Unidentified Analyst: Sure. Sure. Got it. Thank you. And then just one follow-up for me. The RD projects that you guys have anchored here, just going through the release, you guys note that you have potential capacity to expand in subsequent phases, I guess, in California. Do you mind elaborating on that? I guess, to the extent that you guys can, I guess, what would timing look like there? And I guess, what level of capacity could we expect to see ramping in that time frame?
Dax Sanders: Yeah. This is Dax. Good question. I would just reiterate kind of what we’ve got now. Between the two hubs, we’ve got about 60,000 barrels a day just under capacity. And then in Los Angeles harbor, our Carson Terminal, we’ve got 750,000 barrels of storage that will be fully in by the end of the year, 20,000 barrels a day of rack throughput. In Los Angeles Harbor, I think we could easily double that, double both the storage as well as the throughput — rack throughput capacity. On the hubs, we can double those as well. If we did, off of 60,000, that would get us up to a rate — throughput rate that would be somewhat consistent with what we’ve historically supplied in the State of California, call it, roughly around 120,000.
Now California uses about 250,000 barrels a day of diesel. And so theoretically, I think we could convert even above that because I think we’ll see — we’ve got our first facility now, Bradshaw, which is just outside of Sacramento which we’ve converted 100% to renewable diesel, no hydrocarbon diesel going through there. So — but whether we do that, it will all be determined by the market. I mean we’ll be continuously engaged with our customers and watching the ramp-up of these two Northern California refineries, and we’ll do whatever our customers ask us to.
Unidentified Analyst: Perfect. Thank you very much guys. Appreciate it.
Operator: Our next question comes from Neel Mitra with Bank of America. Your line is open.
Neel Mitra: Hi. Good afternoon. I was wondering what volume assumptions you’re using on the gas side for the STX acquisition in the Eagle Ford? And maybe just the dynamics that you’re seeing there with GOR ratios and activity?
Kim Dang: Yeah. Hey, Neal, on — with respect to the 2024 budget assumptions, we’re going to go through all of those at the conference next week. So, if you can hold your question and we’ll make sure we address it next week at the Investor Conference when we go through the ’24 budget in detail.
Neel Mitra: Okay, fair enough. And then maybe asking the same question a different way. All else equal, if you don’t make an acquisition, you’re trending towards I guess 3.8 times leverage in ’24. Do you see value in lowering the leverage ratio and staying under 4 times? Or do you still see kind of 4.5 times is the proper leverage ratio given your asset base?
Kim Dang: Yeah. I think we’re comfortable at 4.5 times, as I said earlier, given the size, scope — size and scope of our assets and stability of our cash flow. And so, that being said, we see value in having some cushion and we’ve been operating with a cushion for the last couple of years.
Neel Mitra: Okay. Can I ask one additional one since the first one is going to go to the Analyst Day?
Kim Dang: Sure. Yes.
Neel Mitra: When you said that GCX can support the downstream assets maybe with an expansion, can you explain what you meant by that comment?
Sital Mody: This is Sital. I think what Kim was talking about is what — one, we have the ability to expand GCX. I think as the intrastate industrial market and power market evolve, there is an opportunity to probably do some downstream expansions to carry those volumes into that corridor. I think that’s what Kim was referring to.
Rich Kinder: And I think just to add something, this just demonstrates the tremendous ability we have to expand and extend our system. I think it’s hard for people to realize exactly how extensive this is in Texas, Louisiana, but every time we put more gas into the system, it brings the opportunity to expand further downstream and that’s a big reason why Kim has said repeatedly that, on our expansion CapEx target, we think we’ll be at the upper-end of that range from $1 billion to $2 billion, we’ll be at the upper-end of that range. And that’s the kind of opportunities we’re seeing. They don’t necessarily make it into a backlog, but they’re out there and things we can take advantage of as more and more gas flows through the system.
Neel Mitra: Got it. I appreciate all the color.
Operator: Thank you. Next, we will hear from Theresa Chen with Barclays. You may proceed.
Theresa Chen: Good afternoon. Thank you for taking my questions. First, just a quick follow-up related to the longer-term guidance on the STX acquisition. In order to get to the 7 times and 7.5 times multiple over multiple years, is there any CapEx associated with that, and how much?
Kim Dang: There may be a little bit, but it is not — it’s not material.
Theresa Chen: Got it. And on the product side in California, given the ample supply of diesel into the state, with renewable diesel being produced in state, as well as entering into the state from other areas, it looks like the state may be short on gasoline over time as in-state refineries convert. With this backdrop, if there is incremental bid for gasoline imports, are there opportunities for your waterborne terminals there?
