PSXP - Earnings call transcript Q3 2020

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Operator

Welcome to the Third Quarter 2020 Phillips 66 Partners Earnings Conference Call. My name is David and I will be your operator for today’s call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded. the to turn President, Dietert, now Relations. Investor will call Jeff over Vice I begin. may you Jeff,

Jeff Dietert

X Good to will and Vice call. Vice afternoon welcome and President, Participants earnings third President Zuklic, on conference Operations; quarter of Harbor financial Officer. Partners website, XX and Today’s Operating today’s Vice Tim be and Chief call Phillips CFO; include information. materials can Safe found with the supplemental Rosy contains on Mitchell, and Phillips Kevin presentation the Roberts, statement. XX operating Slide President Events our section along Partners

well making Kevin during actual in Actual cause today’s Mitchell. With filings. We to forward-looking will will our Q&A materially Factors our comments. presentation results session. to be the SEC may from as differ call I statements over as that, the differ could and turn are that results here included

Kevin Mitchell

conditions safe throughput. Partners and We captured Thank Phillips quarter, you, everyone. market XX by third Jeff, In reliably operations. the reflected good higher delivered afternoon improve pipeline

During XXXX. South to the of to of that well assets contributing our and operating Volumes The projects. results. over third additional up, ramp pipeline per growth quarter the the third are major growth unit, Directors $X.XXX a gateway came on approved common online. continue terminal, and storage distribution These quarter, Board a quarter our Texas we advanced of X% increase

volumes, the Oak the joint by Phillips due of $XXX wholly-owned ramp operated up adjusted $XX startup to Adjusted X ventures to from Slide the Pipeline increased due Mid-Continent to Texas of volumes and and from discuss financial million Gray quarter results. million at onto million South Gateway associated earnings reported of Moving Adjusted improved EBITDA partnership $XXX utilization The refineries EBITDA higher assets of improved EBITDA million. $XX including with Terminal. to higher third XX.

million increased million, higher flow Slide joint Third from third wholly-owned was quarter from flexibility our of in $XXX and reflects financial under with of liquidity. increased investments the credit This pipeline CPG $XXX available the and Texas quarter assets earnings and prior terminal. funded X and the during growth gateway partnership quarter. highlights quarter. ended facility. on up The capital million South cash included cash venture $XX million million $XXX spend revolving distributable $X We our the distributions. The

below prior In partnership the our deferred of which addition, with debt fund Pipeline covenant EBITDA X.X, remain consistent was share Liberty revolver project. commitments the it on ratio is to X.X. continued to the The basis to targets for

Phillips and to Our Partners coverage investment ratio grade capital committed X.XX. XX discipline remains allocation rating. was distributions maintaining our credit

provide will on Rosy projects. our Now, growth update an

Rosy Zuklic

and Kevin, hello Thanks, everyone.

X, projects. Slide talk about to I'll on our Moving growth

been The backed continue near commissioned petrochemical is At customers the million the Gregory, in Clemens are to operations expected advance have July. is began the year as complete operations of in the to of with Texas and phases barrels dock Corpus per from first it to end day Pipeline commitments XXX,XXX will Texas the Terminals, the additional of this and start-up through storage up export X.X mid-XXXX. in construction expected terminal barrels oil ramp South crude capacity are Gateway Terminal We finished. run Caverns will area. long-term is XX% by the roughly and CXG Pipeline pipeline construction pipeline The Texas. and ethane project. Christi serve

capacity. Partners Phillips a quarter in XXXX of of XX expect capacity total project of to interest in export per XXX,XXX be storage and million barrels to the the We owned barrels day first with the XX% completed terminal. X.X up

of approximately our our This capital in in-flight remarks. program $XXX budget prepared December. Details As to concludes we we near expect the million. provided will XXXX completion of projects, capital capital XXXX be be these the

for line the We open will now questions.

Jeff Dietert

David, us? do you have for questions

Operator

question-and-answer Spiro the Suisse. begin Dounis now go from Instructions] [Operator Please Yes, Credit we ahead. session. will

line Your is open.

Spiro Dounis

like came think remaining call and on on it fairly that sounds some to little PSX insulated another like topics heard you closures a refineries more just the downturn. Rodeo came if color PSX I barring correctly, and up back earlier. are the I maybe going Topic guys up bit forward go I'd that refinery beyond well

that correctly service I more So, provider PSX one those guys and perfect here how as risk you are the a to from closer refiners? and at assessing perspective

Kevin Mitchell

it's Spiro, Kevin. Yes,

on, that way XX refineries about PSXP to this, assets think the tied the generally tend to I middle PSXP focused of that to think extent and the portfolio country. down the the in it's Phillips the be

and part, standpoint XX the to I've generally where of the Mid-Continent parts been portfolio. core that most from the for Gulf of which was taught Phillips is the Coast So a sort

so, XX situation off, if And Phillips if of I go in relatively lot that terms talking But meant about, a hypothetical to what just then what place two comment entities. the insulated. in between details action around you and think a I are of depends assets we that's particular take back what exactly idle think refinery it the on to contractual it, the really

stays idling that apply disclosure across but that the those We would in of that. is asset, of excess enable something XX-K no board, Phillips doesn't every impact short-term withhold, in that refinery. that, not commitments months XX XX every have out But any get NBC's have to -- a would the

type case-by-case of really a is it So, situation.

Spiro Dounis

elaborate then helpful some color. few events. that's on, And Midstream to for assuming could around that, comments Thanks Kevin. you on just if a [indiscernible] make Okay,

the mentioned you hasn't in strategy So industry been the next consolidation really years Midstream probably few part of it and sees the first, historically.

the can understand And of being there any fits before? lifecycle a Is than PSXP how evaluating shorter So MLP to indication spending into just to you're that c-corp more little the time mold? comment? wondering second, you interpret about that just want that you talk then structure, think how

Kevin Mitchell

come answer one me the talk second and Yes, and first, one. we'll the about first let then back

around really reflecting. comments just the lifecycle, So, NLP the is

the you've then seen in look ago, what's subsequent in at If you years you've space, the seen and over we years, go conversions, Midstream were back five at, five sector c-crop roll-up to transactions. where happened say the

And that the point at a it quite have time. was MLP -- back you so, universe in bit actually than is smaller

could just it's reflecting we've just and PSXP, seen of really means reflecting specific It's grow place capital any somewhat consolidation, what asset-specific organic But intend that shortened. in time of ability small space. position to time can't four in this has felt take so, on frame parent that. on industry growth the it to intentions itself terms principle, to to of and lifecycle other broader things the We happened that this have in projects And drop We've specific number then through market wasn't participate the one around needs has action And around. and three, that, to earlier meant what acquisitions It the five think over somewhat reality the there's the years we course direct from by always by investments of question company ago. PSXP consolidation. said the period. have we've happen or acquisitions. Midstream probably in MLP done at we a the in I

to efficiencies, helpful, upstream big chains. through cost for well You're that's is seeing scale compete efficient the way a is to ability Midstream I the commercial more right in And entire now. the synergies drive bigger be happen to that Midstream think better the in pretty value

to that's think likely And happen. so, we

Operator

Barclays. from go Please Chen Theresa ahead.

now is open. line Your

Theresa Chen

appeal unpack in potentially think PSXP to asset I Midstream. last more certain and/or to would PSX assets consolidation broader parts your particular and Just Are Kevin, like comment participating chain fit geographical name well Hi. of would the you about others? locations? value across than a there that

Kevin Mitchell

crude got some standalone. Well, are assets, sort we and so value chain of of have assets, NGL integrated a bit little PSXP you've chain value are with portfolio PSX not today, and which of which in in some and

you I way, at portfolio where opportunity drive the don't broader are there. that bigger the leverage respect, efficiencies you just synergies in potentially and think because so create look approach And that it and to commercial you opportunity not can then something cost a into existing if

have And if have. other think I comments I know around I of so, Tim, don't how that's that? you any

Timothy Roberts

on. that about can it's on. No, do the really as It's it chain position sure you we we make effort how build consolidation I Kevin, and going we will the out so think spot value support hit

right. mentioned As yes, that's earlier, Kevin so

Theresa Chen

directly DAPL, What perspective you to your you related EBITDA? of us goes the give Where update eye it some milestones the DAPL? an Bridge you tell key Bridge on can evolution do on that it? And the from think that, and keep about to process. Also, can shifting over is to Bayou to is movement on Bayou the near-term related us

Timothy Roberts

This Timothy. is

bit. a So little I'll cover that

into be will real time. But We based the court expect talk sometime end of same rolling need to court seen, and changed. the Let towards going fully that they're two still Really, items them appellate We nothing's me appeals. district to addressed we DC. the we've in on early but next by that be of schedule likely expect maybe expectation the had those both an year, our get around about year, is DAPL happens, that briefing what regardless quick. addressed

process So of an appeals is that forward. goes I likely one think the process

that your don't that Now details to at from and transfers, But to commercial I may remember, that that on lights you point share can into with we lead Plus, get can't of is we you. heavies energy some what standpoint Bayou got is, of want the you that. I pipeline answer, a hopefully. Bridge, lot and that you a tell on do with help think I on,

Operator

JPMorgan. Tonet go Jeremy Please from Instructions] ahead. [Operator

open. is line Your

Jeremy Tonet

joint and I out Hills, that Sand of in be little be a any if color those just expectations kind on Thank things the wondering Gray met those just how kind Hill, on was JVs is, particular, stood color would helpful? provide to of even you. might perform bit businesses able Southern Oak the hoping there just you more ventures

Rosy Zuklic

I Yes, ones actually Hi, well, quarter. Jeremy, prepared you well, I last performed well, the Rosy. the remarks. Oak it Sand JVs but did think Gray all one performed of Kevin that this quarter. leading during that know, the Hill is mean, covered actually was during our to quarter, contributed as

standout that quarter. to actually would the contributed that So explorer an three Gray I say and where quarter and the as last JVs compared were upside that a Oak this Bakken

Jeremy Tonet

given better it a this Thanks we what kind know. declined could world it a And just capital and ever wondering repurchases, leverage? kind the philosophy, where on refresh situation much? or -- where Or the just yield could allocation has us standing have your kind lowering is the want capital to see of all there so in wondering year, if space evaluations that lot as you you that with of is just everything of be changed how unit deployed

Tim Roberts

invest to good grade Step the maintain also have sheet, and MLP, we the balance Yes, balance question. strong in a expectations strong portfolio, that a We're Jeremy, in that investment maintain is growth we back fortunate very great solid. that we to sheets rating, this continue really a is and priority credit have assets, strong a MLP.

fair a on need around decisions DAPL we're valuation. that from of I we have leverage cloud an utilize standpoint if PSXP that over sort of any hesitant to that. bloom also from a that is make think a amount believe hanging But immediate We having valuation standpoint, the because impact really I equity that's to significant

reluctance So, could well long this decisions as have until make to out. plays whole term that position consequences

in sort about so, up of making we so don't around really, decisions and and really think how rash And that's that, be that. frames

Operator

call. Jeff. now turn the call back over This to I concludes will today's

Jeff Dietert

to Shaw Do within in to me. Investor for And to welcome XX like Thank for has Brent Phillips Investor call you thank like your Relations Shannon questions XX. any please to or the you team. you. Group. another promoted the Relations interest Thank contributions area partners. Phillips his Brent I'd have Holy significant I'd been Shannon to

Operator

you, ladies conference. This concludes today's gentlemen. and Thank

You may now disconnect.

Phillips 66 Partners (PSXP) 30 Oct 202020 Q3 Earnings call transcript