ahead, Instructions] take first Morgan. our now Please from sir. We at JP will go Jeremy

Q Tonet - Jeremy

Good afternoon.

Willie Chiang

Jeremy. Hi,

Jeremy Tonet

of stacking allocation price they of the thoughts whether in to how on declined light and during kind Want levels optimization, philosophy that different be for together? given all but sits how point, just could could trending ways think future of the portfolio lot now, have, you scaled, make call, of sense a be now kind JV off bring you back that could the where which projects any you of touched it the sense, right capital with if start and capital about plays kind the if want they at how share just in any kind buybacks, it's right to of and on

Willie Chiang

and Jeremy, this comments that this returns year complete We done. program year. to to to got allocate me I'll capital look We at the let make and I mean, to that that Willie, to can for on is to ask add Al ways is a improve that's going of projects. next that continue get clearly, it. a we couple priority we've need one is always capital

additional continue XXXX, and partners of kicking the a that, from in projects, If that. you've hit load brought starts seen capital really at we’ll into we we have the dropping. where to inflection But cash point starts look in capital our flow completed

do So at that us gives more point, things. flexibility it to

thing at and to we more even look sell we're other talked to asset additional cash about, continue the then us And ways sales, as looking some some potential other to give financial flexibility. Al

possibility of buy case. get there's sales, or asset back we earnings they if some We base the only shares shareholder from on value would So S&L Depending that's kind a if excess compelling. and were for return.

to quickly it we our focus projects door. really is done it. the board with moving to on would where get our able move and ourselves point, can of this be discussions we get have our the some We Al? on get in capital cash had at But and

Al Swanson

think it's I you Willie, prongs of the allocation hit strategy. our it. one of capital Clearly

As program sense the we're a we'll a funding, shares right leverage very quickly. implement what had be very just think think prioritizing and when strategic discussions prioritize we at with projects. are our there. it, we and we accretive we've we highly our there makes board, time if when get could time mentioned, But if it will we now It

Jeremy Tonet

time as take of That competition of with we're competitor away it seen like been up and makes lot of marketplace kind pipes, helpful. the That's ramping Permian with at there's in over Thanks. it seems we've now sense. the And entering a precipice service. talk some right

there. to a you on guide want looks any down bit see more just a embed, provide step of little color if transportation like so could And XQ the

color we're have, what into that just, just So provide comfort number the of given as that level now, see, want partway helpful? far any right to hitting can quarter that be would of as you kind you

Willie Chiang

me Let ask that. Goebel Jeremy address to

Jeremy Goebel

your multiple term, spot to of is regional multiple regions question of the differentials what all first surge Jeremy, answer we production, types a in part reflecting that saw doing capacity and across second your we and were near supported.

some we quarter. QX in the came on the of than additional in differently from spot capacity in II We regions have forecasted takeaway some different which on, capacity coming is Cactus value that rolled fourth but

where and the beyond. through go we As comfortable is projection going quarter. year into We next feel the

regional next I what that as we're steps think a it a production up that's touched will capacity system. Al reflects year during it allocation our be, into our the as by call, of we've on come surgeon Willie did well, are and our year what year over now as used forecast view seeing differentials and for

our been been downstream and the connectivity customers and wellhead the efficient preparing from for from One been supply, thing most provide lease as have away we've our environment get to to utmost to market. take upstream the we've years, for several we've call this to and right way connectivity ensuring up grooming the we the

supply marketing to of make In our why have ability turned we leads we and opportunities capacity. position can have long-term projects their that our pipes that, That's l our top make combined up strategy. an of partners, systems. we gives where optimize Willie to with the sure industry On long-term we about. do full get addition, contracts, we that have that long-term about talked optimize us excited sure we pipeline us gives stays substantial utilization commitment Both and slack,

Jeremy Tonet

me. That's Thanks taking my great. for for That's all question.

Willie Chiang

Thanks.

Operator

UBS. now sir. Please Gershuni will next ahead, go Shneur of We question instructions] [Operator take from

Shneur Gershuni

good everyone. Hi, afternoon,

bit for cost mentioned actually little Permian a about your have of high some using takeaway capacity overall here, the peers Just the takeaway Permian how capacity much of and to talk DRA it's to wanted added system.

result capacity and capacity probably So, DRA, much can to take taken a with taking of Permian out seriously as do compressing sense peak away how assorts? you of a spreads of out expensive capacity this use sort be of have

Chris Chandler

of but it estimate we DRAs Yes, is daily we the Chris much something Shneur could we a don't stopped short The answer optimize was basis taken have that be of out Chandler. on capacity this is it rate been how and things of in quality recent take to cases power DRA. like utilize a crude more some optimization. flow it's account pipelines and designed And a loan of into really some cost, our continuous an pipeline have base

unrealistic pipelines. that it's completely So would removed DRA our be from using

Willie Chiang

just is or capacity on comment. Shneur for general plus this DRA, a give is thumb of you XX% Willi. rule I minus

Shneur Gershuni

Perfect.

Thank building Okay. as 'XX. you at versus sort to right follow-up currently have to EBITDA CapEx sort sort of you've about so projects questions incremental complete that lower about And look you're out being But, and at And you some an us that have the could I that be suggesting on seems in look it X, initial outlook you. year. the be and given question, you plus growth of of Slide XX When meaningfully XXXX. be now with XXXX of sort I there forth. a 'XX on in my that as know visibility current

it’s we think looking still of you're continued XXXX much putting of that place that. you be the a the you meaningful of terms of sense have something How at would sort be ramp. the just on XXXX? at for Are pretty in end can 'XX? capital ramping in about When sort Do XXXX in and some

Willie Chiang

and I look benefit capital it it. Shneur, the at would these getting as kicking in Yeah, projects of

up that a is in amount ramping meaningful would start So it XXXX.

Shneur Gershuni

All questions. much, my you right, perfect. guys. Thank very are those two Well,

Willie Chiang

Thanks.

Operator

take Richardson next Please at ahead. from Tristan now go We'll SunTrust. question our

Tristan Richardson

evening, good Hey, guys.

Webster, to it UGI seems senior customers can on new Just, this came bring came the about that can that we've little I about volumes talk focus Kind partnerships like development how bit to large had bear. you typically, equity of curious how Wink about? one question a and on a the

Jeremy Goebel

Look, This are afternoon. Good Jeremy. always is optimize. to we looking

there and owners for come several long-term But it sufficient together Wink producers' projects long-term that there's with producers the a and same of ensure to partners for felt similar needs, merge solution. with routes. when system the downstream Saddlehorn the is efficient a had sure to refiners, Grand is and takeaway This meet pipeline Mesa. the the efficient. making sense the example at remember, If at to pipeline. to capital merged you optimizing competing is of industry made takeaway up the this were time, the Webster benefit time an projects its but capital

us to look are see NGL continue Cliffs mentioned project and projects the that You'll or service have that turning of Saddlehorn and capacity competing in Capline, do efficient. road at together river existing the potentially projects, capital be I that bringing Grand the Mesa, all Diamond all that these to trying into project, partners we're White reversing taking projects

to was two one going take as just the another to and rational and together think So one. mines in I industry Webster projects where together come put

Willie Chiang

a I industry. of Tristan mean we by both what great as efficiency this driving the in would capital across example ourselves really characterize

Tristan Richardson

sheet then funding a trying as sort about consideration think And mechanism. do think toolbox. make be what This best you the potential as that stage option? it a sense might you of equity as mentioned that balance of the preferred to just set would of Al would maybe kind a is it. in book Appreciate talk tool you what Could in of conditions sort the

Al Swanson

we in Yeah, our fund this program. as capital XXXX, leverage clearly, pick up we will view that

assets, in any that in we of do view how a cost it, with that equity if of if much the agencies we to it at done in preferred waiting CapEx subscribe tool, program, it'll identify kind our So to were monetize to we rating kind ring, our you the the be capital. changes if to versus to look as debt any, relation may funding XX-XX kind concert, of security, and

basket $XXX could we billion And million of $XXX could we we that so, and to utilize. have in I think ballpark kind million our to $X

we program need that security and be that or will the also so that things subject view leverage but do we to So access of the to manage one look if conditions market market. monitoring is as to our fund and will

Tristan Richardson

Appreciate it. very Thank you much. guys

Operator

the We'll next ahead. go Gabe take from now Moreen. question Please

Gabe Moreen

to little aggressive, Hi, growth more tell XXX,XXX good of afternoon. but it some numbers of think Two viewpoint? producer to questions some year-on-year a is be conservative I stuff barrels that of Permian what Can for to forecasts terms versus bit internal out may the me. a or talk is PAA Whether developed a day. conservative that's seems you guess will to what XXX,XXX in time One that's a been about conjunction in I compared there. talking extent that customers other with

Jeremy Goebel

We current our may that Jeremy. that having rate is probably XXXX at prove forecasts dialogue It's look dialogue own almost This to on saying basically it's our look based this Sure. market. continually customers to rigs customers a at perspective. views. with we the we our through continuous are in run case, internal It continue conservative run XXX it's the are running

with ended more To be with you, XXXX production we honest than thought.

So began year. this it

exit while a expect rates year, million our beginning because XXXX again, simply climb activity from this It's quite XXXX had forecasted we XXXX. at the the the that day. of So to X.XX happens year, that momentum we barrels possible around than exit to higher of continues

is next a X efficiencies and a year, no really to Willie forecast this activity We, you exit day was from, the roughly built forecasts, growth be pieces in that constant liberty when operators. which million working that barrels gets growth integrated you'll and the you'll rates see and historical lower. see some And different substantially that will different of exceed by have far in

to slightly necessarily lengths basis, it's longer normalized our on a for well flat. mean it seems means specific we view respective operators, this that's of it continue increases like anything specific just core performance get activity level, lateral view look assets doesn't will that and fairly it So

parent child working we spacing, it cetera. et are relationships think in that the wealth, So that through customers of impacts

a well, to of continue we well So that it the see lot incremental because than smarter. of getting better last be

is a and continuation activity we've that number. of what none said, we yields as that's of built got in so that current what And

Al Swanson

current environment as on based well. And price

Willie Chiang

is end a was XXXX, end Gabe then of which starting One before we XXX to gave versus XXXX to number which than average XXXX clear little which lower make the I reflects And number, year-end it, XXX to was numbers. I off sure To year XXX expected XXXX Willie. described when the the is and what two is was this taper back I XXXX average,

Gabe Moreen

Thanks, terms holding Willie. MVC And really some $XX you million in to extent of my then the you barrels follow $XXX commitments might $XX a is $XXX the at relative up relationships like Permian around like get prices, to selling [ph] hand scenario that S&L, in downside that? on those you're a around the because question and premium of protected if million to feel put downside whack million what really out how of to million

Jeremy Goebel

of Jeremy. S&L look current it Rockies as S&Ls S&L. Permian. that's is I the of would all the in S&L is reflection in This at impacts our in Canada, the

a operator on those like feel Permian, With respect multiple owner good can be beneficiary pipeline the handle the to into being we we got plus ability markets to attributes. and a sell to the Midland. we've So capacity of

for So happens, there's us that well. as the ways to extent benefit

So asset S&L affiliate. turns out to to length that this will if us to continue to help situation advantage around our of base, and our take I our look think marketing we that our footprint optimize and will opportunities be in

Willie Chiang

at well. said, prepared look Jeremy I our forecast our like a there's So rolling volume in in set and when in a reflection think on We contractual that of our touched commitments really and and the this, contractual opportunity number, the XXXX, but position NGL, you it's XXXX. of as reflection

Gabe Moreen

thanks, Great, everyone.

Operator

will Michael We Wells from now ahead. Please Blum Fargo. the go take next at question

Michael Blum

I sell JV Are Thanks. asset within to be that Red sort the existing or I guess and at is approach JV that really kind question My assets also set consider you discreet Oak. was assets next guess context current specifically that would down also into the Thanks. year. sale of structure well? be would or of about as for you and with willing

Willie Chiang

of you've at, the you things over premature one, opportunities. have take additional I We've and all specific as this really potential Michael. on looking number but working ahead would the are it's to it's We go probably I we on we've on you one give me on don't answer, time. specifics the pipelines us specific, to want some give asset Let for above of seen that too a talked do number implement been option us that of get a about sales. that. or And

Jeremy, to you want something? add

Jeremy Goebel

I We're like looking Yeah, think in and assets the opportunity always Red Oak the opportunistic, them really comfortable we're addition, it. sell we questions our But we won't with. PXX their that on specifically captured and evaluation we may and are keep Maybe way. be it on optimize planes based in strategic all that the to the ownership alliances, it set. be someone this that bring and and

Michael Blum

all That's I right, you. thank All had.

Willie Chiang

Thanks, Michael.

Operator

Research. ahead. question Please next our take Keith from Wolfe at go Stanley now We'll

Keith Stanley

strong QX fourth flat. and your it and kind The segment facilities pretty quarter and implies transportation updated volumes of tick a down guidance very EBITDA the is transportation in and and Hi. in

conservative Just in anything unusual QX going on there as just looking it forward?

Jeremy Goebel

it. II there surge think – online production with of first a question Cactus asked this was maintain simply, online condition came I from we project had cactus and elevated we earlier. all of our The full to rates. the Permian were wild believe But I were outlets very because all

wouldn't So those spot that volumes. expect capacity on we

the White opportunities $XXX Rockies was next is running But up to as of as step Saddlehorn spite online and in end towards projects and the River [ph] step in others Red our In year at ramps, that were up. addition, from Cliffs had reflection River to II and million some pipeline this Cactus the differentials there come that, of year Red elevated levels. fully and year spot as

reflected. and Permian opportunities So we full, every QX had we full of where Rockies But in River. to our Red instance addition Cactus some pipelines feel like was one next is II year and an

Willie Chiang

a On spot of there. facility also gas lot we the had to activity that's to forecast out instance there's natural side for hard the assets, guidance performed relative significantly

to So are that of things types those anticipate are harder quarter-over-quarter. the

Keith Stanley

to disclosed Wink publicly yet. interest one on just the and party the of market just the it has that acquire follow-up the Webster not Can the you who in quick Got that down XX% confirm interest. sell

Willie Chiang

To that. our knowledge, they have not disclosed

Keith Stanley

Okay, you. thank

Willie Chiang

Thanks, Keith.

Operator

Please next Tudor Pickering, & Colton Company. Holt And question ahead. take go Bean we'll from from

Colten Bean

follow-up on million kind to business Canadian marketing? crude and contribution high can the Just NGL the of to breakdown $XX a give million year, between investment $XXX you of level next

Jeremy Goebel

into of don't and type detail We the guidance. that go

Colten Bean

look I environment number, on be would And at assumptions that with the pretty consistent as you crude. tight guess just that spread

Al Swanson

correct. Yes,

Colten Bean

spread in. of come the impacts Well, the you’ve it. businesses, Got seen on NGL side the I the has I in Edmonton guess mean

that that's kind in all XXX. So XX here of to that is dialed-in

Al Swanson

Yes, it is.

Colten Bean

And then referenced. $XX on you the that just million

Al Swanson

The basis, gotten term that on have because term a something weaker long on spread, of Not that that's persists sure case study. Canadian basis. Edmonton just short a

Colten Bean

Got it? Okay.

the -- that or? on crude is side So on

Al Swanson

That I was crude actually speaking the to. on side

NGL the as the well. differentials On compressed are side

Al Swanson

calling much reason variables we the in too it to might really transparency what nightmare so reconciliation of don't gets See the more happen. market give try into that there’s a many

So do. a with on we I stick XXX think the of we'll just our XX the components answer to what

Colten Bean

system just haul any seeing that think million closer just of -- the on Can I the it that got year terms to transportation. you was next where in wellhead? primarily long headwind Permian characterize are $XX is you the And in impact hitting you Understood. reference for

Willie Chiang

The this. some pipelines. includes it I as on as some lower across and long really our XX well Jeremy Rockies touch tariffs Yes, on let was haul, system Permian

Jeremy Goebel

we what of the basin have but any within it's through reflection I Willie transform, the contracts number. we all long think of covered that region changes to basin, what the primarily rates impacted inter view transportation Yes, and haul, across spreads are our our into think

full this volumes pipelines now actually As to we've the system of a have everything that the lot constrained, complex been on built, Gulf to with going markets, up talked different primarily. everything's got Cushing, to is get that can And when we've Coast going markets. before, are new

a Cushing. So our that of going portion on system and long up on base good haul reduction is to

Al Swanson

this, within of and would takeaway contracts movements think pipe. that Yes, given a add basins, long-term and when I just you about also the that as is lot our system a to on

et differentials, inter cetera. about you when basin it reflects guidance combination haul and long next So think regional the our of that year

Operator

will question Pearce take next go now Energy. the at Hammond from ahead. Please We Simmons

Pearce Hammond

taking Thanks question. for my

any me. enterprise update changes for There selling terminals, was curious talk I'm question the maybe Christi, some about Eagle Ford enterprise there? if with one their JV the Corpus portion. on have you Just any

Jeremy Goebel

excited the and a with are happy as to in Pearce. partner you. three very have cargoes JV customers I shipping is so Business Jeremy. we're only a for month were update up and we I that's the as and our Thanks think two This September enterprises started usual terminal

Al Swanson

not their have ownership. a been what we with enterprises on doing So in loop

Pearce Hammond

Thank you.

Operator

America. ahead. next We Please question take go [indiscernible] will of at Bank a from

Unidentified Analyst

for Thanks evening. my taking Good question.

timing, the you First one is construction project as able your talk line JV? reduction XXXX, lower you me, previously in XXXX -- from because led would with to in delays what in for CapEx stated, of then just about contribution that or to sorry, be is coming and XXXX that XXXX a

Al Swanson

Sure. This is Chris Chandler.

cost project As optimization. we answer XXXX reduced X.XX To a have of question our scope and we billion. earlier, timing productions CapEx mix adjustments, your it's said to

looking be as some So routing that. might also well. line exact like from pipelines, flow those initial optimizing tanks things stations, the We're to size of XXXX our like that at sourcing But competitive results number improved cost number, versus estimates. booster something through and

we're So always capital pursuing. is something efficiency

to that a ability thing for and down in our So our XXXX XXXX bring is good both business. number

Unidentified Analyst

impact concerns your maybe, of future of scope you potential legislation federal based Federal And recent related assets considered directive where presidential be lands. Have you throughput to or what touch on don't on you. any fracking market Got against could on why potential are? kind briefly

Willie Chiang

out Willie. look statistic federal if that of what uncertainty to Yes, lot is we might at that one can hard comment there on something than this further I give acreage you there's lands. you got we a happen. What is on are the can we've dedications and we tell that's on that It's It's XX% that. less have,

before people we what I things to So know hearing there's it'd I've some us being from flexibility impacts But premature move might for the quantify happen. been able from community, producer to direct think what for around. be

Unidentified Analyst

That Thank helps. you.

Willie Chiang

Yes.

Operator

question We will go next Jean take at ahead. Salisbury Bernstein. our from Please

Jean Salisbury

I $XX pay? your or anticipating think flow guidance due capacity. our ticker on actually me still comment million this one more of pretty the next cost barrels if Mostly material to this just utilization impact spot to Can is close you is guess Hey, year. to level? for in just spot I floor with lower

Al Swanson

have the pipes volumes and A don't MBC. lot legacy of

of because what's naturally sort a it's systems. those moves flow not what combination volumes And of on gathering think dedicated MBC, there's where demand our So we to where of MBC. the an

Jean Salisbury

Okay, first the I guess, I outside of meant more thing.

Al Swanson

across our that's system. No,

in MBC. their of demand assets controlled that of so super and A Rockies by the construction. -- those feed that a legacy be newer lot industries component. refiners, or ship construction reflects lot has refineries. whether assets aren't have are this on our pullers We pipelines new the And to historical And they it

base our based across unit. reflects pipelines Harry view impact on That's that what of the entities when our and impact our fee are. business on our the pipeline business million about plan the unit. is it based to The the talking flows XX So, net net

Jean Salisbury

exit who Okay. thoughts from your as then one? shippers there's Can capacity will you And to to share on Houston what each That's only and to attractiveness helpful. relative the plenty the Cushing, destinations operator, the have capacity Permian is of midstream of you Corpus. three once think the

Al Swanson

lower the export refining that extent, a barrels. that's competition an shortage need quality you the activity has barrels of Cushing and Sure. substantial what to and water, the of From a for there's ease market. like And pull new in the barrels of a capacity they the think corporate Mid-Con, the that barrels Rockies and full working markets substantial access need way. in there's I would see Permian standpoint, as their, the to and complex

to will in it Houston refining base, stage the there's, addition a has but exports. capacity, some has having bigger Corpus also Houston, refining

similar Nederland function. is in a

Jean, with look So all X. of if customers system or we our have when look a done X you and we're in at map Slide at if XXXX, you projects the

to we barrel or from Basin You St. get take Falls, and Nederland, Permian Wichita can can the Houston. James, a Corpus, Cushing, it see,

where options. terminals ultimate our we’re what to our the to barrels those and all but them, is So long-term makes our intent can developing. the access not for customers and assets in to go, It plan and that's reflect tell of stickier our ensure the pricing have that they

Jean Salisbury

really That's helpful.

Willie Chiang

I I always the of demand highlight just would there is add the is a medium hub refineries. qualities on thing is right, That a that only would lot forward, that qualities, Cushing's go The Mid-Continent we've for we there. for kind see demand, to WTI And get going more segregation of pull Cushing. XX But continued there's crude of going lower barrels going on a predicted more important as be think to the I that continue and aggregate lighter, to that. to get we're in at gravity's is as

Jean Salisbury

I you. that. Thank appreciate

Operator

Now next the go Securities. ahead. take question at Please Global Sibal from Sunil Seaport

Sunil Sibal

clarification And a guys. Hi, but of Most hit, good my clarity. thanks the have questions have points I discussed. of afternoon, couple been did for from

First federal your coming XX%, from regard is you on acreage drilling, I federal think land the that with to mentioned the lands land? current to production was related dedications those more kind to it or referring of

Willie Chiang

acreage My comment was what Permian. on have the in of total we the

Al Swanson

wouldn't right. existing production, impact So

Sunil Sibal

so and think in or your update talked 'XX another 'XX seems like capital. Okay, million on million then you a the between And asset got about sales. then from last I side, it so of $XXX reduction it. And $XXX CapEx

about difference you're think So time, that provided exiting a guidance last million talking about you XXXX, net-net, than correct? $XXX when versus we leverage is

Willie Chiang

want take you to that? do Chris,

Chris Chandler

the on you're sales You're asset capital the number that and on correct correct number, your reference.

the investments to. leverage allocation self-fund our and as reduce capital to our with we look capital consistent strategy, So we opportunity also have

Willie Chiang

component, the and savings numbers, But Sunil, There's cost XXXX and timing an optimization right. a XXXX a component. of

We that. some shift you of on from XXXX be the well. as to that CapEx breakdown will But that given haven't will XXXX

Sunil Sibal

Thanks. it. got Okay,

Operator

next Amoss, Heikkinen go from David take Please now We’ll Energy. ahead. question

David Amoss

expect invested return your just I'm through you change in XXXX thinking we asked on talk get guys, improvement question Should Can about be on as beyond capital to Shneur some there meaningful the guidance efficiency Hey, XXXX. and now further you that XXXX. earlier capital in your about how beyond?

Al Swanson

aggregate points invested hurdles, to XXX it's Well, I going they as I XXXX. capital of can them. we're the hard capital, that which an slides basis And total, third billion shippers, get return and to exceed meet with over be a the really feel natural contracted, it's to projects walk the think projects our that from have don't beyond for in highly through hard say speak It's on of hard parties, MBCs, with on or good is over. long-term returns, returns I we all number XXX we and third we're that, think there's projects, our very parties $X that that what those about to

today. feel we're very it good So returns the we in on gets invested about when what

it's that, find. Beyond bit to little harder a

turn Our view make those return should is need to we or investments. we hurdles that the

the we're in we're disciplined we precious line is with can bottom as these to They're be XXXX, as returns, seeing the to projects. again, So we're going our as we strong dollars. complete capital see trying feel growth and ultimately, going we to very about we

Willie Chiang

the about David, sales that you done. then assets we've also, would add as I think some And if of

values. sold sales good projects to be That Asset should accretive we're doing. the at

of lot a capital think So positive directionally I on up. there's desire taking employed return on

David Amoss

a just, of timing, Capline one bit the moving in cause mind terms expanding back what's And wouldn't follow-up then thank the if you on little Okay, you. that? and of

Al Swanson

going and That's an purging Tennessee pipe process itself fill. of is is approximately We're of expected. progressing That's well, as That the reversal inspection then prepare Mississippi. both activities. Byhalia, in largely removing of for to project course, Memphis, and XX And Capline to line extension Diamond, of new from the that's miles. section

that little We in route now impact that we've optimizing of obtaining right are route the make extension. the the process time a taking away the we're sure community to chosen least and that the on right extra best for has and

David Amoss

clarification. the for you Thank

the your don't you XX like you'll secure Just knowing miles, proceed mind one that's and on you can that project? in feel if with that you do when one last process done be

Willie Chiang

in preparing middle engineering. detailed soon. We're fairly equipment, come should the we're That order long of to lead

So but we they'll piece optimization schedule XXXX. construction right of to the until always last route away in be have our on early buy we start

the route So down course, be that, that locked those of requires for sections.

David Amoss

it. Get you. it. Thank Appreciate

Operator

We’ll take next Please Barclays. Cho question the go at Christine from ahead.

Christine Cho

one question Hi, on everyone. CapEx. your I just have

to Red debt next year? your Oak. you pro said via positive I million will level project so, down says Webster? XXX Are that’s at rata debt. CapEx think levels for if CapEx your you assume And So next And evaluating project guys for you Wink that come year

Al Swanson

Webster. regard are Wink this to Christine, to not No, with is Al. we

looking are disclosure what not on it's On pro-rata reason clearly to these is contributions is to the and or of historically the us, capital investment the investment around Wink doing JV disclosure treated contributions debt whether but and entity true that were the as we the Oak full project we've at reported Webster we're that us investment sure equity finances. inside JVs, from Red as to make as investment our net to

Operator

session. for I'd question-and-answer conference to like This concludes closing the to any speakers additional or the remarks. back today's turn And

Roy Lamoreaux

we all, you appreciate you joining forward Thank update us today look in you and providing February. to an

Operator

Thank for concludes participation. today's you now call. This

now may disconnect. You

Plains All American Pipeline (PAA) 5 Nov 192019 Q3 Earnings call transcript