Ladies and gentlemen, thank you for standing by and welcome to the PAA and PAGP Second Quarter Results Conference Call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions) And also as a reminder, today's teleconference is being recorded. And at this time, I will turn the conference call over to your host, Director of Investor Relations, Mr. Ryan Smith. Please go ahead, sir.

Thanks, Tony. Good morning and welcome to Plains All American Pipeline’s Second Quarter 2014 Results Conference Call. The slide presentation for today's call is available under the events and presentations tab of the Investor Relations section of our website at www.plainsalllamerican.com. In addition to reviewing the recent results, we will provide forward-looking comments on PAA's outlook for the future. In order to avail ourselves of the Safe Harbor presets that encourage companies to provide this type of information, we direct you to the risks and warnings included in our latest filings with the Securities and Exchange Commission. Today’s presentation will also include references to non-GAAP financial measures such as adjusted EBITDA. A reconciliation of these non-GAAP financial measures to the most comparable GAAP financial measures can be found under the guidance and non-GAAP reconciliations tab of the investor relations sections of our website. There you’ll also find a table of selected items that impact the comparability of PAA's financial information between periods. Today’s presentation will also include selected financial information of Plain GP Holdings, or PAGP. As the control entity of PAA, PAGP consolidates the results of PAA and PAA’s general partner into its financial statements. Accordingly, we do not intend to cover PAGP’s GAAP results; instead, we have included a schedule in the appendix to be a slide presentation for today’s call that reconciles PAGP’s distributions received from PAA's general partner, with the distributions paid to PAGP shareholders as well as the condensed consolidating balance sheets. Today’s call will be chaired by Greg Armstrong, Chairman and CEO, also participating in the call are; Harry Pefanis, President and COO and Al Swanson, Executive Vice President and CFO. In addition to these gentlemen and myself, we have several other members of our management team present and available for the question-and-answer session. With that I’ll turn the call over to Greg.

Thanks, Ryan. Good morning to everyone. Yesterday afternoon, PAA reported its second quarter 2014 results. Second quarter adjusted EBITDA totaled $512 million. These results were a $57 million of 13% above the midpoint of our guidance for the second quarter of 2014 and also slightly above the increased performance expectations we provided on June 4, just prior to our Analyst Day presentation. Harry will provide a detailed comparison to guidance for each of our segments later in the call; however, I would generally characterize our second quarter results as solid, particularly in our transportation and supply and logistics segments. Slide 3 contains comparisons for the last year’s second quarter results for adjusted EBITDA, implied DCF and distribution coverage and adjusted net income per diluted unit. The quarter-over-quarter increase in adjusted EBITDA is composed of a 15% increase in PAA’s fee-based segments primarily as a result of continued expansion in capital investments and a 6% decrease in the supply and logistics segment. As expected, our quarter-over-quarter supply and logistics results decreased primarily due to less favorable NGL market conditions compare to the second quarter of 2014 partially offset by improved crude oil market conditions in certain areas. As reflected on Slide 4, this quarter’s results mark the 50th consecutive quarter that PAA delivered results in line with or above guidance. Additionally, for the second quarter of 2014, PAA declared a distribution of 64.5 cents per common unit or $2.58 per unit on an annualized basis payable next week. This distribution represents a 9.8% increase over PAA’s distribution paid in August 2013 and a 2.4% increase over PAA’s distribution paid in May 2014. Distribution coverage for the quarter was 107%. PAA has increased its distribution in 39 out of the past 41 quarters, and consecutively in each of the last 20 quarters. PAA's compound annual distribution growth rate averaged 8.4% over the last 10.5 years, and 9.5% for the last three years. Additionally, PAGP’s quarterly distribution of 18.34 cents per share represents a 7.5% increase over the distribution paid in May 2014 and a 23.1% increase over the initial quarterly distribution included in PAGP’s October 2013 IPO perspectives. PAA continues to execute well, and we are on track to meet or exceed our 2014 goals while positioning PAA favorably for 2015 and beyond. During the remainder of today's call we will discuss specifics of PAA’s segment performance relative to guidance, our expansion capital program, our financial position and the major drivers and assumptions supporting PAA’s financial and operating guidance. At the end of the call, I will provide a recap as well as a few comments regarding our outlook for the future. With that, I'll turn the call over to Harry.

Thanks, Greg. During my portion of the call, I'll review our second quarter operating results compared to the midpoint of our guidance, discuss, discuss the operational assumptions used to generate our third quarter guidance, and provide an update on our 2014 capital program. As shown on Slide 5, adjusted segment profit for the transportation segment was $229 million which was approximately $24 million above the midpoint of our guidance. Our volumes of 3.9 million barrels per day were largely in line with the midpoint of our guidance. Our adjusted segment profit per barrel was $0.64 or $0.07 above the midpoint of our guidance. The higher than forecasted segment profit was primarily driven by higher than anticipated pipeline loss allowance barrels and component gains on our NGL pipelines plus less than forecasting seasonal flooding down time on certain of our Canadian pipelines, and lower operating expenses primarily due the timing of some of our integrity management projects. Adjusted segment profit for the facilities segment was $138 million which was in line with the midpoint of our guidance. Volumes of 120 million of oil equivalent per month were 2 million barrels below the midpoint of our guidance. However adjusted segment profit was $0.38 or $0.01 above the midpoint of our guidance. However volumes were lower than expected primarily due to the lower third-party volumes moving to our St. James Terminal and longer transit times on rail movements due to rail congestion. In addition, NGL fractionation volumes were little lower than forecasted primarily due to upstream pipeline constraints relating to supplying to our facilities. Adjusted segment profits for the supply and logistics segment was $144 million or approximately $30 million higher than the midpoint of our guidance. Volumes of approximately 1.1 million barrels per day were in line with the midpoint of our…

Thanks, Harry. During my portion of the call, I will review our financing activities, capitalization and liquidity as well as our guidance for the third quarter and full year of 2014. We were active during the quarter from an equity financing perspective through our continuous equity offering program. As illustrated on Slide 9, PAA sold approximately 5.3 million units in the second quarter, raising net proceeds of $302 million. Our current continuous operating program is a $750 million program initiated in May 2013 and will soon be completed. Accordingly, we intend to initiate a new program in the third quarter of 2014. As illustrated on Slide 10, PAA ended the second quarter with strong capitalization, credit metrics that are favorable to our targets, $2.2 billion of liquidity. At June 30, 2014, PAA had long-term debt to capitalization ratio of 48% and a long-term debt to forward-adjusted EBITDA ratio of 3.4 times. Slide 11 summarizes information regarding our short-term debt, hedged inventory lines at line fill at quarter end. Moving on to PAA’s guidance as summarized on Slide 12. We are forecasting midpoint adjusted EBITDA of $480 million and $2.175 billion for the third quarter and full year of 2014 respectively. Our forecast for the midpoint adjusted EBITDA for the full year 2014 represents an increase of $25 million. Consistent with past practice, our guidance for the third quarter only takes into account favorable market conditions to the extent that we are highly confident that our current activities will capitalize on those conditions with an assumed return to near baseline type conditions for our supply and logistics segment for the balance of the year. Accordingly we continue to expect negative quarter-over-quarter and year-over-year supply and logistics segment profit comparisons in 2014 as compared to the same periods in 2013, given that market conditions during 2013 were extremely favorable for our assets and business models. The $1.6 billion of investments that we made in our transportation and facilities segment in 2013, combined with our $1.95 billion 2014 capital program will continue to provide meaningful growth in our fee-based activities into 2015 and beyond. Furthermore, the cumulative effect of these capital investments provides us with good visibility for continued multi-year distribution growth given the time lag associated with our JV in full run rate cash flows. For more detailed information on our 2014 guidance please refer to the Form 8-K furnished yesterday. As represented on Slide 13, based on the midpoint of our 2014 guidance for DCF and distributions to be paid throughout year, our distribution coverage is forecast to be 111%, and in line with our targeted coverage of 105% to 110%. This will enable PAA to retain $152 million of DCF or equity capital. With that, I’ll turn the call back over to Greg.

Thanks, Al. The first half of 2014 has been a very active and productive period for PAA and we are pleased with our positioning for the remainder of the year and beyond. As discussed and detailed during our Analyst Day presentation in June, PAA’s significant asset program and substantially all the major crude oil resource plays in North America positions PAA to meaningfully benefit from continued increases in crude oil production. PAA’s proven business model, multi-billion dollar organic growth project portfolio and solid capital structure provides strong business for continued attractive multi-year distribution growth without relying on potential acquisitions. That said, we believe all these characteristics positions PAA to capitalize on attractive acquisitions especially if the industry or the capital markets weakens up. We thank you for participating in today’s call and for your investment in PAA and PAGP. We are excited about our prospects for the future and look forward to updating you on our activities at our next call in November. Tony, at this point in time, we are ready to open the call up for questions.

Thank you very much. (Operator Instructions) And first in queue is Steve Cherkowski with Goldman Sachs. Please go ahead.

Hi, good morning. You've been in the news recently noting the potential need for separate infrastructure to transport condensate out of the Permian? I'd just be interested to hear your further views on that?

What we are seeing is the a lot more of the dollar base improved a lot lighter than the sort of midland base improved and it’s rationing up gravity and we think I could be a point of time where you see two separate streams, the condensate stream and then the historical WTI type of stream and really we gear cap with up for is really to be able to handle a lot of the condensate stream coming out to the Corpus Christi area.

Okay and are there any design or other restrictions that is would limit your ability to, or how much you could batch condensate on Cactus or your other Eagle Ford pipelines?

Well, there’ll be a couple different batches on the Cactus pipeline system. We expect probably going to be a typical WTI type of stream sour stream and a condensate stream. But there is nothing that really would restrict the amount of condensate that could move down Cactus.

Steve, and I just mentioned, effectively, I think, when we are looking at potential delay, dedicated condensate streams when you have an area that needs improved infrastructure with annual volume growth, if you can add smart pipeline designed to it, you can handle a combination of both increased volume and increased verities or segregated varieties. So, it’s really just trying to optimize the overall growth that’s probably going to happen in the area in general.

Understood, thanks. And I'd be curious, just based on your own gathering volumes, how much of the Delaware Basin production is condensate or qualifies as condensate?

Well, let me just tell you, right now, there is a big question is, what is the finest condensate right now? But in general, it’s pretty live and what is it John probably 250?

Yes.

When we ramp up.

200 to 250 when you ramp up.

Ramp up. So, when we look at sort of what we think volumes are in those legs in 2017 and 2018, we think the condensate stream could be about 200,000 barrels a day plus or minus.

And that's just for the Delaware Basin.

Yes, mostly Delaware Basin.

Yes, Thanks and just a quick final question. Could you just get a quick update on Bakersfield?

It should be in surface by late October, in that facility?

Yes.

Yes.

Okay, that’s it for me. Great, thanks.

Thanks, Steve.

Thank you. The next question in queue comes from Jeremy Tonet with JPMorgan. Please go ahead.

Good morning.

Good morning, Jeremy.

There is a lot of talk about project backlog in the MLP space these days it seems like. I see Plains as a very robust spending program for 2014. I am wondering, given your expansive platform if you believe that your footprint will continue to deliver a level of organic growth spend in future years similar to the current year, just any thoughts on that would be helpful?

Jeremy, I gave and I want to go backwards in terms so that I can kind of set the stage for my comments. We are pretty cautious about trying to over-forecast what we think capital is going to be and then try to run underneath it because I think there is tendency among, it’s human nature, to want to fill the basket. Once you define the size of the basket, what we take in the approach in the past has been the size of our basket will be, whatever is necessary to me the needs and the attractive investment opportunity. So, gong back in time, I think we started off a couple years ago with a target of $1 billion, we moved it up to $1.2 billion and by the time we got through with that year, we were at a $1.4. Last year we did a similar trend and that were up to almost $2 billion and we provided kind of directional guidance on our capital programs that anywhere between I think $1 billion and $2 billion for the next couple of years and then we expect it to kind of tail-off based upon what we could see at the time we were making that forecast. There is no question that the resource plays and shale plays or whatever you want to characterize on this are robust and they are continuing to have innovations in technology and efficiencies that looks like it’s extending that run. So, we haven’t – we’ll provide and typically do in our November call kind of our preliminary guidance for not only EBITDA but our capital program, but it’s hard to – it would be hard to make an argument right now that it shouldn’t be at least as robust as we’ve been saying and right now we are at a $1.850 billion to $2.50 billion in terms of expectations for 2014. And I promise you, we are not slowing down any – in terms of our engineers and our commercial guys in terms of dealing with opportunities.

That makes sense and we do appreciate your conservative approach here.

Yes, and - Harry points out, our portfolio - we've actually put a lot of projects into service and we are still running with about $7 billion portfolios. That really tells you, it’s continuing to regenerate on its own and that’s usually on the kind of a front-end loaded basis. Some of the projects we are looking at right now, as Harry mentioned in his comments are becoming a little bit longer dated because as we finish kind of optimizing our existing infrastructure and we are having to build incrementally new pipes, but the lead time on those pipes is still in most cases, it’s in the 18 to 24 months range. A few projects, especially up in Canada are going to be a little bit longer lead times just because you have to hit the seasonal windows to build. You can’t – you don’t really have a 365 day work window there. You have to catch the winners just right. So those will usually add an actually a year to what would typically probably to be an 18 to 24 month project in the US.

That's helpful. Thank you. And switching gears, I was wondering if you could provide any updated thoughts on Nacka storage market? During the quarter it seems like there was some weakness in contract renewals. Just wondering if you see an inflection in storage rates and if so, how you trade-off on rate versus duration of contracts when you are thinking about these renewals?

Yes, I would tell, I don’t think there is really been any major difference in the market – the contract renewals where things that we saw coming. In fact, we talked about it when we were – talked about bringing P&G in because we felt like very positive about the long-term fundamentals that we were little bit concerned about the transition period. Nothing has really changed that outlook. I think on the last call somebody asked questions when we thought the market would start firming up and we said about two weeks prior to the call, and that still feels like it’s the case. In other words we are seeing probably higher volume metric demand for storage and people are trying to look longer term. It’s always a balance. The question you ask about how long would you sign a contract for a rate that you think is probably is sub-optimal in a couple of years. And it somewhat depends on the client. If we are looking and fundamentally solid long-term what we call dispatch-oriented type class, we’ll probably more inclined to bring them in a little bit earlier but they tend to pay a little bit higher price than yield – the market arbitrage triggers. That right now, there really isn’t an arbitrage in the market. So they are not really trying to bang on the others than just buying the cheapest store they can for as long as they can negotiate with. And so, it’s the quality of the customer is in the mix is pretty important to that. And we don’t really put our playbook out there. But we are not having any problem really having the right discussions. We think we have some of the best facilities in the business and after last winter’s challenges that hit everybody, we think ours kind of stood out as being some of the best performing and we think that will continue to be the case.

That’s helpful. Thank you very much.

Thank you. The next question will come from Faisal Khan with Citigroup. Please go ahead.

Thanks good morning.

Good morning.

Just a few questions on condensate here I guess, how much total condensate stabilization capacity do you guys have across your whole system? I think you guys have talked about how you have about 80,000 a day in the Eagle Ford and that's going to 120, but how much do you have across the whole system? And then, I guess, how much of this capacity or volume do you think is sort of eligible to be exported and sort of have you approached the DOC or the BIS about moving those volumes? It sounds like you were talking about the Corpus Christi docks. I'm just trying to figure out how this is going to evolve for you guys?

The only real stabilization facility we have is that Gardendale and the Eagle Ford. We have a couple of small ones in the Alabama area. But not anything substantial or field stabilization facility. So the 80,000 barrels a day is sort of what we have today. I can imagine we have several thoughts on where a potential stabilization facility could be added in the future. But, like I said, Gardendale is probably the primary spot. We are trying to get some clarity to – on exactly what level of processing is necessary for the condensate and we excluded from the export ban. We hope to have a more clarity on that by the next call. And we are certainly positioning ourselves to be able to move condensate on our system across our assets and to the export market if these stabilizations at Gardendale is efficient to qualify for the – so that the condensate wouldn’t be subject to the export ban.

Yes, and I think it’s also fair, I mean, the quality of the assets that we do have is pretty high, I’d be surprised to hear that there – we are not really aware of anybody else that has one of the size and scale and the capabilities that ours already is and so we are simply adding to that. But, I mean, the extremely large distillation towers and everything that you could imagine that should meet the standards that we believe that has been set out there and it’s a little bit hazy exactly to what the standards are. We can meet that and so, we are – the other element of it, I think, Faisal is segregation. I mean, once you’ve actually created a product that qualifies for export, you have to able to trace that barrel to make sure that it doesn’t get contaminated or blended with something that might not need that. And, our system really is unparalleled out there. I mean, we have the gathering system. We have the stabilization distillation towers and the pipeline system all away to the dock, we can pretty much trace the pedigree of that barrel all the way through.

Okay, so it sounds to me like, and correct me if I am wrong. You guys are going to from 80 a day to 120 a day in the Eagle Ford is that right?

At stabilization capacity, yes. So, the 120 plus or minus a year from that, but, yes.

Okay, okay, and What's the cost of – I guess, when you look at the facility of this magnitude that you have, what's the total installed cost of a facility like or what you guys have up and running right now of 80,000 a day?

I would – it’s favorable. If I could leave it at that, I think we’ve heard certainly numbers from others that are kind of having to start from scratch on that and I think their costs are lot higher than ours. But we haven’t really disclosed that separately in the way things are developing and that’s what shows in our best interest to put those numbers out there. We want to get paid for the best value based on the return on the investment.

Okay, so, it sounds like you guys are fairly confident that you can identify, you got the systems in place, you can identify the barrels and therefore given what you've seen with the remarks in the DOC so far, there is no reason to think that your volumes wouldn't be eligible to be exported. But you still have to go through the process to actually figure that out. Is that a fair statement?

That would be correct. The only thing that might – our way is political arbitrariness.

Okay, that's always hard to predict. Just one thing, on the Sunrise project, could you go back, I think you mentioned in your prepared remarks, when do you expect that to start up and whether line fill is to sort of start taking place on that? How does that exactly work?

We are expecting the line to be in service in probably by January 1 of 2015.

Okay.

The line will be actually probably in service before that lot of facilities were tied-in et cetera to be able to get the line totally in service.

Okay, okay. Got it. Thanks. Appreciate the time guys.

Thank you.

Thank you. The next question in queue will come from Cory Garcia with Raymond James. Please go ahead.

Thanks, morning fellas. Turning back to the Corpus market and obviously with the Cactus start-up next year in conjunction with the surge of Eagle Ford production, how are you thinking about the possible congestion down, not only just in the field level, but obviously down along the Gulf Coast? And how we should envision sort of the Cactus ramp, if there's going to be any impact there? And then, obviously, the opportunity set for you down in Corpus?

Well, we think, Corpus will be less congested than Houston. Probably the best way to say it. Corpus, Cactus will add 200,000 barrels a day, the capacity is probably not going to come on at that level. It will be somewhere 100,000 barrels and 200,000 barrels a day and that’s why – that’s sort of supported the expansion of our joint venture pipeline system and we’ll and the expansion of dock facilities down there. So, it will be a little congested in Corpus when we get the dock facility in full service. We should be able to handle all the volumes to come down in Cactus in our Eagle Ford pipeline system.

Will you minus – still is that the expansion from 300 to 470? Is that the correct numbers?

Yes.

And what sort of, I guess, piece of that $140 million investment target that you have is in fact, the dock gets versus actual field level Eagle Ford projects?

I don’t think the cost in that…it’s not in that number.

Okay. Thank you for the color guys.

Thank you.

Thank you. Our next question in queue will come from Michael Blum with Wells Fargo. Please go ahead.

Hi, everybody.

Hi, Michael.

Just a couple of probably just bigger picture questions. One, just in the Bakken, looking at rail versus pipe, you're seeing some movement there. There has been, obviously, a Pipeline project announced. Can you just give some updated thoughts on how you think that market may or may not be changing in terms of the ultimate mix between rail and pipe? And does that change anything in the way you approach things there?

I’ll probably tell you, it’s fairly dynamic. I think for example Pony Express which is going to be able to haul off from the Rockies are probably 200,000 – 200 to 225 should be coming on stream here shortly. And so, that’s going to change the day-to-day dynamic. I think there is a lot of anticipation of some of these projects as there should be about what volumes are going to look like in the future, but in many cases, the willingness or producers and/or other shippers to make commitments is somewhat affected by – we sell more umbrellas when it’s raining than when you don’t and so how differential can congest is present we will dictate that. But I don’t think there is anything that’s actually been announced that’s really changed our view on kind of long-term dynamics of Bakken to some extent to the extent you may have more takeaway capacity than we have imagined you’ve actually seen kind of more production capacity that can help balance it. So it’s still pretty much the same as we needed before. But the way we view it is there is going to be plus or minus 700,000 barrels demand on the East coast for light sweet crude. There is going to be some demand on the West coast for it. And you are just not going to – these pipelines that go to the Gulf Coast aren’t going to satisfy those markets. So, you are still going to see rails to the east and west coast. We are probably going displace rails that’s moving through down in the Gulf Coast right now. Pony Express is probably going to impact volumes that you rail them to some of the Mid-Continent areas. So, that’s where we think you’ll see sort of the decline and we are out moving for these projects – these pipeline projects are developed.

Okay great. That's helpful. And then, just the other question I wanted to ask broadly was on rates at Cushing and just how you see – do you see anything changing there in terms of the pressure we've seen on rates and I realized you are well positioned there. But if you could just remind us kind of if you have any exposure there in terms of contracts rolling over and where you think rates are going for your storage?

I don’t think we have anything rolling over through 2015. We have a little bit in 2016 and to be honest with you the way we’ve structured our arrangement is really they are operating – our operating requirements. So, we never were the guys out in the market trying to figure out what the Contango was and how much you can extract from guys that were trading the inter-month spreads have always been operational and sort of impressed on an operational basis.

So, said definitely, I think, we never press for the highest rats that would be associated with bringing in kind of the financial arbitrage is what you are really talking about splitting the inter-month spreads. They were extracting the most rent they could to still allowing that money to put capital up to put the barrels in the tank and extract it. So, we were more focused in on the longer term relationships. We certainly gave up some near term opportunities to raise our revenue, but we really sustained our long-term ability to have repeat customers. And so, I think if you harken back to some of the calls that we’ve had over the last two or three years, we still think there is kind of three rings of tank functionality in Cushing. And the best place to be is right in the middle of the bulls eye where you have the absolute most versatility and as Harry said, it’s optionality and functionality and operational capabilities. And nothing has changed that. And so we are not really sweating any of the contract renewals because we think people need our tankage and our manifold systems to be able to function.

Great, thank you.

Thank you.

Thank you. Our next question in queue that will come from the line of Brad Olsen with TPH Investments. Please go ahead.

Hey, good morning, everyone.

Good morning, Brad.

My question is really a more big picture and I realize that some of the arbitrary and unexpected decisions that we've gotten out of the government probably create a little bit of more uncertainty than certainty. But when you look around the energy space today and you see a government focused on at least ostensibly increasing exports, you see, maybe a slightly more streamlined LNG approval process, and now you see maybe a lower cost way to export condensate. Is it too early to say that we're seeing at least a subtle shift toward a more export-friendly administration?

I wouldn’t get too carried away with it. But I would tell you that – we’ve been very encouraged like on the export issue, we are not at the crisis mode, yet on the light sweet product. We are getting close, but, they have been able to address this kind of early and embraced it. And so, I probably – we are encouraged when saw that and we probably – for the reasons you just mentioned, Brad, probably equally as encouraged and the fact that they realized that we’re actually a positive catalyst to stimulating the economy and we have raised employment et cetera as opposed to the Eagle empire. And so, in that respect, absolutely. Do I think that – that we are always going to do the right thing as early as we should do it. Well that would be hard one to pressed to all the way there but, again, very encouraged that it’s more of a cooperative spirit and attitude than probably what we might have expected at this same stage.

Got it. One of the things I guess, that surprised me - and it's not just your call, but we've heard it elsewhere too, is this idea that the Department of Commerce ruling on condensate is somehow a competitive advantage. Is the Department of Commerce not obligated on some levels to share kind of a technology that is helping people export condensate with the broader industry, so as to remove confusion about what can be done. I mean, I'm sure you have the technical ability to figure out kind of what needs to be done on the stabilization side. But is it right to think of this as something that only a couple of companies really have the ability to participate in or is this more something that really is going to have relatively low barriers to entry over the next year or so?

Probably, I don’t think it’s really a – there is no secrecy around technology. I think as we all have access to it. I think it’s a definitional issue to some extent and then, ultimately, I think the segregation issue of being able to not only to say that you did something to the product to make it non-crude and therefore available to be export it, but to be able to trace that molecule throughout the system. That so far seems to be very important and if you go back in history of time when we used to have old oil, new oil et cetera, and everything else back when we had strict price regulations, it was critical back then, I think it’s going to be equally critical today. And so, Gosh forbid that you have an 80,000 barrel batch of what’s really qualifies for export and it gets put into a pipeline and dumped into tank with 40,000 barrels or something that doesn’t meet the same definition, that’s a problem. And generally, it’s always a problem in hindsight in other words it’s only when something happens, we raise prices at the pump and they are looking for a scalp on the wall with they come back and say, aha, you didn’t meet the definition that wouldn’t sparely depend for you. So, I think, that segregation part of it’s going to be an important part, but I don’t think it’s a technology issue,

So, when you think about segregation it’s going to be where if you locate these stabilization facilities, because if you have it at a production facility and as Greg mentioned, it goes into a pipeline but also takes unprocessed condensate deals. Then you are not going to be able to trace that barrel however to an export facility.

Got it. And so, that segregation process creates more opportunities than not for somebody who has got assets in the right place and the ability to stabilize and move it to the dock?

Yes, I think it does, but it also – you got through the context but the pipelines are common carrier pipelines. So, if you have a stabilized batch, there will be – anyone that comes in with stabilized products probably is going to be able to do the same batch. But, to sort of want to clarify that these are common carrier pipelines.

Got it. One final one and it kind of hits on some of the storage questions that Jeremy brought up earlier. But we're kind of sitting here heading into what could be the lowest winter storage fill in a decade. Spreads are still relatively subdued in terms of natural gas Contango and we're on the verge of moving a lot of gas to Mexico starting late this year and moving into the later part of this decade, as well as ramping up LNG exports in the next couple of years. Do you guys believe that the market is really so sanguine about this that they just believe that the Utica and the Marcellus are going to overwhelm all possible gas demand? Or is the market looking maybe a little too complacently at a storage market that has a real shot at getting ugly by this winter?

I’d probably say the latter, Brad, I think, everybody is focused in on the aggregate storage levels and saying if we can get to 3.5 TCF, we are okay. I think the important thing to look at is, that especially in the producing area based on current trends if we get to the 3.5 we are probably still going to be about 75% to 80% of where we were last year in the producing area which is where most of the high delivered wealthy is. And I can tell you as an industry, we got very, very close last year to not having enough deliverability. There was gas in the ground, but there wasn’t enough capability to get it out in the short-term period that were necessary to meet the demand. So, if we have a winter this year like we had last year, I would say, it’s not going to be pretty at all. And thereby it’s going to be, I’ve said, I think that the inter-month spreads that you are talking about certainly are not reflecting that attitude and so I would say that’s in place. I do think you are starting to see regional issues, so you are seeing big differentials between gas prices at the well head in the Marcellus and the Northeast versus in the Gulf Coast and that’s reflective of the fact that we are still just not filling storage fast enough in the Gulf Coast. If you parse it even more in the Gulf Coast area, and you assume for a minute that most salt storage facilities, because they have injectability and people like to be able to draw rapidly will be at or near full. The implication is, for the reservoir storage in that area in the same area we may only be at 60% to 70% of where we were the year before and just because the math works in such that to be at an 80% in the aggregate. In the producing year where we were in 2013 and you are 100 full in salt that you are going be by definition sub-70% in many of those particular reservoir facilities. And that’s kind of historic. And that’s not been seen in quite a while. So, I think there is some complacency out there about our ability to meet deliverability. I don’t think we’ll ever run out of gas, because we may not be able to get the gas out of the ground fast enough to keep people from breathing.

Got it. That’s very interesting. Thanks a lot for the time guys.

Thank you. Our next question in queue will come from Becca Followill with US Capital Advisors. Please go ahead.

Good morning guys. Back to the Bakken rail question, can you talk a little more with the recent changes in regulations about your view on how that might further change transit time?

Becca shortened, it’s not going to shorten until you get some rail infrastructure, some better rail infrastructure. I know, most of the rails are looking at improving their infrastructure and trying to debottleneck some of the congestion areas. So, that’s going to have to happen before you really see any improvement in transit times.

And do you have a feel for timing?

Not really.

No, not really.

Okay.

I think there is a lot of motion, it’s just – right now, if it’s translating into measurable action right now. I think, everybody is saying we are going to do, x, y and z which is more than they’ve been doing in the past. But it’s hard, we can’t translate that into what could use to be a two week to three week turnaround time on rail cars. In some cases, we are seeing that extend quite a ways. And so, it’s - and by the way the unpredictability of it is a fair bit of the problem is especially for anybody who has bought on one basis and sold on another basis and realizing that the backwardation in the market right now recalls the delivery of that, oil patterns so to speak to suffer a quite a bit of degradation in value.

And Becca I will say that, they are working on sort of improving the rail infrastructure in North Dakota and some of the congestional places like Chicago, and et cetera. That is one of the advantages that we think that we have with our York Town facility as it bypasses a lot of congestion going into the Philadelphia area. So, but, still – we are seeing a little longer transit times on it.

Thank you. And the next question to be more direct on condensate, have you guys applied for a private letter ruling from the Department of Commerce?

No comments.

That's what I thought, but I had to ask. Thank you guys.

Hi, good morning guys and congrats on a good quarter.

Thanks, Sunil.

Yes, most of my questions have been asked and answered. I just had one with regard to the NGL or especially in Canada, so in 3.5 through NGL export opportunities and I was wondering if you guys have any discussions in that regard and how do you see that opportunity developing for you guys?

If I understood your question correctly is, the export opportunities especially in Canada and the answer is we are looking at that. There are some efforts underway. Nothing that has been made public that could be really talked about. But I think we are definitely seeing a market trend up there that is stable for our asset base and our business model out there and ultimately the resource play in certain of those areas have just now taken out. So, probably we’ll add to that in balance. And we think exports should be a part of that. It’s not an easy process to put in place and - but we are working hard on incremental opportunities. Hopefully that covers that question.

Yes it does. And then one last one, in terms of any updated parts on M&A in the sector?

M&A in the sector?

Yes.

Apology, could you repeat the question real quick.

I was just curious if I know that at the Analyst Day you said that, you are mostly focused on organic growth opportunities, I was just curious if you had any updated thoughts on M&A opportunities in the sector per se, in terms of what you are seeing?

No it still feels about the same as it did in the Analyst Day. I hate to characterize it a little bit like round all day. But it does feel that and the market is still pretty ebullient. And we are still looking at a number of things. I’d probably tell you that a number of things that are available for them to pitch, but we are still looking at things. Prices are still high and we are still focusing on things that are strategic to us. We are having a couple of things that have been available on the market right now. So, we are still active. But it kind of feels about the same.

We are swinging a lot but there is – people had bigger bath.

Thanks guys. That’s it for me.

Thank you.

Thank you very much. At this time, there is no additional questions in queue. Please continue.

If there is no additional questions, again, we want to thank you for dialing in and for all those that invest in us, for the trust that you’ve placed in us that it represents. We look forward to updating you on our activity in our November call. Thank you/

Thank you very much. And ladies and gentlemen, that does conclude your conference call for today. We do thank you for your participation. Thanks for using AT&T’s Executive Teleconference. You may now disconnect.