PAA - Earnings call transcript Q2 2021 | Plains All American Pipeline, L.P.

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Operator

Good day and thank you for standing by. Welcome to the PAA and PAGP Second 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] Without a further ado, I would now like to hand the conference over to your speaker today, Mr. Lamoreaux. Roy is floor yours. the Sir,

Roy Lamoreaux

Relations PAGP you, afternoon plainsallamerican.com, All is welcome News replay be condensed available consolidating and regarding statements Investor appendix. Vice call. Goebel, disclosures Plains located following Good and second Chief in A Chief will Chiang, are Thank also Officer; President our posted and and audio Harry slide team Events financial materials two. measures CEO; will today's available including quarter President at Senior and Al the Q&A Chief balance non-GAAP Executive Commercial forward-looking Officer; presentation President Officer Executive and the Executive call. and American's slide XXXX Jeremy to Today's and the are Kara. earnings Willie Chris where Chief other Herbold, for reference section President Officer. Important under be sheet Chairman website on of and call. provided members and the Vice Pefanis, will Vice and Other President; Accounting host on Chandler, Swanson, for Vice Financial Operating Chris

until and respect fourth call. information to we will quarter, conference the today's venture call Before close we turn year I do to to focus I'll July expected was what call beyond additional quarter now intend to not to discussion we provided that to Midstream share With that, over plan is any transaction full results on to on Willie. Oryx not over the With the XXth not our will guidance. given the Permian second joint that Willie, turning the Basin with form

Willie Chiang

reported full billion. This expected everyone our guidance call. $X.XXX better quarter our by EBITDA increased million million and thanks for Thank adjusted or year you, plus minus afternoon, and $XXX to of than $XX to Roy we second joining we

capital have A I'm initiatives a are advancing year time initiatives, inflection with made which equity in recap within to free second our Our of reduction, reaching returning as calls, our of been to progress take the cash asset develop first natural we A I May. from point our discuss which, number business. holders. guidance. certain of we fruition discussed in slide benefit near-term initiatives We've is to summary our debt financial several three. provided we four. materialize our have $XXX highlights pleased yesterday, These with accelerating the closed gas and with call results very and storage slide was sales, positive items, while is of since coming previous will business, incorporated aimed to the flow of two on roughly on benefited months On million sale quarter maximize ahead our a provided full schedule. timing-related quarter In

We $XXX our asset in to sales and additional million. in exceeding $XXX total continue progress million well target of opportunities expect initial to XXXX, achieve

directly the with venture strategies. announced we Plains-Oryx cash transaction. align debt-free entity through of the definitive This a optimization, our strategic form portfolio to agreement Regarding joint will a execution optimization

last website, Project. within posted the related including screens Scope our are years capital over last Scope guidance, each report February As gas week, our from our below highlights X for full today's the relative to to investment emissions. minus our The of sustainability which a and report, on X data, greatly quantitative further Connection of by our increasing with Byhalia or published importantly, peers have greenhouse included XXXX majority reflect million three which emissions disclosures, favorably is on reduction our presentation. and And XX% overall our on million capital of we reduced the plus program, or the $XXX we XXXX reduction cancellation the $XX to sustainability,

our fundamental outlook demand next global continue quarters. view, oil over Regarding crude we remains the our to several expect rebalance and positive to and supply macro

have recent our continue global largely with While actions to been recovery. expectations, potential consistent OPEC+ demand we near-term to headwinds monitor

increased, early stabilized in signals activity in in have As and commodity has year ramped Permian the the producer recent price months.

activity supply believe JV which Basin Wink underpinned further this is year, this Webster and long-term We of cash to Permian and our a Capline as flow. reversal. growth entering such to expect resume completion with full-service operating projects for well significant Further well-positioned recently assets outside announced growth balance of be will to quality high as by mid-XXXX. of as expect as reinforcing demand our be period with we Permian, We leverage the improves, the Plains completion the of Permian later Oryx, multi-year the

of result our sales. to we XXXX or collective cash distributions flow estimated minus increased asset $X.XX further excluding free progress, this billion million a As or plus have proceeds $XXX after from

on a to near-term slide illustrated a a cash allocating I'll over and debt five, we that, allocating Al. over call to the manner balanced with time is larger on As focus equity continue With our in flow percentage turn plan holders. reduction to free

Al Swanson

An quarter the full and directional guidance our our EBITDA results illustrated by year quarter. for contribution estimates is second of on overview Willie. context Thanks of the within slide six,

the above the for for the EBITDA guidance, May range of end quarter percentage was individual quarter $XXX potential quarters. our $XXX Second across adjusted high of roughly shifts million second within acknowledge the timing which estimated million,

As positions certain of and our occurred to to vast Supply forecast which EBITDA forecast NGL in gains as the function the timing of of Logistics than slide, our a million and on was our than $XX segment, earlier represented addition sales. second Willie contango earlier within decision majority benefits, monetize adjusted mentioned illustrated which quarter from roughly

full majority million EBITDA of by segment adjusted was roughly Additionally, our updated our guidance. quarter within our is year driven $XX The Transportation over-performance. of occurred over-performance our within incorporated second and

throughput Our was pipeline degree across stronger hub and plus a savings. performance of systems various terminals, by driven OpEx

million overview seven. on debt of approximately our our quarter eight. as approximately lower slide capitalization working although the segment $XXX detail a result increased items, during XXXX. capital fee-based provided than $XXX results million Total is An metrics year-end on Additional and of it's normal are second liquidity on slide quarter still summarized

As of $X.X June $XXX short-term yesterday. term our in approximately June net loan gas million with storage as The XXXX which was both due $XXX of debt billion, long-term loan of debt associated of business, and is are million of as gas outstanding of senior a end. storage term was quarter notes reclassified repaid which XX,

announcement. at debt to That progress debt reduction. as have long-term objectives our reiterates and quarter our Moody's short-term. end was EBITDA high X.X times our target it towards above amounts remains are we While range pleased with including end, of made classified review adjusted for the upgrade the said, times when X.X was to ratio further deleveraging our commitment This recent and

slide to Moving nine.

have the back market favorable to on due S&L crude guidance closing segment storage million oil a in S&L and increased facility fee-based guidance by transportation $XX decrease in EBITDA impact we reflects our a the reduction half we to result $XX previously, to that sale guidance mentioned gas reflects the million includes changes million, in expect earlier our adjusted performance million due million to conditions which less segments $XX negative the a $XX well net XXXX million year. segment. As to to a differentials our of increase $XX segment $XX Fee-based as than as to-date forecast.

XXXX our outlook guidance XXXX that until our the season Permian and guidance do for the expected does Basin not earnings timely a year JV not intend close fourth in until a Basin to have allow to fourth year is data results. not the the to call quarter not to with of contribution appreciating current benefit the Permian provide and on will February. material note our transaction JV, incorporate full anticipated completion following producer the I time we would quarter Our This contribution also furnish full reflect the will of basis. XXXX us of budgeting that

on guidance from XX, to the our capital our $XXX reflects forward investment be reduction in to $XXX XXXX capital of million which million Additionally, $XXX updated year-to-date capital and million XXXX slide range annually. expectation for provided investment in continued is

a receiving of repurchased activity, authorization November. million, $XXX repurchased XX of which to totaling In slide the half our approximately million call XX.X have equity allocation we since aggregate, Wille, of have summary a Board this capital Before repurchase returning quarter. units in including for plans provides the we in completed second year, recap the

consistent at XX% allocating allocation free with after of distributions least near-term the Our flow plans reduction debt balanced equity remain and cash XXXX capital to repurchases.

as Willie. expected consistent allocation, call With and timing a intentions turn on our Our approach, described balanced five. slide that, original the to pace, back remains I'll through with total

Willie Chiang

Al. you, Thank

to execute and longer reflected on made continue goals our progress and XXXX XX. good we've strategy are objectives, which term on slide our We on

on on continued that, our to, lead holders. the operating free turn we summary provided over key and progress optimize We will while portfolio, months. appreciate in in providing updates and Plains, today's us business the whole as on reduce forward remains your and to constructive, we're focused XX. call asset for I'll A maximize Q&A. outlook is and support look cash in of with a investment from you and slide Roy, Our cash intently takeaways call additional return coming With continuing to the who industry flow, to equity our debt, of multi-year excellence

Roy Lamoreaux

Willie. Thanks

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

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

Operator

the from first question you, Our comes line sir. from Gershuni Instructions] Thank of [Operator Shneur UBS.

open. is line Your

Shneur Gershuni

was Hi asked that It's of but I was good guidance a bit for confusing, wanted of instead on this little a I question year. think presented I guys. this question, to of-- the afternoon on last I call. kind I the focus strategic guess kind

moving in trying for guidance just if first to modest quarter. shaping or was had of was a you You in only expect the two that quarters? a I here related but I'm as and about for $XX have get that's guidance the There strong quarter understand -- at $XX it, that a strong did your million. time. was had the to but trying following through mentioned to away year Do how but there's $XX the an S&L Just because was trying revised you of what's into timing, quarter, a the and benefit lower so of think we out conservatism mentioned look guidance and the I as if small to you remarks, raised presented. square here second should forward over-performance prepared pieces kind understand roll increase as to million you million here. you about fee-based of conservatism element forth your

Willie Chiang

Willie. for the is question I'll Thanks Shneur. start. This

our on some benefits S&L later chart conditions you in show Canadian to contango from in both as tried we waterfall is we in year sales what of some market quarter, well think into I the contango earnings business. storage that additional because NGL moving second the our as had holdings--

about we did think $XX $XX in the there is also you sales. have what million but If we the out-performance, asset million, is factored the

business Our was gas earlier. two months storage

So, not sales you S&L $XX has happening earlier the when close million. we assessment. take bit a crude little opportunistic it's impact to frankly, asset the and of the realistic the of we around in some year. as the as be. It's And you earnings you expected expect subtract to strong our that gets what been $XX Clearly, sooner,

add know I to if those So, anyone anything. else moving the don't wants are there. pieces

Jeremy Goebel

Willie, to why think transportation. receive S&L line would address and I and the increase to of No. just when same we is part expect Shneur, that in it would drop we question the is --

Willie think said. what of I part speaks that to

the back Midland more Gulf side, on to transportation Cushing. that movements in Midland but from to that definitely led U.S. that's tighter to differentials, So, corridor, up, Coast it's and to opportunities U.S.

more seen we've So, basin. movement up

producers impact S&L by more flow to That's what seen Canada, led there what have proration tariff has offset in S&L more we've have because been tighter. to cash volume you've was system Similar Enbridge led consistent transportation. that tighter along more thing seen, differentials. the So, differentials is so Canadian but and less with been The revenue. the but

a So, positive less performance seen on side, S&L hedge and we've on side, our the so a business. the out-performance natural we that as tariff trade-off in but view

Willie Chiang

the one in about Permian make, one Shneur, but prepared I we that my was would talked point production. Hey, Jeremy, additional comments, of as trajectory --

seeing Permian. we point, had de-inventory As increase the we'll this perhaps goes I really, the a balance for to until the had demand we're of compliance, And production where XXXX, numbers a see and the continue said, we crude, bit actually supply the in to really the a an but also view year. to and early than we of be year, demand on before little expect which different on in stabilization tighter inflection into have guidance OpEx later is gets

Shneur Gershuni

my If just I just can said not there. clarify second you burn something question,

So, you exit to that basically what are expect you I XXXX or XXXX, your for is rate or and that? you thought saying that previously happen lower, now did in mishear

Willie Chiang

go Jeremy ahead.

Jeremy Goebel

This is Jeremy.

six is across April production in been a say we We X.X% from but the had to took we it's X.X%. from Permian higher, the Just other the feel And exit first through forward, would to activity for to and We to rate, looking today production clarify, the effectively forecast system it's flat growth in exit now. and X.X%. months your April still then closer experienced our slightly X.X% from rate estimate systems of now. potentially to the X.X% strongly in basically our previous quarter and the

So, we and be expect through year-end. production to to fairly activity yield would constant constant fairly the be

So, reduction we a it's as not to were. where

thought we I was, is take consistent received basically, guidance. the of earlier, but would the proceeds, to sale think the two what Willie where the forecasted to and close P&G we this for we it of that have million months we've was, but offset $XX end is that benefit at that's out mentioned that of had year asset what

Shneur Gershuni

ratio see just buybacks sense. of use post the towards million XX% a that asset appreciates imagine sale expect and my immunize but here. $XXX earning in the question Okay, sort been the do debt perfect. the fee-based S&L. this from towards That lost that do you about of end versus proceeds complete Good of perspective, makes EBITDA follow-up the allocating to basically to executing complete, I as a the point, And Maybe buybacks think to you've leverage on. more I lot for year? everybody probably you'll with more for XX%

Willie Chiang

take want to you Al, that?

Al Swanson

Shneur, more of really a priority, limit, to the the reduction first target. that for is we've XX% debt Yes, the or a was it to indicated clearly up go not XX%,

$XXX close. actually math very Your is million

that a at provide it's piece intent, clearly, and program at this is our value specific dollar the which we'll would complete year $XX up and it, pace we -- cash of number dividends, provide a continue we just $XXX but don't So, after potential take million it. the being our looking priority, us numbers, free took the amounts reality of a core total to $X.XX million, But if to you to don't do come intend appropriate utilize you flow of we're look to that the second of specific do, we going million. adjust to and it, bought with feel $XXX targets intend of to we already, it's is, and for what or billion up in we're half. purchase repurchase to for The it timing,

Shneur Gershuni

a perfect. one. color Thank today Really the have right, you and guys. great appreciate All

Willie Chiang

Thanks Shneur.

Operator

from of Wolfe Keith from line Research. comes the question next Stanley Our

is line Your open.

Keith Stanley

good afternoon. Hi,

to just on guidance follow-up the for wanted year. EBITDA S&L First, the

early zero you not simplistic, of the So, NGL positions of to overly and but monetization and this make some contango sales. referenced

Winter any year, Storm offsetting any factors So, some something activities had? or offsetting positive what for year. other within had that this Yuri segment realized losing S&L given I you are you're the money -- where you there is activities just or the margin gains guess

Willie Chiang

ahead. go Jeremy,

Jeremy Goebel

this Keith, a earlier. tried I to that Jeremy. is bit articulate

periods. Some between locations market were historical differentials of the tighter than at movements

got S&L the that instead monetization the chose offset had early. by to doing of largely a We where rateably that benefit but That's on monetize throughout to there's transportation the point we year, the forecasted side. some So, spreads contango it. to

just in forecast our the timing sales, that and that all So, the movement forecast, those was the initial is have. between generally NGL we previous of quarters of were components this

future sell So, our in a opportunistically and if store blows given in out, will in basis the versus guys quarter sell quarter.

it's by And was but of for talking context plan That because earnings already S&L. with billion. in So, that transportation, acceleration that of movements. driven higher we're those -- about an S&L million associated $X.XXX movement of lower the some $XX were in just the

the to very it's movements those the specifically So, side, entity and to on U.S. still positive Cushing. the Canadian side

Willie Chiang

Hey other of couple Keith, this points. Willie. is A

in we the late in recall, that the on Canadian you we Canada put were way also, quarter talk through did up well. last about And first our lower which as As fees spreads earnings, pay the impacted a at storage year all forget, frac year, business level. don't

having So, it's out across year. the that not the pay and it's for upside, just pure capturing taken storage entire to

Keith Stanley

be to know you if I touch I let but since the do had very think front from on or issues anything or between up don't as a curious, Got quarters. regulatory just you about on don't me thinking perspective? just Oryx, it the Any transaction mindful see please want to came this you approval of it. you're FTC straightforward was And with an call

Willie Chiang

Keith, comments to specific it. on any inappropriate put probably

process filed, for process. approval, to would the in and but have We have the FTC. We we're through the go expect

Keith Stanley

Got it. Thank you.

Willie Chiang

Thanks.

Operator

Our Richardson Securities. line the from Truist of from comes Tristan next question

Your line is open.

Tristan Richardson

about that that as that occurs up we mid-XXXX we next on good or I your know I stabilization think that you're grow Hey normalizes, if and you time, at evening meaningfully not can and this that guys. really talked supply/demand think the on that providing tightens timeframe, balance as dynamics transport but you should timeline, talked about that I Permian that XXXX for guidance but guess comments should year? appreciate

Willie Chiang

balances be a on more be, one, that up, point an variables you and would and there get transportation expect seeing February way Well, the expectation additional assumption and this be But little there'd Tristan, our as that would the we There's we tightens until we'd would demand start stable better volumes. -- of bit lot I infer I think as and be. the conclusion a in what at you around we'll growth from should which in increased that, that's volumes, Permian time. take supply supply give is, but is trajectory guidance to the to then tighter Permian take should

Jeremy Goebel

Willie, that. this I not Jeremy. like is it's say would linear just

You rigs see as fare until, of will line's the demand, that think, trend wait increasing rigs you the wouldn't the capacity I will come. and any imagine

has dynamic fare said, So, gone activity. Willie wait until add they're supply-demand. going is this a capacity to It's as to not all

can wait part give think what we're we're call be, February to and reason, guys have so well capital we we better as I we're going will a have it incremental contracts that. to what But allocation give positioned that till you capacity estimate where is capture is guidance going in on to and they'll of to mentioned of market, the the to available for Al, see place, and that be. certainly the we production timing comes

Tristan Richardson

versus then, model part you Appreciate as year? you initiatives on it. some what of we about think we kind -- savings planned Al, And or versus just should some permanent the as OpEx previous cost of guidance. out of next Is going or had of maybe over-performance ratable profile talked there there this was there are the

Willie Chiang

Chris Tristan, Chris? that. to on comment I'm to going ask Chandler

Chris Chandler

and comparison XQ, opportunities going expect a we finding quarter, capture Sure. This first are a able Winter Storm to those capturing challenge we're but and of continue the sustain we There parts, of benefit but of certainly, the to of in to organization they is that's moving and impacted deliver. We, everywhere forward. those continue course, to are number portion we Tristan, Chris be Chandler. savings had XQ a to opportunities, Uri cost the so we look,

still opportunities So, and capturing see we them. still we're

Tristan Richardson

you Thank it. Appreciate very much. guys

Willie Chiang

Tristan. Thanks

Operator

from line of Jeremy comes question next Tonet of Our the JPMorgan.

ask your question. now may You

Jeremy Tonet

Hi, good afternoon.

Willie Chiang

Jeremy. Hi

Jeremy Tonet

what situation you you had say. pace little come expected Hi. I calculations buyback is Based buybacks out the it the have have were to out that? what to you're methodology a seeing able back faster a sale locked and the a to time might pace the Just asset forward just bit we you be on able to might you given of our expand and bit a just before, the periods here, wanted laid curious slower seems than can Oryx was if like of on more year-to-date And for might do market as you going proceeds. bit just of with that. I if that wondering

Willie Chiang

I this know, Willie. Jeremy, comment. it. I'll Al, make can on is a follow-up

look lot about at, and think of business the a you outlook. it factors If trajectory the is that we

at the things probably expect of would look we part question you and of some occur all execute think when first year this certainty should able because when buybacks. earlier of we factor to So, of year a about some the of in on you not the being these these, that

is be you intention on do again, to to back not we Our evaluate or cadence specific continue said, but slide we're it. as that we're XX many, And I'd some to going look on volumes going things different that Al have buybacks. the many at on take to as what to we

Al Swanson

would et have you million us And Shneur I XX%, with always XX% year it them, as would close. folks yesterday, if what $XXX Again, there's end think think to the million, And This timing don't XX%, some the specific up we concur I so prudent through $XX to Willie do target is again, said, until -- telegraph versus pretty hit cetera. I closed would for risk limit. the and valuation, a to and And math, a with walk interpreted today. it's I so. associated believe bought P&G close, high up we transactions again, be say that

Jeremy Tonet

it. Got

Were that to I just out want to straight. sure guys locked I So, want understanding or clarify make that. you just was

Al Swanson

year-to-date. done it What fact proceeds do anything June probably you sales to judgments asset up, Again, have has that hand in a tell the on we we else. comes The meaningful specific that impact at any there's don't apply. you what than would more that is had I with don't think that transaction until XX, we've

Jeremy Tonet

interest, question your way seems north markers a there, given strong business, there. thoughts just And quick return second activity, on robust the wondering some M&A if of here. be of And like it capital not Canadian wondering, understood. those border powerful to holders some that could like a out it, Got It here. was just unit seems the up been there's to

your on wondering divestiture could that So, latest just if make thoughts there sense.

Willie Chiang

Jeremy, look about of we anything might any lots really share be we at premature thoughts we sharing be can't at. Well, to any but thoughts things, looking

Jeremy Tonet

leave Thanks. there. it I'll it, Got

Willie Chiang

you. Thank

Operator

question Piper the line Pearce comes of Our question. Hammond Please Sandler. of from your next ask

Pearce Hammond

Good maybe thanks been have taking been We've my afternoon pertains the producer and to the disciplines. heard and certainly for public disciplined have so. first privates My production the E&Ps front more question. on a little less

any So, as I'm far you are as just producers? view when curious, hearing that interact consensus you change with to

Willie Chiang

again. Willie is This

I with The but, seeing. amount, think have the we're may want comment have ones the of more larger discipline, probably you're consistent you quite that? same Jeremy, what not on public to companies smaller do some

Jeremy Goebel

Pearce, It's nuanced even. than that I categories. a more few think there's

a to large, private it, they're producers I front and advantage out there's space, of call community dozen production. are think discipline a of really handful, in and that very the and getting there's taking by been the going half it, grow they're the disciplined. across producer where But opportunity has

the producers, optimistic haven't they're larger months. Within in seen count the in we change about to but year, any next cautiously close three rig

that, this it's think goes. growth we're how hey, months. three last X% the That's and wait to going I in been see indicating

front synthetic price because a and out I today, of to want view think that is there's little be in capacity demand to a that. current get may meet bit there they productive the general don't

capture some and margin. out and prudent nice get is of They some to a this There private in it's front operators opportunity margins under-levered approach. returns. can for capture So, hedge

But them, it's to publics. we and So, that, nuanced like they'll in There's that of setting larger up front paying ones of the more better seeing of durable debt than and a corporate have are it down long-term end a and and be and of capitalized we all and are that a certainly structure. all the privates but we getting exposure it. there, handful number and because this ready, are they're out appreciate at

E&Ps the for long-term. healthy in So, us good are

Pearce Hammond

congrats my by the missed this I the for Thank million remarks Q&A, follow-up, about and $XX and in XX%. color. maintenance in prepared investment you. then apologize excellent That's lowering I year capex but Great. or if And the or this on

there. driver what curious the was Just

Willie Chiang

sorry, capital? was -- maintenance I'm

Pearce Hammond

Yes.

Willie Chiang

Chris, those? why don't you take both of

Chris Chandler

Yes, is I can Chandler, Chris those. take this Pearce.

prior cancellation main maintenance is by There's captured piece in with year the capital. of $XXX and The there. is our But quarter-on-quarter programs And capital, areas, full smaller some Let's been reductions of start that outlook due but bring that factors, a sales now, and where a quarter. improvements, ago. over the down primarily on have, it's to to capital few it is from quite the the the we able maintenance time, range been was of reliability number including other Connection to and bit maintenance reduction unchanged then driven Project. investment million asset Byhalia that's in which efficiencies years a down from

helps. So, I hope that

Pearce Hammond

does. very Yes, much. you Thank it

Willie Chiang

be been again. we've just mean, how I capex, and we're organization capex, efficient is progress we as capex, for as acknowledging can. of made a to I streamline not there. discipline, thank Willie every single at dollar. It the operating looking only this Pearce, the reinforces focus is you really tremendous but maintenance Hey, Financial that's

Pearce Hammond

Thank Willie. you,

Willie Chiang

Thank you.

Operator

line Ann question Bernstein. from next Jean the Our of comes from Salisbury

is line Your open.

Jean Ann Salisbury

Byhalia of anything have it any impact or or the Like more could cancellation reversal? the on that? work that you Does does like not optimal Hi. from like Capline take Patoka

Willie Chiang

Jeremy?

Jeremy Goebel

it's Jean, Jeremy. hi,

longer-term other own. up It that more negotiations some move. seasons could a positive on on could be a there's its some free South. heavy-based So, There's for shippers capacity for be open timing heavy between to available from to and incremental and think I the And Patoka will capacity and capacity Patoka works largely Patoka project project of Capline.

to easiest say. that's way think I the

Willie Chiang

Jean out, that will that to some is clear, has enough should there The point flowing, own, to the to Jeremy return additional as be Ann, be Connector drive less Byhalia just at project near in be its time. Capline right? going expectation stands volumes project So, pointed And impacts that our term. Capline once to that in volumes itself. But on starts able get there

Jean Ann Salisbury

on commenting so makes And Oryx, That level. question, sense. high know not super my you're keep then I I'll

this connections Oryx really showing slide You have gain. would many shippers downstream how helpful

expect or give in that really off? switching to of near-term Just timeframe thing a would is can that you downstream the as that generally, more start term MVCs Permian? be roll Is the you there to medium

Willie Chiang

Jeremy?

Jeremy Goebel

you of I I Jean to clarify switching what Ann, can make understand want is. downstream? sure what the you question just mean

Willie Chiang

stab take me it. let Maybe of a

to capability question was Jean? Your on timing downstream right, connect,

Jean Ann Salisbury

I'm Yes, obviously, a through that basically, many potential has be just obviously everybody would downstream or synergy could now. MVCs right and goes that it's for ton and the to if assuming transaction more, obviously near-term, and options that you're too to be you big a everything, adding of Oryx, if trying understand

So, it's or more those roll four going in years like that MVCs be to to start off? three

Willie Chiang

Yes.

So, and what to on haven't where on be to. a get our be to serve any we JV, point going And producers assumption they better to the JV is need of on our right? mousetrap into to the much be the get to to flexibility ultimately, the connectivity incorporated able done that volumes we've it's is to able

Jean Ann Salisbury

you. Thank Okay.

Willie Chiang

Thanks Jean Ann.

Operator

the from Lapides comes Michael of Sachs. line from Goldman question next Our

Your line is open.

Michael Lapides

guys. Hey

Corpus year of shippers commentary the you battle barrels? of Houston How production. about the flow about Houston of producers exit year end and in and thinking end beginning year Just the the and other versus where the destinations to are of curious, area next your between Permian rate want terms or for

Willie Chiang

to multiple talked have on markets. it's being that able What I'll dynamics There's so we've have that, system to go to always our in much access about this goes flexibility Michael, to the nice market both. that start is with to Willie.

there's it think us I too that difficult rates you be variables market exit to as out there. to because sits many each are give it'd just today for

Michael Lapides

view guys which of on want have get for better you their do barrels a boat? Got export think to opportunities it. a you shippers offers who And

Willie Chiang

Jeremy?

Jeremy Goebel

Michael, this is Jeremy.

guys might been I indicate and million across a market, public of think a answer, the there's think that's would a have the but for the I leaving barrels day period time. different data long street the over Corpus that X.X

across of both go and market think So, dock. Houston volume have in gets I pros the incremental and local a barrels absorbed the lot cons,

at St. as Nederland some see you'll you'll well. And so those over I some James, think time, markets, two see see you'll at

focused depending pan the across of James. has of but So, to are think exports, there's Corpus crude then barrels favorable Houston multiple what all a diversity out think exports. as the them And the on got St. and the amount to will need where logistical but I see across because be a a constraints what oil lot most I its and seems logistics ultimately different Gulf there's Nederland Coast, heavily you'll clear and to markets in on for smaller located

run this, probably heavier that. grade, You already in like U.S. the refiners the the barrels to know but medium

exports, think go lighter when water. the volumes about So, typically will you to the

factors So, on into has the decision a take that also that molecules. factor-- where the to

Michael Lapides

Understood.

that Just changes service, one to think Wink much? Webster in last you do one. dynamic is When fully

Jeremy Goebel

A that current are this is to Jeremy. shippers buyers Wink Michael, market. lot Webster in the of on

to So, flow, when the barrels start Houston moving your from it's like to purchasing almost Midland.

the a move So, they how where and it's swapping move. of almost barrels

from benefit to an more could case, the to And this so refining Houston opposed TNDs demand I ton. usually, the as some market see are in domestic incremental don't a time, a export. But exports. way it structured meet changing to over it's in incremental be There

Michael Lapides

it. Got Thank guys. you

Operator

Our Sunil of last the comes Securities. from question Global from Seaport line Sibal

open. line Your is

Sunil Sibal

question. for guys taking my Yes afternoon hi. and thanks Good

So, just segment. on of on Starting a guidance the couple Transport the clarifications.

full So, implying that that that number that are And or you downtick is a it million in $XXX some EBITDA of got in moving in number. which from significant fairly cost in year half? second because QX you've did items, cetera, any MVCs Is in segment. QX your et the guidance

Willie Chiang

the Can repeat you question, please?

Sunil Sibal

look and close you second then specifically and to quarter, did in you full when $XXX million, half $XXX the million. already the at guidance segment, in did million of $XXX the transportation year So, first I

like guidance will that segment it seems the is a there suggesting So, that be your second QX numbers. downtick half from the in in

is in of just curious, you was function segment I MVCs any So, got in the Transport that or factors? any other a QX that

Willie Chiang

on side, a EBITDA. the and It's MVCs of payments QX has of with also Transportation and it side, the we recognition timing captured on deferral of and benefit the some combination of from do to where the cost

Sunil Sibal

the Then of guidance facilities full segment, the Okay. year on breakeven.

a challenged side, some that undertook, the hedging was it because clearly, headwind. NGL there of you negative -- on So, of spreads bit XXXX. you like And in the a seems the had were

that terms the are forward think segment, crude about they if So, or How when about years? differentials S&L should where think going forward we of we segment in stay XXXX contribution? in

Willie Chiang

our should think give clarity better you much will guidance for you wait That February. I in on that.

Sunil Sibal

Got Okay. all That’s had. Thanks I it. guys.

Willie Chiang

Thanks Sunil.

Operator

That to back closing concludes company our call for Q&A session. remarks. I will over now turn the the

Willie Chiang

I always evening. a wish dialing is of in. Plains very appreciate this Thank interest you Thanks support in. for much your Willie. Hey, you nice and We and dialing for

Operator

This you Thank call. today's concludes participating. conference again for

You disconnect. may now

Plains All American Pipeline (PAA) 4 Aug 212021 Q2 Earnings call transcript