The $6.2 million gain in FFO compared to the same period in 2015, was largely driven by positive results in our NGL processing business. This segment benefited from improvements in propane-plus frac spread pricing at the Cochrane extraction facility and the inclusion of eight days of operations from our newly acquired NGL midstream business.

Cash Dividends

Dividend payments to shareholders totaled $131.4 million or $0.39 per share, representing an approximate six percent increase over the same period in 2015. The quarterly payout ratio was 64.8 percent compared to 63.6 percent in the third quarter of 2015.

Williams Canada Acquisition

On September 23, 2016, Inter Pipeline successfully completed the acquisition of the shares of The Williams Companies Inc.’s and Williams Partners L.P.’s (“Williams Canada”) Canadian NGL midstream businesses for $1.35 billion plus closing adjustments.

This strategic acquisition includes two NGL and olefinic liquids extraction plants located near Fort McMurray, Alberta, a fractionator near Redwater, Alberta and a 490 kilometre pipeline system that connects these facilities. This integrated liquids processing business has the capacity to recover, transport and fractionate approximately 40,000 b/d of NGL and olefins from oil sands upgrader offgas, a by-product of bitumen upgrading operations. The acquisition provides a platform for material future NGL and olefin related growth opportunities including capacity expansion investments and securing additional offgas supply sources.

Inter Pipeline also assumes responsibility for the potential construction of a $1.85 billion propane dehydrogenation (PDH) facility located near the Redwater Olefinic Fractionator. This facility would convert low-cost, locally sourced propane into more valuable polymer grade propylene. Inter Pipeline is also assessing the commercial viability of constructing an additional processing facility, which would convert propylene into polypropylene, a high value, easy to transport solid plastic used in manufacturing a wide range of finished products. The preliminary estimate for the polypropylene facility is approximately $1.3 billion.

Inter Pipeline is currently pursuing long-term, fee based off take agreements with a number of global plastics manufacturing and marketing companies. Subject to securing appropriate commercial contracts, Inter Pipeline anticipates making final investment decisions on the PDH and polypropylene facilities by mid-2017, with both plants operational by mid-2021.

Oil Sands Transportation

Inter Pipeline’s oil sands transportation segment continues to underpin our stable operating and financial results. This business segment generated FFO for the third quarter 2016 of $142.3 million, compared to $146.1 million in the same period 2015.

Cold Lake pipeline system volumes decreased by 42,500 b/d in the current quarter over the same period in 2015. Volumes on the Cold Lake system typically fluctuate with the timing of steam injection cycles associated with certain shippers’ production processes. The Corridor pipeline system hit a new quarterly throughput record at 423,200 b/d, representing a 14,100 b/d increase compared to the same period in 2015. Polaris pipeline system volumes remained stable quarter over quarter increasing by 1,800 b/d due to solid diluent demand from connected oil sands facilities.

Conventional Oil Pipelines

Funds from operations in the conventional oil pipelines business segment remained stable at $49.1 million for the current quarter, compared to $49.8 million for the same period in 2015. Lower transportation revenues continued to be largely offset by the strong financial performance of Inter Pipeline’s midstream marketing activities.

Throughput on Inter Pipeline’s three conventional gathering systems decreased by approximately eight percent to 192,800 b/d compared to the same period a year earlier. Lower volumes were driven by a reduction in producer drilling and development activity due to low commodity prices, natural production declines and weather related disruptions.

Inter Pipeline successfully completed its 400,000 barrel crude oil storage expansion project at the Kerrobert Terminal in the quarter. This expansion was driven by strong volume growth on the Mid-Saskatchewan pipeline system over the past several years. Total capital expenditures for this project to date are $59 million.

Subsequent to the quarter, Inter Pipeline signed a long-term agreement with CHS Inc. (“CHS”) to transport 32,500 b/d of crude oil on the Bow River pipeline system. Effective January 1, 2017, the 10-year take-or-pay agreement replaces the existing transportation agreement with CHS which expires at the end of the year. Under the terms of the new contract, CHS has increased its take-or-pay commitment by approximately 10% for the shipment of crude oil grades sourced from Hardisty, Alberta to the CHS refinery in Laurel, Montana. Volumes are transported as a distinct, segregated stream on the Bow River pipeline system, before accessing third party pipelines for final delivery to the Montana refinery region.

Bulk Liquid Storage

Inter Pipeline’s European bulk liquid storage segment continues to generate strong results with FFO of $30.2 million in the third quarter of 2016, compared to $29.0 million in the third quarter of 2015.

During the quarter, Inter Terminals, Inter Pipeline’s European subsidiary, executed two long-term contracts to provide a total of 175,000 barrels of new chemical storage capacity at its Seal Sands Terminal in the United Kingdom. Five new storage tanks will be constructed at a cost of approximately $25 million, with the new capacity in-service by mid-2017.

Overall utilization rates in the third quarter of 2016 remained at record highs, averaging 98 percent compared to 93 percent in the third quarter of 2015. Utilization rates were higher in all operating countries mainly due to increased storage demand and stronger contango pricing relationships in certain petroleum product futures markets.

NGL Processing

Inter Pipeline’s NGL processing business is comprised of three straddle plants at Cochrane and Empress, Alberta as well as the recently acquired offgas processing and liquids fractionation business.

Funds from operations improved by 22 percent for the quarter to $28.7 million compared to $23.6 million in the third quarter of 2015. The increase is primarily due to $1.4 million of incremental FFO from eight days of offgas processing operations and stronger propane-plus frac spread pricing. In the quarter, realized frac-spread prices on propane-plus volumes produced at the Cochrane straddle plant averaged US $0.37 per US gallon, up 32% from US $0.28 per US gallon in the same period last year.

Natural gas flows to the Cochrane and Empress straddle facilities averaged approximately 2.9 billion cubic feet per day, with 100,500 b/d of natural gas liquids extracted. Natural gas flows through the Cochrane plant remain high as a result of strong demand from the United States west-coast region for low-cost Canadian natural gas.