Leases

On December 1, 2014, we entered into a terminal services agreement with a related party in which we were to take possession of certain storage tanks located in Port Neches, Texas, effective December 1, 2015. On October 26, 2015, the terminal services agreement was amended to provide for an interim in-service period for the purposes of commissioning the tanks in which we pay a nominal monthly fee. Our capitalized costs and related capital lease obligation commenced on December 1, 2015. Upon the in-service date of September 1, 2016, our monthly lease payment was increased to $0.4 million. In the eighteenth month after the in-service date, actual fixed and variable costs will be compared to premised costs. If the actual and premised operating costs differ by more than 5.0%, the lease will be adjusted accordingly and this adjustment will be effective for the remainder of the lease. The imputed interest rate on the capital portion of the lease is 15.0%.

We are also obligated under various long-term and short-term noncancelable operating leases, primarily related to tank farm land leases. Several of the leases provide for renewal terms. Rental expense included in Operations and maintenance on the consolidated statements of income was $0.5 million for 2016, and $0.6 million for both 2015 and 2014.

The future minimum lease payments as of December 31, 2016, for the above lease obligations were:



	Total		2017		2018		2019		2020		2021		Remainder
Operating lease for land	$	0.7	$	0.5	$	0.2	$	—	$	—	$	—	$	—
Capital lease for Port Neches storage tanks ⁽¹⁾	63.0		4.3		4.3		4.3		4.3		4.3		41.5
	$	63.7	$	4.8	$	4.5	$	4.3	$	4.3	$	4.3	$	41.5

⁽¹⁾ Future minimum lease payments include $40.2 million in interest, $22.8 million in principal and excludes $11.0 million in executory costs.

As of December 31, 2016 and 2015, we had short-term payment obligations relating to capital expenditures totaling $3.4 million and $1.9 million, respectively. These represent unconditional payment obligations to vendors for products to be delivered in connection with capital projects.