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Edited Transcript of SHLX earnings conference call or presentation 2-Aug-19 2:00pm GMT

Q2 2019 Shell Midstream Partners LP Earnings Call

HOUSTON Aug 5, 2019 (Thomson StreetEvents) -- Edited Transcript of Shell Midstream Partners LP earnings conference call or presentation Friday, August 2, 2019 at 2:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Jamie Parker

Shell Midstream Partners, L.P. - IR Officer

* Kevin M. Nichols

Shell Midstream Partners, L.P. - President, CEO & Director of Shell Midstream Partners GP LLC

* Shawn J. Carsten

Shell Midstream Partners, L.P. - CFO, VP & Director of Shell Midstream Partners GP LLC

* Steven C. Ledbetter

Shell Midstream Partners, L.P. - VP of Commercial - Shell Midstream Partners GP LLC

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Conference Call Participants

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* Derek Bryant Walker

BofA Merrill Lynch, Research Division - VP

* Gabriel Philip Moreen

Mizuho Securities USA LLC, Research Division - MD of Americas Research

* Joseph Robert Martoglio

JP Morgan Chase & Co, Research Division - Analyst

* Selman Akyol

Stifel, Nicolaus & Company, Incorporated, Research Division - MD of Equity Research

* Shneur Z. Gershuni

UBS Investment Bank, Research Division - Executive Director in the Energy Group and Analyst

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Presentation

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Operator [1]

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Good morning. My name is Kevin, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Second Quarter 2019 Shell Midstream Partners Earnings Conference Call. (Operator Instructions)

I would now turn the call over to Jamie Parker, Investor Relations Officer. You may begin your conference.

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Jamie Parker, Shell Midstream Partners, L.P. - IR Officer [2]

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Thank you. Welcome to the second quarter earnings conference call for Shell Midstream Partners. With me today are Kevin Nichols, CEO; Shawn Carsten, CFO; and Steve Ledbetter, VP Commercial and Business Development.

Slide 2 contains our safe harbor statement. We will be making forward-looking statements related to future events and expectations during the presentation and Q&A session. Actual results may differ materially from such statements, and factors that could cause actual results to be different are included here as well as in yesterday's press release and under risk factors in our filings with the SEC.

Today's call will also contain certain non-GAAP financial measures. Please refer to the earnings press release and Appendix 1 of this presentation for important disclosures regarding such measures including reconciliations to the most comparable GAAP financial measures. We will take questions at the end of the presentation.

With that, I'll turn the call over to Kevin Nichols.

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Kevin M. Nichols, Shell Midstream Partners, L.P. - President, CEO & Director of Shell Midstream Partners GP LLC [3]

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Thanks, Jamie, and good morning, everyone. Thank you for joining me for the Shell Midstream Partners second quarter webcast.

On today's call, I'll take you through our second quarter performance with a focus on our more just recent acquisition, I'll then speak about the results of our Zydeco open season, and I'll close with an update on our key strategic position in the Gulf of Mexico. I'll hand it over to Shawn after that and he'll walk you through the second quarter financials and provide you with updated guidance with regards to tropical storm Barry, which, as you know, impacted the Gulf of Mexico last month.

So let's get started. Starting with the onshore. Quarter-over-quarter results were largely driven by the increased distributions related to the Colonial and Explorer acquisition, which closed earlier this June, and these are 2 of the premier refined products pipelines in the United States, which combined deliver approximately 3 million barrels a day through a network of over 7,300 miles of pipe. And this represents roughly 21% of the total U.S. refined product supply. Both Colonial and Explorer enjoy strategic advantages while serving key markets in the Midwest and the Northeast and these include access to advantaged supply from the Gulf Coast and diversification of services like that of diluent on Explorer. And with this acquisition, Shell Midstream Partners has acquired all of the sponsors' ownership interest in both of these companies. The acquisition was immediately accretive to unitholders, completed in an attractive multiple of 7x forward forecasted EBITDA. This is yet another example of our ability to access high-quality midstream assets from our sponsor, which enables us to deliver on our commitments.

Now let me turn to Zydeco. As announced in June, we successfully completed the Zydeco open season, which resulted in the pipeline being fully subscribed. We are pleased to have demonstrated the competitiveness of the asset by matching the services of Zydeco with the marketplace and the needs of our customers. And in addition to Zydeco's connectivity to key trading hubs onshore, we expect Zydeco to play an important role in the evacuation of crude through an efficient and competitive export route via LOOP, which as of today is the only export hub capable of loading VLCCs. Our assets in this area are some of the most flexible and well-positioned assets to take advantage of this dynamic marketplace as it unfolds. And as always, we will continue to evaluate new business opportunities in the Texas and Louisiana Gulf Coast to provide maximum optionality for our customers and long-term value to our unitholders.

Switching to the offshore, a key differentiator for our partnership. We saw our corridor strategy continue to deliver value as volumes grew yet again in the second quarter despite previously announced planned producer turnarounds. Our total volumes were 2.1 million barrels per day, up 8% from the prior quarter, and we saw new production come online contributing to our growth storyline. LLOG announced first oil from Buckskin, which is expected to have peak production of 30,000 barrels per day connecting into the Poseidon system, and in May, Shell announced the initial production from Appomattox, which is expected have peak production of 175,000 barrels per day connecting into the Proteus and Endymion pipelines. Now this is exciting news as it opens up a new production frontier in the Gulf. As appraisal work continues on fields such as Rydberg, Vicksburg, Dover, Fort Sumter, all of which could tie into Appomattox in the future.

Long term, I continue to remain bullish on the Gulf as the opportunity funnel continues to be replenished. In addition to the previously announced Shell Vito project, 2 new projects took FID this quarter. BP announced the 50,000-barrel per day Phase 2 Thunder Horse expansion, which will flow into Proteus and Endymion, and just yesterday, Shell announced the 35,000-barrel per day Powernap development located in the Mars corridor. Along with Vito, both of these projects are expected to be online by 2021 or in 2021.

As I have discussed in the past, producers are continuing to find innovative ways to accelerate production and drive down breakeven prices. In fact, Shell was able to accelerate the expected first oil date of Powernap by 2 years, and the expected breakeven price on the field is less than $35 per barrel. I continue to be encouraged by what the Gulf of Mexico holds for our partnership. The region remains competitive to the other producing basins and provides the types of crude that the refining industry needs. This combined with our strategic footprint and extensive operating experience leaves us well positioned for the future.

So with that, I'll now turn the call over to Shawn to walk you through the financial performance for the quarter. Shawn?

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Shawn J. Carsten, Shell Midstream Partners, L.P. - CFO, VP & Director of Shell Midstream Partners GP LLC [4]

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Thanks, Kevin. This quarter, we again demonstrated our flexibility to meet our commitments to unitholders. Despite some headwinds, our unique access to our sponsors' high-quality midstream assets coupled with the diversified portfolio contributed to another strong quarter.

So let me cover a few of our key financial metrics for the quarter. Our total revenue was $121 million, down about $10 million from the prior quarter. Now this was primarily related to lower Zydeco transportation revenue due to a third contract expiring in May, fewer deferred credits being utilized this quarter and finally planned producer turnarounds in our Eastern Corridor. As of June 30, the majority of Zydeco credits associated with the 3 expired contracts have now either been used or have expired.

Our operating expenses were $73 million, an increase of about $7 million from the prior quarter. Now as expected, this increase was primarily related to higher project spend on Zydeco and our terminals, as we typically experience higher spend in the second and third quarters. All this was partially offset by a lower cost of goods sold on allowance oil and not having an asset retirement obligation adjustment as we had in the first quarter.

Our income from equity investments was $80 million, up about $10 million from the first quarter, primarily driven by the additional interest we acquired in Colonial and Explorer. And as a result of the recent transaction, Colonial and Explorer are now accounted for as equity method investments. For the quarter, we recognized our share of income on these investments from the closing date of June 6.

Dividend and other income were $12 million, down about $10 million from the -- for the quarter. Now again, this difference is primarily related to Colonial and Explorer now being classified as equity method investments. This impact was partially offset by the receipt of the final order of business interruption insurance related to a producer outage in 2017.

In total, adjusted EBITDA attributable to the partnership was $187 million, up about $17 million from the prior quarter. And after interest expense, maintenance capital and other adjustments, total cash available for distribution was $162 million. Our partnership declared a distribution of $0.43 per LP unit representing a 3.6% increase over the prior quarter. And all of this resulted in the coverage ratio for the quarter of 1.2x.

So now let me move on to a few updates. With regards to tropical storm Barry, we experienced various degrees of volume impacts in and around our assets in the Gulf of Mexico and the Gulf Coast. We anticipate the impact in net income and cash available for distribution to be approximately in the range of $8 million to $10 million in the third quarter. Now while we do not suffer any material damage to our assets, the bulk of this impact is the result of producers shedding in production in advance of the storm. And also let me remind you of the previously guided producer turnaround impacts in the Gulf. We now expect an impact of around $5 million for the second half of 2019 as some turnarounds expected in the third quarter have now been delayed until the fourth quarter.

And finally, in the CapEx space, we incurred $13 million in the second quarter, of which $8 million was related to growth capital. The growth capital is primarily related to continued expansion on the Permian gas gathering system and the Houma tanks.

And now for the partnership's balance sheet and liquidity. As of June 30, the partnership had total debt outstanding of $2.7 billion, which equates to a debt-to-EBITDA ratio of 3.6x based on an annualized Q2 adjusted EBITDA. We're comfortable with our balance sheet, which allows us flexibility as we continue to grow our business.

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

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from Jeremy Tonet with JP Morgan.

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Joseph Robert Martoglio, JP Morgan Chase & Co, Research Division - Analyst [2]

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This is Joe on for Jeremy. First I wanted to ask about IDRs and still recognize that the waiver goes through 3Q. Is it fair to think you guys would, kind of as soon as the waiver expires, want a solution in place? And could you talk about how are you thinking about timing for that?

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Kevin M. Nichols, Shell Midstream Partners, L.P. - President, CEO & Director of Shell Midstream Partners GP LLC [3]

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Yes. Thanks, Joe, appreciate it. I understand this is not a new question and that it's on the minds of all of our investors as to what happens with regards to the IDRs, and frankly also, we haven't given guidance beyond 2019, so you're looking for guidance in 2020 and beyond. Specifically with regards to the IDRs, that's a sponsor's decision. So at this time, I'm not going to give guidance as to the timing or the decision or anything related to the IDRs. I will say that as soon as we have something to say in that space, we will. But no further guidance with regards to timing at this time.

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Joseph Robert Martoglio, JP Morgan Chase & Co, Research Division - Analyst [4]

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Okay. That's helpful. And then you talked a little bit about the Barry impact and turnaround in the Gulf but maybe could you kind of expand there and what type of -- what should we see for the fourth quarter there?

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Kevin M. Nichols, Shell Midstream Partners, L.P. - President, CEO & Director of Shell Midstream Partners GP LLC [5]

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Yes. So I think if I understand your question, it's not so much the impact about Barry. If you do want to have some further detail or a follow-up question, I'll ask Shawn to answer that. But if you're asking about kind of future weather events and what's in the Gulf of Mexico, it's -- look, there's inherent risk to operating anywhere and, of course, in the Gulf of Mexico one of the risks is weather. We don't -- I'm not going to predict or forecast forward weather events, but I will say that I am confident that there's no operator operating in the Gulf of Mexico that has more capabilities, more expertise and knowledge of operating the Gulf than Shell. And I'd also like to remind everybody about the benefits of operating in the Gulf of Mexico, which is a strategic advantage for our partnership. There is growth in the Gulf of Mexico and it aligns very nicely with our corridor strategy in our existing footprint, and I expect we'll be able to continue to take advantage of that and capture that growth for little to no capital expenditure. And also we have been diversifying our portfolio to include things not just in the Gulf of Mexico but elsewhere, as an example, the Colonial and Explorer acquisition that we did, which further mitigates the risk across the portfolio.

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Operator [6]

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(Operator Instructions) Our next question comes from Derek Walker with Bank of America.

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Derek Bryant Walker, BofA Merrill Lynch, Research Division - VP [7]

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Just a couple for me. I appreciate the color on sort of the impacts for 3Q, but maybe -- I know you don't give quarterly guidance, but perhaps should we see 3Q directionally above or below 2Q just given some of these impacts? And just how you're seeing some of the volume growth as well?

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Shawn J. Carsten, Shell Midstream Partners, L.P. - CFO, VP & Director of Shell Midstream Partners GP LLC [8]

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Thanks, Derek, this is Shawn. So a couple of items. I think the guidance hasn't changed, so we still continue on a plan for mid-teens growth in 2019. With regards to Q3 specifically, we have an $8 million to $10 million impact from the Barry, from the tropical storm, and then also we have this $5 million turnaround that we thought was going to be in Q3, some of that seems to be pushing into Q4. So I would expect the bulk of that would now hit in Q4 versus Q3.

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Derek Bryant Walker, BofA Merrill Lynch, Research Division - VP [9]

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And then maybe just, Kevin, you mentioned the IDR color, maybe I'll ask it a little differently just given some recent sector transactions that have been out there. Have you had conversations with Shell just given the -- I guess, the recent transactions and just how that process may unfold for the remainder of the year?

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Kevin M. Nichols, Shell Midstream Partners, L.P. - President, CEO & Director of Shell Midstream Partners GP LLC [10]

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Yes. Thanks. What we've said in the past hasn't really changed and the activity and actions are the same. Shawn and I have continued conversation and dialogue and that flows both ways between the leadership of the company back up to the sponsor. The sponsor watches the marketplace and the segment. They are well aware of what Phillips 66 has done or P66, PSXP and -- as well as other things that unfold. And I know this is really important to everyone and you've asked this question and you're looking for an answer. I would also point you though that in this period of time while you're waiting for the answer from the sponsor for us to communicate that, that we have seen strong sponsor support in the form of the waiver, which we're currently under, the recent transactions that we've acquired, these high-quality assets at very reasonable multiples and then the sponsor being willing to take back units with these transactions. So I would just say that we continue to have open dialogue and conversation. They are well aware of what's taking place in the marketplace.

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Derek Bryant Walker, BofA Merrill Lynch, Research Division - VP [11]

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Got it. And maybe one last one for me. You mentioned the first oil on a couple of projects and some of the recent FIDs. Do you see anything from your end as far as -- whether it's on Proteus, Endymion or Mars that you need to do to receive these barrels? Or is there enough excess capacity there to just take this on, there's not much from an operational perspective that you need to do?

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Steven C. Ledbetter, Shell Midstream Partners, L.P. - VP of Commercial - Shell Midstream Partners GP LLC [12]

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So I'll take that one. This is Steve Ledbetter. It's good to be with you all. I appreciate the question. What I'd say about our approach in the Gulf of Mexico is we continue to look at where we have any constraints and work towards deconstraining those effectively as the profiles continue to grow. At this point, we feel like we've planned appropriately for the flows coming into the Proteus and Endymion systems.

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Operator [13]

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Our next question comes from Shneur Gershuni with UBS.

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Shneur Z. Gershuni, UBS Investment Bank, Research Division - Executive Director in the Energy Group and Analyst [14]

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I just wanted to circle back just to the IDR question again. I'm sure you're frustrated about questions on it in general, but when you say that you're having conversations with the sponsor with respect to the IDRs, is it about which way to proceed with the IDRs, as what premium to pay, or a waiver extension? Or is there actually also a part of the conversation that maybe you just roll SHLX back up into IDRs?

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Kevin M. Nichols, Shell Midstream Partners, L.P. - President, CEO & Director of Shell Midstream Partners GP LLC [15]

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Yes. Thanks, Shneur. This is Kevin. Look, all options and things are under dialogue. That's not one that Shawn and I have actively had conversations around. I would tell you that as the sponsor looks back over the first 5 years of this entity, they are pleased with its performance. They are putting assets into this entity that are very strategic to the integrated value and the performance of Shell in the United States, and we're busy concentrating the midstream assets into one operating organization. So -- well, I won't give you guidance as to what the sponsors are going to do. They take a very long-term view of this entity and playing in this space and that's not changed since the very first day that we went public.

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Shneur Z. Gershuni, UBS Investment Bank, Research Division - Executive Director in the Energy Group and Analyst [16]

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Okay. So just to paraphrase. The entity will continue to exist. What Shell is really trying to figure out is to have long-term view on how investors can recognize the value in it and looking at different options like you highlighted, whether it's IDR conversion or labors or taking back credit? Did I paraphrase that correctly?

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Kevin M. Nichols, Shell Midstream Partners, L.P. - President, CEO & Director of Shell Midstream Partners GP LLC [17]

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Yes. So look, I'm not going to speak specifically for the sponsor concretely one way or another. I would say that RDS looks at this and looks at our strategy going forward as how do we win for the LP unitholders, how does RDS win as well and remember that the RDS owns a good chunk of the LP units and would like to see the stock price and the value grow just like the LP unitholders would.

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Shawn J. Carsten, Shell Midstream Partners, L.P. - CFO, VP & Director of Shell Midstream Partners GP LLC [18]

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And Shneur, I might add, this is Shawn. I mean our sponsor's work is around, how do we make this MLP sustainable for the long run. So our hope is that once we have a few of our questions answered, Kevin and I will be able to come out to the markets and give you kind of the better explanation of how the wheel goes around. So...

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Kevin M. Nichols, Shell Midstream Partners, L.P. - President, CEO & Director of Shell Midstream Partners GP LLC [19]

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Yes. And I think to that point -- that's a good point that you bring up, Shawn. While the IDR piece is a sponsor decision, Shawn and I and the leadership are busy putting together the holistic strategy for the entity going forward so that we can kind of come back at the appropriate time and give you the guidance for the strategy of the entity.

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Operator [20]

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Our next question comes from Selman Akyol with Stifel.

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Selman Akyol, Stifel, Nicolaus & Company, Incorporated, Research Division - MD of Equity Research [21]

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Let me start with a couple of housekeeping questions and then maybe a larger one. So in the Eastern Corridor, you talked about the quarter being impacted by turnarounds. Have those ended in -- have those started back up or is that some of the deferral you're seeing?

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Shawn J. Carsten, Shell Midstream Partners, L.P. - CFO, VP & Director of Shell Midstream Partners GP LLC [22]

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So to make sure I understand the question. Was the question around ongoing turnarounds or new emerging issues to...

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Selman Akyol, Stifel, Nicolaus & Company, Incorporated, Research Division - MD of Equity Research [23]

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Well, just in the Eastern Corridor, you guys referenced that volumes are lower due to turnarounds. And I'm just kind of wondering are those completed or is that part of what you see continuing into?

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Steven C. Ledbetter, Shell Midstream Partners, L.P. - VP of Commercial - Shell Midstream Partners GP LLC [24]

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Yes. So I would say that the turnaround work continues on schedule and it will extend into third quarter, and then as mentioned earlier by Shawn, the other turnaround activity we have some movement from third quarter to fourth quarter.

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Selman Akyol, Stifel, Nicolaus & Company, Incorporated, Research Division - MD of Equity Research [25]

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All right. And then SG&A ticked up sequentially. Is there anything there? Anything unusual?

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Shawn J. Carsten, Shell Midstream Partners, L.P. - CFO, VP & Director of Shell Midstream Partners GP LLC [26]

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Nothing in particular. I think, it's a little bit about some of the activity in the middle of the quarter for some of our assets as well as some of the general corporate items. So nothing to read into that.

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Selman Akyol, Stifel, Nicolaus & Company, Incorporated, Research Division - MD of Equity Research [27]

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Got you. And then just kind of going back to your comments, you guys were thinking about sort of holistic strategy, and I guess when you think about the assets that you could acquire and I guess, I'm not asking what does the sponsor necessarily want to drop down, but if you're just on a blank piece of paper, getting assets and you had your wish list, would you be looking for more onshore, more offshore, more pipelines, more terminals? Is there any sort of thoughts there?

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Kevin M. Nichols, Shell Midstream Partners, L.P. - President, CEO & Director of Shell Midstream Partners GP LLC [28]

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Yes. So thanks for that question. Yes, I kind of go back to our regional markets day that we did a couple of years ago. We look at things around a number of lenses, diversification is one. Diversification takes a number of forms, geographic, onshore, offshore, but also kind of product types, crude oil products, but also the types of commercial contracts, right? Companies and entities that have upside growth like Amberjack and others that are very ratable and can provide ratable cash flow in fixed contracts like we have with the Refinery Gas. So we have a notional view at any moment in time as to what we would like to see given where we are in the markets and what's happening. But I will tell you that as we see different things unfold that can shift when the FERC made their announcement and there was some concern around where will the FERC go, it made sense to add more things that weren't FERC-regulated. So as we look at what the market's valuing and where we see the risk, we could diversify or change our views there, but diversification is key on our strategy going forward.

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Operator [29]

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Our next question comes from Gabe Moreen with Mizuho.

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Gabriel Philip Moreen, Mizuho Securities USA LLC, Research Division - MD of Americas Research [30]

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Just a -- maybe a little bit of a multifaceted question on Zydeco and the open season results. Can you maybe talk about sort of your medium- to longer-term view on the pipeline and the shifting dynamics there? I know that you went -- that there were some shorter-term contract renewals, whether that was your decision, shipper decisions? And then also whether or not there is a possibility to shift tariffs along the pipe, let's call it, maybe in the Louisiana market and where there may be higher demand for end delivery to some of the refiners and offshore ports in the area? So maybe if you could speak to that a little bit and the aftermath of the open season?

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Steven C. Ledbetter, Shell Midstream Partners, L.P. - VP of Commercial - Shell Midstream Partners GP LLC [31]

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Yes. So thanks for the call again -- the question, this is Steve Ledbetter. I'm going to break the question just to make sure I answer them completely. Let me talk a little bit about our approach to the open season first to give you a little color. Then we'll kind of talk about the near medium-term. As you mentioned, there's quite a bit of volatility still out there in terms of supply demand balances at various projects that are being announced, what will come to fruition and indeed our customers took a shorter-term view on that. But we have strong belief in the system and what it can do, the flexibility and the connectivity, being connected to multiple trading hubs, the refineries alike and as well being an important piece of an efficient export route through the only-functioning deepwater VLCC-capable hub. And we believe in our ability to demonstrate that was justified with us being fully contracted to system. If you move longer term, we believe that our ability to continually demonstrate the capability allows us to play in this marketplace. But if you think even in total around our asset footprint, we have quite a bit of flexibility in this area, and we will be able to leverage that to match the needs of the customer for whatever may unfold in the marketplace into the future. Now there's probably other pieces to that.

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Gabriel Philip Moreen, Mizuho Securities USA LLC, Research Division - MD of Americas Research [32]

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Yes, I was just wondering in terms of can you break down the pipeline a little further, for example, in terms of whether you see further demand or greater demand on one piece of the pipe. Whether it's coming out of the open season or prospectively? Whether there is the opportunity to shift tariffs higher, for example, down the line if that ends up happening?

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Steven C. Ledbetter, Shell Midstream Partners, L.P. - VP of Commercial - Shell Midstream Partners GP LLC [33]

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Okay. Appreciate that. So the way we approach this in terms of building the right value proposition matching to what our shippers needed was indeed flexibility. Whether they wanted to move to import and trading hub such as St. James or have a refinery need or have the optionality to play in the export market, that's the way we frame the terms of the open season and was part of our successful outcome. And we see that being a valuable proposition moving to the future. We continue to have conversations with the current shippers about that.

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Kevin M. Nichols, Shell Midstream Partners, L.P. - President, CEO & Director of Shell Midstream Partners GP LLC [34]

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This is Kevin. One thing I might add is a demonstrable piece of proof to that and our flexibility is, if I rewind a few years ago, the market was concerned about the ability to get to St. James and it being constrained and we were overnominated on our 18-inch, and we were able to look at the pieces that we had and put a solution in space against the backdrop of competitive offers or projects that were announced and create a winning solution by offering an additional route on Zydeco and putting a tariff in place on Zydeco through LOOP and low cap out into St. James. So that's just an example of how we can work with the different pieces of the system to create value.

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Gabriel Philip Moreen, Mizuho Securities USA LLC, Research Division - MD of Americas Research [35]

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Great. And I guess, maybe one last on the Zydeco, I'm sorry to harp on it so much. Is there -- would ever be a circumstance where you just say, hey look, we don't want to be contacted here. We're just going to kind of take the risk and go on spot volumes? Or is your view point, hey you'd much rather take contracts here even if they are shorter-term then see what the spot -- Mars spot market may end up kind of giving you? Does that make sense?

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Steven C. Ledbetter, Shell Midstream Partners, L.P. - VP of Commercial - Shell Midstream Partners GP LLC [36]

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Yes, I think it's a fair question and it was also part of our valuation of how we wanted to position the best use of the assets for ultimately meeting the needs of the customers and driving the most value for the unitholders. And as the market continues on both, we will again evaluate those opportunities and decide whether it makes sense and we get a fair value that we believe this system offers and can put that in terms of the contract when we decide to run in the spot market.

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Operator [37]

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We have no further questions. I will now turn the call back over to Jamie Parker.

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Jamie Parker, Shell Midstream Partners, L.P. - IR Officer [38]

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Thank you very much for your interest in Shell Midstream Partners today. If you have any additional follow-up questions after today's presentation, please feel free to call me directly. My contact information can be found in the presentation materials as well as on our website, shellmidstreampartners.com. So this concludes our call for today and have a great weekend. Goodbye.

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Operator [39]

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Ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day.