Shell Midstream Partners (SHLX) 31 Jul 202020 Q2 Earnings call transcript

Good morning. My name is Trusso, and I'll be your conference operator today. At this time, I would like to welcome everyone to today's webcast for Shell Midstream Partners. All participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. advised conference be be Please Instructions] that may today's recorded. [Operator the I to will Instructions] call now Officer. [Operator Relations turn over Investor Jamie Parker,

your begin may You conference.

you. X CFO; and Midstream Ledbetter, VP for are Thank Business Nichols, Safe Steve today's Development. Harbor and me Slide Kevin Carsten, With our today Shell Shawn CEO; Commercial to Welcome contains Partners. webcast statement.

the such presentation may be future could results Risk events contains in during to as and Appendix-X from earnings Today's the in to Factors important differ with filings of that call forward-looking results and this under presentation certain the well regarding reconciliations release Actual related and measures. also and statements financial financial making session. cause We to including for such will measures, SEC. GAAP measures. to press are Q&A factors and be as non-GAAP disclosures statements, the release our materially refer included press expectations actual comparable today's most Please different here

take the turn Nichols. end I'll presentation. that, to With over call the at will questions of the We Kevin

Thanks, everyone, Jamie. to welcome second earnings Good webcast. and quarter our morning,

and by a been I heart impact on have Before about talking our pause quarter my goes our staff, acknowledge who that from individuals, out those affected to to to I investors take customers, a performance, and our the pandemic begin, had to moment the want COVID-XX. has our to

hope able all stay to I are As and this of safe. know, these you're that times, through difficult I

quarter was were to facing many of unfold. there destruction, We potential in pandemic, resilience our the views quarter unsure impacts the assets. as and and As believed would give to uncertainties supply/demand as of I the were demand the on the how as willing there reflect world the that the them people from were imbalance, we back

take were what where many would surrounding would to demand cuts there place. production and However, questions happen

but we quarter, of we both able back performance real-time challenges. as assets our on strong our Now, fared from impacts the of to mitigate from landscape, expected, actions better look the these I also evolving the than to the take were against

focus I'll three today, on areas. So

First, I'll global our against some again we're monitoring this our began; and share provide pulling economic saw partnership uncertainties levers impacts quarter the been And the actual want have and on assets. since to second we enhance that we the update I finally, resilience pandemic detail an the the to of long-term sustainability. challenges on highlight I'll

across business quarter So let me saw our we the progressed and operationally. how start with impacts the

key refineries Gulf before, As and were throughputs destruction Mexico. saw impacts some refined signs observing levels rest I lowered of affected as specifically production orders. as products finished mentioned and of even in lifted two we around we early April, cases their refined In and the shutdown. demand in like of the March market of respective products states the industry, products stay-at-home In drivers, recovery, which rates experienced demand run lower crude some pipeline their May, we demand

to would to crude on water, across the as better increased Shifting the our of well the also hold and to balance to come not would demand, as levels have our to centers, that lower and up basins, States demand to to due the with the storage, Gulf saw of down quarter production Mexico Northeast improve to a assets oil levels products to basin than systems, type. favorable believe overall that the As United markets. [ph] knew nearly and but products cost-efficient refining because other crude and our its of we we connectivity access refined because we throughputs recovery, demand progressed, month, move means continued the only pipelines, most Midwest

took primarily both Gulf and performed cuts production barrels Gulf customers. of by throughout Mexico demand global sour quarter Coast progressed, place quarter were well as in the basin onshore. medium refiners the The As

So to the with Mexico Coast the improving utilization, production, the of of improved combination producers curtail basin by demand, and on Gulf the stress level logistic the systems taken higher Gulf quarter. and refinery actions of throughout onshore

to fit our partnership. the for the a These to looking profile will Currently, let fleet I cost and to some that size allowing scale size with of resilience locations, the of our air the of reducing two way, turn spend for to both savings. our in wins us elimination sustainable financial at cost deliver steps reducing run like on our costs, the partnerships operational that program optimizing purpose value where more team and the our profitable assets and risk our On costs, the work we'd enhance and areas, we're Gulf safely Mexico, Now, be search reduction, and towards without some immediately offshore ensure ways I of preserve projects reduce include you operational me of of sacrificing now to has few in also lead A ultimately, sustainably approach bottom the line travel self-help our helicopter and reviewed initiatives to the quick efficiencies in our reduce to responsible of and delivery. and cash. initiatives quarter, process our taking include of making re-scoping into business. last that it to driving measures to alluded a shared future. long-term focused to We're organization our discretionary all

execution to third-party of and Second, we're use and asset size steps of the reducing taking optimize closer contractors. putting the to the organization, our decision-making work

enter And we'll ramp does between These So operate, as $XX value or savings to we in mean? costs forward. contributions $XX JVs looking we with continue from future. add to an savings to million an the and that up of at this to example approximately direct increased ways are XXXX by we million We reduce of and everything expect $XX we and look expect all and end XXXX. go now for the to spend partnership cost into how we savings sustainably what annualized are million this

the one resilience offshore, let of have premier the I have in sector. Shell provides me allowing to pricing. which optionality grades with we the of of corridor in netback but unique Overall, close to confident outlook So provides maximize networks, Starting assets medium and we the for the crude the advantage feel why them some sour not best-positioned Midstream our Partners. for our with customers, only also assets transportation

assets portfolio the unit environment. marketplace to With products per span and the basis. to that onshore confident around of year, will term intends maintain to quarter-by-quarter of the our a global common uniquely the our of Board I clean advantaged from asset to Partnership through continue distribution they're the crude still decisions environment performance through end make Partnership's the second business and the quarter, expect and but volatility monitor our throughout to of and distributions Additionally, assets the recovery. on a in to uncertainties in given regarding longer $X.XX the future the the third supply pandemic, of commodity Directors for July, the uncertainty ability and remain still see up with manage are our US chain half we ramp the

call that, with for hand over financials, the now to Shawn I'll So the Shawn?

Thanks, Kevin.

these Shell's Mattox a call, way allowed quarter a a We're Partnership interests. our our timely in pipeline from reflect completed extraordinary really manner, which and benefit quarter earnings cash in the pleased the interest. the quarter full world with GP construct to eliminating converted April this the The along interest results economic we portfolio this transaction assets, our on the X, really As sponsors' help April have non-economic On acquisitions all transaction given volatile looked commercial our at stable the have assets. economic I and which assets in with last underpin into unitholder Norco interest full while with the receive economic environment. our pleased will logistics long-term aligning closed and I'm also also the refinery those performed flows. the in previously on eliminated The fully Partnership acquired announced how IDRs to of IDRs

So now financial of let metrics me for key a few our cover the quarter.

was [Technical even quarter. revenue prior $XXX Difficulty] roughly million total the with Our

on lower CAFD, Now Eastern -- of utilize supply/demand Both at on pay along as I'll the volatility from resulting shippers $X a with curtailments. remind booked this revenue their continuing reflected primarily a million Corridor COVID-XX we related with impacted shallow $X Zydeco our credits of space, later so producer [ph]. you million few and volumes the [ph] of Zydeco and about date. water to in cash shippers our for is effects that of by to for these still some were deferred

the of to Norco also down sales partially of revenue allowance lower volume this is $X prior to This in all million the which compared about lower due million of by offset Now quarter. when the the $XX acquisition quarter. contributed oil, product was assets, we're

operating $X Our that was prior an from increase $XX about was million of million, expense quarter. the

did in measures Now were severance to of the the and Norco of lower that offset have sold of we oil decrease to we a allowance quarter assets, allowance described not partially related million, of cost accrual oil that the which increase earlier. QX. addition did $XX is cost in Kevin of and adjustment These $XX about which a most of this related expense this is $X by added self-help as million we the one-time less in the market million,

$X was is in Our markets. now this our refined due $XXX first mostly caused related about equity the our pandemic demand million imbalances on income by down quarter, pipelines from million, to products investments lower from key

income million, of Now the from to quarter. this pipeline. $XX prior an contribution was Mattox the newly compared million Other partially $X increase acquired offset the by was

financing failed notice connection to sheet treated through quarter is and the lease is simultaneously cash the received back, and that to split as acquisition, as also And on and a Norco of amount accounting the is for interest will income on contract those XXXX. take financing will assets pay sale-leaseback. Partnership be revenue, an transaction titled interest booked income you with received assets this the are a this the financials; coming receivable or assets In the quarter, this what Norco related Partnership receivables. transferred the this principal beginning between purposes Now Norco from balance means in interest our second

EBITDA see from CAFD. You'll to in the this walk

fairly to amounts the the was million the booked million. $XXX distribution to other interest the $XXX of expect total this cash of for the expense, available adjusted we EBITDA forward, Partnership contracts, and with be Norco given all for and assets capital after stable Going was maintenance structure adjustments, attributable

Partnership Our per distribution unit. LP declared $X.XX a of

quarter a [ph]. ratio resulted this one of times the So in for coverage

incurred we the the recall quarters. the growth from space, will turn Partnership's million So And capital distribution you'll with waiver to $X to for the sheet million in now second and in quarter and related benefit sponsors' of million let four at $X million balance As quarter QX liquidity. $XX the me to beginning maintenance finally, we in per CapEx $X

As had continue to of an on to of June XX, comfortable the X.X annualized our of our total this allows it adjusted business. We're effectively $X.X billion, sheet equates based outstanding now us and EBITDA balance to believe QX EBITDA. the ratio a desired with to times debt Partnership manage we debt flexibility

producer So quarter. the a for the offshore, several few third of planned to In turn we now turnarounds let me expect the rest to the updates have year. during

cash which are $XX capital turnarounds teams our XXXX. This initiatives in by preservation and approximately million. And removed deferred CapEx. income and million for both $X impact in Now million growth maintenance negatively for distribution part cash of earlier, these and our have roughly or $X self-help roughly projects highlighted as available Kevin million $XX net expected of includes to

pleased the for have well our midstream as So flow, sheet we're a term. the a position stable balance ratable high-quality provide which this to and strong suite coupled long close, assets, and we of us cash strong with Partnership

So your we'll now that, with Operator? all questions. take

UBS. you. [Operator Gershuni Thank from And comes question Instructions] first Shneur our from

line open. Your is

morning, Good Shneur.

make was can Good that at besides level Hi. talk wondering, flat and day-to-date that to you I if off, you Is demand Is next signpost forth, signposts looking congestion? flows but start so the signposts that gives at the what are signaled quarter, pay following following refinery flows? you morning, everyone. as the is your this system things it you you're confidence be that and expect we utilization? distribution the right same of should you that you've you declared the and What the on your it now it prognostications? that are Maybe the are tracking, to sort about quarter. you're

pandemic uncertainty with like looking right not But we're guidance as are middle is a has as And actually, see mid-term and the sustainability in July; the states just hotspots actually Shneur. you appreciate much see the that and the performing looking long-term longer-term thanks, -- there of of while we assets so -- we'd Yes, term, outlook uncertainty others the like in and been see the look to now; view and now, as It's a right and lot as cities I you right for changed. the as uncertainty we gave of in really the see marketplace is that the you a to there's well we you as as up, that, recovery. but plays around the and give at our ability our recovery in before, hence the the we'd demand the short as there's now we've QX. well the which and term it's that confidence reimpose pandemic really to that's out just sustainable restrictions, things watching production, flashing same for longer term, how long

So prospects Powernap still looking doing just be we're the Mars coming needs to project to our project, we're other much to growth offshore at expansion from our Vito pretty and some to the the is complete, and which the systems installed offshore. things growth

So changed. long-term our medium hasn't our the and confidence in story and

flowing, are different you us had as that better but system, as And things expectations? did very is that the last thought products at when enough. there has how a on thought you your you the updated terms going interesting both and were trends obviously and you than -- you as everything than look mean, are quarter? follow-up, in of surprised and positive that you your then you of individual at last quarter, I some [ph] Fair how were look Great. anything operational note maybe to you things -- that last look emerging were sort flow negative flows

believed over start mean come So that assets to about fruition, saying I'll then we start we the our it would have and I experience product we turn I'll have the on side. to of Maybe talked by resilience Yes. we've of Steve. theories kind our that would right? what I

products not recovery to one demand demand cost the -- the So other for be see the of go pipelines basins for versus those most and Colonial cuts Explorer the provide premier first catching then, to recovery to optionality effective actually and as Mexico And we'll some up, you of centers, those the against from being the and up recovery. perspective held that demand people systems onshore picked the move to the basin well as think I in performing only way other also cost-efficient came the place has is the production on a and that offshore. Gulf that how but

if Steve, add? So -- and you want to

Yes.

to storage and so I think happy I in we surprised, concentration captured in, that relative believed terms of export move we're we're to heavy up mean, with of Gulf product refining I product thesis advantaged in the with position and options that. assets, our Coast assets and well. around the that it you PADD ways think in out for crude happy and of the to and III, premier

were patterns there So the would those and geographies supply would around are I well and know assets thesis performed imbalance, too but refinery up and happen that but happen. basins say we're might and surprised, held uncertainties cuts have happy against don't that expected demand proper in thought our we we Again surprised, the overall well. our production, demand that then

complete pull QX products in for saw was global early that from we for markets. types timeframe, to when that US the there a there interesting lockdown was still crude global but was exports It

things -- maybe to you're we going to from that long-term basis reductions, to much you expect be That's going how of surprising. perspective this details trend of much taking control these difficult of XX%. a was No. yes, because through able long-term and cost And to went doing are be as everything? final environment, about you're kind how obviously, a now we lot expect XX% but of on some definitely be of a the should capture how can one rethinking cost or of question, you're sustainable, permanent you How right kind progress is a steps or

you a can that. wondering, us give if Just color bit little around of

Yes.

So some cost talked actual one-off, but of alluded the projects deferral right spend, are the opening, those I or that of reductions. in about short-term to sustainable things that discretionary more now we cost are with all the those some

come those So will -- of and in XXXX. some

that reduction that For future. year or cost will the then of complete place all are in the of in XXXX. underway have these end that staffing, by organization now and the put example, we're and will initiatives of our the sustainable resizing them and our Those other we in be some the starting savings into

that And and the highlighted, a we what Yes. our this I great was us really That ERP us some we're in already big think this cost just be well. we it Shneur, as a as more so a only new thing have transparency just is new efficiencies. will lives I'd that implement business I add new think will brand providing past, in Kevin make actually quarter our to the in implementation did success, pleased also that give us, help. just challenging, offers it didn't during And right, is it's Shawn, with

your out the of ability field, that to phone pulled So fill a on orders bunch paperwork. in to up the do having work versus

our enhanced new is to implementation. ERP this by think be I So going sustainability

the And you Thank guys. Perfect. very much, enjoy weekend.

safe you. Thank Be

you. Thank

Barclays. from Chen Theresa from comes question next Our

is open. line Your

Theresa. Hi,

a and the my more to hoping I you month little I get there. granularity half. bit quarter see very clarity on to was the demand affirm one the third Thanks distribution. happy Hi, as and are we for picture was maybe into second questions taking

you by Just how and have product through trending? July, maybe you it's refined region what on your systems -- seen

from Yes, as of It's one are approaching that it the but and different as number, think Coast have the along really to system to I different the seen the Steve recovery to I'll Gulf markets we've everything, XXs the previous States because may now XX% to it's the that demand talk we're with parts thing of across things. Northeast, between different they areas difficult more down -- you. a where it levels United and details get In across to and XXs. way share varies the can vary about in,

Yes.

think I we were and pattern demand refined products jet for the but -- opportunities, to diesel obviously and York is that's ability flow to of The with particularly the the right. gas demand resiliency well, over in held in around pleased terms up off, of systems still the more a the out cost significantly recovery advantage our the continue and the bit and storage the supply water to have flexibility getting probably Harbor. overall New

And they've their with demand they that depending is are, on as and pattern the to comfortable been obviously, so as what ability see we're they continue today. if they performing as happens, very we are resilient continue

a your export And toolkit. of it. market one being the and comments, in option related lever your to Got about Steve,

facilities just [ph] pain that affiliate in that been abroad, see basis, few but export recently brought So of US seeing areas how story economics I do think a there are the in marketing refining throughput your time? are over unsold viewpoint, evolving the given broader have a of the volumes online contracted on has because you good lot been a

York and though and appreciate things in volatility you I we vessels European I'd happening who up Harbor. one terms dislocations others of this picture the a I and I uncertainty, it's that storage opening better with trends assets do get be given difficult what of in you hyper can with the clearly. what picture the be a not areas, paint the believe and the to that's partners don't opportunities What different to uncertainty question honest, as between trading happens I be longer-term point. pricing tell but in shippers have and Yes, is, of New that waterborne flexibility paint of our terms the But position of see maybe around landlocked, are our current and able the are than think -- a may to to water to hard is in at we that access, think level use for some this

the for continue Except that a stage perspective, from a way. to global cost will Coast Gulf on out play price that from advantaged and the is perspective

Understood. very you much. Thank

Be Theresa. safe. Thanks,

You too. Thanks.

question from Walker Bank America. Thank from you. Derek comes our And next of

is line open. Your

Derek. Hey,

if think color in right, Hey. [ph] alluded think a today, with guys. morning, Appreciate Good or appreciate clarification you the self-help with $XX start aggregate I measures. I of million guys. Maybe -- in morning. a clarity to $XX the million the couple Good I time number of kind just XXXX. the wonder to question, I maybe just I million, coming heard $XX the you so around

around year, means the that think alluded based that trying could [ph] on what's year. some million savings example that $XX the re-scoping the scenario that some -- out that cost think XXXX also actually does you commentary to just do. I I the So you around want ERP implementation, I include increase think guys to Does to of to I give of next you the that does figure programs, helicopter an you just million of while the $XX some next include --

Derek, this Shawn. Yes, is

that. it's yes, So

taken the of that's First one-time not included those measures we've cash preservation all, numbers. in

So cash we're a a not savings. one-time calling that's -- sustainable that's just -- it's event, that

do of We at As that will sustainable end run of and a we million new Jamie, ERP. year, talk that XXXX staff our it's not combination of around about cost model $XX in cost be it's you XXXX, be look see this at initiatives by of and the around of in an run to know $XX we by things, we're million. probably to will transparency kind of a because to end there's new a because the working it's to the will new of $XX be Derek, I it, enhanced the and savings, to rate of And you savings then exact way end by million better think sustainable rate through. range savings

with how ramp it, work model So I'll up Jamie. you and you let that that

gave Okay. general coverage just coverage then going around where guys think would around That's you X. guidance helpful. the ratio, thought to just And I the you last is given quarter that actually go

So think will how turnarounds some it improving, things about -- we distribution do the slightly there should XQ, coverage -- in the are is coverage for XQ?

Yes.

So mean we're we the -- to not that we're these still where again to -- going providing that I understand distribution. guidance trying reaffirmed because markets go,

whatever I not think it we're the what's of it will providing any guidance. to look that at once be kind return of normal, us point, easier But like COVID-XX. provide after might to this further for kind more guidance market normal

Okay.

thinking strategy of about against maybe So just normalized the one funding kind that's maybe that? to things a dropdown, you actually you at, at here is the of are you forward, do kind dropdown How we're but looking bit, more looking there and about little as just fair. coverage Maybe moderate-sized from thinking to and are are dropdown I ask in certain and be order going this I'll you you execute guys XXXX. how ratios expect that only know quarter end last are

Yes.

best sitting if additional it's back can some return that some we're runway, say talked have of that be and from the the sense what we in coverage look this savings of When it deploying we for assets we IDR thin we transaction assets that's to knew as things. to a about talking the get cash of Mattox logistics let some hence build number which different when did as pieces use that it waivered and strategy by will the of things about can balance we at those have start way would ways at with options be here me that build we kinds Let to build the the kind mechanisms acquired expansion those you look the growth March the as We kind see, that We unique always Shawn and of, be assets and of of online. coverage, we've we [ph] putting then organic Norco we that a the shareholders position we projects look best flow. accretive other at have at a the the of talk we coverage and going that can from Shawn? acquiring makes the cash. we the is but like we or immediately while, or elimination, can look right transaction, then distribution, now, to we're of sheet I'll as our hard in look funding from those to into to use available well the us. And we as all of with the or at was that of sponsor the about there, of

our almost to times mean, position, standpoint, Yes. in X.X thing a we from I And probably only I'd leverage. on that have EBITDA, I funding we're the is add debt an think enviable

the have build to at we'll we with, deploy coverage facts work our on and how balance sheet what rewarding kind and of will circumstances markets that and continue as to continue liquidity cash So the Kevin highlights, us be and we the are to ultimately for. time very capability, much build

Kevin. Got the Appreciate it. Shawn, and time. Thanks, thanks,

Yes. Thanks so much

you. Thank

Our from from next Moreen Mizuho. question Gabe comes

is Your line open.

sales the assets your things just talk the pretty you about I ancillary that sponsors your having some for in -- to this at sales me, it that morning, good refineries, like about of essential say. a or like from of are to and and everyone. Can ones point are and develop? assets there process your including from quick seems might -- being contracts how should Hey, forthright implications potential Couple couple of

first. No. take Yes, that I'll

and don't really in it I that to impact material the to refineries come them, who have our the be runway landscape, in choose continue the our really mix in always assets think logistics business dynamic, owns of long energy from. has a we that So a will go regardless that US to it's of list in from we supply will things perspective, we've our a but runway said

with that to into supplies, a a products really I matter around current what have that acquire the just refinery having to they're And that to perspective. the for don't would Norco strategic logistics sanitizer, cleaning Norco do going the fact, options demand sense production, and major medical plant, the The generates So, hand partnership supplies, go around ramped for makes impact term, we in acquired could down, actually in long very not see assets them environment. assets the from acquire its that's a that Group. of partnered or as it's all high chemical it we

-- So read really doesn't a I have that to us. through don't

Okay.

And Second think would the seems Can there. of a year? me July? also question you more counterparties bit talk little the volume re-upping into fourth preliminary here of in this think contracts in healthy then Zydeco, any just quarter drilling some just that terms those of down be for volume continued with I I on due ramp discussions about come does of your kind

Yes. is Hi, this Steve.

quite didn't I be first the to Just question. understand clear,

got the the repeat So, that for first? could what was but I second you me? one,

July Yes. have relative in really been the here volumes Zydeco what the second It's just on to trends quarter?

Okay. Yes.

this uncertainty -- now kind that we is performing right well. dislocation that I'll represent I the what take But abnormal still of dynamics. is system would volatility the with long-term may see say So not and currently, the

trading strategic we how centers see given we'll what market. refining and plays optionality flexibility export hubs is system all very still the but connecting see out, meaning and shippers need that the So the and being

have contracts, are two there of renewal plays and for contracts about you So each active one those asked and shippers. question potential we discussing conversations right with in options that the November, into but now are current expire six-month that and in we options

to that it's Coast, the So and feel term. the products, past or future. points Norco, destination we about We're continuing our asset position for it's I acquisition as gathering and and and portfolio out the assets refined we capability grow well the diversify to and over longer important remains onshore good sources gas But this to think and connected and to also say that believe in away the asset. we've follow for strategic strongly in important what total that it of into any another our we've us the on, plays and been done many from real our recent offshore one of purposeful geography and Gulf

Thank the you. in just terms last is for Mexico. now That's And you're helpful. Gulf of then seeing what right of in me question

then Eastern this shut tie-in you all some the is delayed, activity of that happened for volumes point, tie-ins point? up at And about some how think so this back the talked I online of had at that's also being XQ? and Corridor being just shaping

Yes.

mainly the water So the initial not reasons minor, impact in some and back was shallow to platforms us economic were on. those but very containment some come reasons shut-ins the started of see in East, it of we those

starting come overall, some in in production a of remained You've there producers of quarter, take see still those not the couple been areas, and there thesis and turnaround maintained. accelerate but ahead that has online. of some our seen situation it's have resilient But advantage on back go tiebacks some activity Gulf a position target, has cases, been are around to we're predominantly the the they to And material. that the pushing our being and

you. Thank Great.

Thank you.

Spiro Suisse. next from Dounis Our Credit question comes from

line is open. Your

everyone. morning. morning, Good Good

short-term I some maybe issue. could distribution the just back will briefly, the distribution to go the in you you imagine confidence Kevin, don't for be long term, mentioned If and cut

these quarter I'm guess out, or not say that or increase is trying being point flat want thought I the which figure whether to on long question it issue looking term, is just So it. sure I each the to the what confident versus keep your in when this at short-term fair point I understand is I board very at to make it making decisions here? that some

Yes.

but specifically, from for extremely the commitments So I'm the to and some not the know day I that able guidance - of today marketplace to to I Company be look our think take provide kind looking and we seriously. a long-term public, that just certainty. you're took we going

in. say business, deliver So driving control out can't now, to assets, is the managing that out What operating deliver landscape. we're it. on the of cost we on something, getting the of And focused we management landscape most is the uncertainty that going this this when through on right current we're we in

difficult it then for So delivering guidance marketplace very we the -- just and give longer when would without to us ourselves a give it's term, marketplace. commit the knowing

production as and impacts the hopefully mentioned it from demand board here. that pandemic how on what's see we'll and And with earlier monitor I the improve environment associated So current will really. continue the continue response, we'll and the happening and to

Yes.

obviously, Okay, onto coming the a that's fair. that, mentioning have just uncertainty, And up. guess we I then an election layer

making? playing seems at So occur what guess I'm how November? relevant distribution strategic be on the shouldn't in weighing that's or how would I federal much the your lands curious that like just it and expect Just And general, uncertainty also of election to it factor anything restriction a look itself we around this like? comes on just the would decision-making I your here if even decision before curious point? into to When much really growth process guess

Yes.

chain of the come, different States and importance that energy of many mean, speculate I'm believe in and and environments. to of value existing who election demonstrated what United to multitude will for hydrocarbon I office the to in area. turn not operate we've going our landscape continue can will the on on what to in the like depending even look gets We the years how out assets So it into and

quite and need, that set really we the running of that. markets well well-positioned the new performance you've construction are growth of proud the other have challenges those robust through we're energy actually we up the permit and think a navigated for to seen of that and restrictions those But -- assets some we've I we're construction, that the long-term. and provide or in of some whether believe confident new so issues done on and new we've

one, distribution. assets hydrogen and its is European [ph], production RDS But ramping up Last is are base, California. perfect. some that there most believe last do I I of in a know from Okay, bit deal little And I while guess,

just differentiate yourselves to yourself guess time. Do is see I that So perspective? to how hydrogen an for benefit expansion trying into over ESG an to from there big from you curious, SHLX get opportunity

now assets. running uncertain. really it. choose that we're and said that always work sit where are we'll can with front we we also go something logistics all mainstream priority And said where that that logistics that we've up midstream else partnered from But that is Yes, of there's going us that -- at in in opportunities the with consider to the need said, need, someone a have before things from cash to one, from would we look filled then day in But generate our does. that of getting sponsor

the for Be guys. Thanks Understood. well. time today,

Thank you.

too. You

Thank you.

you. Thank

Our Joe Martoglio from next JPMorgan. from comes question

line Your is open.

SHLX Hi would Mars that kind question. the on significant how seems progressing, and to guys, ballpark of they an that big to could Wanted be? the kind thanks my ask of do for expansion just how potentially and taking have like of be contribution discussions it are you idea

point, the and guidance anticipate of incremental terms any still Ledbetter. fields. LOIs project Appreciate is with advance to giving just the we in Yes. Joe, expansion Partnership. We're Steve hi, And XXXX have progressing. Vito cash the previously yet that the we in pleased announced the in and Powernap this in At the [ph] place. to of come this not impact we're is Indeed, online question. on

past about a the -- what barrels we've in believe it's day. do XX,XXX it's said I that

still producers Yes. is LOIs And the testament of and the on very continues I and move. bullish that's to the And we in fact the place project in with customers, that to Gulf everyone a think Mexico. the very, have do conversations

and out number. play a half. depends over So anticipate somewhere how around that things It just the year next

new And building question That's Spiro's the on thank you. helpful. about administration. Okay, then

there, Just do no have federal kind will is see of idea guys? of digging in what knows restriction clients kind you if there that. production you look you what of will what one GoM do for But mean a that and kind with -- of you kind happen on the an deeper would and like would of land how progressing

Yes.

the between think existing that as that when to So affect what's So this think the in Mexico you when I would of impact have right? about and place business, take happened would Gulf productions to and got to prove a cases or host and they've prospect. out commercialize contracted it producers, already connect a in up, system. Then long a build leases wells the some it's process

many to to and assets we're to Gulf an Mexico. impact Where But before and the of to have very be the that our in medium about out, longest-term the come they already that are a leases play years funnel. may view, what's bullish from in because continue So will future is out this ever funnel development. would that well-positioned would

taking questions. Okay, That's and helpful thanks great. for my

Thank you.

question from Thank you. And from next TJ our comes Schultz RBC.

open. Your line is

Hey, TJ.

update on negotiations potential Hey, good rig-based morning. [ph] and all? to Any Colonial impact you

Yes.

We're Steve. is this give on any the guidance current going TJ, So not to situation.

to Colonial, that's I and think for there we'd you on back public point questions them out information further is comment. for there

to And Okay, timing then and Dog your X any Gulf, Mad the just enough. update then impact fair in on pipeline on volumes?

We'll that, I'll to have ask at look it of to a on and but aware take I'm get not certainly, back to [indiscernible]. Jamie that one. you

remarks. conclude closing question that And for Parker any to does Jamie today's like back our now over session turn and the you. to conference answer I'd Thank for conference.

you very Partners. Yes. Shell your in interest Thank much Midstream for

my have Thanks, any have as follow-up today's questions found website, If to can free great additional weekend. please well following presentation, our the you as call shellmidstreampartners.com. presentation be information contact on directly, feel a on me everyone, materials,

Ladies and participating Everyone, conclude conference. in the for and have you may today's does day. gentlemen, thank all wonderful you This a disconnect. program