Question-and-Answer Session
Operator
Certainly. (Operator instructions) First question comes from the line of Brian Zarahn of Barclays Capital. Please go ahead.
Brian Zarahn – Barclays Capital
Good morning.
Greg Armstrong
Good morning, Brian.
Brian Zarahn – Barclays Capital
On the Transportation segment, pipeline volume were down below guidance. Can you talk a little bit about what was behind that? Was it weak refinery demand, lower imports?
Harry Pefanis
There is variance in so many different pipelines, it’s hard to pinpoint. I’d say basin was down a little bit, but that’s -- an average basin has been on target for the year, which could have some monthly variations. And that was probably the one pipeline system that had little more variance than the others.
Brian Zarahn – Barclays Capital
In terms of acquisitions, can you talk a little bit about the Tulsa acquisition, how it fits in with your Cushing assets?
Harry Pefanis
Well, it’s -- the tankage had been pretty much used by Holly for its refinery supply. It does have -- we do have connectivity -- pipeline connectivity between the Cushing terminal and Holly’s refinery. And we have struck an arrangement with Holly (inaudible) contango opportunities. We would share the contango opportunities (inaudible) tankage of Cushing and our sort of supplying at Cushing.
Greg Armstrong
Yes, Brian, basically it’s backed by a long-term use agreement. So we get a guaranteed rate of return on the low end and we get upside for the contango opportunity. So we’re able to do the same strategies in Tulsa that we do in Cushing, but the connectivity there is why it’s important to get those pipelines.
Brian Zarahn – Barclays Capital
Okay. And just looking at the higher level, what kind of opportunity set do you see from the large integrateds that are pursuing a lot of asset sales over the next one or two years?
Harry Pefanis
We have purchased a lot of assets from the integrated historically. So we think we are as well positioned as anyone to acquire extreme assets that we would consider selling.
Greg Armstrong
I would say, Brian, we certainly welcome the opportunity and the fact that they have made a public statement generally means they are going to go ahead and follow through on that. There certainly will be other competitors for those assets, but a lot of these assets we’ve studied and in some cases approach the majors in the past trying to do a deal on and been rebuffed. And so it’s not as if we’re going to have to start from scratch learning about the assets they want to sell. Whether we are the winner or not, we will be really a function of just what synergies we can see with those assets versus our competitors and the relative cost of capital.
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