Paul Cheng: The first question, good morning, the first question, I think, is either for Gary or for Lane. TMX stopped up. And so, that’s going to bring the WCS, which is mostly the man-made synthetic heavy oil with really heavy bottom and a lot of light barrels and no middle. So, when that happens, will your system be able to convert all your — if the price is right, can your system convert all your heavy intake and the medium intake into using some form of combination of WCS plus some light barrel or that is not as simple? And also, whether the industry will be able to, say, eliminate all their imports from the heavy barrel from, say, [indiscernible] from the Middle East replacing the WCS? That’s the first question.
Gary Simmons: Yes, Paul, this is Gary. I think what we anticipate, there’s a lot of coking capacity on the West Coast. I’ll just use our Benicia refinery as an example. Benicia was really designed to run ANS. And we think with the barrels that are coming off TMX, both the heavies and the lights, you’ll be able to blend those together to form something that looks a lot like ANS. And we would expect most West Coast refiners will be doing something similar to that.
Paul Cheng: Okay. And second question that, Gary, can you give us some, maybe, your cut list that what you see in the Mexican market for both gasoline and diesel?
Gary Simmons: Yes. So, our sales in Mexico have been consistent with historic levels. We’re selling just over 100,000 barrels a day. We expect demand in Mexico remains very strong. We would expect to see that kind of ramp up later this year when we get our marine terminal in Altamira up and running, that’ll make us more competitive in the North and allow us to continue to grow volumes in Mexico.
Paul Cheng: Hey, Gary, do you have an export number you can share?
Gary Simmons: Export?
Paul Cheng: in the first quarter? Yes. So, how much did you export?
Gary Simmons: Yes. So, we did 103,000 barrels a day of gasoline exports. We did 153,000 barrels of diesel exports and 25,000 barrels a day of jet exports. The diesel number in the first quarter was down year-over-year, quarter-over-quarter. And I wouldn’t read that as lack of demand. That was really a result of the heavy turnaround activity and just we didn’t have barrels available for export.
Paul Cheng: Thank you.
Operator: Thank you. The next question is coming from Matthew Blair of Tudor, Pickering, Holt. Please go ahead.
Matthew Blair: Hey, good morning. Could you talk about your M&A appetite for refining assets? I think it’s been about a decade since you did a major deal. Has anything changed? It’s been about a decade since you did a major deal. Has anything changed regarding your overall outlook on M&A?
Lane Riggs: This is Lane, not really. I mean, we always look at everything. I mean, if you look at the most prompt sort of big deal that’s out there at CITGO, we’ve sort of, as a corporation, decided not to engage in that. For whatever reason, whoever the successful buyer taken, if they can sort everything out, wants to liquidate some of the assets, we’ll certainly look at them at that time. In terms of philosophy, we look at everything, but we also, as a company, because we have done so much buying refineries and merging and acquiring, we understand the full cost to make a refinery run, it’s certainly at the level that we expect. And so, ultimately that goes into our valuation models.
Matthew Blair: Sounds good, I’ll leave it there. Thanks.
Operator: Thank you. The next question is coming from Jason Gabelman of TD Cowen. Please go ahead.
Jason Gabelman: Hey, good morning. I had two market-based questions. The first just wanted to get a sense of what you’re seeing on the West Coast as we move into the summer now that another asset will be permanently shut down there. Are you see ratable exports coming from overseas product-wise into that market or do you expect kind of heightened volatility and elevator prices there?
Gary Simmons: Yes, so this is Gary. I would tell you in the first quarter, we saw a little lower demand, at least in our system, California for gasoline, which I think was related to weather. We’ve seen demand kind of return to normal patterns. And it’s very difficult to just speculate and put barrels on the water to import the California market. So, we don’t think a lot of people are doing that. And you need to see the market react before you would go ahead and put barrels on the water for import into California. So, we think there will be a lot of volatility, and it really is all dependent on how refineries on the West Coast run throughout the driving season.
Jason Gabelman: Got it. And then, my second question, just going back to the commentary around the global lightning crude slate, and you had previously made a comment that crude gravity over the past few years has gone up three to four points, and that’s maybe reduced global capacity available by three to four percentage points. Can you just comment on that dynamic?
Gary Simmons: I don’t know that I can quantify that. Certainly, that is our view, that as the crude gravity goes higher there’s a lot of refining capacity around the world that was designed for a heavier gravity crude diet. It causes some de-rate crude units, but quantifying it, I don’t know that I can do that. I don’t know, Greg, if you have —
Greg Bram: I don’t have any rules with me either.
Jason Gabelman: Okay. I’ll leave it there. Thanks.
Operator: Thank you. At this time, I would like to turn the floor back over to Mr. Bhullar for closing comments.
Homer Bhullar: Thank you, Donna. I appreciate everyone joining us. Obviously, please feel free to contact the IR team if you have any follow-up questions. Thank you, everyone, and have a great day.
Operator: Ladies and gentlemen, thank you for your participation. This concludes today’s event. You may disconnect your lines at this time or log off the webcast and enjoy the rest of your day.
