Related Party Transactions

9 Months Ended

Sep. 30, 2024

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

See Note 16 to our Consolidated Financial Statements included in Part IV of our 2023 Annual Report on Form 10-K for a complete discussion of related parties, including the determination of our related parties and nature of involvement with such related parties.

Promissory Notes with our General Partner

We and certain Plains entities have issued promissory notes to facilitate financing. In March 2023, we assigned PAGP our interest in an existing unsecured promissory note due from a consolidated subsidiary (“March 2023 note payable”) with a face value of CAD$500 million (approximately $370 million). Concurrently, PAGP issued an unsecured promissory note to us (“March 2023 note receivable”) for the same face value amount. Both notes are due April 2027 and bear interest at a rate of 8.25% per annum, payable semi-annually.

In July 2024, a consolidated subsidiary issued additional unsecured promissory notes to PAGP (collectively with the March 2023 note payable, the “related party notes payable”) with a face value of CAD$865 million (approximately $629 million). Concurrently, PAGP issued unsecured promissory notes to us (collectively with the March 2023 note receivable, the “related party notes receivable”) for the same face value amount. These notes are due September 2034 and bear interest at a rate of 6.50% per annum, payable semi-annually. In connection with the July 2024 issuance of related party notes, we received cash from PAGP of $629 million, which is reflected in “Proceeds from the issuance of related party notes” (a component of cash flows from financing activities), and we paid an equal and offsetting amount of cash to PAGP, which is reflected in “Investments in related party notes” (a component of cash flows from investing activities) on our Condensed Consolidated Statement of Cash Flows.

Accrued and unpaid interest receivable/payable was $11 million and $10 million as of September 30, 2024 and December 31, 2023, respectively. Interest income/expense on the related party notes totaled $16 million and $31 million for the three and nine months ended September 30, 2024, respectively, and $8 million and $18 million for the three and nine months ended September 30, 2023, respectively.

As of September 30, 2024 and December 31, 2023, our outstanding related party notes receivable and related party notes payable balances were as follows (in millions):

	September 30, 2024		December 31, 2023
Related party notes receivable (1)	$	1,011	$	379
Related party notes payable (1)	$	1,011	$	379

(1)We have elected to present our related party notes with the same counterparty on a net basis on our Condensed Consolidated Balance Sheet because there is a legal right to offset and we intend to offset with the counterparty.

Transactions with Other Related Parties

During the three and nine months ended September 30, 2024 and 2023, we recognized sales and transportation revenues, purchased petroleum products and utilized transportation and storage services from related parties. These transactions were conducted at posted tariff rates or prices that we believe approximate market.

The impact to our Condensed Consolidated Statements of Operations from these transactions is included below (in millions):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Revenues from related parties	$	12	$	13	$	34	$	37
Purchases and related costs from related parties	$	103	$	103	$	296	$	302

Our receivable and payable amounts with these related parties as reflected on our Condensed Consolidated Balance Sheets were as follows (in millions):

	September 30, 2024		December 31, 2023
Trade accounts receivable and other receivables, net from related parties (1)	$	46	$	63
Trade accounts payable to related parties (1) (2)	$	70	$	72

(1)Includes amounts related to transportation and storage services and amounts owed to us or advanced to us related to investment capital projects of equity method investees where we serve as construction manager.

(2)We have agreements to store crude oil at facilities and transport crude oil or utilize capacity on pipelines that are owned by equity method investees. A portion of our commitment to transport is supported by crude oil buy/sell or other agreements with third parties with commensurate quantities.