Inventory, Linefill and Long-term Inventory

12 Months Ended

Dec. 31, 2023

Inventory Disclosure [Abstract]

Inventory, Linefill and Long-term Inventory

Inventory, Linefill and Long-term Inventory

Inventory, including long-term inventory, primarily consists of crude oil and NGL in pipelines, storage facilities and railcars that are valued at the lower of cost or net realizable value, with cost determined using an average cost method within specific inventory pools. At the end of each reporting period, we assess the carrying value of our inventory and make any adjustments necessary to reduce the carrying value to the applicable net realizable value. Any resulting adjustments are a component of “Purchases and related costs” on our accompanying Consolidated Statements of Operations. No adjustments were recorded during the years ended December 31, 2023, 2022 or 2021.

Linefill in assets we own is recorded at historical cost and consists of crude oil and NGL. We classify as linefill (i) our proportionate share of barrels used to fill a pipeline that we own such that when an incremental barrel is pumped into or enters a pipeline it forces product out at another location and (ii) barrels that represent the minimum working requirements in tanks and caverns that we own. Linefill carrying amounts are reviewed for impairment in accordance with FASB guidance with respect to accounting for the impairment or disposal of long-lived assets. Carrying amounts that are not expected to be recoverable through future cash flows are written down to estimated fair value. See Note 6 for further discussion regarding impairment of long-lived assets. During 2023, 2022 and 2021, we did not recognize any material impairments of linefill.

Minimum working inventory requirements in third-party assets and other working inventory in our assets that are needed for our commercial operations are included within specific inventory pools in inventory (a current asset) in determining the average cost of operating inventory. At the end of each period, we reclassify the inventory not expected to be liquidated within the succeeding twelve months out of “Inventory,” at the average cost of the applicable inventory pools, and into “Long-term inventory,” which is reflected as a separate line item under “Other assets” on our Consolidated Balance Sheets.

Inventory, linefill and long-term inventory consisted of the following (barrels in thousands and carrying value in millions):

	December 31, 2023						December 31, 2022
	Volumes	Unit of Measure	Carrying Value		Price/ Unit (1)		Volumes	Unit of Measure	Carrying Value		Price/ Unit (1)
Inventory
Crude oil	5,877	barrels	$	383	$	65.17	6,713	barrels	$	452	$	67.33
NGL	5,957	barrels	154		$	25.85	7,285	barrels	270		$	37.06
Other	N/A		11		N/A		N/A		7		N/A
Inventory subtotal			548						729
Linefill
Crude oil	15,409	barrels	909		$	58.99	15,480	barrels	906		$	58.53
NGL	2,168	barrels	67		$	30.90	1,876	barrels	55		$	29.32
Linefill subtotal			976						961
Long-term inventory
Crude oil	3,256	barrels	232		$	71.25	3,102	barrels	246		$	79.30
NGL	1,326	barrels	33		$	24.89	1,066	barrels	38		$	35.65
Long-term inventory subtotal			265						284
Total			$	1,789					$	1,974

(1)Price per unit of measure is comprised of a weighted average associated with various grades, qualities and locations. Accordingly, these prices may not coincide with any published benchmarks for such products.