Neil Mehta: Okay, great. So, the first question is just on Asia. Margins have certainly softened up out there and a lot of that seems like we’re towards run-cut levels in the region. We’d just love your perspective on how you see the Asia market pan out? And then, how do you see Hawaii basis trading — trending relative to Asia as we get our way into the summer?
Will Monteleone: Sure. Thanks, Neil. I tend to agree with your assessment that as we’re kind of approaching a Singapore Crack or 3-1-2 of $12, you look at the secondary products out there like naphtha and fuel, that the simpler refiners in Asia are approaching negative gross margin levels. So again, I think from that perspective, again I think that supply side support exists. Again, I think our view is the marginal barrel still needs to clear from Asia to Europe as you approach the summer. And I think that you’ll ultimately see that trend reemerge. And when you think about that, given where the freight market is, it’s quite expensive. And so, you’re going to see I think ultimately products continue to flow in that direction.
As that relates to Hawaii, again, I think the marginal barrel to Hawaii is still imported and freight is a major factor. So again as we think about the Hawaii basis and our local capture rates, refined product freight and the trends there remain elevated. I think we’ve continued to see refined product freight cost trade in the — between $8 and $10 per barrel range, which is consistent to where they’ve been over the last several quarters.
Neil Mehta: Yeah. Thanks, Will. And the follow-up is just, if you could spend a little bit more time on the Rockies? I think you did allude to the fact it was a softer start to the quarter, but things seem to be moving in the right direction in the region. So, just your perspective on how much of that was transient and what we should carry into 2Q? Thank you.
Will Monteleone: Sure. Yeah. I think Shawn referenced this, and again we saw some strong utilization rates for the PADD IV refining complex in the first quarter. It’s really the first time in a while that’s been the case. And I think on top of that, we saw, I’d say, steady improvement with really being a pretty substantial trough in January, with steady improvement as we move through the first quarter. So again, I think that signals a little bit of rebalancing that was happening. And again, the steady upward trends continued, Neil, as we’ve moved into April and into May. So again, I’d really point to some of the weaknesses being a January-specific event.
Neil Mehta: Thank you, Will.
Operator: The next question comes from John Royall from JPMorgan. Please go ahead.
John Royall: Hi. Good morning. Thanks for taking my question. Could you go into some detail on the pivot you called out at Tacoma on the renewable side? What’s the new scope of the work? And is the green hydrogen project effectively off the table here?
Will Monteleone: Hey, John, it’s Will. So, I think at a high level, we’ve spent significant effort scoping this project. And given the policy backdrop and also really where the renewables environment sits, we think a larger capital kind of higher risk project is more difficult to fund today, and more difficult and doesn’t generate the types of returns that we think are necessary for a project in this area. And so again, I think I’ve talked about renewables in the past and our view on investing there. And again, ultimately, we think the returns there need to be at or above the way we think about investing in our conventional fuel business. And so, I think that’s really the backdrop for the change. And the green hydrogen project pairs with the SAF project.
So again, I think that’s currently been deferred. And then, as we think about the scope of work, again, I think we’re looking at the advantages we have in Tacoma logistically. Again, we’ve got great rail access, significant tankage, deepwater capabilities, and ultimately, thinking about the right way to utilize our logistics assets so that we are prepared to either distribute and/or produce lower carbon fuels in the future.
John Royall: That’s helpful. Thank you. And then, on the intermediation facility in Hawaii, just so we understand, is the savings there just from less inventories being encompassed under the new deal, given it’s crude only? And does that come at the cost of carrying more inventories on your balance sheet? And should we think of this as a step towards eventually going to no intermediation agreement and reducing your finance costs even further? Or should we think of this as kind of more of a necessity for your Hawaii business longer term?
Shawn Flores: Hey, John. It’s Shawn. I think the drivers of the savings that we called out of $10 million a year is really the actual cost of the facility vis-a-vis the ABL, not necessarily the fact that we’re equity funding more inventory. In fact, I would signal a big shift in the amount of inventory that we’re equity funding. But I think the right way to think about it is about 200 basis points to 300 basis points of savings shifting from intermediations to ABLs. I think on the question of whether this is just a step in direction of funding our Hawaii business exclusively with ABLs, I think at this time, we see some benefits in intermediation financing as it relates to our crude. Obviously, we have a complex supply chain with cargoes on the water, and we think that the intermediation facility provides a good solution there.
But ultimately, we’ll evaluate that as our liquidity position improves over the years and whether it makes sense to shift completely towards ABL.
John Royall: Okay. Thank you.
Operator: The next question comes from Jason Gabelman from TD Cowen. Please go ahead.
Jason Gabelman: Yeah. Thanks for taking my questions. I want to ask about the upcoming Montana maintenance. Can you just remind us what the scope of work is? And then, given it to your first maintenance event since acquiring the plant and you previously alluded to some eventual improvement in operations, should we expect to see any of that after you come out of turnaround relative to where it was performing prior to turnaround? Thanks.
Will Monteleone: Sure, Jason. It’s Will. I assume when you mean the upcoming turnaround, you mean the April activity we’ve referenced?
Jason Gabelman: Sorry. Yes, the 2Q event.
