Good day and thank you for standing by. Welcome to the PAA and PAGP Second Quarter 2021 Earnings Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Without further ado, I would like to welcome your speaker for today, Mr.
Roy Lamoreaux. Sir, the floor is yours.
Thank you, Carl. Good afternoon, and welcome to Plains All American's Q2 2021 earnings call. Today's slide presentation is posted on the Investor Relations website under News and Events section of 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 2. A condensed consolidating balance sheet for PAGP and other reference materials are located in the appendix.
Willie Chang, Chairman and CEO and Alice Watson, Executive Vice President and Chief Financial Officer will host our call. Other members of our team will be available for Q and A including Harry Buffonas, President Chris Chandler, Executive Vice President and Chief Operating Officer Jeremy Goebel, Executive Vice President and Chief Commercial Officer and Chris Herrbold, Senior Vice President and Chief Accounting Officer. Before turning the call over to Willie, I'll note that we will focus today's discussion on our Q2 results and full year guidance. With respect to the Permian Basin joint venture that we intend to form with Oryx Midstream, given that the transaction is not expected to close until the Q4, we do not plan to share any additional information beyond what was provided on our July 13 conference call. With that, I'll now turn the call over to Willie.
Thank you, Roy, and thanks to everyone for joining our call. This afternoon, we reported better than expected second quarter adjusted EBITDA of $579,000,000 and we increased our full year guidance by $25,000,000 to plus or minus $2,175,000,000 Our second quarter results benefited from certain timing related items, which as Al will discuss are incorporated within our full year guidance. A summary of our financial highlights is provided on Slide 3. In previous calls, we have discussed reaching a positive inflection point in our business. We've been advancing a number of initiatives aimed to maximize free cash flow with the near term benefit of accelerating debt reduction while returning capital to our equity holders.
These initiatives take time to develop and materialize and I'm very pleased with the progress we have made with several initiatives coming to fruition since our Q1 call in May. A recap is provided on Slide 4. On asset sales, yesterday we closed the $850,000,000 sale of our natural gas storage business, which was roughly 2 months ahead of schedule. We continue to progress additional opportunities and expect to achieve $920,000,000 in total asset sales in 2021, well exceeding our initial target of $750,000,000 Regarding portfolio optimization, we announced the execution of a definitive agreement to form the strategic Plains Oryx joint venture through a cash flow transaction. This debt free entity will align directly with our optimization strategies.
As for our capital program, we have further reduced our 2021 investment capital by $50,000,000 to plus or minus $325,000,000 or 25% below our February guidance with the majority of the reduction related to the cancellation of the Bejalia Connection project. And importantly, on sustainability, last week we published our 2020 Sustainability Report, greatly increasing our quantitative disclosures, including our Scope 1 and Scope 2 greenhouse gas emissions data, which reflect a reduction over the last 3 years and screens favorably relative to peers on overall emissions. The full report is posted on our website, highlights from which are included within today's presentation. Regarding our macro view, our fundamental outlook remains positive and we expect global crude oil supply and demand to continue to rebalance over the next several quarters. While recent OPEC plus actions have largely been with our expectations, we continue to monitor potential near term headwinds to global demand recovery.
As commodity price signals have increased, producer activity in the Permian ramped earlier in the year and have stabilized in recent months. We expect growth activity to resume as supply and demand balance further improves, which we expect to be mid-twenty 22. We believe Plains is well positioned for a multi year period of Permian growth with significant operating leverage and assets underpinned by high quality long term cash flow. Further reinforcing this will be the completion of our recently announced Permian Basin JV with Oryx, our Wink to Webster entering full service later this year, as well as the completion of projects outside of the Permian such as the Capline reversal. As a collective result of this progress, we further increased our 2021 estimated free cash flow after distributions to plus or minus 1,350,000,000 for $450,000,000 excluding proceeds from asset sales.
As is illustrated on Slide 5, We plan to continue allocating our free cash flow in a balanced manner with a near term focus on debt reduction and allocating a larger percentage over time to equity holders. With that, I'll turn the call over to Al.
Thanks, Willie. An overview of our Q2 results is illustrated on Slide 6 within the context of our full year guidance and directional estimates for the EBITDA contribution by quarter. 2nd quarter adjusted EBITDA of $579,000,000 was roughly $110,000,000 above the high end of the percentage range estimated for the Q2 within our May guidance, which acknowledge the potential for timing shifts across individual quarters. As Willie mentioned and as illustrated on the slide, Roughly $70,000,000 of our 2nd quarter adjusted EBITDA was a function of timing benefits, the vast majority of which occurred within our supply and logistics segment, which represented gains from our decision to monetize Additionally, roughly $40,000,000 of our 2nd quarter adjusted EBITDA was driven by over performance. The majority of our over performance occurred within our transportation segment and is incorporated within our updated full year guidance.
Our performance is driven by stronger throughput across various pipeline systems and hub terminals, plus a degree of OpEx savings. Additional detail on our 2nd quarter fee based segment results is summarized on Slide 7. An overview of our capitalization and liquidity metrics provided on Slide 8. Total debt increased approximately $250,000,000 during the quarter as a result of normal working capital items, although it's still approximately $370,000,000 lower than year end 2020. As of June 30, long term debt outstanding was approximately $8,400,000,000 which is net of $750,000,000 of senior notes due in June of 2022 and a $200,000,000 term loan associated with our gas storage business, both of which were reclassified as short term debt as of quarter end.
The gas storage term loan was repaid yesterday. While our long term debt to adjusted EBITDA ratio was 3.5 times at quarter end, it was 3.9 times when including the amounts classified as short term. This remains above the high end of our target range and reiterates our commitment to further debt reduction. That said, we have made progress towards our deleveraging objectives and are pleased with Moody's recent review for upgrade announcement. Moving to Slide 9, as mentioned previously, we have increased our 2021 adjusted EBITDA guidance by $25,000,000 which reflects a net $50,000,000 increase to our fee based segments and a $25,000,000 decrease to our S and L segment.
Fee based guidance reflects Transportation segment performance to date as well as a $10,000,000 to $15,000,000 negative impact on the facility segment due to the gas storage sale closing earlier than forecast. S and L guidance includes a $25,000,000 reduction due to changes in market conditions that we expect to result in less favorable crude oil differentials in the back half of the year. Our current guidance does not reflect the Permian Basin JV appreciating that the transaction is not expected to close until the Q4 and will not have a material contribution to our full year results. I would also note that we do not intend to provide our outlook for 2022 until our Q4 2021 earnings call in February. This will allow us time to furnish 2022 guidance with the benefit of timely data following the completion of producer budgeting season and and incorporate the anticipated contribution of the Permian Basin JV on a full year basis.
Additionally, our updated capital guidance is provided on Slide 10, which reflects a $100,000,000 year to date reduction in 2021 investment capital and our continued expectation for investment capital from 2022 forward to be in the range of $200,000,000 to $300,000,000 annually. Before returning the call to Willie, Slide 11 The recap of our capital allocation plans for the year, including a summary of equity repurchase activity we have completed since receiving Board authorization in November. In aggregate, we have repurchased 11,500,000 units totaling $103,000,000 which approximately half of this repurchased in the second quarter. Our near term capital allocation plan remain consistent with allocating at least 75% of 2021 free cash flow after distributions to debt reduction and the balanced equity repurchases. Our expected total allocation pace and timing remains consistent with our original intentions through a balanced approach as described on Slide 5.
With that, I'll turn the call back to Willie.
Thank you, Al. We continue to execute on our strategy and we've made good progress on our 2021 goals and longer term objectives, which are reflected on Slide 12. Our outlook for the business and industry as a whole remains constructive and we're intently focused on operating excellence while continue to maximize multiyear free cash flow, optimize our asset portfolio, reduce debt and return cash to equity holders. A summary of key takeaways from today's call is provided on Slide 13. We appreciate your investment in in support of Plains and we look forward to providing you with additional updates on our continued progress in the coming months.
With that, I'll turn the call over to Roy, who will lead us in Q and A.
Thanks, Willie. As we enter the
Q and A session, please limit yourself to one question and one follow-up question, then return to the queue if you have additional follow ups. This will allow us to address the top questions for as many participants as practical in our available time this afternoon. Additionally, our Investor Relations team plans to be available throughout the week to address additional questions. Carl, we're now ready to open the call for questions.
Thank you, sir. Our first question comes from the line of Shneur Gershuni from UBS. Your line is open.
Hi, good afternoon, guys. I guess instead of a strategic question, I wanted to focus on the guidance that was percentage for this year. It's kind of a little bit confusing, but I think I kind of asked this question on the last call. You had a strong Q1, there was a modest increase in guidance, and you'd mentioned conservatism at the time. I'm trying to square away if that's, kind of what's shaking out here because As I sort of look through it, as you mentioned in your prepared remarks, the Q2 was a strong quarter, dollars 70,000,000 was related to timing, but you did have 40,000,000 of over performance, but and you raised your fee based guidance for the year for about $50,000,000 Do you only expect a small benefit of that to kind of roll forward into the following 2 quarters.
Just trying to understand the moving pieces here. Again, that ethanol was revised lower and so forth. But Just trying to understand if there's an element of conservatism here or how we should sort of think about the guidance as presented?
Thanks for the question, Shneur. I'll start. This is Willie. I think what we tried to show you on our waterfall chart is moving some S and L earnings because of market conditions from later in the year into the second quarter, both in contango holdings, contango storage benefits as well as some additional NGL sales that we had in our Canadian business. If you think about the $40,000,000 what we factored in there is the $40,000,000 is outperformance, but we did also have the asset sales.
Our gas storage business was 2 months earlier. So when you take the $40,000,000 and you subtract the impact of the asset sale happening a little bit sooner, Get you close to that $25,000,000 And frankly, it's what we expect to be. It's our realistic assessment. Clearly, some of the opportunistic S and L earnings around crude has not been as strong as we expected earlier in the year. So those are kind of the moving pieces there.
I don't know if anyone else wants to add anything.
No. Willie, I think part of it just to address the question we would expect to receive and it's in the same line Why would we drop SNL and increase transportation? I think part of that speaks to what Willie said. So to back that up, on the U. S.
Side tighter U. S. Gulf Coast to Midland differentials, less S and L opportunities in that corridor. But it's led to more transportation and movements from Midland to Cushing. So we've seen more movement up base and so The SNL impact was offset by transportation.
Similar thing in Canada, tighter differentials, The proration along the Enbridge system has been consistent with what we've seen, but differentials have been tighter. That led to less SNL there, but what you've seen is more volume because Canadian producers have more cash flow. And so that's led to more tariff revenue. So we've seen outperformance on the tariff side, but less performance on the S and L side, so we view that as a positive trade off and a natural hedge in our business.
Hey, That was Jeremy, but one additional point I would make is in my prepared comments. We talk about the trajectory of Permian production. As I said, we had the increase early in the year. We're actually seeing the stabilization of the production numbers in the Permian. And really until the supply and demand bounce gets a little tighter to continue the inventory on crude, we'll have to see where demand goes and OpEx compliance.
But Really the inflection point we expect to be later into 2022, which also perhaps is a bit of a different view than we had for on guidance for this year.
If I cannot burn my second question, just clarify something you just said there. So Are you basically saying that your exit rate for 2021 is now lower and you expect that to happen in 2022 or what you thought previously or did I mishear that?
Jeremy, go ahead. This is Jeremy. Just to clarify, the growth we experienced in the first quarter through April to production in the Permian from 4.3 to 4.5. We had our previous exit rate estimate of 4.4 4, 5, we still feel strongly in the exit rate and we would say it's closer to the 4, 5 and potentially slightly higher, but it's been effectively flat across our system and other systems from April to now. And then looking forward, the activity today is basically a forecast for your production 6 months from now.
So we would expect activity to be fairly constant and yield production to be fairly constant through the year end. So it's not a reduction as to where we were. I think that the offset to what Willie mentioned was this is consistent at the end of the year where we thought it was, But the asset sale of P and G is basically we've received proceeds, but 2 months earlier that's close to $15,000,000 that we had to take out of what we would have forecasted that benefit in guidance.
Okay, perfect. That makes a lot more sense. And I do think everybody appreciates Earning more in fee based versus ethanol. Maybe just for my follow-up question here. Good to see the buybacks that you've been executing on.
Getting on. I imagine with the asset sale complete, you'll probably use about $300,000,000 of the proceeds to sort of immunize the lost EBITDA from a leverage perspective. But post that point, do you basically expect to complete kind of allocating 75% towards buybacks and 75% towards debt as kind of your ratio for the end of this year?
Al, you want to take that?
Yes. Shneur, the 75% or more that we've indicated to go for debt reduction is clearly the first priority. The up to 25%, it was really a limit, not a target. Your $300,000,000 math is actually very close. So if you look at it this year and just Take our numbers, the $1,350,000,000 of free cash flow after dividends adjust for the 300, You would come up with a total number of potential of up to $250,000,000 The reality of it is we bought $50,000,000 already.
We don't intend to provide specific kind of timing, pace and value at which we'll complete it. That being a priority. But clearly, the repurchase program and our intent, it's a core piece of what we're looking to do and we do intend to continue to utilize it. But we don't feel it's appropriate for us to provide specific targets or dollar amounts that we're going to purchase in the second half.
All right, perfect. Really appreciate the color today, guys. Thank you and have a great one.
Thanks, Shneur.
Our next question comes from the line of Keith Stanley from Wolfe Research. Your line is open.
Hi, good afternoon. First, just wanted to follow-up on the S and L EBITDA guidance for the year. So it's of 0 and not to make this overly simplistic, but you reference early monetization of the contango positions and some NGL sales. So you had some positive margin activities realized for the year. I guess what is there something offsetting within the S and L segment or any activities where you're losing money this year given winter storm Yuri or other factors that are just offsetting any gains you had?
Jeremy, go ahead.
Keith, this is Jeremy. I tried to I think that's a bit earlier. Some of the movements between market locations are at tighter differentials than historical periods. So there's a benefit to transportation offset by Tom, on the S and L side, that's largely it. We had forecasted the contango monetization, but instead of doing that ratably throughout the year, spreads got to the point where we chose to monetize that early.
So that was in our initial forecast and the previous forecast. All of those components were the timing of the NGL sales. This is just movement between quarters that we generally have. So if basis flows out, our guys will opportunistically sell in a given quarter versus store it and sell it in the future quarter. So it's just an acceleration of earnings that were already in the plan for SNL And that because we're talking about $25,000,000 in the context of 2.1 transportation, but lower S and L associated with some
of those frac spreads that were put on late last year, which impacted the Canadian business at a lower level. And also don't forget, we pay storage fees up in Canada all the way through the year as well. So it's not just pure capturing up
Got it. And please let me know if you don't want to touch anything with ORIX. But I was just curious, I don't think it came up on the call you had between quarters. Any issues to be mindful of or you're thinking about on the regulatory approval front or do you see this as just a very straightforward transaction from a FTC perspective?
Keith, probably inappropriate to put any specific comments on it. We have filed and we're kind of in the process with the FTC. We would expect approval, but have to go through the process.
Got it. Thank you. Thanks.
Our next question comes from the line of Tristan Richardson from Truist Securities. Your line is open.
Hey, good evening, guys. Really appreciate your comments on the Permian dynamic.
I know you're not providing guidance for 'twenty two at this time, but should we think that as that supply demand balance tightens up or normalizes as you talked about kind of that mid-twenty 22 timeframe. So we think that if that occurs on that timeline that transport can meaningfully grow next year?
Well, I think the conclusion you should take from that is, 1, that's an assumption at this point in time. There's a lot of variables around that. But as supply and demand balances a little bit and tightens up, our expectation would be there'd be more there'd be growth in the Permian. And we'll give you better guidance as we get to February on what we expect the Permian trajectory to be. But the way I would take that Tristan is kind of stable until tighter supply and then we start seeing increased volumes, which should infer additional transportation volumes.
Willie, this is Jeremy. I would just say it's not linear like that. You wouldn't imagine that the rigs will wait until that. I think as you see the trend of spare capacity and increasing demand, the rigs will come. So as Willie said, this is dynamic supply and demand.
It's not they're going to wait till All spare capacity has gone to add activity. I think part of the reason Al mentioned on the call that we're going to wait to give guidance. So February is just we want to capital allocation is and what that timing will be, so we can give you guys a better estimate of what they'll be. But certainly, we have contracts in place and we have capacity available to capture incremental production as it comes to market and we're well positioned for that.
Appreciate it. And then And Al, you talked about maybe some OpEx savings versus what you had planned was part of the over performance versus previous guidance. Is there are there initiatives going on there? Should we think of some of this as permanent and or ratable as we kind of model out sort of just the cost profile next year?
Tristan, I'm going to ask Chris Chandler to comment on that. Chris? Sure. This is Chris Chandler. There are a number
of moving parts Tristan, but we continue to challenge the organization to capture cost savings opportunities and And they continue to deliver. We, of course, had a benefit from winter storm Yuri in the Q1, so that's impacted the 1Q, 2Q comparison, but we are finding opportunities everywhere we look and we're capturing those and certainly expect to be able to sustain any portion of those going forward. So we still see opportunities and we're still capturing them.
Appreciate it. Thank you guys very much.
Thanks, Tristan.
Our next question comes from the line of Jeremy Tonet of JPMorgan. You may now ask your question.
Hi, good afternoon.
Hi, Jeremy.
Hi. Just wanted to kind of come back to the buyback situation a little bit here, seeing what you might be able to say. Based on our calculations and kind of the methodology that you had laid out before, it seems like the pace of buybacks is a bit slower than what we might have expected year to date given the asset sale proceeds. And was just wondering if you were kind of locked out of the market for periods of time with ORIX or you might have a faster pace kind of going forward just as you're able to do that? Just kind of curious if you can expand a bit more on that.
Jeremy, this is Willie. I'll make a comment. I know Al can follow-up on it. If you think about the trajectory and the factors that we look at, A lot of it is business outlook. So when you look at the 1st part of the year and question of certainty of being able to execute on some of these, You should expect that some of this would probably not occur earlier in the year because we factor all these things when we think about buybacks.
Our intention is to continue to have some buybacks. And again, as Al said, we're not going to be specific on volumes or cadence and what we're going to do, but I'd take you back to that Slide 11 on the many, many different things that we look at as we evaluate it.
Yes. And I would concur with what Willie said. And again, the 25%, up to 25%. I do think some folks have interpreted that as a target versus the limit. Again, if you walk through the math, I think Cheniere hit it pretty close.
This year is Up to 25 percent, I would say the high end would be $250,000,000 We bought $50,000,000 today. And again, we don't believe it's proven for us to telegraph specific timing and valuation, etcetera. And P and G closed yesterday. So until transactions close, there's always risk associated with them.
Got it. Just want to clarify that, were you guys locked out or just want to make sure I was understanding that straight?
What I would tell you is until a specific transaction comes up, there's judgments that you apply. Again, we don't I think that had any meaningful impact on what we've done year to date. The fact that we don't have the asset sales proceeds in hand at June 30 probably has more to do with it than anything else. Right.
Got it. Understood. And just a quick second question here. It seems like there's been some robust M and A interest, if not activity up north of the border there. And was just wondering, given some of those strong markers out there, wondering your thoughts on the Canadian business.
It seems like that could be a powerful way to return capital to unitholders here. So just wondering your latest thoughts on that if divestiture there can make sense?
Well, Jeremy, we look at lots of things, but we can't really share any thoughts, premature to be sharing any thoughts about anything we might be looking at.
Got it. I'll leave it there. Thanks. Thank you.
Our next question comes from the line of Peter Salmon of Piper Sandler. Please ask your question.
Yes, good afternoon and thanks for taking my question. My first pertains to producer disciplines. We've certainly heard the public E and Ps have been more disciplined on the production front and maybe the privates have been a little less so. So I'm just curious, are you hearing any change to that kind of consensus view as far as when you interact with producers?
This is Willie again. I think we're probably consistent with what you're seeing. The larger public companies Have more discipline. Some of the smaller ones may not have quite the same amount, but Jeremy, do you want to comment on that?
Pierce, I think There's a few categories. It's more nuanced than that even. I think there's a handful, call it, half a dozen private producers that are really taking advantage of the opportunity where there's discipline across the space and they're getting out in front of it and they're going to grow production. But by and large, the producer community has been very disciplined. Within the larger producers, they're cautiously optimistic about next year, but You haven't seen any change in the rig count in close to 3 months.
I think it's been 4% growth in the last 3 months. That's indicating that, hey, we're going to wait and see how this goes. I think there's a general view that the current price may be a little bit synthetic There is productive capacity to meet demand today and they don't want to get out in front of that. So it's a prudent approach. There is some opportunity for under levered private operators to get out in front of this and capture some margin.
They can hedge nice margins and capture returns. So we are seeing that, but it's more nuanced than all privates and all publics. There's The handful that are getting out in front of it and we certainly have exposure to a number of them and we appreciate that and like it. But the larger ones are there and ready and they'll be better capitalized at the end of this because of paying down debt and setting up a long term durable corporate structure. So Healthy E and Ps are good for us in the long term.
Great. That's excellent color. Thank you. And then my follow-up and I apologize if I in the prepared remarks or in the Q and A, but congrats on lowering the investment in maintenance CapEx for this year by about $65,000,000 or 10%. Just curious what the driver was there?
I'm sorry, it was maintenance capital endorsement. Yes.
Chris, why
don't you take both of those?
Yes. This is Chris Chandler, Pierce. I can take those. Let's start with maintenance capital. The reduction quarter on quarter is driven by the cancellation of the Vidalia Connection project.
There's been some smaller reductions in efficiencies captured in other areas, but that's the main piece there. And then on maintenance capital, our full year outlook of $180,000,000 is unchanged from the prior quarter, but we have over time due to a number of factors including asset sales and investment programs and reliability improvements been able to bring that maintenance capital down to the range that it's in now which is Down quite a bit from where it was a few years ago. So hope that helps.
Yes, it does. Thank you very much.
Hey, Piers, this is Willie again. I thank you for acknowledging the progress we've made there. It just reinforces how we're looking at every single dollar, financial discipline, not only CapEx, but maintenance CapEx, operating CapEx. I mean, there's that's really been a tremendous focus of the organization is to streamline and be as efficient as we can.
Thank you, Willie.
Thank you.
Our next question comes from the line of Jean Ann Slesberry from Bernstein. Your line is open.
Hi. Does the cancellation of Bechalia have any impact on the optimal Capline reversal, like could you take more from Patoka or anything like that or is it not really work like that?
Jeremy?
Jean Ann, hi, it's Jeremy. So the project works on its own. It'll be largely a heavy based project from Patoka South. There's incremental capacity available to move and I think there's some timing in some other open seasons and negotiations between shippers that could free up capacity to Patoka and more capacity to Patoka for heavy and longer term be a positive for Capline. I think that's the easiest way to say.
And just to
be clear, Jean Ann, Capline stands on its own, right? So that project has enough return to drive itself. The Behelia Connector impacts, less volumes going to Capline in the near term. But as Jeremy pointed out, once that project starts flowing, our expectation is there should be additional volumes that will be able to get there at some point in time.
That makes sense. And then I know you're not commenting on Oryx, so I'll keep my questions super high level. You that's really helpful slide showing how many downstream connections, Oryx shippers would gain. Just really Generally, can you kind of give the timeframe that you would expect there to be sort of switching of downstream in the Permian? Is that a near term thing or is that more medium term as MVCs start to roll off?
Jeremy? Gina, Can you clarify what you mean switching of downstream? I just want to make sure I understand what the question is.
Maybe let me take a stab of it. Your question was timing on downstream capability to connect, right,
G and A?
Yes. Basically, you're obviously adding a ton of potential downstream options to Oryx and that could be Obviously, a big synergy for you. And I'm just trying to understand if that would be near term, obviously, assuming that the transaction goes through and everything or if it's more Everybody has too many MVCs right now, so it's going to be more like in 3 or 4 years as those MVCs start to roll off.
Yes. So what we've done on the JV is We haven't incorporated any of that into our assumption on the JV, right? And the point on the connectivity and flexibility is ultimately it's going to be A much better mousetrap to be able to serve our producers to be able to get volumes to where they need to get to.
Okay. Thank you.
Thanks, Jean Ann.
Our next question comes from the line of Michael Lapides from Goldman Sachs. Your line is open.
Hey, guys. Just curious, your commentary about end of year exit rate for Permian Production. How are you thinking about the end of the year and the beginning of next year in terms of kind of the battle between Houston and Houston area destinations versus Corpus and where producers or other shippers want to flow barrels?
I'll start with that, Michael. This is Willie. What we've always talked about our system being able to have access to multiple markets, there's so much that goes on in market dynamics that it's nice to have the flexibility to go to both. I think it'd be difficult for us to Give you exit rates to each market as it sits today because there's just too many variables that are out there.
Got it. And do you guys have a view of which you think offers better export opportunities for shippers who want to get their barrels on a boat?
Jeremy? Michael, this is Jeremy. I think the guys across the street might have a different answer, but I think the public data would indicate that there's over 1,500,000 barrels a day leaving The Corpus market and that's been for a long period of time. So I think both have pros and cons. A lot of volume gets absorbed in the Houston local market and incremental barrels across the dock.
And so I think over time you'll see those two markets, you'll see some at St. James, you'll see some at Nederland as well. So I think depending on where the barrels are located and what the logistics will ultimately went out as to what the most favorable markets. I think there's a need for all of them to clear because there's multiple logistical constraints across the Gulf Coast, but Corpus seems to be heavily focused on crude oil exports and Houston has got a lot of different diversity across its exports and then you'll see a smaller amount at Nederland and
You probably already know this, but the heavier barrels and the medium grades, the U. S. Refiners like to run that. So when you into the decision on where to take the molecules.
Understood. Hey, just one last one. When Wink to Webster is fully in service, do you think that dynamic changes much?
Michael, this is Jeremy. A lot of the shippers on Wink to Webster are current buyers in that market. So when the barrels start flow. It's almost like moving your purchasing from Houston to Midland. So it's almost a swapping of where the barrels move and how they move.
And so I don't see it changing a ton. There could be some incremental benefit to the Houston market from an export. But usually in this case In the way that T and Ds are structured over time, it's more to meet domestic refining demand as opposed to incremental exports.
Got it. Thank you, guys.
Our last question comes from the line of Sanil Sibal from Seaport Global Securities. Your line is open.
Yes. Hi. Good afternoon, guys, and thanks for taking my question. So just a couple of clarifications starting on the guidance on the Transport segment. So you did 433 $3,000,000 in Q2 in EBITDA in that segment.
And your guidance full year is implying a fairly significant downtick from that number. Is it because of some MVCs that you got in Q2 or any cost items, etcetera, which are moving that number in the second half?
Can you repeat the question, please?
So when I look at the Transportation full year guidance of $1635,000,000 And you already did close to $810,000,000 in the first half. And then specifically in the Q2, you did $433,000,000 So it seems like your guidance is suggesting that there will be a downtick in that segment in the second half from the Q2 numbers. So I was just curious, is that a function of any MVCs that you got in Q2 in the transport segment or any other factors?
It's a combination of some deferral of the benefit from Q1 on the cost side where we captured on the transportation side and it also has to do with MDCs and timing of payment and recognition of the EBITDA.
Okay. Then on the Facilities segment, the full year guidance of kind of breakeven. So clearly, the spreads were challenged in 2021. And it seems like on the NGL side, You had some because of the hedging that you undertook, there was a bit of a negative kind of a headwind. So when we think about S and L segment, if crude differentials kind of stay where they are in 22 or forward years.
How should we think about that segment going forward in terms of contribution?
I think you should wait for our guidance in February. That will give you much better clarity on that.
Okay. Got it. Thanks, guys. That's all I had. Thanks, Danielle.
That concludes our Q and A session. I will now turn the call over back to the company for closing remarks.
Hey, this is Willie. Thanks for dialing in. We always appreciate your interest and support of Plains, and I wish you a nice evening. Thank you very much for dialing in.
Thank you again for participating. This concludes today's conference call. You may now disconnect.