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Revenue Recognition | 12 Months Ended
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Dec. 31, 2023
Revenue Recognition [Abstract] |
Revenue Recognition | Revenue Recognition Revenue from Contracts with Customers The following tables reflects the disaggregation of our revenues by major category for the years ended December 31, 2023, December 31, 2022, and December 31, 2021, respectively:
| Year Ended December 31, 2023
| Offshore Pipeline Transportation |  | Soda and Sulfur Services |  | Marine Transportation |  | Onshore Facilities and Transportation |  | Consolidated
Fee-based revenues | $ | 382,154 |  |  | $ | — |  |  | $ | 327,464 |  |  | $ | 54,783 |  |  | $ | 764,401 |
Product Sales | — |  |  | 1,639,195 |  |  | — |  |  | 678,347 |  |  | 2,317,542 |
Sulfur Services | — |  |  | 95,053 |  |  | — |  |  | — |  |  | 95,053 |
| $ | 382,154 |  |  | $ | 1,734,248 |  |  | $ | 327,464 |  |  | $ | 733,130 |  |  | $ | 3,176,996 |
| Year Ended December 31, 2022
| Offshore Pipeline Transportation |  | Soda and Sulfur Services |  | Marine Transportation |  | Onshore Facilities and Transportation |  | Consolidated
Fee-based revenues | $ | 319,045 |  |  | $ | — |  |  | $ | 293,295 |  |  | $ | 68,625 |  |  | $ | 680,965 |
Product Sales | — |  |  | 1,152,450 |  |  | — |  |  | 859,907 |  |  | 2,012,357 |
Sulfur Services | — |  |  | 95,635 |  |  | — |  |  | — |  |  | 95,635 |
| $ | 319,045 |  |  | $ | 1,248,085 |  |  | $ | 293,295 |  |  | $ | 928,532 |  |  | $ | 2,788,957 |
| Year Ended December 31, 2021
| Offshore Pipeline Transportation |  | Soda and Sulfur Services |  | Marine Transportation |  | Onshore Facilities and Transportation |  | Consolidated
Fee-based revenues | $ | 278,459 |  |  | $ | — |  |  | $ | 190,827 |  |  | $ | 86,711 |  |  | $ | 555,997 |
Product Sales | — |  |  | 863,264 |  |  | — |  |  | 604,847 |  |  | 1,468,111 |
Sulfur Services | — |  |  | 101,368 |  |  | — |  |  | — |  |  | 101,368 |
| $ | 278,459 |  |  | $ | 964,632 |  |  | $ | 190,827 |  |  | $ | 691,558 |  |  | $ | 2,125,476 |
The Company recognizes revenue upon the satisfaction of its performance obligations under its contracts. The timing of revenue recognition varies for the revenue streams described in more detail below. In general, we recognize revenue either over time as services are being performed or at a point in time for product sales. Fee-based Revenues We provide a variety of fee-based transportation and logistics services to our customers across several of our reportable segments as outlined below. Service contracts generally contain a series of distinct services that are substantially the same and have the same pattern of transfer to the customer over the contract period, and therefore, qualify as a single performance obligation that is satisfied over time. The customer receives and consumes the benefit of our services simultaneously with the provision of those services. Offshore Pipeline Transportation Revenue from our offshore pipelines is generally based upon a fixed fee per unit of volume (typically per Mcf of natural gas or per barrel of crude oil) gathered, transported, or processed for each volume delivered. Fees are based either on contractual arrangements or tariffs regulated by the FERC. Certain of our contracts include a single performance obligation to stand ready, on a monthly basis, to provide capacity on our assets. Revenue associated with these fee-based services is recognized as volumes are delivered over the performance obligation period. In addition to the offshore pipeline transportation revenue discussed above, we also have certain contracts with customers in which we earn either demand-type fees or firm capacity reservation fees. These fees are charged to a customer regardless of the volume the customer actually delivers to the platform or through the pipeline. In addition to these offshore pipeline transportation revenue streams, we also have certain customer contracts in which the transportation fee has a tiered pricing structure based on cumulative milestones of throughput on the related pipeline asset and contract, or on a specified date. The performance obligation for these contracts is to transport, gather or process commodity volumes for the customer based on firm (stand ready) service or from monthly nominations made by our customers, which can also be on an interruptible basis. While our transportation rate changes when milestones are achieved for certain cumulative throughput, our performance obligation does not change throughout the life of the contract. Therefore revenue is recognized on an average rate basis throughout the life of the contract. We have estimated the total consideration to be received under the contract beginning at the contract inception date based on the estimated volumes (including certain minimum volumes we are required to stand ready for), price indexing, estimated production or contracted volumes, and the contract period. We have constrained the estimates of variable consideration such that it is probable that a significant reversal of previously-recognized revenue will not occur throughout the life of the contract. These estimates are reassessed at each reporting period as required. Billings to our customers are reflected at the contract rate. Differences between the amounts we bill our customers and the revenue recognized on any one contract results in the recognition of a contract asset or liability. In circumstances where the estimated average contract rate is less than the billed current price tier in the contract, we will recognize a contract liability. In circumstances where the estimated average contract rate is higher than the billed current price tier in the contract, we will recognize a contract asset. Onshore Facilities and Transportation Within our onshore facilities and transportation segment, we provide our customers with pipeline transportation, terminaling services and rail unloading services, among others, primarily on a per barrel fee basis. Revenues from contracts for the transportation of crude oil by our pipelines are based on actual volumes at a published tariff. We recognize revenues for transportation and other services over the performance obligation period, which is the contract term. Revenues for both firm and interruptible transportation and other services are recognized over time as the product is delivered to the agreed upon delivery point or at the point of receipt because they specifically relate to our efforts to transfer the distinct services. Pricing for our services is determined through a variety of mechanisms, including specified contract pricing or regulated tariff pricing. The consideration we receive under these contracts is variable, as the total volume of the commodity to be transported is unknown at contract inception. At the end of a day or month (as specified in the contract), both the price and volume are known (or “fixed”) in order to allow us to accurately calculate the amount of consideration we are entitled to invoice. The measurement of these services and invoicing occurs on a monthly basis. Pipeline Loss Allowances To compensate us for bearing the risk of volumetric losses of crude oil in transit in our pipelines (for our onshore and offshore pipelines) due to temperature, crude quality, and the inherent difficulties of measuring liquids in a pipeline, our tariffs and agreements allow for us to make volumetric deductions for quality and volumetric fluctuations. We refer to these deductions as pipeline loss allowances (“PLA”). We compare these allowances to the actual volumetric gains and losses of the pipeline and the net gain or loss is recorded as revenue or a reduction of revenue. As the allowance is related to our pipeline transportation services, we have a single performance obligation to transport and deliver the barrels. When net gains occur, we have crude oil inventory. When net losses occur, we reduce any recorded inventory on hand and record a liability for the purchase of crude oil required to replace the lost volumes. Under ASC 606, we record excess oil as non-cash consideration in the transaction price on a net basis. The net oil recorded is valued at the lower of cost or net realizable value using the market price of crude oil during the month the product was transported. The crude oil in inventory can then be sold at current prevailing market prices, resulting in additional revenue if the sales price exceeds the inventory value when control transfers to the customer. Marine Transportation Our marine transportation business consists of revenues from the inland and offshore marine transportation of heavy refined petroleum products, asphalt and crude oil, using our barges or vessels. This revenue is recognized over the passage of time of individual trips as determined on an individual contract basis. Revenue from these contracts is typically based on a set day-rate or a set fee per cargo movement. The costs of fuel and certain other operational costs may be directly reimbursed by the customer, if stipulated in the contract. Our performance obligation consists of providing transportation services using our vessels for a single day either under a term or spot based contract. The transaction price is usually fixed per the contract either as a day rate or as a lump sum to be allocated over the days required to complete the service. Revenue is recognizable as the transportation service utilizing our vessels occurs, as the customer simultaneously receives and consumes these services as they are provided. If provided in the contract, certain items such as fuel or operational costs can be rebilled to the customer in the same period in which the costs are incurred. In the event the timing of a trip to provide our services crosses a reporting period under a lump sum fee contract, the revenue earned is accrued based on the progress completed in the current period on the related performance obligation as we are entitled to payment for each day. Customer invoicing occurs at the completion of a trip, or earlier at the customer’s request. Product Sales Soda and Sulfur Services Product sales in our soda and sulfur services segment primarily involve the sales of caustic soda, NaHS, soda ash and other alkali products. As it relates to revenue recognition, these sales transactions contain a single performance obligation: the delivery of the product to the customer at the agreed upon point of sale. For some transactions, control of product transfers to the customer at the shipping point, but we are still obligated to arrange for shipment of the product as directed by the customer. Rather than treating these shipping activities as separate performance obligations, our policy is to account for them as fulfillment costs in accordance with ASC 606. The transaction price for these product sales is determined by specific contracts, typically at a fixed rate or based on a market or indexed rate. This pricing is known, or is “fixed,” at the time of revenue recognition. Invoicing and related payment terms are in accordance with industry standard or contract specification based on final pricing. The entire transaction price is allocated to the performance obligation. As this type of revenue is earned at a point in time, there is no allocation of transaction price to future performance obligations. For certain sales of soda ash, we offer volume inventive credits, or rebates, to customers based on the quantity purchased within a period of time as determined by the contract. The volume inventive credit is not earned by the customer until the minimum quantity of soda ash is purchased. Our policy is to reduce the transaction price allocated to these performance obligations so that our revenue is presented net of the volume incentive credits we expect to be realized. Onshore Facilities and Transportation Product sales in our onshore facilities and transportation segment primarily involve the sales of crude oil and petroleum products. These contracts contain a single performance obligation: the delivery of the product to the customer at a specified location. These contracts are settled on a monthly basis for term contracts, or on a spot basis. Invoicing and related payment terms are in accordance with industry standard or contract specification based on final pricing. The transaction price is designated within the contracts and is either fixed, index-based or formulaic, utilizing an average price for the month or for a specified range of days, regardless of when delivery occurs. In either case, the transaction price is known at the time of revenue recognition and invoicing. The entire transaction price is allocated to a single performance obligation. As this type of revenue is earned at a point in time, there is no allocation of transaction price to future performance obligations. Sulfur Services Our sulfur services business primarily provides sulfur removal services to refiners’ high sulfur (or “sour”) gas streams that the refineries have generated from crude oil processing operations. Our process applies our proprietary technology, which uses caustic soda to act as a scrubbing agent at a prescribed temperature and pressure to remove sulfur. The technology returns a clean (sulfur-free) hydrocarbon stream to the refinery for further processing into refined products, and simultaneously produces NaHS. Units of NaHS are produced ratably as a gas stream is processed. We obtain control and ownership of the NaHS immediately upon production, which constitutes the sole consideration that we receive for our sulfur removal services. We later market this product to third parties as part of our product sales, as described above. As part of some of our arrangements, we pay a refinery access fee (“RSA fee”) for any benefits received by virtue of our plant’s proximity to the customer’s refinery. Our RSA fee is recorded as a reduction of revenue. Providing sulfur removal services is the singular performance obligation in our refinery service agreements. As our customers simultaneously receive and consume the refinery service benefits, control is transferred and revenue is recognized over time based on the extent of progress towards completion of the performance obligation. We use units of NaHS produced during a period to measure progress as the amount we receive corresponds directly with the efforts to provide our services completed to date. The transaction price for each performance obligation is determined using the fair value of a unit of NaHS on the contract inception date for each refinery services agreement. Accordingly, we record the value of NaHS received as non-cash consideration in inventory until it is subsequently sold to our customers (see “Product Sales,” above). Contract Assets and Liabilities The table below depicts our contract asset and liability balances at December 31, 2023 and December 31, 2022:
|  |  | Contract Assets |  | Contract Liabilities
|  |  | Other Assets |  | Accrued Liabilities |  | Other Long-Term Liabilities
Balance at December 31, 2022 |  |  | $ | — |  |  | $ | 2,087 |  |  | $ | 64,478 |
Balance at December 31, 2023 |  |  | 859 |  |  | 11,460 |  |  | 112,734 |
For the years ended December 31, 2023, 2022, and 2021, $2.6 million, $2.6 million and $3.0 million, respectively, that was classified as a contract liability at the beginning of each period was recognized as revenue. During 2023, we deferred $11.5 million of revenue associated with a change in estimate to the measure of progress on the satisfaction of our performance obligation related to a contract within our offshore pipeline transportation segment. Additionally, we recognized $4.1 million of revenue during 2021 as a result of a contract modification related to one of our offshore pipeline transportation contracts. Transaction Price Allocations to Remaining Performance Obligations We are required to disclose the amount of our transaction prices that are allocated to unsatisfied performance obligations as of December 31, 2023. However, ASC 606 provides the following practical expedients and exemptions that we utilized: 1)Performance obligations that are part of a contract with an expected duration of one year or less; 2)Revenue recognized from the satisfaction of performance obligations where we have a right to consideration in an amount that corresponds directly with the value provided to customers; and 3)Contracts that contain variable consideration, such as index-based pricing or variable volumes, that is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that is part of a series. We apply these practical expedients and exemptions to our revenue streams recognized over time. The majority of our contracts qualify for one of these expedients or exemptions. After considering these practical expedients and identifying the remaining contract types that involve revenue recognition over a long-term period and include long term fixed consideration (adjusted for indexing as required), we determined our allocations of transaction price that relate to unsatisfied performance obligations. As it relates to our tiered pricing offshore transportation contracts, we provide firm capacity for both fixed and variable consideration over a long-term period. Therefore, we have allocated the remaining contract value (as estimated and discussed above) to future periods. In our onshore facilities and transportation segment, we have certain contractual arrangements in which we receive fixed minimum payments for our obligation to provide minimum capacity on our pipelines and related assets. The following chart depicts how we expect to recognize revenues for future periods related to these contracts:
| Offshore Pipeline Transportation |  | Onshore Facilities and Transportation
2024 | $ | 119,185 |  |  | $ | 1,800 |
2025 | 136,326 |  |  | — |
2026 | 110,428 |  |  | — |
2027 | 66,828 |  |  | — |
2028 | 45,453 |  |  | — |
Thereafter | 124,184 |  |  | — |
Total | $ | 602,404 |  |  | $ | 1,800 |

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