Q2 2024 Par Pacific Holdings Inc Earnings Call
Speaker Change: Good day and welcome to the Par Pacific second quarter 2024 earnings conference call. All participants will be in a listen-only mode. Should you need assistance please signal conference specialist by pressing the star key followed by zero. After today's remarks there will be an opportunity to ask questions.
Operator: Conference call. All participants will be in a listen-only mode. Should you need assistance? Please signal conference specialist by pressing the star key followed by zero.
Operator: After today's remarks, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touch-tone phone. To withdraw your question, please press star, then two.
Hashimi Patel: To ask a question, you may press star then one on your touchtone phone. To withdraw your question, please press star then two. And please note that this event is being recorded. I would now like to turn the conference over to Ashimi Patel, Vice President of Investor Relations. Please go ahead.
Operator: And please note, this event is being recorded.
Ashimi Patel: I would now like to turn the conference over to Ashimi Patel, Vice President of Investor Relations. Please go ahead.
William Monteleone: Thank you, Cole. Welcome to Par Pacific, second quarter, earning conference call. Joining me today are Will Monteleone, President and Chief Executive Officer, Richard Creamer, UVP of Refining and Logistics, and Shawn Flores, SVP and Chief Financial Officer.
Hashimi Patel: Thank you, Cole. Welcome to Par Pacific's second quarter earnings conference call. Joining me today are Will Monteleone, President and Chief Executive Officer, Richard Creamer, EVP of Refining and Logistics, and Shawn Flores, SVP and Chief Financial Officer.
William Monteleone: Before we begin, note that our comments today may include four looking statements. Any four looking statements are subject to change and are not subject to risks and uncertainties, and actual results made different materially from these four looking statements. Accordingly, investors should not place undue reliance on four looking statements, and we display many obligations to update or revise them.
William Monteleone: I refer you to our investor presentation on our website and to our filing with the SEC for non-GAAP reconciliation and additional information.
William Monteleone: I will now turn the call over to our President and Chief Executive Officer, Will Monteleone. Thank you, Ashimi. Good morning, everyone. Second quarter, adjusted Yvida was 82 million, and adjusted net income was 49 cents per share. These financial results reflect strong reliability and crisp, planned maintenance execution. Notably, the buildings' turnaround planning and performance was excellent. In addition, our retail and logistics segments continued to deliver steady earnings. The completion of the building's maintenance positions us to push utilization rates in the third quarter in order to meet market demand. Each of our markets is short refined product in the summer months, requiring long-haul imports to balance supply and demand.
William Monteleone: These financial results reflect strong reliability and crisp planned maintenance execution. The completion of the billing maintenance positions us to push utilization rates in the third quarter in order to meet market demand. However, the Southern Rockies has been slightly less attractive, as excess mid-continent inventories have pressured markets like Denver and Rapid City.
William Monteleone: Shifting to the broader refining environment, global product inventories are approaching below the end of the five-year range. The combination of elevated utilization rates and relatively flat refined product demand will add for modest inventory restocking margins have responded in our near mid-cycle levels in most regions. Regional dynamics and pad four have largely returned to typical premiums versus the Gulf Coast. However, the Southern Rockies has been slightly less attractive as excess mid-continent inventories of pressured markets like Denver and Rapid City. A retail brand continued to gain market share with same-store fuel and merchandise sales growth of 1.3 and 1.8 percent, respectively.
William Monteleone: The retail team has focused on growing food service gross margin, enhancing systems to better manage store costs, and building a pipeline of remodel and new-to-industry sites. Our young brands continue to be well received in the local markets we serve.
Speaker Change: Building, a pipeline of remodel and new to industry sites.
Speaker Change: Our young brands continued to be well received in the local markets we serve.
William Monteleone: On the strategic front, our growth initiatives are progressing. Billions reliability initiatives are delivering encouraging early results. And the why a renewable hydrotrider conversion is on budget and the renewable fuel code generation project is progressing towards a potential power purchase agreement with Hawaiian Lex. On the financial side, we further reduced our cost of debt capital, and we repurchased more than $65 million of our stock. Our balance sheet remains strong, affording us the flexibility to both opportunistically repurchase stock and pursue our strategic objectives.
William Monteleone: On the strategic front, our growth initiatives are progressing, and our Billing Reliability Initiatives are delivering encouraging early results. In Hawaii, a renewable hydrotreater conversion is on budget, and the Renewable Fuel Code Generation Project is progressing towards a potential power purchase agreement with Hawaiian Electric. Our balance sheet remains strong, affording us the flexibility to both opportunistically repurchase stock and pursue our strategic objectives. In closing, we are focused on safe and reliable operations and crisp project execution.
Speaker Change: On the strategic front our growth initiatives are progressing.
Speaker Change: Billings reliability initiatives are delivering encouraging early results.
Speaker Change: In Hawaii, our renewable hydro treater conversion is on budget and the renewable fuel cogeneration project is progressing towards potential power purchase agreement with Hawaiian electric.
Speaker Change: On the financial side, we further reduced our cost of debt capital and we repurchased more than $65 million of our stock.
Speaker Change: Our balance sheet remains strong fortinet has the flexibility to both opportunistically repurchase stock and pursue our strategic objectives.
William Monteleone: In closing, we are focused on safe and reliable operations and crisp project execution. While the margin environment is moderated, focus on these key areas will last to generate strong free cash flow and healthy returns to the cycle.
Speaker Change: In closing, we're focused on safe and reliable operations and Chris project execution.
William Monteleone: While the margin environment is moderated, focus on these key areas will allow us to generate strong free cash flow and healthy returns through the cycle. I'll now turn the call over to Richard to discuss our refining and logistics operations.
Speaker Change: While the margin environment has moderated.
Speaker Change: On these key areas will allow us to generate strong free cash flow and healthy returns to the cycle.
Richard Creamer: We'll now turn the call over to Richard to discuss our refining and logistics operations. Thank you, Will. The refining segment, second quarter combined throughput, was on plan at 180,000 barrels per day. In Hawaii, throughput was 81,000 barrels per day and production cost for $4.50 per barrel. Refinery operations performed well, delivering 99% operational availability. With Hawaii's consistent throughput and strong catalyst performance, we will be extending the scheduled 2025 turnaround into 2026. Shifting to Wyoming, throughput was a new record of 19.9 thousand barrels per day and production cost for $7.80 per barrel. This represents great work by the Wyoming team to sustain nameplate capacity throughout the quarter.
Speaker Change: I'll now turn the call over to Richard to discuss our refining and logistics operations.
Richard: Thank you will.
Richard Creamer: The refining segment second quarter combined throughput was on plan at 180,000 barrels per day. In Hawaii, throughput was 81,000 barrels per day, and production costs were $4.50 per barrel. Refinery Operations performed well, delivering 99% operational availability. With Hawaii's consistent throughput and strong catalyst performance, we will be extending the scheduled 2025 turnaround into 2026.
Richard: Our refining segment second quarter combined throughput was on plan at 180000 barrels per day in Hawaii throughput was 81000 barrels per day and production costs were $4 50 per barrel refinery.
Richard: Refinery operations performed well delivering 99% operational availability with Hawaii consistent throughput in strong catalyst performance, we will be extending the scheduled pointing twenty-five turnaround into 2026.
Richard Creamer: Shifting to Wyoming, throughput was a new record of 19.9 thousand barrels per day, and production costs were $7.08 per barrel. This represents great work by the Wyoming team to sustain nameplate capacity throughout the quarter. Moving to Washington, second quarter throughput was 41,000 barrels per day, and production costs were $3.66 per barrel. The Washington team did an excellent job of safely restarting in April following their planned outage in March. Finally, I'm pleased to report that Billings executed one of their largest turnarounds on record, successfully meeting all health, safety, and environmental targets, and, as Will stated, finishing on schedule and on budget. The plant restart went well and has met or exceeded all operational objectives.
Richard: Shifting to Wyoming throughput was a new record of $19 9000 barrels per day and production costs were $7.08 per barrel.
Richard: This represents great work by the Wyoming team to sustained nameplate capacity throughout the quarter.
Richard Creamer: Moving to Washington, second quarter throughput was 41,000 barrels per day and production cost for $3.66 per barrel. The Washington team did an excellent job of safely restarting in April following their planned outage and March.
Richard: Moving to Washington second quarter throughput was 41000 barrels per day and production costs were $3 66 per barrel, Washington team did an excellent job of safely restarting in April following their planned outage in March.
Richard Creamer: Finally, I'm pleased to report that the Billings executed one of their largest turnarounds on record, successfully meeting all health, safety, and environmental targets and, as well stated, finishing on schedule and non budget. The plant restart went well, and as met, they're exceeded all operational objectives. Given the turnaround downtime and billings, Q2 throughput and production cost were 38,000 barrels per day and $16.18 per barrel.
Richard: Finally, I am pleased to report that the billing billings executed one of their largest turnarounds on record successfully meeting all health safety and environmental targets and as will stated finishing on schedule and on budget.
Richard: The plant restart went well and has met or exceeded all operational objectives.
Richard Creamer: Given the turnaround downtime in billings, Q2 throughput and production costs were 38,000 barrels per day and $16.18 per barrel. We do have planned maintenance of the Billings Coker in the third quarter, and Shawn will cover those financials. Looking to the third quarter, we expect throughput in Hawaii between 78 and 82,000 barrels per day, Wyoming between 18 and 20, Washington between 38 and 41, and Billings between 55 and 59, resulting in system-wide throughput between 190 and 200,000 barrels per day. I'll now turn the call over to Shawn to discuss the financial results.
Richard: Given the turnaround downtime in billings Q2's throughput and production costs were 38000 barrels per day and $16 18 per barrel we.
Richard Creamer: We do have planned maintenance of the Billings Coca in the third quarter, and Sean will cover those financials. Looking to the third quarter, we expect throughput in Hawaii between 78 and 82,000 barrels per day, Wyoming between 18 and 20, Washington between 38 and 41, and Millings between 55 and 59, resulting in system-wide throughput between 190 and 200,000 barrels per day.
Richard: We do have planned maintenance of the billings coker into third quarter and John will cover those financials.
John: Looking to the third quarter, we expect throughput in Hawaii between 78, and 82000 barrels per day, Wyoming between 18, and 20, Washington between 38, and <unk> 41, and billings between 55 and 59.
Resulting in systemwide throughput between 190 and 200000 barrels per day.
Shawn Flores: I'll now turn to call over to Sean to cover the financial results. Thank you, Richard. Second quarter, Adjustity Vida and Adjustedirings were 82,000,000 and 29,000, or 49 cents per share. The refining segment reported Adjustity Vida of 60,000,000 compared to 81,000,000 in the first quarter. In Hawaii, the Singapore Index averaged $12.49 per barrel, and their landing career differential was $5.08, resulting in a combined index of $7.41. Hawaii margin capture was 136%, including a product crack hedge gain of $12 million and continued margin support from elevated clean product freight. Looking ahead to the third quarter, we expect the Hawaii career differential to land between $6.25 and $6.75 per barrel, and we have hedged approximately 10% of our third quarter sales at an average crack of $18 per barrel.
John: I'll now turn the call over to Sean to cover the financial results.
Shawn Flores: Thank you, Richard. Second quarter adjusted EBITDA and adjusted earnings were $82,029.049. The refining segment reported a justification of about $60 million, compared to $81 million in the first quarter. In Hawaii, the Singapore Index averaged $12.49 per barrel, and our landing crew differential was $5.08, resulting in a combined index of $7.41 per barrel. Hawaii margin capture was 136%, including a product crack hedge gain of $12 million in continued margin support from elevated clean product freight.
Sean: Thank you Richard second quarter, adjusted EBITDA, and adjusted earnings were $82 million and $29 million or <unk> 49 per share.
Sean: The refining segment reported adjusted EBITDA of $60 million compared to $81 million in the first quarter.
Sean: In Hawaii, the Singapore Index averaged $12 49 per barrel and our landed crude differential was $5.08, resulting in a combined index of $7 41 per barrel.
Sean: Hawaii margin capture was 136%, including a product crack hedge gain of $12 million and continued margin support from elevated clean product freight.
Shawn Flores: Looking ahead to the third quarter, we expect the Hawaii crew differential to land between $6.25 and $6.75 per barrel, and we have hedged approximately 10% of our third quarter sales at an average crack of $18 per barrel. In Billings, our U.S. Gulf Coast Index averaged $17.93 per barrel.
Sean: Looking ahead to the third quarter, we expect the Hawaii crude differential to land between 625, and 675 per barrel and we have hedged approximately 10% of our third quarter sales at an average crack of $18 per barrel.
Shawn Flores: In Billings, our U.S. Gulf Coast Index averaged $17.93 per barrel. Fresh margin capture was 94 percent, reflecting seasonally strong clean product differentials in the upper Rockies and benefits from our lag costly crude differentials. Offsetting the improved margin backdrop was an approximate $25 million impact from the crude unitarian activities, driven by reduced clean product sales and higher purchase product. Looking ahead to the third quarter in Billings, clean product premiums to the Gulf Coast remain strong, trending slightly above Q2 levels quarter to date. Costly crude differentials in the third quarter are expected to increase by approximately $5 per barrel, reflecting tighter, heavy and sin crude differentials during the second quarter.
Sean: And billings, our U S. Gulf Coast Index averaged $17 93 per barrel gross margin capture was 94%, reflecting seasonally strong clean product differentials and the upper Rockies and benefits from our lag cost of crude differentials.
Shawn Flores: Breast margin capture was 94 percent, reflecting seasonally strong clean product differentials in the upper Rockies and benefits from our lag-costed crude differential. Offsetting the improved margin backdrop was an approximate $25 million impact from the crew unit turnaround activities, driven by reduced clean product sales and higher purchase product. Looking ahead to the third quarter in Billings, clean product premiums to the Gulf Coast remain strong, trending slightly above Q2 levels quarter to date. Costly crew differentials in the third quarter are expected to increase by approximately $5 per barrel, reflecting tighter heavy and thin crew differentials during the second quarter.
Sean: Offsetting the improved margin backdrop with an approximate $25 million impact from the crude unit turnaround activities driven by reduced clean product sales and higher purchase product.
Sean: Looking ahead to the third quarter in billings clean product premiums to the Gulf Coast remains strong trending slightly above Q2 levels quarter to date.
Sean: Costly crude differentials in the third quarter are expected to increase by approximately $5 per barrel, reflecting tighter heavy and syn crude differentials during the second quarter.
Shawn Flores: As a reminder, feedstock costs and billings will typically lag prompt crude pricing by one quarter under our FIPO inventory accounting. Third quarter operating costs will reflect an incremental seven to eight million dollars related to the maintenance activities on the Coker U. In Wyoming, capture to the Gulf Coast Index was 82%, reflecting softer premiums in the Southern Rockies. However, local demand continues to strengthen into the third quarter, and clean product spreads to the Gulf Coast have returned to typical summer levels. Lastly, in Washington, the P&W Index averaged 2,254 per barrel in the second quarter.
Shawn Flores: As a reminder, Feet.Cossum Billings will typically lag prompt crude pricing by one quarter under our 5.0 inventory accounting. Third quarter operating cost for reflect an incremental $7 to $8 million related to the maintenance activities on the Coker unit. In Wyoming, capture to the Gulf Coast Index was 82 percent, reflecting softer premiums in the Southern Rockies. Local demand continued to strengthen into the third quarter, and clean product spreads to the Gulf Coast have returned to typical summer levels. Lastly, in Washington, the P&W Index averaged $22.54 per barrel in the second quarter; margin capture was 21 percent, driven by narrow heavy crude differentials and lower secondary product margins.
Sean: As a reminder, feedstock cost and billings will typically lag crude pricing by one quarter under our FIFO inventory accounting.
Sean: Third quarter operating costs will reflect an incremental $7 million to $8 million related to the maintenance activities on the Coker unit.
Speaker Change: In Wyoming captured to the Gulf Coast Index was 82%, reflecting softer premiums in the southern Rockies local demand continues to strengthen into the third quarter and clean product spreads the Gulf coast have returned to typical summer levels.
Speaker Change: Lastly, in Washington, The PNW index averaged $22 54 per barrel in the second quarter margin capture was 21% driven by narrow heavy crude differentials and lower secondary product margins.
Shawn Flores: Margin capture was 21 percent, driven by narrow heavy crew differentials and lower secondary product margin. Prompt Secondary Product Margins have also improved with the recent decline in flat price. The logistics segment reported adjusted EBITDA of $26 million in the second quarter compared to $28 million in the first quarter, down slightly due to reduced pipeline throughput related to the billing's turnaround. Our retail segment reported adjusted EBITDA of $19 million during the second quarter compared to $14 million in the first quarter.
Shawn Flores: Looking ahead, quarter-to-date heavy crude discs have widened $3 per barrel, which is expected to provide more immediate benefits to Washington under LIFO accounting. Prompt secondary product margins have also improved with the recent decline in flat price. The logistics segment reported a justity, but I have 26 million in the second quarter compared to 28 million in the first quarter, down slightly due to reduced pipeline throughput related to the Billings turnaround. Our retail segment reported a justity, but I have 19 million during the second quarter compared to 14 million in the first quarter. Strong retail performance was driven by expanded fuel margins and continued growth in same store fuel volumes and merchandise revenue.
Speaker Change: Looking ahead quarter to date heavy crude diff have widened $3 per barrel, which is expected to provide more immediate benefits to Washington under LIFO accounting.
Speaker Change: Prompt secondary product margins have also improved with the recent decline in flat price.
Speaker Change: Well logistics segment reported adjusted EBITDA of $26 million in the second quarter compared to $28 million in the first quarter down slightly due to reduced pipeline throughput related to the billings turnaround.
Speaker Change: Our retail segment reported adjusted EBITDA of $19 million during the second quarter compared to $14 million in the first quarter <unk>.
Speaker Change: Strong retail performance was driven by expanded fuel margins and continued growth in same store fuel volumes and merchandise revenue.
Shawn Flores: Corporate expenses in adjusted EBITDA were $23 million in the second quarter, compared to $29 million in the first quarter. Lower costs were driven by lower renewable development activity and employee costs. Net cash used in operations in the second quarter totaled $5 million, including a $61 million working capital outflow related to a temporary increase in inventories and deferred turnaround expenditures of $29 million. Excluding these items, cash from operations was $85 million during the second quarter.
Speaker Change: Corporate expenses and adjusted EBITDA were $23 million in the second quarter compared to 29 million in the first quarter reduced costs were driven by lower renewable development activity and employee costs.
Shawn Flores: Corporate expenses and adjusted EBITDA were 23 million in the second quarter compared to 29 million in the first quarter. Reduced costs were driven by lower renewable development activity and employee costs. That cash used in operations during the second quarter told 5 million, including a 61 million working capital outflow related to a temporary increase in inventory and deferred turnaround expenditures of 29 million. Excluding these items, cash from operations was 85 million during the second quarter. Cash used in investing activities total 35 million, including 37 million of capital expenditures, partially offset by 1.5 million dollar annual tax distribution from Laramie.
Speaker Change: Yeah.
Speaker Change: Net cash used in operations during the second quarter totaled $5 million, including a 61 million working capital outflow related to a temporary increase in inventories.
Speaker Change: Turnaround expenditures of $29 million.
Speaker Change: Excluding these items cash from operations was $85 million during the second quarter.
Shawn Flores: Cash use and investing activities totaled $35 million, including $37 million of capital expenditures partially offset by $1.5 million annual tax distribution from Laramie. Moving to financing activities, we recently completed a working capital refinancing in Hawaii, replacing the legacy inventory intermediation with a combination of borrowings under the expanded ABL and a crude only intermediation.
Speaker Change: Cash used in investing activities totaled $35 million, including $37 million of capital expenditures, partially offset by one and a half million dollar annual tax distribution from Laramie.
Shawn Flores: Moving to financing activities, we recently completed the working capital refinancing in Hawaii, replacing the legacy inventory intermediation with a combination of borrowings under the expanded AVL and a crude-only intermediation. In connection with the refinancing, total intermediation liabilities decreased by 412 million, offset billion. As previously announced, the Hawaii refinancing is expected to reduce funding costs by approximately $10 million per year. We continue our opportunistic approach to share repurchases with 66 million during the second quarter and 116 million year-to-date through August 5th. Since completing the Billion's acquisition last June, we have repurchased a total of 5.6 million shares, equivalent to 10% of our current shares outstanding.
Speaker Change: Moving to financing activities, we recently completed the working capital refinancing in Hawaii, replacing the legacy inventory intermediation with a combination of borrowings under the expanded ABL and a crude only intermediation.
Speaker Change: In connection with the refinancing total intermediation liabilities decreased by $412 million offset by an increase in ABL funding of $420 million.
As previously announced the Hawaii refinancing is expected to reduce funding costs by approximately $10 million per year.
Speaker Change: We continued our opportunistic approach to share repurchases with 66 million during the second quarter and $116 million year to date through August 5th.
Speaker Change: Since completing the billings acquisition last June we have repurchased a total of $5 6 million shares or equivalent to 10% of our current shares outstanding.
Shawn Flores: Total liquidity as of June 30th was 520 million, made up of 180 million in cash and 340 million in availability. The strong balance sheet where well positioned to advance our strategic growth priorities while maintaining an opportunistic approach to share repurchases.
Speaker Change: Total liquidity as of June 30 was 520 million made up of $180 million in cash and $340 million in availability.
Speaker Change: The strong balance sheet, we're well positioned to advance our strategic growth priorities, while maintaining an opportunistic approach to share repurchases.
Speaker Change: This concludes our prepared remarks, operator, we'll turn it to you for Q&A.
Speaker Change: Yeah.
Operator: This concludes our session.
Speaker Change: Thank you and at this time, we will now begin the question and answer session.
Operator: If you would like to ask a question, you may press star, then one on your touch-tone phone. If you're using a speaker phone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then two. And at this time, we'll partner internally for the first question.
Speaker Change: I would like to ask a question you May Press Star then one and you touched him so.
Speaker Change: If youre using a speakerphone please pick up your handset before pressing the keys.
Speaker Change: To withdraw your question. Please press Star then two and at this time, we will pause momentarily for the first question.
Neil Mehta: And our first question today will come from Neil Mehta with Goldman Sachs. Go ahead. Good morning, team, and thank you for taking my question.
Operator: And our first question today will come from Neil Mehta with Goldman Sachs. Okay.
Speaker Change: And our first question today will come from Neil Mehta with Goldman Sachs go ahead.
Adam Wijaya: Good morning, team, and thank you for taking my questions. This is Adam Wijaya on behalf of Neil Mehta.
Speaker Change: Good morning team and thank you for taking my questions. This is Adam Wood Jaya on for Neil Mehta I wanted to first get your thoughts on Singapore margins and a key area of focus in our recent conversations centered around more disappointing Asia demand and as a result, Singapore margins and it looks like based on the par market indicators seem to tick up and margins over reason.
Adam Wijaya: This is Adam Wajaya. I wanted to first get your thoughts on Singapore margins and a key area of focus in our recent conversations that center around more disappointing Asian demand and, as a result, Singapore margins. And it looks like, based on the par market indicators seen to tick up in margins over recent weeks. So what are you guys seeing in terms of real-time demand, and then how do you see that margin environment evolving over the coming months? Thank you. Sure, Adam. Good morning. So I think on the Singapore front, we're probably hovering between $11 and $13 a barrel for the Singapore 312.
Adam Wijaya: Wanted to first get your thoughts on Singapore margins, and a key area of focus in our recent conversations that's centered around more disappointing Asian demand and, as a result, Singapore margins. And it looks like, based on the PAR market indicators, we've seen a tick-up in margins over the last weeks. So, what are you guys seeing in terms of real-time demand, and then how do you see that margin environment evolving over the coming months? Thank you.
Speaker Change: Weeks. So what are you guys seeing in terms of real time demand and then how do you see that margin environment evolving over the coming months. Thank you.
William Monteleone: Sure, Adam. Good morning.
Speaker Change: Sure Adam good morning.
Speaker Change: So I think on the Singapore front, you know what.
Speaker Change: Probably hovering plain 11, and $13 a barrel for the Singapore 312, and I think those are levels, we characterized as mid cycle.
Adam Wijaya: I think those are levels we characterize as mid-cycle. I think on the supply side, you're looking at levels where the simpler refining fleet in Asia is up against negative gross margins. So I think you have some supply side support with respect to where the clean product margins are. And I think importantly, we're secondary product or trading like fuel map. I think importantly, I think you've seen limited exports of refined product out of China despite some of the concerns on the demand side. And ultimately, I still think you're seeing the world operated in a connected fashion where barrels are arbitraged between.
William Monteleone: You know, I think on the supply side, you're looking at levels where the simpler refining fleet in Asia is up against negative gross margin, so I think you have some supply side support. And ultimately, I still think you're seeing the world operated in a connected fashion where barrels are arbitraged between Asia and Northwest Europe.
Speaker Change: I think on the supply side Youre looking at levels, where the simple or refining fleet in Asia is up against negative gross margin. So I think you have some supply side support.
With respect to where.
Speaker Change: Clean product margins are and I think importantly, we're secondary products are trading like fuel oil and naphtha.
Speaker Change: I think importantly, I think you're seeing limited exports of refined products out of China. Despite some of the concerns on the demand side.
Speaker Change: And ultimately I still think youre, saying the world operated in a connected fashion, where our barrels are arbitrage in between.
Adam Wijaya: Asia and Northwest Europe. So again, I think that's the net driver of ultimate refining throughput in the Northeast Asian market. And no major changes, and with elevated freight impacting both inputs and the cost of arbitrage. I think the supply side has limited incentive to ratchet rates up further. Got it. Okay, that's super helpful.
Speaker Change: Asia and northwest Europe.
Speaker Change: So again I think that's the.
Net driver of ultimate refining throughput in the northeast Asian market.
Speaker Change: And no major changes and with elevated freight.
Speaker Change: Impacting both inputs and the cost of arbitrage.
Speaker Change: I think the supply side has limited incentives to ratchet rates up further.
Speaker Change: Got it Okay. That's super helpful. And then I guess my next question is just on capital returns. The buyback number came in really strong this quarter, which was good to see and could you see continued progress on the buybacks thus far into three Q. So wanted to get the team's updated thoughts on capital returns expectations in the context of the current refi.
Adam Wijaya: And then I guess my next question is just on capital returns. The buyback number came in really strong this quarter, which is good to see and good to see continued progress on the buybacks thus far into 3Q. So I wanted to get the teams' updated thoughts on capital returns expectations in the context of the current refining margin environment. Then also where the share prices as well. Thank you. Sure, Adam. So I think on the cherry perched cadence, I think we'll remain opportunistic in how we think about it, and ultimately our approach is going to be influenced by our cast generation, our outlook, the share price relative to our view of intrinsic value, and ultimately our liquidity position.
Speaker Change: Any margin environment, and also where the share prices as well. Thank you.
Speaker Change: Sure Adam So I think on the share repurchase cadence.
Speaker Change: We will remain opportunistic in how we think about it and ultimately our approach is going to be influenced by our cash generation our outlook.
Speaker Change: Share price relative to our view of intrinsic value and ultimately our liquidity position.
Operator: So we'll continue to look at all those factors, and ultimately work to deliver a cherry-perched cadence that I think is consistent with driving maximum shareholder returns. Got it, super helpful. Thank you. Ed, once again, if you would like to ask a question, please press star, then one.
Speaker Change: So we'll continue to look at all of those factors.
Speaker Change: And ultimately.
Speaker Change: Our work to deliver our share repurchase cadence.
Speaker Change: I think is consistent with driving maximum shareholder returns.
Adam Wijaya: Got it. Super helpful. Thank you.
Speaker Change: Got it Super helpful. Thank you.
Speaker Change: And once again, if he would like to ask a question. Please press Star then one.
John Royall: Our next question will come from John Royall with JP Morgan. Please go ahead. Hi, good morning. Thanks for taking my question. So my first question is on Billings. You've got the 2024 work now behind you, and sounds like it went quite well. Can you talk about the work you have scheduled for 2025 and how it compares in scope and in cost to this year's work? Sure, John. I think, as we've messaged, yarn tent with Billings is really over the course of 24 and 25 to turn around every major unit in the refinery. And again, the major work that was completed this year was a first step in the right direction.
Operator: Our next question will come from John Royall of J.P. Morgan. Please go ahead.
Speaker Change: Our next question will come from John Royall with JP Morgan. Please go ahead.
John Royall: Hi, good morning, Thanks for taking my question.
John Royall: So my first question is on billing them, you've got the 2024 work now behind you.
Speaker Change: Sounds like it went quite well.
John Royall: Can you talk about the work you have scheduled for 2025 and how it compares and in scope and in cost to this year's work.
John Royall: Sure John.
Speaker Change: I think as we've messaged, our intent with billings is really over the course of 'twenty four and 'twenty five.
Speaker Change: Two turnaround every major unit in the refinery.
Speaker Change: And again the major work that was completed this year was our first step in the right direction.
John Royall: I think ultimately when you look at our expected amortized turnaround cycle and billings, it's about $120 million over a roughly 4 to 5-year period. And so again, I think you can expect for us in the total amount between 24 and 25, in that range.
Speaker Change: I think ultimately when you look at our expected.
Speaker Change: Amortized turnaround cycle in billings, it's about $120 million over a roughly.
Speaker Change: The five year period.
Speaker Change: And so again I think you can expect for us to spend a total amount between 24 and 25 in that range.
John Royall: And there's probably an incremental 10 to 20 million dollars of work that we're focusing on to ensure that we get a solid runtime out of the Gatcracker, which is the major focus area for 25.
Speaker Change: And theres, probably an incremental.
Speaker Change: $10 million to $20 million of work that we're focusing on to ensure that we get a solid run time out of the cat Cracker, which is the major focus area for 25.
John Royall: Great, thank you. And then just sticking with the Rockies region, was hoping for a little more color on the drivers of the crack basis between Rockies and Gulf Coast and how that's improved and maybe your expectations for the second half. And in particular, we'll notice the Southern market not doing quite as well. You can just get some more detail on that bifurcation you're seeing there that will be helpful. Sure. So I think ultimately, the Southern Rockies has a fair amount of interconnectivity with the midcontinent, and I think our observation would be in June and July while you typically expect to see significant railborne imports into Southern Rockies.
John Royall: Great, thank you. And then just sticking with the Rockies region, I was hoping for a little more color on the drivers of the crack basis between Rockies and the Gulf Coast and how that's improved and maybe your expectations for the second half. And, in particular, Will noted the southern market not doing quite as well. If you can just give some more detail on that bifurcation you're seeing there, that'd be helpful.
Speaker Change: Great. Thank you and then just sticking with the Rockies region was hoping for a little more color on that.
Speaker Change: The drivers of the crack basis between Rockies and Gulf Coast.
Speaker Change: How that's improved and maybe your expectations for the second half in particular will noted the southern market not doing quite as well. If you can just give some more detail on that bifurcation youre seeing there that would be helpful.
Speaker Change: Sure.
William Monteleone: So I think ultimately, you know, the Southern Rockies has a fair amount of interconnectivity with the mid-continent, and I think, you know, our observation would be in, you know, June and July, while you typically expect to see significant rail-borne imports into the Southern Rockies, we didn't see the spread. So I think those are the biggest factors that are driving the distinctions and differences.
Speaker Change: So I think ultimately the southern Rockies has a fair amount of Interconnectivity with the mid continent, and I think our observation would be in June and July while you typically expect to see significant rail borne imports into the southern Rockies.
John Royall: Ultimately, we didn't see the spreads that you would typically expect in those markets. As you've moved later in July and August, I would say it's beginning to normalize to higher levels that would be more consistent with railborne imports into Pad Four to balance supply and demand during peak demand season. The Northern Rockies again, I think, has more principally served by rail, and ultimately demand seasonality is more pronounced, I think, in the Northern Rocks. Keys. So, I think those are the biggest factors that are driving the distinctions and differences. And ultimately, I think we're seeing good demand across our system.
Speaker Change: Ultimately, we didn't see the spreads.
Speaker Change: That you would typically expect in those markets as you've moved later in the July and August I would say, it's beginning to normalize.
Speaker Change: To higher levels that would be more consistent with.
Speaker Change: Our rail borne.
Imports into pad four to balance supply and demand during peak demand season.
Speaker Change: The northern Rockies again, I think is more principally served by rail.
Speaker Change: Rail.
Speaker Change: And ultimately.
Speaker Change: Demand seasonality is more pronounced I think in the northern Rockies.
Speaker Change: I think those are the biggest factors that are driving the distinctions and differences.
Speaker Change: And ultimately I think we're seeing good demand across our system.
John Royall: And, you know, ultimately we're still seeing demand well and excess of supply in the summer periods.
Speaker Change: And.
Speaker Change: Ultimately are still seen.
Speaker Change: Demand well in excess of supply in the summer periods.
Speaker Change: Yes.
John Royall: Thank you.
Speaker Change: Thank you.
Jason Gabelman: And our next question will come from Jason Gabelman with TD Cowan. Please go ahead. Yeah, good morning, Taser. Taking my questions.
Operator: And our next question will come from Jason Gabelman with TD Cowen. Please go ahead.
Jason Gammel: And our next question will come from Jason gave women with TD Cowen. Please go ahead.
Jason Gammel: Yeah. Good morning, Thanks for taking my questions.
Jason Gabelman: I wanted to go back to Billings, and it sounded like I just wanted to confirm there was going to be some work on the Coker in 3Q24 if I heard correctly. Was that part of the initial plan for this year, or was that related to something you perhaps saw in while you had the asset down in 2Q and had expected that to impact that capture in 3Q? Sure, Jason. So, this is consistent with our plan. It impacts op-ex, not capex in turn arounds. And again, this is largely due to the typical maintenance cycle links on our fluid poker.
Speaker Change: I wanted to go back to billings and it sounded like I just wanted to confirm there was going to be some work on the coker and 324, if I heard correctly was that part of the initial.
Speaker Change: Plan for this year or was that related to.
Speaker Change: Something you perhaps saw and.
Jason Gabelman: while you have the asset down in 2Q and how you expect that to impact capture in 3Q.
Speaker Change: Well, while you have the asset down in <unk>, and I would expect that to impact capture and <unk>.
Speaker Change: Sure Jason So this is.
Jason Gammel: Consistent with our plan it impacts opex, not capex and turnarounds and again this is largely due to the typical maintenance cycle lengths on our fluid coker.
Jason Gabelman: So, ultimately, this is something that is going to be a nine to eighteen month interval, and we did accelerate the downtime based on some performance, but I wouldn't say it was a material reduction in the planned runtime. So, again, this is a really nine to 18 month impact. And so, I think you should really spread out those costs over that time frame and think about it as an amortized cost for running that unit.
William Monteleone: So ultimately, this is something that is going to be a nine to 18 month interval. And we did accelerate the downtime based on some performance, but I wouldn't say it was a material reduction in the planned runtime. So again, this is a really nine to 18 month impact, and so I think you should really spread out those costs over that timeframe and think about it as an amortized cost for running that unit.
Jason Gammel: So ultimately this is something that is going to be a nine to 18 month interval.
Jason Gammel: And.
We did accelerate the downtime based on some performance, but I wouldn't say it was a material reduction in.
Jason Gammel: And the planned run time.
Jason Gammel: So again this is a really nine to 18 months.
Jason Gammel: Impact and so I think you should really spread out those costs over that timeframe to think about it as the amortized cost.
Jason Gammel: For running that unit.
Jason Gabelman: Okay. And then, you know, you have exposure to West Coast cracks both from Washington and then what you export from Hawaii to the West Coast. Cuders, remind us on specifically Hawaii what that exposure is and how that impacted your results in 2Q and kind of how you're thinking about that impacting your results in 3Q. Sure. You know, Jason, I don't think it'd be appropriate to specifically provide a percentage on our, you know, contract index exposure, but I would tell you that, you know, Hawaii does have a smaller percentage influence by Pacific Northwest and Los Angeles markets.
Jason Gammel: Okay.
Jason Gabelman: And then, you know, you have exposure to West Coast cracks, both from Washington and then from what you export.
Jason Gammel: And then.
Jason Gammel: You have exposure to the west coast cracks, both from Washington, and then what you export.
From Hawaii to the West Coast can you just remind us on specifically, Hawaii, what that exposure is and how that impacted your results in <unk> and kind of how youre thinking about that impacting our results in three kipp.
William Monteleone: Sure, you know, Jason, I don't think it'd be appropriate to specifically provide a percentage on our, you know, contract index exposure. But I would tell you that, you know, Hawaii does have a smaller percentage influence by the Pacific Northwest and Los Angeles markets. So again, I think Singapore is the main factor and that's why the index for Hawaii is set based on Singapore. And again, that's a very difficult arbitrage to capture
Speaker Change: Sure Jason I don't think it would be appropriate to specifically provide a percentage on our contract index exposure, but I would tell you that Hawaii does have a smaller percentage influence.
Speaker Change: By civic.
Jason Gammel: Civic northwest and Los Angeles markets.
Jason Gabelman: So, again, I think Singapore is the main factor, and that's why the index for Hawaii is set based on Singapore. That said, we are observing, you know, really the unusual weakness in the West Coast margin environment that's reflected in our PNW index, especially for summer periods. Again, I think that has more to do with the influx of refined product imports in the May time frame that, when you look at them on a standalone basis, appear to be very un-economic, given where the markets trended. And again, that's a very difficult arbitrage to capture value, and ultimately, you know, when you look forward, the quantity of imports appears to be reducing, particularly on the gasoline in between the equations.
Jason Gammel: Again, I think Singapore is the main factor and that's why the index for Hawaii set based on Singapore.
Jason Gammel: That said we are observing.
Jason Gammel: Really the.
Jason Gammel: Unusual weakness in the west coast margin environment.
Jason Gammel: That's reflected in our BMW index.
Jason Gammel: Especially for summer periods again, I think that has more to do with influx of refined product imports.
Jason Gammel: May timeframe that when you look at them on a standalone basis appear to be very uneconomic.
Jason Gammel: Given where the market has trended.
Jason Gammel: And again, that's a very difficult arbitrage to capture value.
William Monteleone: And ultimately, you know, when you look forward, the quantity of imports appears to be reducing, particularly on the gasoline side of the equation. That said, I think the West Coast is in a challenging environment, given the material increases in renewable diesel into the market and the marginal barrel of conventional petroleum diesel being exported consistently. So, again, I think we're in a good position as a low-cost operator in Washington, and ultimately, we're well-positioned with our Hawaii business to capture opportunities when they emerge. Okay.
Jason Gammel: And ultimately.
Jason Gammel: When you look forward.
Jason Gammel: The quantity of imports appears to be reducing.
Jason Gammel: Particularly on the gasoline side of the equation.
Jason Gabelman: That said, I think the West Coast is in a challenging environment given the material increases and renewable diesel into the market and the marginal barrel of conventional petroleum diesel being exported consistently. So again, I think we're in a good position as a low-cost operator in Washington, and ultimately we're well positioned with our Hawaii business to capture opportunities when they emerge.
Jason Gammel: That said I think the west coast is in a challenging environment given the material increases in renewable diesel into the market and the marginal barrel of conventional petroleum diesel being exported consistently so again I think we're in a good position as a low cost operator in la.
Jason Gammel: Tim.
Tim: And ultimately we are well positioned with our Hawaii business to capture opportunities when they emerge.
Jason Gabelman: Okay, great, if I could just sneak one more in, you know, as you've absorbed buildings and gone through the first major turnaround, how do you think about M&A moving forward? It sounds like you're still growing the retail business. There's been some public activity from one of your peers there. Are you still a buyer of retail and just more broadly on the M&A? The environment? Sure, so I think we've grown our business over the years through an active M&A program. And ultimately, I think it's one of our core competencies. That said, and I think we're disciplined and thoughtful on value at all times.
Speaker Change: Okay, great if I could just sneak one more in you know as you've absorbed billings and gone through the first major turnaround how do you think about M&A moving forward it sounds like you're still growing the retail business, there's been some public activity.
From one of your peers, there or are you still a buyer of retail.
Speaker Change: And just brought more more broadly on the M&A environment.
Speaker Change: Yeah.
Speaker Change: Sure.
William Monteleone: So I think, you know, we've grown our business over the years through an active M&A. We'll weigh all those pieces and evaluate the opportunity set, and I think try and make the most thoughtful capital allocation decision. So again, I think it will remain dynamic. I would say, ultimately, the M&A market is still highly influenced by
Speaker Change: We've grown our business over the years through an active.
Speaker Change: M&A.
Speaker Change: Program and ultimately I think it's one of our core competencies.
Speaker Change: That said I think we're disciplined and thoughtful on value at all times.
Jason Gabelman: And I think we'll continue to weigh really the opportunity for us to redeploy capital, to repurchase our shares as well as additional steestor development and really the opportunities to invest in organic projects inside of our existing refining fleet to improve the efficiency of our operations. We'll weigh all those pieces and evaluate the opportunity set. And I think trying to make the most thoughtful capital allocation decision. So again, I think it will remain dynamic. I would say ultimately the M&A market is still highly influenced by the last 24 months, which I think makes it difficult for a buyer and seller to agree on value.
Speaker Change: And I think we will continue to weigh.
Speaker Change: Really the opportunity for us to redeploy capital to repurchase our shares as well as additional Steve store development and really the opportunities to invest in organic projects inside of our existing refining fleet.
Speaker Change: To improve the efficiency of our operations.
Speaker Change: All of those pieces and evaluate them.
The opportunity set.
Speaker Change: And I think try and make the most thoughtful capital allocation decision.
Speaker Change: So again I think it's it will remain dynamic.
Speaker Change: I would say ultimately the M&A market is still highly influenced by.
Speaker Change: The last 24 months.
Speaker Change: Which I think makes it difficult for our buyer and seller to agree on value.
Jason Gabelman: That said, given the outlook, I think you're likely to see a more rational framework emerge as concerns of, or the return for mid-cycle environment becomes more evident. It makes sense. Thanks for the color.
Speaker Change: That said given the outlook.
Speaker Change: I think youre likely to see a more rational framework emerge.
Speaker Change: As concerns of or returned towards mid cycle environment becomes more evident.
Speaker Change: Got it makes sense thanks for the color.
Matthew Blair: In our next question, we'll come from Matthew Blair with THP, or TPH. Please go ahead. Thank you, and good morning.
Speaker Change: And our next question will come from Matthew Blair with T. H P.
Speaker Change: D. P. H. Please go ahead.
Matthew Blair: Thank you and good morning. On the refining side, could you talk about WCS availability on the West Coast with TMX starting up? And for your Washington refinery, is that still entirely a rail supply arrangement, or are you able to, have you started running some of these TMX WCS barrels at Washington?
Matthew Blair: Thank you and good morning.
Matthew Blair: On the refining side, could you talk about WCS availability on the West Coast with TMX starting up? And for your Washington refinery, is that still entirely accrued by rail supply arrangement, or are you able, have you started running from these TMX WCS barrels at Washington? Sure, Matthew, thanks for the question. So we are seeing increasing availability of needing grades on the West Coast, and I think ultimately in Washington, we do have the capability to receive waterborne cargoes, and so we do have a great logistics system there that affords us the flexibility to pose. Deliver rail as well as waterborne.
Matthew Blair: On the refining side could you talk about WCS availability on the west coast with <unk>, starting up in and for your Washington refinery is that still entirely.
Speaker Change: Crude by rail.
Speaker Change: Pi arrangement or are you able.
Speaker Change: Have you started running some of these.
Speaker Change: T M X WCS barrels at Washington.
William Monteleone: Sure, Matthew, thanks for the question. So we are seeing increasing availability of Canadian grades on the West Coast. And I think, ultimately, in Washington, we do have the capability to receive waterborne cargoes. And so we do have a great logistics system there that affords us the flexibility to both
Speaker Change: Sure Matthew Thanks for the question. So we are seeing increasing availability of Canadian grades along the west coast and.
Speaker Change: And I think ultimately in Washington, we do have the capability to receive waterborne cargos.
Speaker Change: And so we do have a great logistics system, there that affords us the flexibility to both.
Speaker Change: Deliver rail as well as waterborne.
Matthew Blair: Ultimately, I think the WCS market or the availability of Canadian crude is beginning to impact A&S pricing and broader West Coast crude alternatives. We are seeing lighter Canadian grades offered, and I think that's presenting a new opportunity for our Hawaii business. Again, I think that's going to be dynamic over time.
Speaker Change: Ultimately I think the WCS market.
Speaker Change: Or the availability of Canadian crude is beginning to impact.
Speaker Change: And as pricing and broader west coast crude alternatives.
Speaker Change: We are seeing a lighter Canadian grades offered them and I think thats, all presenting a new opportunity for our Hawaii business.
Speaker Change: Again, I think that's going to be dynamic over time, I think the winter period will be a good past as you know really the first cargos loaded in may and you've seen volumes increase as we got into June but.
Matthew Blair: I think the winter period will be a good test as really the first cargo is loaded in May and you've seen lawyums increase as we've got in the June, but I think that's a dynamic factor and the Prince Mountain barrels are learning to offer in based on the typical waterborne trade cycle, which is different than the M1 market trade cycle. Sounds good.
Speaker Change: I think that's a dynamic factor in the Trans mountain barrels are learning to offer in based on a typical waterborne trade cycle, which is different than the inland market trade cycle.
Speaker Change: Sounds good.
Matthew Blair: And then in Hawaii, we thought the capture trend was pretty encouraging. I think the release mentioned a tailwind from the fuel lagged contract, but could you talk about some other drivers here? I guess it's particular, any benefit from your product crack hedging in Hawaii and any benefit from the pretty robust, clean product tanker market. Thanks.
Speaker Change: In Hawaii.
We thought the capture trend was pretty encouraging.
Speaker Change: I think the release mentioned a tailwind from the few oil lagged contract, but could you talk about some other drivers here I guess in particular any benefit from new product crack hedging in Hawaii.
Speaker Change: And any benefit from the.
Speaker Change: Pretty robust clean product tanker market.
Shawn Flores: Hey Matthew, it's Shawn. You know, Q2 capture in Hawaii was 136%, so well above our 100% guidance, and I called out the $12 million hedge, crack hedge gain. We also called out in the release the $2 million price hike benefit. So I think when you, when you back out, those sort of tailwinds that are working in our favor, and Q2 capture was about 110%.
Shawn Flores: Hey Matthew, it's Sean. Q2 capture in Hawaii was 136%. So, well above our 100% guidance. And I called out the $12 million Hedge Crack Hedge game. We also called out in the release to $2 million price I've benefited. So, I think when you back out those sort of tailwinds that are working in our favor in Q2, captures about 110%. And I think that sort of delts of the 110 versus the 100 is really reflective of the elevated clean product rate that we're continuing to see.
Shawn Flores: Hey Matthew, it's Shawn, you know, Q2Cat.
Sean: Hey, Matthew it's Sean.
Sean: Q2 capture in Hawaii was 136%, so well above our 100% guidance and I called out the $12 million hedge crack hedge gain.
Sean: We also called out in the release to $2 million price benefit. So I think when you when you back out.
Speaker Change: Those sort of tailwind that are working in our favor in Q2 captures about 110%.
Speaker Change: So I think that sort of delta, but $1 10 versus the 100 is really reflective of the elevated clean product freight that we're continuing to see.
Speaker Change: Okay.
Speaker Change: Okay.
Matthew Blair: Great. Thanks for your comments.
Speaker Change: Great. Thanks for your comments.
Manav Gupta: And our next question will come from Minab Gupta with UBS. Please go ahead. Sorry, if I missed this earlier, I just wanted a little bit of update on your Hawaii's renewable project. Like what's the progress over there? You were conducting an initial engineering design on the cohesion facility, and any updates you could provide over there.
Speaker Change: And our next question will come from Manav Gupta with UBS. Please go ahead.
Speaker Change: Sorry, if I missed this earlier.
I just wanted a little bit of update on the Hawaii renewable project, what's the progress over there.
Conducting ancient engineering design on the co Gen facility any updates you could provide a lot of that.
Manav Gupta: Sure, Monov. So, the project there remains on track. Again, as a reminder, it's a $90 million capital project that we're targeting to bring online in the second half of '25. And ultimately, I think major equipment has been ordered. We've completed at least two of the feedstock tanks. It will be necessary. And again, I are working on and have major bits in hand from critical vendors and providers to begin executing that. And we're waiting on one or two critical permits, but I think I feel confident on the timeline there to receive and move ahead with those items. So, I feel good about where that project is.
Manav Gupta: Sure Manav.
William Monteleone: So the project there remains on track. Again, as a reminder, it's a $90 million capital project, and ultimately, I think major equipment has already been ordered. We've completed at least two of the feedstock tanks that will be necessary, and again, I am working on and have major bids in hand from critical vendors and providers to begin executing that, and now we're awaiting one or two critical permits, but I think I feel confident on the timeline there to receive and move ahead with those items. So I feel good about where that project is and on the renewable cogen project again moving forward. And that's something that is targeted to be completed, I think, by the end of this year.
Speaker Change: So the project there remains on track again as reminder to $90 million capital project.
Speaker Change: Oh that we're targeting to bring online in the second half of 'twenty five.
Speaker Change: And ultimately I think major equipment has been ordered.
Speaker Change: We've completed at least two of the feedstock tanks that will be necessary.
Speaker Change: And again are working on and have major bids in hand from critical vendors and providers to begin executing that and or.
Speaker Change: We are waiting on are two critical permits, but I think feel confident on the timeline there to.
Speaker Change: To receive and move ahead with those items so.
Feel good about where that project is.
Manav Gupta: And on the renewable cohesion project, again, moving through the power purchase agreement negotiation with Hawaiian Electric. and that's something that is targeted to be completed, I think, by the end of this year. And so, I think from there we'll have, you know, former estimates on our engineering and ultimately the power purchase agreement timeline, and can make a final investment decision.
Speaker Change: And on the renewable co Gen project again moving.
Speaker Change: Through the power purchase agreement negotiation with Hawaiian electric.
Speaker Change: And that's something that is targeted to be completed I think by the end of this year.
Speaker Change: And so I think from there we will have.
Speaker Change: From our estimates on our engineering and ultimately the power purchase.
Speaker Change: Agreement timeline and can make a final investment decision.
Matthew Blair: Thank you so much. I'll turn it over to him.
Manav Gupta: Thank you so much. I've done it all.
Speaker Change: Thank you so much I'll turn it over.
Operator: And this will conclude our question-and-answer session.
William Monteleone: And that will conclude our question and answer session. I'd like to turn the conference back over to William Monteleone for any closing remarks.
Speaker Change: And this will conclude our question and answer session I would like to turn the conference back over to wheel monthly earn for any closing remarks.
William Monteleone: I'd like to turn the conference back over to William Monteleone for any closing remarks. Great. Thank you all for joining us today. We're pleased with the strong operational performance of each of our teams, and in particular the well-executed turnaround activities. Have a good day.
Speaker Change: Great.
William Monteleone: Thank you all for joining us today. We're pleased with the strong operational performance of each of our teams and, in particular, the well-executed turnaround activity.
Wil Monteleone: You all for joining US today, we're pleased with the strong operational performance of each of our teams and in particular, the well executed turnaround activities have a good day.
Operator: Have a good day. The conference is now concluded. Thank you for attending.
Operator: The conference is now concluded. Thank you for attending today's presentation, and you may now
Operator: The conference is now concluded. Thank you for attending today's presentation, and you may now disconnect your lines at this time.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation and you may now disconnect your lines at this time.
Operator: ?? ?? ?? ?? ??
Speaker Change: [music].