Plains All American Pipeline (PAA) 5 May 212021 Q1 Earnings call transcript

Company Profile

Participants

Roy Lamoreaux	VP, IR
Willie Chiang	Chairman and CEO
Al Swanson	EVP and CFO
Jeremy Goebel	EVP and CCO
Richard McGee	EVP, General Counsel & Secretary
Chris Chandler	EVP and COO
Shneur Gershuni	UBS
Christine Cho	Barclays
Jeremy Tonet	JPMorgan
Tristan Richardson	Truist Securities
Keith Stanley	Wolfe Research
Gabe Moreen	Mizuho
Michael Lapides	Goldman Sachs
Jean Ann Salisbury	Bernstein
Harry Mateer	Barclays

Call transcript

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Operator

Good day and thank you for standing by. Welcome to the PAA and PAGP First Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your speaker today, Roy Lamoreaux. ahead. go Please

Roy Lamoreaux

and Good call. first Joseph. of the is IR welcome Plains to be earnings the transcript to on other audio slide our plainsallamerican.com, PAGP measures Thank condensed Swanson, will Chairman post this Chiang, reference be today's replay XXXX today's afternoon disclosures include located forward-looking Kit statements evening, earnings Investor and our American's financial sheet also CEO; Important and News under website quarter Investor following and presentation to section A will non-GAAP regarding materials call. All will are section at hosted and are in the where which today's you, available Relations and website, by for Events Vice Later Today's package and posted plan reference slide consolidating Executive Al President balance presentation. two the Willie materials. other call CFO. and appendix. on provided of Today’s we

Commercial Senior Goebel, now Accounting and well President, Chief Chris other our call are over Herbold, the as turn Executive of With Jeremy Harry and Operating of that, and Including for Vice Executive call. today's Vice the Q&A Pefanis, portion Officer; Additionally, executive as Chris President available and Chief our and will Vice President Chief Officer; Officer. I Chandler, President; to team members Willie.

Willie Chiang

us for comments Thanks, evening. Roy, brief. and joining plan this to thanks you of our each We keep prepared to

outlook million, number XXXX billion, or guidance comments on from note that free flow, $X.XX and We positioning. plus Al and storm our first roughly focus on our my Uri. plans, expectations quarter key plan the strong reporting winter provide continue minus advancing results cash on $XX benefit exceeded $XX guidance make I'll net year today our more estimated this results call. implied at adjusted our a I'll in section our to full to detail will objectives. that of by million of maintaining incorporates EBITDA year progress full solid generating longer-term

our meaningfully. increasingly are We are down global in have progressing. levels drawn economies energy inventory constructive reopening demand are COVID for and outlook Key vaccinations recovery. world global

On the increases recent beyond the of in ongoing and in OPEC's with the activity growth half our supply the and building combination XXXX resume of demand producers side, and And supply discipline, balance Permian XXXX. global momentum into our improves. Permian reinforces importantly, confidence in dialogue to back as levels

to million We $X.XX bias, at and which constructive expect Al matters XXXX to day the view the million X.X fact Permian our year-end XXXX. this day, XXX,XXX cover XXX,XXX maintain billion barrels EBITDA chose constructive we the the of our to that is XXXX X.X year. an adjusted a increase will guidance from to our to end at of of that Notwithstanding is a exit time timing the combination of XXXX year-end to fundamentals the of towards due the weighted barrels

we flow meaningful cash PAA, point. For represents XXXX injection believe

formal cash targeted by asset sales $XXX XXXX to flow ability estimate Including and generate million slide our to our target $XXX $X.XX or million, asset confident billion. increased million engagement. levels plus We flow and free excluding to continued $XXX of sales. and minus our grow sales in on distributions after achieve free expect illustrated having with distribution of progress As interest now we've our asset processes cash remain four, to sales, strong after projected

to focus. continue be will flow cash our free maximizing XXXX, Beyond

holders debt allocating We would a manner equity sheet, a on a flow return to or shifting through also to our balanced free of while a sizable our increases. asset plan We expect approach to of increasing believe time in share prospective holders to and levels with investors. generate continue and our free further flow combination strengthening balanced distribution near-term equity distributions proceeds balance be and this and/ over after repurchases cash meaningful a period, after for any of larger value focus cash current cash multiyear We additive. percentage distributions sale over reduction offer

is Our by flow build-out, slide going the visibility long-term CapEx in multiyear resulting substantial our forward, five. is a completion cash bolstered of system profile lower significantly on which illustrated

remaining we no exercise to XXXX and reduced our must investment within linked opportunities do over the expectations I'll call our limiting prior Diamond to and status XX%. reversal continue or two of appendix We cap for relative and $XX by our regrets projects to update the today's line capital to turn investment our the expansion A Al. maintenance estimates, Webster overview presentation. capital to have that, and key million roughly located discipline, further high-level are With

Al Swanson

Thanks, Willie.

first exceeded As million and with $XXX shown six, on fee-based expectations slide fourth our in EBITDA of quarter adjusted XXXX. quarter was line

including natural more expect incur stronger costs, our hedges on in we NGL that benefited later some downtime and storage to gains as First and systems well as pipeline Texas operating impacts results realized business gas offset in quarter timing lower power results non-hub lower and related, power at Mid-Con certain as as expenses from are revenue well benefits revenue terminals and facilities. our These than the across the year. crude lower Canadian storm-related of the

guidance quarter. were to the relative I the Supply and the the of second quarter quarter the locked everyone, and XXXX Before during reflect than to half margins for our weaker first NGL get be prices because set level not normal our was to did first performance in during Logistics and into expected rising

for Looking year are in forward, lower but balance little market, current the line with than are a the NGL margins. historical of the margins our

in quarter first differentials impacts in as was and second Coast Yuri, differentials combination for Uri impact less EBITDA US the of the the below of oil Storm builds a $XX Winter The of our US. quarter. both for a inventory The negative the into in million adjusted Storm favorable crude guidance Gulf the winter Canada. quarter the the the on negative and Focusing were drivers crude compressed underperformance of extends primary

that expectations, continue we to in we see proration in favorable with anticipated. despite line Additionally, differentials are originally levels Canada less our than being

Willie and totaled on earlier, noted $XXX which cash first timing Free fluctuates the based the in capital quarter. flow changes free million for strong generated after of we flow As requirements. cash working distributions, short-term

by able the items, benefited them, after were even While quarter from million. first forecast we for increase these the $XXX adjusting our for to year

seven. Our provided liquidity on metrics capitalization slide and are

X.X debt focus EBITDA March which on further of long-term reinforces and was our X.X target to above As our to ratio is three XX, range times our of reduction. debt times, adjusted

quarter committed of liquidity. the exited we've billion $X.X Additionally, with

segment. increased overall guidance EBITDA net our at amount, S&L that summarizes Facilities a unchanged eight, adjusted million million guidance slide on remaining we approximately our the billion. by in fee-based S&L. NGL intersegment our change would outlined reduces corresponding segment increase the guidance each $XX As plus/minus adjusted segment with $X.XX drivers for $XX note resulting a adjusted some EBITDA XXXX similar for XXXX slide in fees full of changes I of our a by EBITDA to the the decreased and was The which year,

to initiated the in the Willie, we returning equity that program call November. summarizes repurchase nine slide Before

first of will The continue described ultimate the equity and nine. as consistent turn will over up we repurchases after with Although XXXX be timing allocation, in XX% allocation on distributions that, free the equity total pace allocating our make repurchases. call Willie. our to flow plans quarter, to did not I balanced capital slide cash remain to back With to

Willie Chiang

enhance a expect holders. cash flow you, to and generation, to to over respect we turned unit allocate holder levels a cash significant period cash unit generating multiyear the free meaningful Al. and will flow of Thank to We've our free we corner continue value by of with flow benefit free

outlook call increasingly partners through and our call to providing updates that, goals as progress. streamline continues global with to and our above our lowering of cash Meanwhile, With including on XX, turn our you operations, align systems, long-term on recap continued by the maximizing demand appreciate Q&A. and and our additional responsible North in customers, your focus optimizing of are A on American over working program, operations. and delivering excess today's to We investment and to outlined summary energy, the on Roy planes, our sustainability free XX. constructive safe, of look flow into be a of from provided interests reliable our all, followed We to continues and key capacity, takeaways recover. forward are advancing XXXX peers with slide support rationalize to I'll cost and our we rationalizing us slide business lead

Roy Lamoreaux

as many to allow available additional address session. the and to as Thanks, Q&A time and follow-ups. to practical limit queue question one afternoon. Please Willie. will and questions the one follow-up the top for question We this us return you have if yourself This are participants enter

we're team Relations ready to the to plans week available questions. to Additionally, the be address Joseph, throughout now Investor call questions. our for open additional

Operator

Thank you, from [Operator Gershuni. first We presenters. our Shneur Instructions] have question

Your line is open.

Shneur Gershuni

start afternoon, a to from than had you Hi. better reconcile Overall, strong guided everyone. fee-based Good off, here. a sort for guidance certainly I perspective. little me a if the can was Maybe of you you wondering bit quarter, had

the was call today, on last more constructive it than definitely Your commentary time.

production talked but weighted, sounds building the certainly about You forecast better. like for your momentum. It back-half it's Permian,

of election $XX fee-based And by math, view of your that you so, up kind the only election you of million. expectations the conservatism? mentioned us, I happening Is that of, had if think word about the the before? in back in on you in Is for million, kind $XX Or half just, was if is guidance you the year. can. something wondering of can is on base that sort there a business? expand I degradation the

Willie Chiang

if Jeremy you around first of, and just your is quarter. start I'll year blanks. it Shneur. off think on -- just kind or Thanks full first let focused fill quarter, Harry, in was the and question the I'll When then

Shneur Gershuni

the back a year. I of mean, the imply and end but commentary. the to -- at day, fee-based which half seems the momentum year. guide, it around of expectations, you expecting you But on It's to seems full beat that even maintain worse talked positive you you're basis, the about

out just figure square that's that's to about? that you something if to if if thinking be if So there's can or trying we conservatism I or -- that was need

Willie Chiang

that to of about others the a let storm, who -- I we on starting maybe Jeremy will of -- can shifting I Yes, and impacts more. storm for be in million that's the a comments, for comment it's benefits my made of got to prepared the start, think $XX And the me in million good the and the into in S&L whole point some then its bit a year. really shifting related that think based here. across jump comment the if you the $XX Shneur,

Jeremy Goebel

Good afternoon, Shneur.

mentioned some Part the is and segment QX. an from the a by segment, our some of to first in our by it's that involved to operating $XX So, lower somewhat million NGL the to Facility later of you benefiting transportation benefit million driven or of facilities. bit operating -- some $X costs, close expenses million. and saw interruptions acceleration. opportunistic in that additional quarter volumes $XX That seeing around offset lower because was deferred in just year timing that We

So that down $XX the going $XX of million net part to as million.

were market by impacts there further spreads into Uri, that second on even and The based S&L, other component timing. the is pushed were quarter driven and of some

is And of erosion with you'd all so Uri. just some associated lumpiness that see

opportunity. the faster. say see the just We wait we haven't $XX We rest really million accelerate seen rigs million So, $XX see but on the is the part the is efficiencies, if completions. see you and other of versus net impact

historical with looking not we're we're we're mention production so on also weighted. as and seeing assets proration. Canadian degradation I'll to Permian based back-end growth the And into no are to is to level core our to see. levels Part other -- for differentials core expectations. as that's assets of of in business. built performing this line And and widen see far well, that But seeing as plan, There's we're looking

Shneur Gershuni

process. Maybe of Okay. wondering I That a follow-up makes sense. it. asset was the can and question. talk aspect we about see if the it's sale Really wait do appreciate

timing us year? does this remind guidance you've out and the doing of can in share repurchases? you for into baked any from terms process block If EBITDA the that you this And

Jeremy Goebel

So, this Goebel again. is Jeremy

stated, But year. or timing don't of first very both in confident sake regard ability on to Willie speculate this ability our just to the feel The to very processes the all transactions strongly to execute As for of in Alan, our with our execute. confidentiality. begin the of We targets. impact quarter are want in we I

Willie Chiang

Richard, why on comment blackout don't you the period?

Richard McGee

included any impact. predicted the our will have don't that guidance. So I timing -- On the think as part of repurchases, asset our we that sales, of

the repurchases. so on And affect impact no ability to

Shneur Gershuni

Really today. the the color Okay. and Perfect. clarification appreciate much. Thank very you

Willie Chiang

Thanks Shneur.

Operator

Cho have next from question Barclays. We from our Christine

open. Your line is

Christine Cho

you Thank rate for like of usually you. is Permian exit on what volumes. Jeremy, the Yes, expectations sort provide for year

that we one think So means to about guys? of could sort year should we the in if And curious, for kind XXXX, that with going what for and closer earnings that contract volumes how of expirations. be that the tied headwind some growth to get you to maybe we're context,

do and extent think what volumes at system keep blend Just point you for guys longer? your about the on to

Willie Chiang

Jeremy?

Jeremy Goebel

Christine, good questions.

So we'll What heard does momentum I pipes. ability does our for if right, that into longer-term mean an mean our I And for on rate. XXXX? And then to start. get them that exit there's what contract

Christine Cho

Right.

Jeremy Goebel

bump. and cycle completion a that's just drilling I first completions aren't the shorter production, there. I driven Mexico by that What April back this speed were of the pacing commodity a say of times bit We're timing, we're question, and into but acceleration March New seeing EURs, because original themselves on Texas They're -- environment, an with mean, and production, February and spacing. stronger. we're down So, a bias of manifesting efficiency, was in our seeing seeing some higher projections. would rig rigs came is positive but

production, our So we're nothing materially outlook. of but changed acceleration seeing some that

production, and year see We're to at need million X.X see XXXX step that. But North expectations. X.X to optimistic to you ultimately day, production exit. really your American you the but entered until our day Rigs come From acceleration. barrels million this increasingly We're comes a we behind view to see demand supply demand. not that if and material it barrels million down rig goes going ramp high, fill So to a X.X out. is for and about OPEC in

hit But cautiously see approach see OPEC So, optimistic. before I the think see That's and a and need expectation. we we're there. an respond, barrels wait there's to market to you'll see really need demand why we to

constantly that So, directly because see it's that to how question, rigs production With early for regard but in our time. with call Midland backfill blend XXXX, with growth. really enter now accept. I know, this at differentials, bode we're of to I to didn't it well about re-contracting to we're dialogue at doesn't take additional answer thinking XX that's too need your material customers. to XX and extends, levels you will we MEH Right that

we're doing to what close is we're our customers. So staying

X.X continue extend. We to And to the with million of continues add lease. acres dedications that we're now well over term

And ourselves comes We barrels those Our position the customers it big a filling the problem with a XXX,XXX happy us. now pipes to are in purchased is very securing with first strong re-contracting. right customers back when the over of part people supply. very to long-haul either come pipes day when re-contract, or

time. concern a filling We to at So not right it the pipes. going volume do to be want is in our

that for levers you we're to patient, there, have space a don't XXXX dialogue but to opportunities -- have and on say time we look in constant long across don't we'll have where tool think we material before the I constantly commitments. we most is any our from reductions while be rationalize now So, will time,

be have center right understands this for we'll options overcapacity, and evolve, some So, industry in they're the and we to of rationalize, time discussions. because of do to constantly those looking let the the

Willie Chiang

go sorry, Christine And -- ahead. I'm

Christine Cho

please. ahead, go No,

Willie Chiang

the of happens end I the was on Willie. is just going of optimistic trajectory if momentum, benefits, and in XXXX. end build kind key before to add this continues clearly, of, to. that about, the The our expect XXXX. you don't with a at it this builds we It we recovery, the momentum way -- what if and year, that's expectations But, the point quicker we're the this you see a driving lag into see growth time longer there's the everything is

Christine Cho

or then, on And rationalization. Okay. pipeline you comments end the did sort just because of

that that CapEx sound Is And least it's it would to I needs that, other to pipes a XX heard I've what It less make to transport could have sense sense also right meaningful there to change gas? takeaway the most we pipe stations. that to the these on like at would NGL simple would trying As conversion sounds require it it the requires or not what options about sufficient side. doesn't a are here? to pump we inches. out liquids seem like Just convert are think be diameter things get understand, since that a From maybe the that spending? of gas

Willie Chiang

start been Chris and this. you Jeremy, off? why Jeremy have Well, working don't

Jeremy Goebel

gas And is gas and look on for hitting in a question scope. and piece, It's natural as takeaway, valuation thanks. the more you the a markets. for rationalization Christine capital home of

So on how with question of reviewed and those existing then, get pipe. time And time. to do it's you a contracts deal from structures existing

So -- I any so across options our and looking It's the options. and all many are think it's one peers. we're I at system of mean,

just have so now. say, details And patient, don't for you I'd we be

around are the Some of the that fuel you compressible increasing the and gas comments because gas consumption sense. make with smaller does of just diameter make of nature true, pipes

that So -- just be gets it. to we're I options, you at, but we looked as works the the all on patient working through as best all but need industry of

Christine Cho

anything do Chris, you you want add? have to

Chris Chandler

course, guess, like I typically Yes, are this liquids kind pipes require you and in instead on would pumps have compression your initial the of gas natural is of made points just I Chris Chandler. of larger, confirm question, you they, pipes.

liquid to in of to certainly in times but asset and done, to sometimes So number industry. of and question, it's the specific a done -- been back our be the it can gas it's liquid history

out an have do and efficiency a than replace pipe smaller pumps by were impact to you you certainly having if do from general, it or you opportunities in there. you take install scratch. there's building capacity the to it with might So compressors relatively But

Christine Cho

is this And Christine, Willie.

I is, that's if and harder it seems important as other One think, to of the getting harder benefits, build assets it's now.

certain our if capability we've of One in more across about things, challenge industry, perhaps evaluate really think than the is, the gives others. to a and And these in, a of lot the may designing capital which us needs operating not of the a be of what efficiency all is you'd In able sense. things lot leverage of size. that got these if things with factor it cases, new other system, And from industry you're to a through. really if working scratch, while it be does you some make many is line the when perfect it you that's to start go

Christine Cho

So if out just Permian follow-on. or of major XX And really over long-haul pipes your I more? could on a inches all helpful. maybe tack Are the

Chris Chandler

in Chandler. XX, Chris vary size is This to up They inches. from XX

Christine Cho

Great. Thank you. it for That’s me.

Willie Chiang

Christine. Thanks

Operator

next Jeremy We our JPMorgan. Tonet have question from from

open. is line Your

Jeremy Tonet

afternoon. good Hi,

Willie Chiang

Jeremy. Hi,

Jeremy Tonet

and you if there to want what means more that dive are I seems the agree that of guess with and you on what for see like conversations the a a you, for kind than planes, confidence, into I active different you more just what's -- privates and in guess, it of guys? trends Just XXXX, wondering how bit giving public that bit of the kind activity means your and little producer sense

Willie Chiang

Jeremy?

Jeremy Goebel

for again, question. thanks, is Jeremy It the consistent.

balance demanding are private they're The to they're leverage. in public and producers heavily with flow free down for waiting the little -- going and maximizing largely paying the it. operators large to no company returns in and see cash and demand that they investing holders their the are just and investing leverage, equity it, free So supply investors flow back holding line cash to

group group private well So very a public. say privates it's very that hitting there's very capitalized. versus say select -- large the of that's accelerator. I'd That's I the are wouldn't generally

some that's they'll so but And that's impact, driving all not this. have

backwardation think steep $XX producers backwardation hedge. to I versus oil with allows slight

allocate. that's more So free them flow cash to for

and The I there's that the flat that the say are cautious the on stepping privates a that's And select there's with it. that few but price, area, gray made I'd generalization operators aggregates, that all a a So, leg think public front here are market optimism versus there's all hitting structure, out of is really accelerator. in side.

Jeremy Tonet

projects. and it. now getting that. if topical. the thinking subject energy And if days. these topical Got I'm for and written the transition, thoughts on sufficient to Thank had That's XXQ very move helpful. about want wondering as you you And more you that kind specifically, obviously, pivot just is see of right any credit carbon towards to with wondering capture forward

you have redeployed be could kind that in If assets direction. that of existing

any general would helpful. thoughts be Just in

Willie Chiang

this energy on point been looking as I as resource Jeremy, not COX a a know, have transport, produce in on it. I that. don't On manufacture would company sequestration, doesn't comment is, active make you, at make as tell is Willie. Others The would as can and we we a product. far you our transition

We have from agreements point products to to move and find A B commercial solutions.

moving may but not share of it transition. projects, sequestration really things We we we news moved stay than nothing of you different in in can that advancing things have tuned our and we some we can with a And been we so and on figure role there's our energy do of we as lot how it’s do forward really the back while can peers upstream with other to again, and no really on we generate downstream as have the peers. to COX, on, specific stay I -- haven't on around. some At out our -- time, discussions this well on solutions tune activity there's advancing in stay point see -- very

Jeremy Tonet

Got I'll there. it. it leave

Willie Chiang

you. Thank

Operator

question We Securities. from Tristan from Truist our Richardson next have

Your open. line is

Tristan Richardson

that inclusive just throughout of asset materialize of cash to upper potential is Hi, guidance? free they distributions Should sales the we to as the after of afternoon purely extent year? the guys. of question with Or Clarification flow respect the repurchases. bound think that

Willie Chiang

take you don't why Al, that?

Al Swanson

around to we that well. account the would the up are articulated we're specifically asset would XX% selling and sales EBITDA Yes. as into we've maximum, of I No, being consider think the have that what but

keep proceeds flat. you're part as those to just go an leverage selling need to to debt asset, reduce of so And

So, just XX% you other to a be practically Again, on points think with sales, And after will of considerations that a tool got that up of as our asset I the our part But it that come give number allocation point nine, you to provided to it be We then be slide but of capital maximum, that. less going other we'll we the into it in. this will -- factor to there's than there that. will a considerations view mathematical would play. forward.

Tristan Richardson

That's to helpful. And question, then on follow-up is I appreciate of within of the asset general the of a previous fourth earlier comments sort terms timing of delta assumptions year. that contributing in in? of the quarter outlook? Just timing the year around weighted that on for has sales any factored the asset sales is Curious that's changed cadence the sort to there

Jeremy Goebel

They something I'd have Jeremy. the one, since there. earlier. make to materially to about we we'll we announcement speak haven't divestiture. sales, don't it's timing in Tristan, If beginning say, changed assumptions asset the of year. once the does want of we we of talked But change, the the as update

Tristan Richardson

guys you Appreciate. much. Thank very

Willie Chiang

Tristan. Thank

Operator

Stanley We question from from next have Keith Wolfe our Research.

is open. Your line

Keith Stanley

Thanks. Good evening.

follow-ups. two quick Just

First, amount year-to-date? now of you asset sorry this. on the if missed sales completed comment Did I

Jeremy Goebel

is asset Jeremy million to completed $XX sales We've this date. Keith, Goebel. of

of did in And this guess that with what I January we year. so that's had. consistent we

So date, in is progress. that's amount to completed the the rest total

Keith Stanley

Okay, And understand. just then to great. one, the other I want

And item. this, think is uses. rates the fees just the million hurt facilities EBITDA assume business some I assets that's and for $XX by year. intersegment said you want NGL that it facilities to on the just S&L S&L I lowering clarify, of $XX helps be million the I you're So, lower

Jeremy Goebel

our about we and the look by the Jeremy. for correct. around just assumptions market charge is beginning make rates that, rates, market affiliate area. structure is Effectively year, competitive and thinking at we that's the This it Keith, we marketing impact of

And that adjustment. made so we've

And neutral. facilities allocation so a It's from it's net an just

Keith Stanley

you. Thank Great.

Operator

next We from Moreen Mizuho. have from our question Gabe

Your line open. is

Gabe Moreen

might to about was those low questions I good outside can CapEx and you or think those and take an everyone. numbers afternoon maybe going down you kind just on CapEx you're Most how Hey sort basis? to how, answered, talk of finding been guess, savings your of ongoing of maintenance have I just whittle out so able of but far where asked you be annual my

Willie Chiang

Gabe. Sure, let Chris I'll that. Chandler address

Chris Chandler

Hey and are think practices maintenance the been million driving is we in rate asset inspection year. methodology $XXX tools that a and have I'll we with for forecasted programs to to that related capital. be equal analysis. completing multiyear best case. completed that, reliability XXXX start number going a on sales to spend around to a our number including to to than of won't later Gabe, believe ones forward. run capital million. it's maintenance factors do or $XXX that improvement Regulatory We the of also We've We're less said a and have reduction. Chris integrity There's $XX Chandler. that We long-term update still continue previously requirements as the evolve that guidance for did million,

of look factors are apply all found of best that by means industry, or a it’s the lack of when or practices within So to certainly we to maintenance commitment investment number But or a lack integrity. internally those. not

capital, lowered our number factors We're As we've a looking spend. your by $XXX to million. million of on capital from question guidance to to there maintenance $XX optimize our involved. investment Likewise, million always $XXX there's

or project some we'll at that's update that we've We've Diamond very our the provide of to expansion customer alternatives particular two do with from impact a We're miles construction refinery certainly the end done support for appropriate. an That's pushed change, activities almost if that. a reductions, alternatives financial cause that But some scope Mississippi. a been customers will part evaluate in improvements, and with cap the goes piece in outside stakeholder that start the we of delay talk back the of our We've engagement cost of to Memphis scope So of facility now. of years take on the a if to time the can to also the XX the doing for still we when planning Byhalia response project. that without we'll line timing some by the by to the optimization year-end. start-up

Willie Chiang

Willie. really flow I Hey maximizing think One to every maintenance business, broader we what much dialogue free maximize thing it about costs area. I our right? do want discussion, we we is day to will a investment you that Gabe, as so cash away back how CapEx, that's all in in it's Chris operating mean, the it's taking And part flow, goal and why CapEx, free we of this do. and to talked continue is think is success the take from we about cash hold on have that the in

Gabe Moreen

Thanks. I ask quick the just on, Maybe could Byhalia extension. I guess, follow-up a

If in slips have for contracts alternatives, tied because your the still at whatever time-line kick somehow? together look those do Capline or as to you reason, there expected are

Chris Chandler

So Chris. answer I'll this that. is

On Capline of into on the Diamond moving originates independent the independent reversal, St. Diamond and James, is as and anything and It in the that Patoka an expansion that the is mainline project, scheduled. project extension. ahead it's

startup unchanged are on by that's year-end. schedule So there, still and things for a

Gabe Moreen

Thanks Chris.

Operator

from question next Goldman Michael Sachs. Lapides our have We from

open. is line Your

Michael Lapides

kind first do years legs? of both full at take ramp And on that? in so my it taking for do expect will run Diamond you Or of fully a us of be a rate thanks Capline question. EBITDA to Capline. you year? quick, remind be on to just kind in guys, follow-up in when Hey Can to you it And of Yes. -- couple that expect service real

Willie Chiang

Jeremy?

Jeremy Goebel

Hey, thanks for the question.

north we that commitments, -- south. at current rate stated -- we'll a and fill But and There additional we'll for Capline based evaluating run committed look Chris go from look some Diamond be to that, full in is on the to run so space, first on full have to with the from capacity As alternatives continue there's mentioned, the commitments will and of southeast, to uncommitted rate to time. over what piece. to quarter XXXX is some to reiterate north Chris associated we're you'd

as as On guys possible. the you evaluating we're soon we update alternatives, and will piece, Diamond

Michael Lapides

well, as city Diamond, the Got federal. then with state obviously, it. council messy, both and and the And gotten on underway it's litigation if

you far pipeline is they Just an opportunity full that opportunity work curious, is to partner’s there pipe a use right that that runs pipeline? utilize Byhalia. around, now? too There’s to or that second as from not your a have Do

Willie Chiang

evaluating at would we're options it Michael, and that. leave Willie. I you, this is tell all

Michael Lapides

it. Got

Okay, guys. Much thanks appreciated.

Willie Chiang

you. Thank

Operator

our Ann have Salisbury from Jean question We Bernstein. from next

Your line open. is

Jean Ann Salisbury

true that we're tariff I think committed which investor Webster some The recently and $X.XX if committed rate the an large Wink hasn't caused about been or was confusion to interim right as me and that's just Is being has for to confusion, way yet? honest rate $X.XX and some posted barrel, long-term for the it, well. disclosed then posted per for for customers think

Jeremy Goebel

Ann, is Jeremy. Jean this

It's origination service correct. pump capacity. a period Midland MBCs and quarter capacity, absolutely AR it's the prior is to limited during Houston to interim from the You're when This limited matching with kick just effectively the in. fourth

the So destination no long-term limited on committed reflection here and has that alternatives.

Jean Ann Salisbury

will running Okay. posted? And be up when eventually, tariff freight the is long-term pipeline that and

Jeremy Goebel

That’s correct.

Jean Ann Salisbury

a as It Rangeland then follow-up, more seems any axed And interest? be might expansion? Keystone Thank with update on Okay. you. that garnering like getting the

Jeremy Goebel

our in dialogue Ann, with this Jeremy. is customers. Jean constant We're

and in we destinations. the is south expansion. -- our are this Canada at that going But point, capacity shipping multiple have from interest to and U.S. We we're full

Jean Ann Salisbury

Okay. Thanks.

Willie Chiang

Ann. Jean Thanks,

Operator

We have Mateer from from Harry our Barclays. last question

Your line is open.

Harry Mateer

the for a debt $XXX short-term And about to that how Al, I debt in tended guide in to the the the sort guys. the $XXX historically, you've range. million line you think number use? Is for afternoon, think good large should of highlighted of good to million first Hi, drop to guide short-term trending XXXX? And still fluctuating in that quarter. rest we

Al Swanson

kind long-term we say still but obviously, of some expect on number saw cash that's in that Clearly, number. long-term a million. be What probably would is XQ will $XXX the say the after would flow free be benefit was expect, again, distributions to temporal. we variables in it's of we million But XQ What do impact number. $XXX we reasonable is, I that trend, a of Yes. do our to

So tells be of of some you to that kind we've we benefit seen in temporal. that what XQ expect

Harry Mateer

are and free coupon is related then you debt it high when to to be metrics the to door, prioritize Is that, comes there might debt you how that proceeds runway? about asset debt getting you reduction? some it think going And sort target Thanks. coverage? flow to Or lengthening cash of sale just that you these Okay. like in planning have? pre-payable about something Or to better boost reduction,

Al Swanson

debt lot high our a on to of has Most keep it. of maturity left

And it's within couple shortly few harder next of a maturing We the get I issues other years. have, billion to with obviously that. $X.XX So after. upfront do cost out out, and take a there's think, and associated

some if out With near-term front maturities on at we near-term So note will to stuff, is the a but target the try exposure. will take retire be we a to of to end. we to of think we'd maintain look some suited likely ways. manage there an And said, the economic longer-dated better to it's look and benefit that some there senior

Harry Mateer

it. very Okay. Thanks Got much.

Willie Chiang

Harry. Thanks,

Roy Lamoreaux

joining for thank many having the and with we in I wanted our you to to forward look everybody follow-up again call, days. of conversations coming

again to again, look So we August. thanks you in forward and updating

Operator

concludes Thank for gentlemen, today's and this conference Ladies call. you participating.

may disconnect. You now

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