Related Party Transactions

Ownership of PAGP Class C Shares

As of December 31, 2016, we owned 491,910,863 Class C shares of PAGP. The Class C shares represent a non-economic limited partner interest in PAGP that provides us, as the sole holder, the right to vote in elections of eligible PAGP GP directors together with the holders of PAGP’s Class A and Class B shares, commencing in 2018.

Reimbursement of Our General Partner and its Affiliates

Our general partner provides general and administrative services necessary to manage and operate our business, properties and assets, including employing or retaining personnel. We do not pay our general partner a management fee, but we do reimburse our general partner for all direct and indirect costs it incurs or payments it makes on our behalf, including the costs of employee, officer and director compensation and benefits allocable to us as well as all other expenses necessary or appropriate to the conduct of our business. We record these costs on the accrual basis in the period in which our general partner incurs them. Our partnership agreement provides that our general partner will determine the expenses that are allocable to us in any reasonable manner determined by our general partner in its sole discretion. Total costs reimbursed by us to our general partner for the years ended December 31, 2016, 2015 and 2014 were $514 million, $648 million and $598 million, respectively.

Omnibus Agreement

In connection with the Simplification Transactions completed in November 2016, the Plains Entities entered into an Omnibus Agreement, which provides for the following:

•

that, for all periods following the closing of the Simplification Transactions, we will pay all direct or indirect expenses of any of the PAGP Entities, other than income taxes (including, but not limited to, (i) compensation for the directors of PAGP GP, (ii) director and officer liability insurance, (iii) listing exchange fees, (iv) investor relations expenses and (v) fees related to legal, tax, financial advisory and accounting services). We paid $4 million of such expenses in 2016;


•	the ability of PAGP to issue additional Class A shares and use the net proceeds therefrom to purchase a like number of AAP units from AAP, and the corresponding ability of AAP to use the net proceeds therefrom to purchase a like number of our common units from us; and


•	the ability of PAGP to lend proceeds of any future indebtedness incurred by it to AAP, and AAP’s corresponding ability to lend such proceeds to us, in each case on substantially the same terms as incurred by PAGP.

See Note 1 for discussion of the Simplification Transactions.

Transactions with Oxy

As of December 31, 2016, Oxy had a representative on the board of directors of PAGP and owned approximately 13% of the limited partner interests in AAP. During the three years ended December 31, 2016, we recognized sales and transportation revenues and purchased petroleum products from Oxy. These transactions were conducted at posted tariff rates or prices that we believe approximate market. Included in these transactions was a crude oil buy/sell agreement that includes a multi-year minimum volume commitment. The impact to our Consolidated Statements of Operations from those transactions is included below (in millions):



	Year Ended December 31,
	2016		2015		2014
Revenues	$	655	$	866	$	1,212

Purchases and related costs ⁽¹⁾	$	42	$	41	$	925


⁽¹⁾	Purchases and related costs include crude oil buy/sell transactions that are accounted for as inventory exchanges and are presented net in our Consolidated Statements of Operations.

We currently have a netting arrangement with Oxy. Our gross receivable and payable amounts with Oxy were as follows (in millions):



	December 31,
	2016		2015
Trade accounts receivable and other receivables	$	789	$	405

Accounts payable	$	836	$	363

In November 2014, we purchased Oxy’s 50% interest in BridgeTex. See Note 8 for further discussion. Also in November 2014, Oxy exchanged a portion of its interest in our general partner for Class A shares of PAGP and immediately sold such shares through a secondary public offering completed by PAGP.

Transactions with Equity Method Investees

We also have transactions with companies in which we hold an investment accounted for under the equity method of accounting (see Note 8 for information related to these investments). We recorded revenues of $14 million, $17 million and $3 million during the years ended December 31, 2016, 2015 and 2014, respectively. During the three years ended December 31, 2016, we utilized transportation services and purchased petroleum products provided by these companies. Costs related to these services totaled $209 million, $164 million and $75 million for the years ended December 31, 2016, 2015 and 2014, respectively. These transactions were conducted at posted tariff rates or contracted rates or prices that we believe approximate market. Receivables from our equity method investees totaled $39 million and $14 million at December 31, 2016 and 2015, respectively, and included amounts related to capital activity at several of our investments. In addition, we had prepaid tariff costs related to our equity method investees of $14 million at December 31, 2016. Accounts payable to our equity method investees were $35 million and $25 million at December 31, 2016 and 2015, respectively, and included amounts related to capital activity at several of our investments.

In addition, we have an agreement to transport crude oil at posted tariff rates on a pipeline that is owned by an equity method investee, in which we own a 50% interest. Our commitment to transport is supported by crude oil buy/sell agreements with third parties (including Oxy) with commensurate quantities.

Preferred Unit Issuance

In January 2016, we completed a private placement of preferred units. Certain of the purchasers of the preferred units or their affiliates are related parties. Kayne Anderson Capital Advisors, L.P. and certain of its affiliates and an affiliate of The Energy Minerals Group hold ownership interests in our general partner. In addition, certain of the current directors of our general partner are affiliated with certain of the purchasers. See Note 11 for additional information.