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Inventory Financing Agreements | 3 Months Ended
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Mar. 31, 2024
Other Commitments [Abstract] |
Inventory Financing Agreements | Inventory Financing Agreements The following table summarizes our outstanding obligations under our inventory financing agreements (in thousands):
| March 31, 2024 |  | December 31, 2023
Supply and Offtake Agreement | $ | 662,688 |  |  | $ | 594,362 |
LC Facility due 2024 | — |  |  | — |
Obligations under inventory financing agreements | $ | 662,688 |  |  | $ | 594,362 |
Supply and Offtake Agreement We have a supply and offtake agreement with J. Aron to support our Hawaii refining operations (the “Supply and Offtake Agreement"). Under the Supply and Offtake Agreement, we pay or receive certain fees from J. Aron based on changes in market prices over time. The amount due to or from J. Aron was recorded as an adjustment to our Obligations under inventory financing agreements as allowed under the Supply and Offtake Agreement. The Supply and Offtake Agreement expires May 31, 2024 (as extended, the “Expiration Date”). LC Facility due 2024 On July 26, 2023, PHR, as borrower, the lenders and letter of credit issuing banks party thereto (collectively, the “LC Facility Lenders”), MUFG Bank, Ltd., as administrative agent (the “LC Facility Agent”), sub-collateral agent, joint lead arranger and sole bookrunner, Macquarie Bank Limited, as joint lead arranger, and U.S. Bank Trust Company, National Association, as collateral agent (the “Collateral Agent”), entered into an Uncommitted Credit Agreement (the “LC Facility Agreement”) whereby the LC Facility Lenders agree, on an uncommitted and absolutely discretionary basis, to consider making revolving credit loans and issuing and participating in letters of credit. The LC Facility will mature on July 25, 2024, unless the obligations are accelerated and the maximum credit limits of the LC Facility Lenders are terminated prior to such date. The following table summarizes our outstanding borrowings, letters of credit, and contractual undertaking obligations under the intermediation agreements (in thousands):
| March 31, 2024 |  | December 31, 2023
Discretionary Draw Facility |  |  |
Outstanding borrowings (1) | $ | 167,902 |  |  | $ | 165,459 |
Borrowing capacity | 169,765 |  |  | 175,891 |
MLC receivable advances |  |  |
Outstanding borrowings (1) | — |  |  | — |
Borrowing capacity | — |  |  | — |
LC Facility due 2024 |  |  |
Outstanding borrowings | — |  |  | — |
Borrowing capacity | 120,000 |  |  | 120,000 |
MLC issued letters of credit | — |  |  | — |
LC Facility issued letters of credit | — |  |  | 13,000 |
______________________________________________________ (1)Borrowings outstanding under the Discretionary Draw Facility and MLC receivable advances are included in Obligations under inventory financing agreements on our condensed consolidated balance sheets. Changes in the borrowings outstanding under these arrangements are included within Cash flows from financing activities on the condensed consolidated statements of cash flows. The following table summarizes the inventory intermediation fees, which are included in Cost of revenues (excluding depreciation) on our condensed consolidated statements of operations, and Interest expense and financing costs, net related to the intermediation agreements (in thousands):
|  |  |  | Three Months Ended March 31, |  |
|  |  |  | 2024 |  | 2023 |  |  |  |
Net fees and expenses: |  |  |  |  |  |  |  |  |  |
Supply and Offtake Agreement |  |  |  |  |  |  |  |  |  |
Inventory intermediation fees (1) |  |  |  | $ | 19,038 |  |  | $ | 13,999 |  |  |  |  |
Interest expense and financing costs, net |  |  |  | 1,784 |  |  | 1,725 |  |  |  |  |
Washington Refinery Intermediation Agreement |  |  |  |  |  |  |  |  |  |
Inventory intermediation fees (benefits) |  |  |  | $ | — |  |  | $ | 750 |  |  |  |  |
Interest expense and financing costs, net |  |  |  | — |  |  | 2,659 |  |  |  |  |
LC Facility due 2024 |  |  |  |  |  |  |  |  |  |
Interest expense and financing costs, net |  |  |  | $ | 618 |  |  | $ | — |  |  |  |  |
___________________________________________________ (1)Inventory intermediation fees under the Supply and Offtake Agreement include market structure fees of $8.8 million and $2.4 million for the three months ended March 31, 2024 and 2023, respectively. The Supply and Offtake Agreement also provide us with the ability to economically hedge price risk on our inventories and crude oil purchases. Please read Note 12—Derivatives for further information.

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