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Revenues
 6 Months Ended
Jun. 30, 2023
Revenue from Contract with Customer [Abstract]  
Revenues Revenues
We generate revenue by charging fees for gathering, transporting, offloading and storing crude oil; for storing intermediate products and feed stocks; for distributing, transporting and storing refined products; for marketing refined products output of Delek Holdings' Tyler and Big Spring refineries; and for wholesale marketing in the West Texas area. A significant portion of our revenue is derived from long-term commercial agreements with Delek Holdings, which provide for annual fee adjustments for increases or decreases in the CPI, PPI or the FERC index (refer to Note 3 for a more detailed description of these agreements). In addition to the services we provide to Delek Holdings, we also generate substantial revenue from crude oil, intermediate and refined products transportation services for, and terminalling and marketing services to, third parties primarily in Texas, New Mexico, Tennessee and Arkansas. Certain of these services are provided pursuant to contractual agreements with third parties. Payment terms require customers to pay shortly after delivery and do not contain significant financing components.
The majority of our commercial agreements with Delek Holdings meet the definition of a lease because: (1) performance of the contracts is dependent on specified property, plant or equipment and (2) it is remote that one or more parties other than Delek Holdings will take more than a minor amount of the output associated with the specified property, plant or equipment. As part of our adoption of ASC 842, Leases ("ASC 842"), we applied the permitted practical expedient to not separate lease and non-lease components under the predominance principle to designated asset classes associated with the provision of logistics services. We have determined that the predominant component of the related agreements currently in effect is the lease component. Therefore, the combined component is accounted for under the applicable lease accounting guidance. Of our $941.7 million net property, plant, and equipment balance as of June 30, 2023, $339.7 million is subject to operating leases under our commercial agreements. These agreements do not include options for the lessee to purchase our leased assets, nor do they include any material residual value guarantees or material restrictive covenants.
The following table represents a disaggregation of revenue for the gathering and processing, wholesale marketing and terminalling, and storage and transportation segments for the periods indicated (in thousands):
Three Months Ended June 30, 2023
Gathering and ProcessingWholesale Marketing and TerminallingStorage and TransportationConsolidated
Service Revenue - Third Party$17,270 $— $3,112 $20,382 
Service Revenue - Affiliate (1)
2,121 10,886 14,335 27,342 
Product Revenue - Third Party26,785 66,751 — 93,536 
Product Revenue - Affiliate3,673 28,892 — 32,565 
Lease Revenue - Affiliate
43,388 12,298 17,400 73,086 
Total Revenue$93,237 $118,827 $34,847 $246,911 
Three Months Ended June 30, 2022
Gathering and ProcessingWholesale Marketing and TerminallingStorage and TransportationConsolidated
Service Revenue - Third Party$1,579 $— $3,733 $5,312 
Service Revenue - Affiliate (1)
4,011 8,242 — 12,253 
Product Revenue - Third Party17,642 119,430 — 137,072 
Product Revenue - Affiliate2,963 26,843 — 29,806 
Lease Revenue - Affiliate
38,631 11,025 32,651 82,307 
Total Revenue$64,826 $165,540 $36,384 $266,750 
Six Months Ended June 30, 2023
Gathering and ProcessingWholesale Marketing and Terminalling Storage and TransportationConsolidated
Service Revenue - Third Party$30,449 $— $3,409 $33,858 
Service Revenue - Affiliate (1)
6,422 20,157 34,944 61,523 
Product Revenue - Third Party53,277 145,309 — 198,586 
Product Revenue - Affiliate8,343 43,150 — 51,493 
Lease Revenue - Affiliate87,178 22,520 35,278 144,976 
Total Revenue$185,669 $231,136 $73,631 $490,436 
Six Months Ended June 30, 2022
Gathering and ProcessingWholesale Marketing and Terminalling Storage and TransportationConsolidated
Service Revenue - Third Party$3,290 $— $6,805 $10,095 
Service Revenue - Affiliate (1)
8,015 16,787 — 24,802 
Product Revenue - Third Party17,642 197,474 — 215,116 
Product Revenue - Affiliate2,963 58,589 — 61,552 
Lease Revenue - Affiliate74,960 23,466 63,340 161,766 
Total Revenue$106,870 $296,316 $70,145 $473,331 
(1) Net of $1.8 million of amortization expense for both the three months ended June 30, 2023 and June 30, 2022 and $3.6 million for the six months ended June 30, 2023 and June 30, 2022, related to a customer contract intangible asset recorded in the wholesale marketing and terminalling segment.
As of June 30, 2023, we expect to recognize approximately $1.3 billion in lease revenues related to our unfulfilled performance obligations pertaining to the minimum volume commitments and capacity utilization under the non-cancelable terms of our commercial agreements with Delek Holdings. Most of these agreements have an initial term ranging from five to ten years, which may be extended for various renewal terms. We disclose information about remaining performance obligations that have original expected durations of greater than one year.
Our unfulfilled performance obligations as of June 30, 2023 were as follows (in thousands):
Remainder of 2023$164,244 
2024238,217 
2025208,949 
2026199,857 
2027 and thereafter477,381 
Total expected revenue on remaining performance obligations$1,288,648