Plains All American Pipeline, L.P.

Good day and thank you for standing by. Welcome to the PAA and PAGP 3rd Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, press star 0. I would now like to hand the conference over to your speaker today. Mr. Roy Lamoureux, please go ahead.

Thank you, Chino. Good afternoon and welcome to Plains All-American's third quarter 2021 earnings conference call. Today's slide presentation is posted on the investor relations website under the news and events section at plainsallamerican.com, where an audio replay will also be available following today's call. Important disclosures regarding forward-looking statements and non-GAAP financial measures are provided on slide two. A condensed consolidating balance sheet for PAGP and other reference materials are located in the appendix. Today's call will be hosted by Willie Chang, Chairman and CEO, and Al Swanson, Executive Vice President and CFO. Other members of our team will be available for the Q&A session, including Harry Pafanis, President, Chris Chandler, Executive Vice President and Chief Operating Officer, and Jeremy Goble, Executive Vice President and Chief Commercial Officer, and Chris Herbold, Senior Vice President of Finance and Chief Accounting Officer. With that, I'll now turn the call over to Willie.

Thank you, Roy, and thanks to everyone for joining our call. Well, what a difference a quarter makes. Since our last earnings call, oil and gas prices are materially higher as global demand returns to pre-pandemic levels, and the markets are increasingly concerned about a supply-demand imbalance. Once again, the Permian appears to be the obvious choice for increasing domestic oil production, reinforcing our confidence in the long-term outlook for our business. In terms of the third quarter, we delivered better than expected adjusted EBITDA of $519 million, despite some operational challenges at our Fort Saskatchewan Fractionation Facility, and we continue to execute on a number of our initiatives. We have maintained our 2021 adjusted EBIDOC guidance of plus or minus $2.17 billion. This is despite an approximately $40 million negative impact of non-recurring and timing-related items, which includes a fire that we experienced at our Fort Sass facility in late September. Al will discuss the 2021 EBITDA impact related to these items in his prepared comments. With respect to Fort Sass, while it's unfortunate that this incident occurred, I want to acknowledge our Canadian team's execution of our emergency response plan and that fortunately no injuries occurred. Our team has been assessing the damaged area and making the appropriate repairs to return capacity to service in the near future. Now let me shift to our 2021 outlook and positioning for 2022. which is summarized on slides three and four. Notably, we further reduced 2021 investment capital by $50 million and have increased forecasted 2021 free cash flow after distributions by the corresponding amount to plus or minus $1.4 billion. This reflects our continued execution of the goals and initiatives that we outlined at the beginning of the year, which have centered around maximizing free cash flow And consistent with our plan, we have allocated this free cash flow to reduce debt and to execute our repurchase program. And we have improved our visibility to increase cash return to our equity holders, including prudent distribution growth as leverage approaches our target metrics. Additionally, in October, we closed the Plains-Oryx-Permian Basin joint venture and are confident in our ability to achieve the JV synergies that we previously identified. In fact, we expect some of the synergies will be recognized earlier in 2022 than anticipated. An overview of the JV is included in the appendix. With respect to our remaining key projects, the fully contracted Wink to Webster JV pipeline running from the Permian to the Houston area markets is scheduled to enter full service around year end with committed volume scheduling to begin ramping up in first quarter 22 and continuing into 2023. Additionally, the NBC-backed CapLine JV reversal for southbound service from Patoka to St. James is on track. Line fill from Patoka has commenced, which is expected to be completed in December and is on schedule for January 2022 in service date. CapLine's initial throughput is expected to be approximately 100,000 barrels a day, and the system has adequate capacity to serve growth in Canadian production. Regarding sustainability, we have continued to advance on multiple fronts. Since publishing our sustainability report in July, we have received positive feedback from investors, and we've seen notable improvements in our ESG scores from a key third-party ESG rating agency. In August, we announced further improvements to our governance, resulting in 100% of Plains directors now being subject to public election. And just last week, we announced the appointment of Dan Nowak, to the role of vice president, emerging energy and process optimization, and the formation of a cross-functional emerging energy team. Dan has been with Plains for 13 years, most recently as vice president of operations for a natural gas storage business. We're taking a very thoughtful and disciplined approach to evaluating a number of opportunities in and around our existing asset base and operations. We look forward to sharing more information as appropriate in the future. Now let me make some comments about global supply and demand and industry fundamentals that are shown on slide five. And it's further detailed in the appendix. Hydrocarbons are absolutely critical to the global economy. Global demand is recovering to pre-COVID levels, resulting in sustained inventory draws against a multi-year backdrop of reduced upstream investment and a continuation of OPEC discipline. Global energy markets are tight, with shortages in traditional energy sources including natural gas, coal, and crude oil, as evidenced by the increase in most all commodity prices as seasonal heating demand approaches. Global supply chain disruptions are exacerbating product shortages in certain regions and incentivizing increased coal-fired power generation and others. We believe North American energy supply will play a very key role in satisfying global demand, and the Permian is positioned to drive the vast majority of U.S. short cycle production growth. Permian completion activity has increased since our prior earnings call, reinforcing our confidence in the magnitude of production growth, which could be approximately 2 million barrels a day in four or five years, assuming no material change in present-day producer discipline, capital recycle rates, as well as no significant supply chain impacts. We look forward to providing additional updates in February with the benefit of timely data following the completion of producer budgeting season that's currently underway. We believe that Plains is very well positioned to serve the global call on North American energy supply, which also positions us well to generate significant free cash flow going forward, which is summarized on slide six. With that, I'll turn the call over to Al to cover our third quarter financials, full year guidance, and capital allocation.