Good day, everyone. Thank you for standing by. Welcome to the PAA and PAGP First Quarter 2019 Earnings Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Roy Lamoreaux. Please go ahead.

Thank you, Hanna. Good afternoon, and welcome to Plains All American's first quarter 2019 earnings conference call. Today's slide presentation is posted on the Investor Relations News & Events section of our website at plainsallamerican.com. Slide 2 contains important disclosures regarding forward-looking statements and non-GAAP financial measures. The appendix includes condensed consolidating balance sheet information for PAGP. Today's call will be hosted by Willie Chiang, Chief Executive Officer; and Al Swanson, Executive Vice President and Chief Financial Officer. Additionally, Harry Pefanis, President and Chief Commercial Officer; and Jeremy Goebel, Executive Vice President, Commercial; and Chris Chandler, Executive Vice President and Chief Operating Officer along with other members of our senior management team are available for the Q&A portion of today's call. With that, I'll turn the call over to Willie.

Thanks, Roy. Good afternoon, everyone and thank you for joining our call. Let me begin by hitting the high points of the information we released today. This afternoon, we are pleased to report first quarter results that meaningfully exceeded our expectations as outlined on slide 3 and as Al will discuss in more detail. These results reflect strong performance in our margin-based supply and logistics segment and fee-based earnings that were aligned with expectations. Accordingly, we have increased our full year adjusted EBITDA guidance by $100 million plus or minus $2.85 billion for the year. With respect to positioning PAA for the future, we continue to execute on several key initiatives to create enduring value for our investors. In April, we announced the completion of our August 2017 deleveraging plan, updates to our financial policy and targeted metrics and an increase to our common unit distribution. As detailed in the announcement, we're taking a balanced long-term approach to enhancing per-unit value creation through our commitment to improving financial flexibility and making discipline investments and prudently increasing cash return to equity holders over time. We will continue to optimize our system and drive for improved returns. Over the past three years, we've executed approximately three billion of divestitures, several of which have been through strategic JV and joint operating agreements that have bolstered the durability and visibility of our fee-based business while allowing us to reduce debt and fund a large portion of our growth capital. Optimizing our existing capacity, leveraging our systems to sanction capital efficient projects and pursuing strategic JVs and divestiture opportunities have been and will continue to be central to our ongoing strategy. We remain highly focused on capital discipline and project returns and if sanctioned a number of additional strategic and accretive projects that bolt-on extend…

Thanks Willie. During my portion of the call, I'll share a brief recap of our first quarter results update to our 2019 guidance and growth capital program and provide an overview of our current capitalization, liquidity and leverage metrics. I will also address one accounting-related item. We recorded first quarter adjusted EBITDA of $862 million, which represents a year-over-year increase of more than 45% and was driven by strong performance in our S&L segment. Our first-quarter fee-based results of $583 million are summarized on Slide 7 and represent a year-over-year increase of 12% or 17% when adjusting for the impact of asset sales. The first quarter fee-based results decreased by 4% versus the fourth quarter of 2018. This was in line with expectations and was driven by lower volumes on certain pipelines resulting from narrower differentials and other factors including one-time items and higher operating expense including property taxes from assets placed into service. As illustrated in Slide 8, we have increased our 2019 adjusted EBITDA guidance by $100 million to plus or minus $2.85 billion. This increase is driven by our S&L performance in the quarter and is attributable to favorable regional basis differentials in both our NGL and crude oil businesses. That said, we continue to expect our S&L results in 2020 to be materially lower than 2019 as new pipeline capacity is placed in the service and logistical constraints are alleviated. Additionally, as Willie noted, we are increasing our 2019 capital program by $250 million with $200 million as a result of sanctioning the St. James expansion, the Marten Hills terminal, several new complementary Permian projects and the new Midland pipeline control center related office facilities. The remaining $50 million of the increases associated with increased costs on our Cactus II project and scope changes on a…

Thanks Al. So we're on track with each of our goals for 2019. A summary of our goals and key takeaway from today's call are shown on Slides 10 and 11. The execution focus, optimizing our assets to improve returns and capital discipline are central themes throughout the updates that we share today. Additionally, we continue to focus on additional asset sales and strategic joint ventures. Proceeds from these transactions along with any S&L, excess profits will be used to fund capital for reduce debt. We expect the rest of 2019 to be very active as we continue to execute our plan and position the company for the long term. We look forward to sharing additional updates with you in a more detailed discussion at our upcoming investor day on June 11th in New York. With that, I'll turn the call over to Roy.

Thanks Willie. As we enter the Q&A session, please limit yourself to one question and one follow up question and then return to the queue if you have additional follow-ups. This will allow us to address the top questions from as many participants as practical in our available time this afternoon. Additionally, Brett Magill and I plan to be available this evening and tomorrow to address additional questions. Hanna, we're now ready to open the call for questions.

Thank you. [Operator Instructions] We'll go first to Jeremy Tonet with JPMorgan.

Hi, good afternoon. Just want to start off with a Cactus II pipeline if that's okay, want to see how things are progressing there and thoughts on time lining when that could get partially and fully on service and some of the competing pipes out there. I think had mentioned some inflationary cost pressures, so just wondering if you have anything to comment on if you're seeing that. Thanks.

Hi Jeremy, this is Willie. Let me start with this and I'll ask Chris Chandler to chat a bit more about that. So Cactus II is on schedule. We expect to have that in service Q3 of 2019 for the first phase and the second phase in the first quarter of 2020. And we have had some cost creep, but I will let Chris address that.

Sure. Thanks Willie. This is Chris. We are seeing some cost pressure on both the material and labor side of the project. As you would expect, there's multiple pipelines being installed in the area and there is quite a bit of competition. But our total forecast for the Cactus II project is consistent and within about 10% of our budget for the project.

That's helpful. Thanks. And just turning over to Capline, was wondering that change in ownership structure here, if there has any impact on what the reversal project as far as if the government changes, does that mean that the scope of this project could change? And is there anything in your CapEx budget this year for Capline at this juncture?

So the first question on the governance piece, it was necessary to convert to a partnership to conduct a joint open season. Historically, it's been under a JOA, which we had three undivided interest owners which effectively three pipes within a pipe. So it was just necessary for the conversion and conducting an open season to have one tariff and to go to the market with one offering. As far as capital goes, Capline will get sanctioned. Within the budget now is just associated with shutting down the pipeline and purging the pipeline. Going forward, it will require commercial support and as Willie said in his prepared remarks, we're evaluating the open season, which goes today and as soon as we have something to report, we will.

Jeremy, we've given guidance before on the project being roughly $250 million net to us. If we go forward with it, it'd be a fairly modest amount in 2019 with the majority of the dollars being spent 2020, 2021.

Great, that's helpful. Thanks for taking my question.

Thank you.

We'll go next to Shneur Gershuni with UBS.

Hi, good afternoon everyone. For the most part, it’s pretty straightforward quarter and so forth. I was just wondering if we can spend some time talking about for starters, your dividend guidance of plus 5% for 2020 and 2021. Is that where you expect fee based earnings to grow in the 2020 and 2021 period? What can we read from that guidance?

Sure. I won't read that into it. As I commented, we have 190% coverage and so we then try to link that to any specific item. We did – our looking at what we think our CapEx program will be and leverage and migrating that down. But we weren't linking that to a cash flow or a DCF type of growth number.

So there's no read through with your 8% growth rate in fee-based you declining down? There's potential for it to be higher than that I mean, is that one way to think about it?

Yes. We haven't guided 2020, 2021 EBITDA growth. Again, what we wanted to do was to communicate that don't expect another 20% next year of growth when you're sitting with 190% plus coverage this year on the distribution.

Shneur, this is Willie. I think the other piece of it is just we've got CapEx that we're spending. We just want to ensure that we can cover the equity portion of the CapEx over that period of time.

Right. Okay. And maybe that sort of leads into a follow up question. I mean your – part of your earnings driver this quarter is obviously S&L, which is viewed as temporary at times by you guys. But in general, I was wondering if you can sort of talk about the lower leverage target that you put out there. Where the agency is pushing forward is that something that that we have seen out there. And maybe if you can sort of talk about the excess earnings from S&L as a potential source for buybacks on a go-forward basis. Is that kind of a way to be thinking about it? Just sort of if you can sort of talk about the pieces to the puzzle there.

Al, why don't you take that?

Yes. Clearly, our leverage target and bringing it down was part of view of what made the most sense for how we want to run the company, how investors were looking at the company, how rating agencies were looking at the company. Shneur what you got to remember is our target of 3.0 to 3.5 times for long-term debt to adjusted EBITDA. We do incur short-term hedged inventory debt and we do have preferred securities that have a 50% kind of debt component in the rating agency guy. So on a kind of normalized basis, you got to allow for that. So if you look at the three to three and a half, took the midpoint, those two adjustments can sometimes add up to 0.75 turns so that would be roughly a four. Most of our large cap peers are either targeting something close to that or are already there. So no one kind of entity kind of nudge this to it. But we think it's prudent and we think we need to be a mid BBB entity. I do think longer-term your comment about S&L as we get to where we want to be financially would provide a source of funds for an opportunistic share repurchase and/or funding capital or reducing debt further to create dry powder, but we're a little bit away from that. This particular cycle where we're seeing stronger S&L, it's really going to fund the capital program and reduce debt.

The prudency makes perfect sense. Thank you very much for the clarity. And have great day guys.

Thanks.

We will go next to Gabe Moreen with Mizuho.

Hi. Good afternoon, everyone. If I could ask a little bit, Exxon is out there talking about upsizing accelerating plans at the Permian. You talked a little bit about, I think you're partnering with some on the long-haul things, can you talk a little bit about to what extent you might be working with them on gathering are the intra-basin side of things?

Gabe, this is Jeremy Goebel. We can't speak on particulars about how we're working with them in the basins, but clearly we're aligned on with Exxon commercially on the long-haul project and that does present all the other alternatives from a marketing or intra-basin standpoint.

Okay. And then maybe if I can ask on the Wink-to-Webster project, it sounds like you're recently optimistic about signing additional customers. Can you speak to maybe the return profile on the project? Would you ever need to maybe upsize it if you sign up additional customers in terms of a CapEx – from a CapEx standpoint.

Gabe, this is Jeremy again. I would say that the 36-inch pipeline, as we stated in January, the pipe's been ordered and the initial scope and budget that we put out was for full main line capacity, which could be up to 1.5 million barrels a day, but it's greater than a million barrels a day. And we would expect to continue to talk to shippers, committed shippers and potentially equity partners in the pipeline. But we're in the midst of those discussions now and prefer not to speak to that at this point, but we feel the project will be successful and well in excess of our minimum returns.

And Gabe, this is Willie. I think you're thinking about it correctly. Remember we sanctioned the project with adequate commercial support and that would be consistent with our 300 basis points to 500 basis points over weighted average cost of capital. So hopefully, if we are able to get additional people on the project, it not only serves as a good project for them, but it increases the return of the project beyond that.

Thanks guys. Appreciate it.

Thanks Gabe.

We'll go next to Justin Jenkins with Raymond James.

Great. Thanks, good afternoon everyone. Willie, I want to start maybe with the more macro oriented question here on crude quality and it’s something we get quite a few questions on. Maybe just thinking about how API gravities changed in the Permian over the past few years and the challenges or opportunities that, that presents for you guys and the industry as a whole.

Yes I’ll start with this and I think maybe Jeremy and/or Chris can add and certainly Harry can add as well. We've been a pretty big proponent of making sure we’re talking about quality. If you think about the projects we have built and continue to build, it's really around three things, it's flow assurance, it's quality, maintaining the quality of the segregation and access to markets. And I think what you're seeing now is over the last number of years, the API gravity has gotten lighter and lighter. And in our view, we've started to hit limits where the U.S. refiners have started to push back and it doesn't make as much sense to run the life barrel on their facilities. And to that point, you're starting to see more price transparency around Midland with the life barrels, including the addition of an additional marker out there called WTI Light, which will give a little more transparency to the pricing. And the reason I tell you all this is, again, if you've got a system that is built for segregation, I think that's going to be a more important component going forward of being able to make sure we maintain the segregations of the different crudes to be able to get it to market and preserve quality of all the basins – all the barrels in the basin.

Perfect thanks for that Willie. And I guess follow-up question is probably for Al. How do we stand here today in terms of where the kind of portfolio optimization process is and maybe if we're targeting anymore incremental asset sales throughout 2019 and beyond? Thanks.

Yes, I think Willie touched on it, but yes, we continue to try to manage our portfolio, look for opportunities to either sell assets or bring in partners that can support them, that buy into a part of an asset and bring volume to it. So we're continuing that. But we aren't setting a specific dollar target. We don't believe – we did for a couple of years when it was more to help explain how we were finding things, but nothing has changed as far as our approach and our discipline around that. We think it's a very positive way to challenge our business, and we continue to do so.

Got it. Thanks guys.

We'll go next to Michael Blum with Wells Fargo.

Hi, thank you. I guess first question is just, I think, you addressed Capline, but in terms of assuming Diamond expansion and Red River both move forward as FID projects, would that materially impact your 2019 CapEx? Or that spend be more in 2020?

Michael this is Willie. For 2019 it would be a modest increase to the tune of between the projects maybe $100 million to $150 million order of magnitude, just to give you some perspective, and the majority would be in 2020.

Great. And then second question was just on S&L. So I guess prior quarter, you've given guidance, you had said you'd locked in the majority of that with hedges. Just trying to understand outperformance here, was that up above and beyond what you hedged? Is it in Canada? I just want to get a little more details on exactly what transpired during the quarter.

It’s sum of both. We didn't fully hedge, but what we were trying to say on the last call was we're comfortable with our $350 million partially due to the fact that we had hedged a substantial amount of it. But we don't hedge hundred percent of things where operational offsets could cause volumes not to move, that type of thing. But we did see stronger NGL performance as you alluded to.

Great, thank you.

Thanks Michael.

And we’ll go next to Dennis Coleman with Bank of America Merrill Lynch.

Great, thanks for taking my questions. If I could start with just one detailed point, just because a lot of these open season seem to conclude with an extension of an open season. Did I hear it right, the open season for Capline close – it did close, it won't be extended?

We should probably let the operator speak to that, but it's our understanding that we have closed the open season.

Fantastic, that's good news. I guess just, maybe one other question on the, $250 million of projects that you added, maybe I missed it, but did you give any, I mean, what's the timeline on some of these things, is it – are they short term projects, will they impact 2020 earnings? And can you give any – speak to any kind of return metrics that we might use?

Sure. Dennis, this is Chris. Al covered the details in our prepared remarks, but just to recap, we're investing an additional 2.4 million barrels of capacity at our St. James terminal, that's about six tanks backed by third-party commitments. We have a new terminal being built in the Martin Hills region of North Central Alberta that will place volume into our Rainbow Pipeline. And then we have several complimentary Permian projects. So timing with those would be a typical 18 to 24 months and returns would be consistent with 300 basis points to 500 basis points above cost to capital.

Great. Sorry if I missed that. Thanks. That's it for me.

Thanks Dennis.

And we’ll go next to Jean Salisbury with Bernstein.

Hey can you remind us how much of Cactus I is still take or pay, assuming that the traffic take-or-payments to the Cactus II?

Jean this is Jeremy. We don't publicly disclose that, but we're actually looking to continue to back that site. I wouldn't necessarily look at it because it comes off nothing comes back in. We have substantial commitments in the field, and it's a question of do you convert them from Midland to Gulf Coast basis. So we have lots of opportunities to fill that space with or without specific shippers. [Indiscernible]. Please go ahead.

Remember Cactus I was placed in service a long time before we had any discussions with traffic here, so it had meaningful contractual commitments upfront.

Yes I feel like you – maybe it’s just old information, but I feel like you disclosed 245 right before Trafigura or another 100, but may be that information is old saying that was still the case but…

No there has been – Jean, there's been things in and out since so that's kind of a sales number that's what I'm trying to get to.

Okay, that’s fair. And then as a follow-up over the past few years, private equity has obviously been very active in Permian Midstream. Many observers believe that, that was putting pressure on margins and gathering. Can you discuss whether you're still see that pressure from PE? Or is it easing up a bit now that people have kind of figured out where they're playing?

Jean this is Jeremy. It depends on your area in the basin. I would say the closer to Midland your are the more competition you will see from a gathering standpoint. You'll see more competition from a margin standpoint, which is why honestly we focus a lot out west and it's a larger pull through for our business. But I'd say that depending on the area, you see different pressures from different either strategic or private equity. Certain customers are more open to working with private equity backed teams and there the competition is more intense. Certain of our customers that we have aligned with, you don't necessarily see that pressure because they want an industry partner. So I'd say it's not a ubiquitous, we see the same competition everywhere. So we spend a lot of our business development time and opportunities where we can win and not necessarily have to compete directly with that capital. But certainly there's areas where we just are not competitive because what they're willing to do is inconsistent with some of our investments policies.

That makes sense. Thank you for taking my question. That's all from me.

No problem.

We’ll go next to Colton Bean with Tudor, Pickering, Holt & Co.

Good afternoon. So just follow-up, you noted that the wider spreads drove some benefit to the NGL business this quarter. So how are you guys seeing that play out over the next couple of years here with Whidbey Island starting up, I guess, here in the next couple of months and then Prince Rupert coming on next year. Do you see any impacts to the NGL marketing business?

Harry do you want to take that?

Sure. So yes – the more infrastructure you develop, the more take away capacity that exist. So I think it complements sort of the growing production North America. We’ve really sort of streamlined our business. We think going forward you'll see more stability in the margins and not quite the volatility. So that means whilst that has much downside, it does take away some upside opportunities as well. So I think it's probably going to be more of a factor of the way we've streamlined our business and historical volatility. Long way of saying, those assets will create more takeaway capacity for their growing production North America. But we think we'll see more stable earnings in our NGL business.

So implicitly, the business going forward has less sensitivity to overall basis spreads than maybe it did in the past?

Correct.

Perfect. And then so just on facilities, pretty strong contribution here in Q1. How are you thinking about that in regard to the full year guide? And just on a related note there has been quite a bit of discussion around an increasingly tight frac market in Edmonton. So any thoughts you have there will be helpful.

Harry, I'll take the first part, maybe you take the second part.

Sure.

On the frac market, but yes our facilities segment, we did have a strong quarter, following last year we had a pretty strong year. We've seen excess throughput, we’ve seen some gains in the terminals. We have a tendency to try not to reforecast some of that because you don't know if they'll recur at the same volume metric contributions. So hopefully the business continues to perform higher than our guidance, but we're not certain of that, so we chose to kind of leave it leave it flat. I'll let Harry take the second part of it.

So we have seen a tightening in the frac capacity at Edmonton. I think it's been reflected in our guidance. We see higher rates this year on recontracting we saw last year. But most of the capacity is contracted on one – at least one year terms. A lot of it is multiyear terms as well. So I wouldn't take that to mean that you'd see much upside in our guidance in the facility section because a lot of that was baked into our forecasts.

Okay. That's helpful. I appreciate your time.

Thanks Colton.

We’ll go next to Chris Sighinolfi with Jefferies.

Good everyone this is Vikram Bagri for Chris. I wanted to understand the minor decrease in volume guidance for S&L. Was it driven more by changing producer budgets, or more competition in the basin? And more broadly your peers have talked about basing getting over piped, our analysis also shows that on crude side basis Permian basin will be over piped for some time and tariffs have been going down. How do you see that situation evolving? Is there some repurposing that can take place in the basin or how do you see that situation evolving over time?

Al why don't you take that?

I'll take the first part and I don't if Harry or Jeremy take the second part. But the volume on S&L that you’re seeing down roughly 85,000 barrels a day is virtually all NGL. And it's the streamlining that Harry mentioned, we chose to take a different view on contracting going forward again back to the stability and that Harry just walked through. So that's really what drove the volume change.

On the longer term Permian to the extent that it does get over piped the pipelines that have the strategic advantage and the competitive advantage on the upstream connectivity and sourcing of barrels and downstream, they'll stay full. The ability to segregate barrels, provide flow assurance and market options. The other pipelines that don't, will look for other alternative uses as you mentioned. Take the DJ Basin for instance, the combining of the Saddlehorn Pipeline, the conversion of White Cliffs, that's an example of what a basin does when it gets long capacity. So you would expect things to happen in the Permian as well. No one sits still in perpetuity. So you'd fully expect the industry to respond in instances where you're over piped.

Great. Then just as a follow-up, when is St. James storage coming on line, the additional storage that you're building? It seems like you're preparing for Capline diverse so the date of that storage coming online will coincide when Capline comes online. And then if you can talk about whether this is – you can expand storage further and what kind of opportunities you will see once that decision is made? And how much of an increase in CapEx or opportunities you may announce with the FID of – reversal of that pipeline?

The first component for this expansion is not tied, this is a separate customer that is likely not to kind of participate in Capline, it's just for a local business. Any additional expansion [indiscernible] to Capline successful open season. And once we get the results of the open season we'll be in a position to support it. But it's certainly favorable for the expanded dock capacity at St. James which we’re recently expanding from 250 to 400, that could be complimentary to that. We have an existing footprint and St. James that's capable of expansion for additional customers that have been wanting to export across that dock. And then the Capline dock tankage could ultimately benefit which where owners in as well.

Thank you.

We'll go next to Sunil Sibal with Seaport Global Securities.

Hi, good afternoon guys. And thanks for all the clarity on the call. Just wanted to take a step back from an industry point of view, seems like there's increasing impetus on the E&P side consolidate in Permian. I was wondering if you could talk a little bit about how do you think that impacts your business in Permian, especially when we think about the three legs, the gathering in the intra-basin and the long haul pipeline components of the business?

Sunil, this is Jeremy. One you would say that that's generally positive because a lot of our customers or the larger customers looking for long-term partners in the basin, he flexibility of that system. They generally don't like to consolidate all in one particular market and have access to multiple markets. Quality control becomes important because they want to market the barrel and get the highest value for their product. So we're looking at a customer-friendly model towards the larger customers and then tend to work with them. Several instances this year where there's been M&A in the last 12 months, those have been positive results for us. So history is a measure of what it’s going to look like in the future. We're happy with consolidation and things that plays to our strengths.

Okay, got it. And then my follow-up also on Capline reversal, I was wondering is, is there a certain minimum volume that you would need on the 40-inch pipeline for stable operations when you extension of the project for the reversal of the Capline?

I would say that there's two components, there's a financial component and there's a safety and operational component. And both of those will be guiding principles on how we commercialize the asset.

Any good way to handicap from an operational perspective, what's the kind of flow you need?

I think Chris and his team will work directly with the operator to make sure that we stay within something we're comfortable with.

Yes we've designed the open season around making sure that we have sufficient flow to meet our standards around safety and engineering.

Okay, got it. Thanks guys.

We’ll go next to Danilo Juvane with BMO Capital Markets.

Hi, good afternoon and thank you. Some of your peers have recently talked about the importance of euphemism market for crude logistics and certainly a market for export and viewed Corpus as more of a secondary destination. You've obviously have projects in pipelines going into both locations. I was just curious and what your thoughts are on using versus Corpus as a desire of market for your customers?

Danilo this is Willie. We believe in access to all markets. When you think about what I talked about, flow assurance, quality segregation and access to markets, we want to give solutions to people to get to whatever markets they want to get to. And one thing that we've found over the last year as we've developed some of these projects is there's actually a preference sometimes to use one person's pipe and others docks. So rather than a single solution where you have to go through a pipe and a dock, having the flexibility to get to other docks, as well as your own dock, I think, gives the shippers the most flexibility possible.

Yes, if you think about it it's not like we're building a pipeline to a market and then hoping to go get shippers to that market. Those shippers are telling us where they want to go. So I'm certain there are some shippers that prefer the Houston market and there are others that prefer the Corpus market. And it would be hard to say that one is inferior to the other. The pipes are going to where the shippers want them to go.

And there's certainly attributes of both. If the marginal barrel had to get to the water and they can get efficiently there, one may be better than the other if the intent is to sell to local refiners may be other. Certainly there's attribute to the Corpus ship channel or Ingleside that are preferential to docks inside. So I don't think it's one answer fits all. Once again, it goes to Harry's point that the shippers will dictate where they're most comfortable with and they view logistical advantages. In addition, a lot of these shippers are large enough they want exposure to multiple markets. They don't want hurricane and shut in their entire production fields. So I think there's attributes of all and we're trying to create a mousetrap in the Permian Basin and in the Midcontinent that touches St. James, Nederland, Houston and Corpus to allow for the most flexibility flow assurance and quality control, as Willie mentioned in the beginning.

And Christi.

Thanks to the great color there. My second question if I may, one of your owners at AGP is obviously going through a potential M&A transaction. To the extent that they try to sell down some of their ownership, does that impact you in any way?

No, it won’t.

Thank you. Those are my questions.

Thank you. I think we – maybe have time for one last question, Jeremy. I think you're in the queue…

You get the prize Jeremy.

Thanks for…

Over to you Jeremy.

Thanks for squeezing a second here. Just a couple of quick ones here. I thought as far as developed pipes originating at Wink, do you see the need for more in new commercial storage there especially on the segregation side, given all the different grades that are coming through and producers looking to keep those grades separate, just wondering if you see much storage be needed there and that being an opportunity for you?

Well, Jeremy has been jumping – our Jeremy has been jumping at the bit to talk about this. Go ahead.

Jeremy, good question. The answer is yes. I think you'll see the Wink will be the source for the aggregation point for most of the WTL and condensate. It'll have export capabilities there, it'll have capabilities to move to Midland. So we were creating that, but there's a need for operational storage, one for safe and reliability. So as we move more and more volume through there the Delaware basin grows. So I think operationally the answer is yes, but commercially there is the potential that it could develop into a pricing hub similar to Midland. And so you're going to see different pricing hubs develop and the Gulf Coast and you'll probably see some additional ones using the pricing marker that will start in June but you're already seen some price discovery as Willie mentioned in the condensate. So you're seeing different grades show up from a pricing standpoint, you could see different locations both in the Gulf Coast and within the basins themselves.

And if I could finish one last quick one, differentials in Canada have been coming in now, but just wondering what your thoughts were as far as crude by rail activity out of Canada and how that impacts you guys?

Harry, do you want to take that one?

I'll take a crack at it. Listen, I think, the incremental barrel is going to have to move by rails out of Canada. So we continue to see rail movements out of Canada. As production increases, we think you'll see some more rail activity out of Canada until new pipes come into service.

Yes rail will be the governor and then the other piece is whether or not production mandates get – production cuts get lifted or not.

That’s very helpful. Thanks for taking my other question.

Thanks Jeremy.

Thanks you, everybody for joining the call. Thank you Hanna for your help today. And everybody have a safe evening. Thank you.

That concludes today’s conference. Thank you for your participation.