John Randy Burkhalter - Enterprise Products Partners LP A. James Teague - Enterprise Products Partners LP Graham W. Bacon - Enterprise Products Partners LP Bryan F. Bulawa - Enterprise Products Partners LP Tug Hanley - Enterprise Products Partners LP Bradley Motal - Enterprise Products Partners LP William Ordemann - Enterprise Products Partners LP Brent Secrest - Enterprise Products Partners LP Justin Kleiderer - Enterprise Products Partners LP Anthony C. Chovanec - Enterprise Products Partners LP

Shneur Z. Gershuni - UBS Securities LLC Brian Joshua Zarahn - Mizuho Securities USA, Inc. Yves Charles Siegel - Neuberger Berman BD LLC Jean Ann Salisbury - Sanford C. Bernstein & Co. LLC Jeremy Bryan Tonet - JPMorgan Matthew Phillips - Guggenheim Securities LLC Darren C. Horowitz - Raymond James & Associates, Inc. TJ Schultz - RBC Capital Markets Michael Blum - Wells Fargo Securities LLC Keith Stanley - Wolfe Research LLC Nick S. Raza - Citigroup Global Markets, Inc. Becca Followill - USCA Securities LLC Barrett Blaschke - MUFG Securities America, Inc.

Good day. My name is Shelby, and I will be your conference operator today. At this time, I would like to welcome everyone to the Enterprise Products Partners Second Quarter Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you. Mr. Randy Burkhalter, you may begin your conference.

Thank you, Shelby. Good morning, everyone, and welcome to the Enterprise Products Partners second quarter 2017 earnings call. Our speakers today will be Jim Teague, Chief Executive Officer and Enterprise's General Partner; Graham Bacon, Executive Vice President will also speak; and Bryan Bulawa, our Chief Financial Officer will wrap-up the prepared remarks. Other members of our senior management team are also in attendance for the call today. During this call, we will make forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934 based on the beliefs of the company as well as assumptions made by and information currently available to Enterprise's management team. Although management believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Please refer to our latest filings with the SEC for a list of factors that may cause actual results to differ materially from those in the forward-looking statements made during this call. And with that, I'll turn it over to Jim.

Thanks, Randy. Our businesses continued to perform in the second quarter, continuing to benefit from our integrated assets that match supply with demand across all commodities. We reported increases in all of our financial measures and most volumetrics for the second quarter compared to second quarter last year. We generated $1.1 billion of DCF that provided 1.2 times coverage, in addition we increased our cash distribution by 5% to $0.42 per unit and we retained $145 million of DCF for future growth. Work continuous on several large plant and pipeline projects that we have under construction. We also continue to develop new strategic projects. During the second quarter, we approved two large midstream projects for the Permian. In June, we announced our second processing train at Orla in the Delaware Basin. This 300 MMcf a day plant will double Orla's inlet capacity to 600,000 and will increase Orla's NGL extraction capacity from 40,000 barrels a day to 80,000 barrels a day. When Orla II is complete, expect in the third quarter of 2018, we will have about 1 Bcf a day of processing capacity and more than 150,000 barrels a day of NGL extraction capacity in the Permian. NGLs from Orla will be delivered into our NGL integrated system. And we're not done in this basin. In April, we announced the Shin Oak pipeline, it's 24-inch pipeline that will originate in the Permian and transport Permian NGLs to Mont Belvieu. The initial capacity for the line is 250,000 barrels a day, expandable to 600,000 barrels a day with a projected in-service time, first half or second quarter 2019. Also in the Permian, we recently announced that we have executed additional long-term contracts for the Midland-to-ECHO crude oil pipeline that is currently under construction, bringing total commitments to 335,000 barrels a…

Thanks, Jim. I'll try not to get too deep in the weeds this morning, but I want to outline where we are today. You all know that we released our original contractor and replaced him with another contractor OPD, which is a subsidiary of Koch Industries in December of 2015. It's always difficult to change contractors in the middle of a project, but OPD started making a difference the first day. And we believe we're well ahead of where we would have been without making the change. As Jim said, at this point in time we finished all construction activities, and are in full commissioning mode. While we've had some minor issues with the delayed commissioning processes, all our utility systems are in service and we run most of our major rotating equipment on a test type mode. We expect to be introducing propane into the unit within the next two weeks, and I still expect that build to be running and making propylene in the third quarter of this year.

Thanks, Graham. Obviously, we're happy about getting this plant on line. The start-up of this plant is meaningful to EBITDA and DCF, and quite frankly a strategic part of our value chain. Enterprise is working on becoming a fairly major player in niche portions of the petrochemical midstream space. In addition to the iBDH, where we already operate one plant and are building the second, the PDH, our legacy propylene splitter activities and our growing export position in propylene, we also recently announced that our petrochemical team is developing a high-capacity ethylene storage and transportation hub. As a part of that project, we're converting a cabin in Mont Belvieu to ethylene and adding facilities to increase our receipt and delivery capabilities to provide third-party services to the petrochemical industry. There are eight third-party ethylene pipelines within one-half mile of our headers in Mont Belvieu providing significant connectivity opportunities for our high-capacity system. We're also making progress in developing an ethylene export facility on the Ship Channel. In July, we announced that we signed a letter of intent with Navigator Gas to jointly develop an ethylene export terminal. Navigator is the owner of the world's largest combined fleet of handysize and mid-size liquefied gas carriers including the largest fleet of ethylene vessels by tonnage. Combined those types of capabilities with our presence in pipeline connectivity and storage, we believe that our relationship between Enterprise and Navigator could be a good fit. Based just on currently announced projects, U.S. petrochemical industry will be expanding its ethylene production capacity by 45% between 2016 and 2020, and there those expect a second wave. Ethylene storage and logistics including exports is a logical extension of what we at Enterprise do well in our other midstream activities. And I'll finish with a few fundamentals. The only…

Thank you, Jim, and good morning, everyone. I will discuss a few income statement items for the second quarter, provide an update on our growth and sustaining capital expenditures for the balance of 2017, and wrap up with an overview of our balance sheet metrics and capital-raising activities for the quarter. Before doing so, I'd like to add to Jim's earlier comments regarding our financial performance where we maintained 1.2 times DCF coverage during a period which seasonally experiences lower liquid transportation volumes and was also met by a weaker commodity price environment when compared to the first quarter of 2017, demonstrating again the durability of our integrated business model, which is further complemented by exercising financial discipline. Okay. Now moving along to income items for the quarter, net income attributable to limited partners for the second quarter of 2017 was $654 million or $0.30 per unit on a fully diluted basis compared to $559 million or $0.27 per unit on a fully diluted basis for the second quarter of 2016. Net income attributable to limited partners and earnings per unit this quarter included non-cash asset impairment and related charges of $14 million or $0.01 per unit compared to $21 million or again $0.01 per unit for the second quarter of last year. General and administrative expenses were $11 million higher than second quarter of 2016 due largely to transaction expenses related to the Azure transaction in the second quarter of 2017 coupled with the benefit of a legal expense reimbursement settlement in second quarter of 2016. Depreciation, amortization and accretion expenses were $19 million higher when compared to the same quarter of 2016 due to assets being placed into service such our Morgan's Point Ethane Export Terminal and several crude oil terminal expansions. Provision for income taxes increased $9…

Thank you, Bryan. Shelby, we're ready to take questions now from our listeners. And I would like to remind our participants that let's limit our questions to one question and one follow-up question. Okay. Thank you, Shelby. Go ahead.

And your first question comes from Shneur Gershuni of UBS.

Just a couple of quick questions here at this stage. I was wondering if you can talk about your expected equity needs. I think you just said that you're getting $91 million in proceeds from the DRIP. Do you expect to be issuing equity throughout the balance of this year to fund your CapEx needs or does retained DCF and the DRIP sort of cover everything that you need?

The DRIP goes a long way – that goes a long way towards our needs for the third quarter. I think if you use the history as a guide, you can kind of extract from last quarter we had quite a bit of flexibility, we had limited use of the ATM. I think you can expect that to continue.

Okay. And as a follow-up, I was wondering if you can talk about frac and processing margins, seemed a bit light this quarter. Is there a function of a mix shift, I'm trying to understand sort of the cadence of margins with respect to that segment?

So you're asking – I guess, Shneur you're asking what do we think processing and frac margins would be on a go-forward basis?

Yeah. It seemed like it might have weakened during the second quarter relative to where they were. I'm not sure if it's a function of ramp-ups in different areas and so forth. I was just wondering if you can sort of talk about that.

Well, as Bryan mentioned, second quarter is typically seasonally a lower quarter. But as we've seen a rally in crude prices, what we're seeing today is increasing processing spreads. So the second quarter, I can't remember, Tony, we had low-$40 crude prices. That always depresses processing margins, frankly on frac margins. Our fractionators are continued and sold out. So we're in pretty good shape because most of those are locked-in deals and we're beginning to see in the third quarter a little improvement in processing margins. We think you'll see even more improvement, as you enter the fall season with LPG inventories not rolling as much as they did last year and you're going to start seeing a lot of ethylene plants come online, which should be supportive of ethane margins.

Great. Thank you very much. I've exhausted my two questions.

And your next question comes from Brian Zarahn of Mizuho. Please go ahead.

Good morning. Staying on the NGL segments. Any color on the second quarter volumes on MAPL and Seminole. South Texas is understandable, but simply how much of impact or what's taking or what's happening in MAPL and Seminole and is that changing at all with third quarter?

We just named Tug Hanley as running our regulated business. So let's see if he is on top of this game.

I'll give it a shot. So on our Rockies system, we're continuing to see some lower volumes come in, but one of the nice things about our integrated assets is we're also seeing a pickup in the Permian. So we're seeing some of our downstream assets from Rockies namely Seminole and Chaparral if we're starting to see those volumes pick up.

Let's address the Rockies. One of the things we've seen in the – that we're seeing develop in the Rockies is first of all we've done some deals at our Pioneer plant. That plant is going to be built for the next 10 years. And then we've seen EnCana – a lot of these basins and it's what happened in the Haynesville. As you had acreage turnover, we've seen volumes in the Haynesville just go Northeast and then you've seen EnCana sell their Piceance position and we know the people that bought them and they have intentions to put rigs out there. So we expect our Meeker plant to start ramping up over the next couple of years. So we think what's coming out of the Rockies is going to increase. And then I said earlier we're not through in the Delaware Basin and you'll see more plan announcements if Brad Motal is doing his job in the Delaware Basin. The other thing on the go-forward basis is you should see with our – with new cracker demand, I could see more ethane rejection subsiding. So it kind of looks a little brighter than it looked in the second quarter in the future.

Hey Brian, and just a little bit more context. When you compare second quarter of this year to second quarter of last year, volumes on Mid-America and Seminole are flat. Sequentially, volumes are down. A lot of that is just seasonality of weather, but then also you're also going to have pipe being down for regular maintenance in second quarter and third quarter. So typically Mid-America and Seminole volumes are going to be off in second quarter third quarter.

Appreciate the color. I guess just shifting to the Permian, any updated thoughts. I guess building off Jim's recent comments on processing plants as well as the competitive landscape for Shin Oak and then any update on the gas pipe that you're evaluating.

On Shin Oak, I put all the burden on Brad Motal. I think you're going to see – Bill, you can help on this. We don't think we're through in the Delaware and you heard what we just said as it relates to the Rockies. The most reliable supply you can have for a pipeline or a fractionator is supply that comes out of your own plants. As we grow those plants, we think our competitive position is enhanced and we believe that we're well positioned given the – I know, Brian, you all hear it all the time, but that value chain approach works. And we look at bundled services. Our competitive advantage is not Shin Oak in and of itself. Our competitive advantage is the total system and we're not afraid of it at all. Do you want to add to that, Bill?

No, I think what Jim said is we've announced the two plants in Orla. They're both under construction, scheduled to come on in second quarter and third quarter, fourth quarter next year, and Brad and his folks are actively pursuing what could eventually relate to two more similar trains in that area. So I don't think we're finished, as Jim said, and continuing to move ahead.

Just on the gas pipe, any update?

Yeah. We're still working it. Do you want to comment on that, Bill?

I think Brad is still working it where we've had a number of folks come to us, talking about the potential of joint venture or something. We're listening. I don't think we're ready to make any announcements at this point in time. It's kind of tough to make money on those gas pipes because we have to see what the spread does and how it goes, but given the fact that we're seeing a lot of gas coming out of the Permian and the fact that most of that gas is associated gas and the producers are starting to see a little bit more of it as you guys are aware, we think there is going to be a need for a pipe, and the question is who is going to be able to pull it together and pull the commitments together and where is that pipe going to go. So we're continuing to work on it, but I don't think we're ready to take any victory laps at this point in time.

Thanks, Bill. Thanks, Jim.

And your next question comes from Yves Siegel of Neuberger Berman.

Yves, you there?

Can you guys hear me? All right. Two quick questions. Yeah. Good morning.

Good morning, Yves.

So the first question is maybe Jim, you were talking about the crude and producers outlook for controlling the crude. Can you just frame the augment with Corpus Christi and the Houston Ship Channel? And how does it fit into the equation as it relates to congestion in the Houston Ship Channel versus Corpus Christi? Where the producers want to go and are there problems with the Houston Ship Channel given congestion concerns?

Yeah. There's a famous guy in Washington, D.C. that would call that fake news. You look at what producers want. They want to make sure that their product flows and they want market choices. So if you compare, and I'm doing this off the top of my head from a slide that Tony put together on this subject, but just you look at markets, you don't look at docks. So if I'm going to the Houston Ship Channel, I got a market that's up on the Upper Texas Gulf Coast that's really connected to the Houston Ship Channel by a pipe of 4.5 million barrels a day of refining. If I'm in Corpus, I got maybe 800,000 barrels. If I'm going to Houston, I'm looking at 300 million barrels of storage. If I'm going to Corpus, I'm looking at 20 million barrels. If I'm going to Houston, we'll talk about congestion. Congestion is a matter of parking places. If I'm going to Houston, there's 150 docks. If I'm going to Corpus, there's 20 docks. So if I want my product to – the other thing that producers are demanding and Brent says is right, quality is king. They want segregations and they want to control their own barrels. A lot of these guys have already been out, keeping tires in the global markets and they're beginning to understand what those customers want and they want to be in control of their own destiny. So when you're in Houston, you're not captive to a limited market, you've got multiple outlets. And rather than looking at whether a dock can hold a VLCC, they're looking at what's the market opportunities and the export capability is a component, but not the total. So you can tell, I get a little weird on this subject, Yves.

Yeah. Well, if I could just shift gears just a little bit, philosophically how do you think about JVs and there I am thinking about Shin Oak potential JV, number one; and number two and this may sound a little bit silly, but there is always the concern that the industry is going to overbuild and to a certain extent maybe doing JVs prevents some of that from happening in the future, so maybe you can expand on the prospects for a JV with Shin Oak and just philosophically how you think about it?

Yeah, I'm not going to talk about Shin Oak specifically, but I will talk about the philosophy. The philosophy at Enterprise is you think about it. Dan built this company with joint ventures. We got joint ventures in our PP splitters, we got joint ventures in our fractionators, we got more joint ventures in Louisiana than we can count. So joint ventures are something that we're always open to. The criteria is pretty simple though. We don't want your money, we either want you to bring product in or we want you to have an off-take. And for instance, we've got a fractionator in Louisiana that we joint venture with a petrochemical company. So we're wide open to joint ventures. And I think we've said in the past, I think Randy has and Bryan have said in all these conferences they go to, that we would be open to a joint venture on Shin Oak, but it's not something that we're going to – we're going to build this dad-gum pipeline and it's going to be pretty strategic to us.

Okay. Well, thank you very much.

And your question comes from Jean Ann Salisbury of Bernstein. Jean Ann Salisbury - Sanford C. Bernstein & Co. LLC: Hey. Good morning. How hard is it to add LPG export capacity? Are expansions of existing capacity far cheaper than the initial build-out was?

Yeah, people think about LPG export capacity and they think – I'm going to put a dock in, I'm going to buy my propane; it's not that simple. You really need the ability to produce export quality LPG. For example, propane, Graham, is 2%, 2.5% ethane, while domestic is 6% ethane.

Correct.

So you got to have all the infrastructure that supports that, so it's not easy. And to expand it, you've got to expand your capability to produce export quality propane or butane, and you've got to expand your refrigeration and you probably got to add pumps to increase your loading rate, and you better will have high-capacity storage. And that can either be adding fully refrigerated above-ground storage or adding the capability to turn a salt dome cavern into a high capacity. With all that said, it's not easy to add more capacity. Jean Ann Salisbury - Sanford C. Bernstein & Co. LLC: Okay.

Do you agree with that, Bill? Jean Ann Salisbury - Sanford C. Bernstein & Co. LLC: Okay. So would it be fair to say that those with the capability now and the capacity now to export it out of the Gulf are kind of the set of players? It's pretty hard to imagine new people coming in and building a bunch of new LPG export capacity in the next few years?

Well, you're not going to see me leave Enterprise and try to go into that business by myself. Jean Ann Salisbury - Sanford C. Bernstein & Co. LLC: All right. That's helpful. Thank you. And then I just want to make sure I understand the ethylene export terminal. So it would be the same ships that could then switch to exporting ethane. Is your view that probably for the first couple of years it would be ethylene and then maybe you would just start doing more ethane as a share of the ships as demand rises for that going forward from there?

That is a scenario, but the way I look at this is a lot of these new ethylene plants and the derivative plants, and Tony, correct me if I mess up or R.B., a lot of that product, they're going to be exporting as polyethylene. Jean Ann Salisbury - Sanford C. Bernstein & Co. LLC: Okay.

To me, if I were a big producer of ethylene, it's a fairly cheap option. If I can't place my polyethylene to have the ability to load ethylene in order to keep my plants running at rates that I want them to run at. So I think you will see, and I think R.B. can bear this out, is if we're successful in this, we're going to have merchant players who want this because they need it, but you're going to have integrated petrochemical companies want this as an option to their ability to export polyethylene. Jean Ann Salisbury - Sanford C. Bernstein & Co. LLC: Got it. That's really helpful, and that's all from me. Thank you very much.

Your next question comes from Jeremy Tonet of JPMorgan.

Good morning.

Good morning.

Good morning, Jeremy.

Just want to circle back on ethane a bit more here. It seems like prices popped up a bit recently and I was just wondering if you guys could share with us how much rejection you kind of see across U.S. right now. And if ethane rejection is starting to subside a bit more, the impact on your pipelines and just kind of how you see that playing out. You talked a good amount about the demand increasing, which is encouraging to see that.

I think I'll take it. We don't model it day in and day out how much, even though we believe has been rejected. But it's going to move with those spreads, with the ethane to gas spread. So natural gas impacts it also. Regionally, natural gas impacts it. It should be just like it is. There should be movement in this market. So I don't want to say that there has been a sea change one way or another yet. We still are rejecting a significant amount of ethane. And those volumes are going to move with the whims of the market, including the gas market by region.

It's all about demand, but the other thing that's about it is the gas to crude spread. And as these ethylene plants come out, frankly I think you'd have more ethane rejection than you have and you've got a lot. A lot of these guys or producers have commitments, so their variable cost is zero. So they may be extracting ethane basically to mitigate stranded capacity. And then if you look at Enterprise, if own the pipe, then we're going to operate around our variable economics, so we don't have to have the spread that justifies the total.

Great. Thanks for that. And then just want to circle back to the crude oil segment and it seems like the marketing kind of picked up there a bit. And wanted to see if differentials were getting better or anything else that you could expand upon as far as driving the strength this past quarter?

Brent, you got a clue?

It's not necessarily one specific strategy. We had some decent spreads across our docks. Some of the – the prices have gotten healthier in terms of our Gulf Coast markets, but it's not necessarily just one specific strategy. There's starting to be some spreads you're seeing between Midland and Cushing, that helps. Then once our pipeline comes on line from Midland to Houston, then that will help us as well.

Are you seeing spreads where you're exporting more?

Yeah. In terms of exports, August will be a record month for the marketing segment for crude oil. I imagine as crude – Enterprise marketing goes, the industry goes. So we're definitely seeing uptick on volumes of crude oil across our docks in August. We're having record volumes across our docks and refined products, and I don't want us to be (36:12) but I'm going to make the assumption that we're having record volumes for petrochemicals as well.

Great. So if you strip out the mark-to-market noise, is this kind of a new baseline that should grow as Permian production increases?

We'd see appetite for WTI.

So when you talk about WTI, in terms of, I'll call that the Midland-Permian barrel, not the Cushing DSW barrel, there is a healthy appetite for WTI both in the Houston Gulf Coast market and then also across our docks in the global market. So I am not worried about selling it. The question is, where are we going to sell it, are we going to sell it domestically in the Houston market at some point. That market will be saturated and we've said this in the past that barrel will clear across the water, but in terms of who we talk to in the global market, everybody is focused on and everybody is trying to position themselves to take that barrel from the Houston market.

Great. Thank you for that. That's very helpful. That's it for me.

And your next question comes from Matthew Phillips with Guggenheim.

Hey, guys. Thanks for taking my questions. Follow-up on the crude segment here. You are at 83%, you said, for the Midland-Sealy line. I think it's kind of been at that level for a quarter or two now. I mean are you saving the incremental capacity for walk-up or what is kind of the producer outlook in terms of putting more barrels on that system?

I think we're going to be – we say in our notes 405,000 barrels a day, I guess, the idea is that the balance is for walk-up capacity, and hopefully Brent's primarily a walk-up customer. But we're not going to be at 83%, when the pipe comes up, we're going to be at a higher percentage than that.

Got it. And then...

And hang on, just a bit.

Sure.

And you say we've been there for a while, I think we announced this past quarter that we just signed up. And did we say how much that volume was? Yeah basically, we signed up another 100,000 barrels a day. So, it may have been there for a while, if you call a month, a while.

Yeah. I thought it was from last quarter, but I could be wrong there. And then, on the fractionation side, what drove the sequential increase in volumes there? Was that just ethane recovery, or is there something else going on?

Say that again, I'm sorry.

On the NGL fractionation front, volumes increased from around 800,000 barrels a day to 841,000 barrels a day in 2Q. Was that ethane recovery driving that or is there something else going on that we should look out for?

This is Brent talking. But at the end of the day, our frac capacity has not increased, so if our frac volumes went up, either it had to do with some sort of maintenance that we were doing in the prior quarter or it has to do with ethane – the stream having more ethane in it.

We've also had volumes ramping up with our new two plants out in the Delaware Basin plant and the South Eddy plant. And with the purchases of the Pascagoula plant, interest from BP, we've got additional volumes coming into our system that weren't coming into our system before that purchase too, so that may have some impact on it.

Okay. Thank you. That's all I have.

Your next question comes from Darren Horowitz of Raymond James. Darren C. Horowitz - Raymond James & Associates, Inc.: Good morning guys. Jim, I want to go back to your comment on the opportunities across the petrochemical value changes for a minute. And I noticed that in your latest slide deck you've got a chart showing really low U.S. propylene inventories. And obviously one could imply from that that you'd be advantaged to have access to some low-cost propane, especially when the seasonal demand for propylene increases and also what could be a growing arbitrage between, let's just say normal butane and maybe butylene and isobutylene or some of the derivatives. So how do you see for you and your book that opportunity developing into the end of this year? And what more can you do to capitalize on that?

What you've been doing? You've been reading chemical for dummies. Darren C. Horowitz - Raymond James & Associates, Inc.: I've been trying to steal Brent's playbook.

Yeah. Thanks, Darren. I think it's pretty obvious that, when we look at extending the value chain – Enterprise has always been in petrochemicals. The first tower that Dan built out there was a propylene splitter out in Mont Belvieu. So we've always been in petrochemicals. We like the idea of moving further downstream. So, if R.B. can pull it off, I really like the idea of building an ethylene storage, logistics and potentially export system. It's our way to be in the ethylene business, without going whole hog. So, iBDH, and we love the isobutylene, it's an extension of C4s, PDH an extension of C3s and we see this as our way of extending our C2 value chain. I don't know if that answers your question, but the point is yeah, we are focused on going further downstream. Darren C. Horowitz - Raymond James & Associates, Inc.: Yeah. I think that makes sense. And then from a follow up more of a housekeeping question, and Bryan I apologize if I missed it. But what's the amount of the debt currently or I should say capital currently allocated on that working cap facility for as you said those "short-term contango" opportunities?

Yeah. It's right around $800 million and typically we are right around $300 million. Darren C. Horowitz - Raymond James & Associates, Inc.: Okay. And I would expect that to increase, is that fair?

Well, it kind of depends on what happens with the market. So, that's the thing is that, it certainly has gone longer than traditionally, but we've kind of been in a slow recovering market here. So, hard to say to project out as far as how it will move.

This is Brent talking. I'd say look at the foreign markets on what we do contango on and that will probably give you the answer. Darren C. Horowitz - Raymond James & Associates, Inc.: Yeah. All right. Thanks guys. I appreciate it.

And your next question comes from TJ Schultz of RBC Capital Markets.

Hey, guys. Good morning. First on PDH, just two parts to the question, I guess. What type of ramps should we be expecting over the next few quarters as it starts up? And then second where does litigation with the original PDH contractors stand right now?

Let's go to the second one first, TJ, you want to answer it? You don't want me answering that question.

The case has been filed and is progressing through the discovery phase right now.

That's about all you're going to get from a lawyer, TJ.

No pressure at least on that litigation that we should be expecting?

No.

No.

And then what about the ramp as it starts up?

Yeah. As far as the ramp up, we expect a little bit of a shakedown in the fourth quarter and really fully up and operational at full rates in the first quarter of next year.

Okay.

And TJ you know, he's going to get one hell of a lot of pressure on that.

Yeah, understood, understood. I guess the last question from me would just be on the structure. You guys have studied the FC structure and then you've made comments about kind of checking the box to be taxed as a C-Corp is really a limited taxable event, and all this depends on your view of access to capital in the MLP market. But just as you think about the project backlog over the next couple of years and funding needs, what's the current thinking on access to capital as it relates to your structure right now?

Yeah, TJ. This is Randy. Yeah, I mean, we continue to come in and evaluate structure and form, but really no new developments on that front. I think as far as access to capital, and if you would, the projects that we currently have under construction, we feel like, we've got good access and good cost of capital. So we're pretty contained with where we are.

Okay, great. Thanks Randy.

Your next question comes from Michael Blum of Wells Fargo Securities.

Hey, good morning everyone.

Good morning, Michael.

Can you remind us again, just the latest in terms of your thinking on how has the ethane export dock ramps up, how that's going to sequence versus capacity and actual volumes over the next whatever a year, two years?

Yeah, thanks. Some of these guys are still finalizing their facilities, which probably is going to create some deficiencies I would think, whereas Justin some time in his first phase. But I think we – I don't even remember what the ramp is, did you Justin? I guess its mid next year before we're fully loaded.

Yeah. It should be mid next year, I would say, volumes that we've published across the dock here aren't necessarily reflective of where we are contractually. So we're still behind on the contractual versus physical side, but we expect that to increase as we get to the next 12 months.

Okay. And then maybe just turning to the Northeast for a minute. Any updated progress on Centennial? And just maybe within the context of that, just your latest thoughts on kind of the supply demand dynamics for Northeast NGL markets? Thanks.

Yeah. This is Bill. As far as Centennial goes, we just were not able to pull the interest together that we would need to do a project of that magnitude at this point in time. I won't say we've totally given up on it, we will continue to keep our pulse on it. But at this point in time, we just haven't been able to pull together the interest in that project.

Okay. Thank you.

Your next question comes from Keith Stanley of Wolfe Research.

Hi. Good morning. You guys have talked some about growing Asian demand for LPG. Just curious if you have any updates on contracting efforts for LPG exports or are you seeing a lot of interest in extending contracts and are you actively working on that or comfortable waiting a couple of years first?

We're not comfortable waiting on anything; I'm about as impatient as they come. But what we're seeing is, I believe, growing demand. And I think – I just got back yesterday morning from Asia, and these guys are reaching the point where they're fairly dependent on U.S. exports. Strategically, if you look at it from – as they put their portfolios together, what would be the price out of the AG if it weren't for U.S. exports. And, yeah, we're constantly working to extend contracts. I'm not so naïve that I think those contracts are going to be extended at $0.12, $0.14 a gallon, but they're going to be extended, and there's an appetite for them.

Okay. Great. And just one follow-up. Just any latest thoughts on M&A? Are you more optimistic you'll find sort of smaller tuck-in type acquisitions like Azure, do you think there will be sizable opportunities as well over the next year or so?

We don't have a clue. We constantly look out – I'll let Randy chip in, in a minute, but we look at a lot of things, but we're pretty disciplined. We're not going to go buy something just to say we're buying something. We'd rather build, we get a better return on that. But I'm not going to tell you that we don't constantly look. But when you look back, heck, the largest acquisition we've ever made was the Oiltanking acquisition at $6 billion. So, yeah, we'll continue to look. If things like Azure comes along, we'll jump on them. But it's not like we need them to grow. You got anything?

Okay.

Okay. Your next question comes from Nick Raza of Citi.

Thank you. Just a couple of follow-up questions. In terms of the walk-up volumes on ATEX, is there an opportunity perhaps to firm some of those up?

I didn't hear the question. I'm sorry.

Walk-up volumes on ATEX, can you firm them up?

Okay. You know, kind of a timely question, because I didn't hear you, because Randy and I were talking about the Northeast. There are producers who seem to think, we've got a lot of easy to add capacity, and that's not true. I think our capacity on ATEX will pop out or tug at 144 million, 145 million (51:10); beyond that it's pretty darn expensive. So I was a little surprised that – well I wasn't surprised, but somebody asked earlier about Centennial, I think these guys are going to be challenged on takeaway, in particular on NGLs. But, I understand, because a lot of them have so much stranded capacity on natural gas pipelines, I mean, it's hard to make a 10-year commitment. And on the money we're talking about on Centennial, we're not going to do that without the kind of commitments that will support the size of the investment. You got anything to add?

Yeah. The only other comment, and again this falls back up on Michael Blum's question earlier is, out of the Northeast from an NGL perspective, there's a limited number of outlets and what we're seeing, if you have a ripple due to maintenance on one of those outlets, just like what we're seeing in the month of August on ATEX, we're going to be at record volumes on ATEX, because of pipeline maintenance on other facilities. So, sort of still limited outlets.

The other thing is when you talk about firming up walk-up capacity, you really can't, I mean, all the movements through ATEX are FERC regulated movements. And FERC requires that we hold 10% of the capacity related to those movements back for a walk-up capacity, so we can use it, others can use it, but there's really no mechanism out there where we'd be able to firm it up.

Got you. Okay. That's very helpful. And then just turning really quick to Orla, you mentioned you may have more projects in the backlog and essentially more expansions. I think you said it could be two more. But, at what point, do you think you could have enough of critical mass to actually do the pipeline, and particularly your natural gas takeaway pipeline? Is it after the ones that you already have in execution come online or do you have to announce more projects before you have enough volume aggregated to actually make a project viable?

Well, from those plants, we've already got a natural gas takeaway pipeline that's going to be built into Waha. But I don't know that we're talking about building a natural gas takeaway pipeline specifically for those plants. I think what we'd be talking about is a pipeline linking the Waha market to the Gulf Coast.

Right, exactly. So, I mean essentially, if you control the molecules say of – or you control the molecules into Waha, you could conceivably control the molecules downstream. I guess the question that is really, just how much volume can you sort of aggregate, at which point in time you can actually have a pipeline system or a viable opportunity to make the pipeline system down to the (54:06)?

Hey, this is Brad. As a follow-up to what Bill said, technically we don't control those molecules. So we're just getting them to Waha at this point. What I can tell you is, our growth on the gathering and processing piece, it helps support it, but I would say you still – as Bill said, looking to leave Waha, which effectively means you need to aggregate volumes outside of the volumes that leave our gas plants to create a project that's viable in the competitive market as it is for this kind of pipeline.

We tend to aggregate and control much more on the NGL side out of those plants than we do on the gas side out of those plants; the producers tend to like to hold onto their gas.

Okay, that's very helpful. Thanks, guys.

Your next question comes from Becca Followill of U.S. Capital Advisors.

Good morning guys. One of the more recent themes we're hearing out of E&Ps this quarter is higher gas oil ratios out of the Permian with not necessarily lower oil production, but more gas and liquids per barrel and some discussion of upsizing plants as a result. Beyond the normal course of business with your customers, have you had any discussions on this?

No, not really. But higher GORs with the same amount of oil results in more gas that needs to be moved and more NGLs that are going to be produced and need to be moved. So we're going to obviously keep our finger on the pulse there. First, we really started hearing to that was in last couple of days, so we're going to be talking to those producers and trying to understand it a little bit better.

Super. That's all I needed. Thank you.

Your next question comes from Barrett Blaschke of MUFG Securities.

Hey guys. A lot of mine have been answered, but I did want to ask a little bit about, not necessarily around one of petrochemical crackers, but the drilling round two crackers and your outlook there and where you see those developing?

I'm going to let Tony take a shot at that, because he believes in the second wave, I'm just looking forward to the first wave getting here.

So given what the U.S. has from a supply situation, we are talking to a significant amount of people that appear to have an interest in continuing to build on the U.S. Gulf Coast incremental ethylene capacity. So I firmly believe that there will be a second wave, call it in the early 2020s. Obviously I can't talk about who that is or I couldn't even speculate which ones will go through, but many of the people we're talking to just like you see today on the ethylene crackers are foreign players that want exposure to U.S. NGLs.

Okay. And just a quick follow-up. I think we're all very aware of what the risk picture looks like as midstream players go closer to the wellhead. You guys are obviously doing more going downstream and going further away. Could you give us a little bit of color around sort of what the different risks are as we move that direction versus towards the wellhead?

What we're doing costs more money and it's harder to duplicate, pure and simple. We think that from a – Brent, maybe want to chime in on this. But the easiest thing to do is build a gathering system and get a dedication and call yourself a midstream company. What we're seeing is producers and we'll use the Permian as an example. The producer is going to dictate what that gather would does for him, and he is going to dictate whether or not he wants – what kind of segregations he wants. So we're going to fill this pipeline up and we will build out into certain basins, we will do things, like buying the Eagle Ford system from Pioneer, but our focus is, we like things that have a high barrier to entry, and we like things that add to our downstream value chain. Brent?

That's exactly it. I mean, I think upstream of hub markets is incredibly competitive and at some point, you step out of that arena, and so I think we'll pick and choose as Jim said, but usually when we choose, it's when the larger producers wants us to control those barrels all the way to where they want to go, and actually they're going to be in the Gulf Coast refinery market or across our docks, and they want one midstream provider to handle that barrel without having anybody else touch it. So that's probably when you see a step out somewhere that'll be the lead.

I think the same holds true in the gas and NGL side of the business.

Okay. Okay. Thank you.

Okay. Shelby is that all our callers?

There are no further questions.

Okay. Included in the e-mail from Pam Bricker this morning was a replay information for our call today. It would be good Shelby, if you just repeat it to our listeners and then that will end our call.

This call will be available for replay beginning at 1 o'clock PM Eastern Time today through 11:59 PM Eastern Time on August 10, 2017. The conference ID number for the replay is 49822181. The number to dial for the replay is 1-855-859-2056 or 404-537-3406.

Okay. Thank you, Shelby. And that ends our call today and thank you for joining us and have a good day.

This concludes today's conference call. You may now disconnect.