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Researched by Industrial Info Resources (Sugar Land, Texas)--Executives at pipeline operator Plains All American Pipeline LP (NYSE:PAA) (Houston, Texas) say that takeaway capacity in the Permian Basin in Texas is filling quicker than expected, and the company is accelerating its projects, as well as maximizing capacity, to try to take advantage of the increased production in the region. Industrial Info is tracking more than $2.5 billion in Plains All American projects.
At the company's recent earnings conference call, Chief Operating Officer Willie Chiang said, "Our 2018 guidance incorporated an expectation that Permian takeaway capacity would likely experience constraints in the second half of 2018 and the first half of 2019. This is materializing earlier than expected. Although we have capacity in our gathering in intra-basin systems, the rapid production growth has substantially filled the Permian long-haul pipelines sooner than expected and has created constraints in some of our Delaware Basin intra-basin pipelines."
Among the projects planned to alleviate this capacity overload are the Cactus II crude oil pipeline and the Sunrise crude oil pipeline loop. "We've been accelerating projects to address these constraints but long-haul constraints will likely remain until additional takeaway capacity projects such as our Sunrise loop and extension and Cactus II are complete," said Chiang.
The Cactus II Pipeline will connect the Permian to ports in the Corpus Christi/Ingleside area on the Texas Gulf Coast. The pipeline includes a combination of existing pipelines and two new pipelines. The first new pipeline will extend from Wink to McCamey, Texas, and the second pipeline will extend from McCamey to Corpus Christi/Ingleside. Chiang said, "We are proceeding as planned with our Cactus II pipeline system that will connect the Delaware Basin with the Corpus Christi/Ingleside area. We have determined to construct the line with the fully expanded capacity of 670,000 barrels a day (BBL/d) and expect that line to begin service in the fourth quarter of 2019 with throughput volumes ramping up over a couple of quarters." The pipeline was originally planned to transport 585,000 BBL/d. Construction is expected to begin this quarter. The pipeline has an estimated total investment value (TIV) of $1.1 billion. For more information, see Industrial Info's project reports on the Wink-McCamey segment and McCamey-Corpus Christi/Ingleside segment.
The Sunrise pipeline loop addition will run from Midland, Texas, to Plains All American's terminal in Cushing, Oklahoma. Chiang said, "The extension 24-inch loop of our Sunrise system adds approximately 500,000 BBL/d of capacity from Midland to Colorado City and Wichita Falls. This enables us to utilize approximately 120,000 BBL/d of existing available capacity on our Basin Pipeline System from Wichita Falls to Cushing. The project is supported by producer commitments as well as the recently negotiated sale of an undivided joint interest of 100,000 BBL/d of capacity in the Sunrise expansion to a subsidiary of Valero" (NYSE:VLO) (San Antonio, Texas). The project has an estimated TIV of $500 million and is expected to be in service in mid-2019. For more information, see Industrial Info's project reports on the Midland-Colorado City segment, the Colorado City-Wichita Falls segment and the Oklahoma portion of the pipeline.
Terminals
To keep up with the additional crude oil transmission capacity, Plains All American also is underway with terminals projects. In Corpus Christi, Plains and Enterprise Products Partners LP (NYSE:EPD) (Houston) are constructing a crude oil storage terminal and dock at the site of a former zinc plant and waste site. The facility will include two 270,000-barrel tanks, two 350,000-barrel tanks and a deepwater ship dock. Construction on the $200 million project began late last year and is expected to be completed this summer. For more information, see Industrial Info's project report.
"As a complement to our long-haul projects, we're accelerating the expansion of our terminalling and storage facilities at Wink and adding additional tankage at Midland," said Chiang. Plains recently began a project in Midland to install booster pump packages and piping to tie six existing crude tanks into the Sunrise system. The project is expected to be completed in the first half of 2019. For more information, see Industrial Info's project report.
In Wink, Plains is constructing a 270,000-barrel tank at its terminal. Construction began in the second half of last year and is expected to be wrapped up shortly. For more information, see Industrial Info's project report. Also in Wink, Plains recently began construction on three 275,000-barrel crude tanks to increase storage capacity. Construction is expected to be wrapped up by the end of the year. For more information, see Industrial Info's project report.
Plains All American reported first-quarter 2018 net income of $288 million, compared with $444 million in first-quarter 2017. Revenues in the recently completed quarter were $8.4 billion, compared with $6.67 billion the same period last year.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
At the company's recent earnings conference call, Chief Operating Officer Willie Chiang said, "Our 2018 guidance incorporated an expectation that Permian takeaway capacity would likely experience constraints in the second half of 2018 and the first half of 2019. This is materializing earlier than expected. Although we have capacity in our gathering in intra-basin systems, the rapid production growth has substantially filled the Permian long-haul pipelines sooner than expected and has created constraints in some of our Delaware Basin intra-basin pipelines."
Among the projects planned to alleviate this capacity overload are the Cactus II crude oil pipeline and the Sunrise crude oil pipeline loop. "We've been accelerating projects to address these constraints but long-haul constraints will likely remain until additional takeaway capacity projects such as our Sunrise loop and extension and Cactus II are complete," said Chiang.
The Cactus II Pipeline will connect the Permian to ports in the Corpus Christi/Ingleside area on the Texas Gulf Coast. The pipeline includes a combination of existing pipelines and two new pipelines. The first new pipeline will extend from Wink to McCamey, Texas, and the second pipeline will extend from McCamey to Corpus Christi/Ingleside. Chiang said, "We are proceeding as planned with our Cactus II pipeline system that will connect the Delaware Basin with the Corpus Christi/Ingleside area. We have determined to construct the line with the fully expanded capacity of 670,000 barrels a day (BBL/d) and expect that line to begin service in the fourth quarter of 2019 with throughput volumes ramping up over a couple of quarters." The pipeline was originally planned to transport 585,000 BBL/d. Construction is expected to begin this quarter. The pipeline has an estimated total investment value (TIV) of $1.1 billion. For more information, see Industrial Info's project reports on the Wink-McCamey segment and McCamey-Corpus Christi/Ingleside segment.
The Sunrise pipeline loop addition will run from Midland, Texas, to Plains All American's terminal in Cushing, Oklahoma. Chiang said, "The extension 24-inch loop of our Sunrise system adds approximately 500,000 BBL/d of capacity from Midland to Colorado City and Wichita Falls. This enables us to utilize approximately 120,000 BBL/d of existing available capacity on our Basin Pipeline System from Wichita Falls to Cushing. The project is supported by producer commitments as well as the recently negotiated sale of an undivided joint interest of 100,000 BBL/d of capacity in the Sunrise expansion to a subsidiary of Valero" (NYSE:VLO) (San Antonio, Texas). The project has an estimated TIV of $500 million and is expected to be in service in mid-2019. For more information, see Industrial Info's project reports on the Midland-Colorado City segment, the Colorado City-Wichita Falls segment and the Oklahoma portion of the pipeline.
Terminals
To keep up with the additional crude oil transmission capacity, Plains All American also is underway with terminals projects. In Corpus Christi, Plains and Enterprise Products Partners LP (NYSE:EPD) (Houston) are constructing a crude oil storage terminal and dock at the site of a former zinc plant and waste site. The facility will include two 270,000-barrel tanks, two 350,000-barrel tanks and a deepwater ship dock. Construction on the $200 million project began late last year and is expected to be completed this summer. For more information, see Industrial Info's project report.
"As a complement to our long-haul projects, we're accelerating the expansion of our terminalling and storage facilities at Wink and adding additional tankage at Midland," said Chiang. Plains recently began a project in Midland to install booster pump packages and piping to tie six existing crude tanks into the Sunrise system. The project is expected to be completed in the first half of 2019. For more information, see Industrial Info's project report.
In Wink, Plains is constructing a 270,000-barrel tank at its terminal. Construction began in the second half of last year and is expected to be wrapped up shortly. For more information, see Industrial Info's project report. Also in Wink, Plains recently began construction on three 275,000-barrel crude tanks to increase storage capacity. Construction is expected to be wrapped up by the end of the year. For more information, see Industrial Info's project report.
Plains All American reported first-quarter 2018 net income of $288 million, compared with $444 million in first-quarter 2017. Revenues in the recently completed quarter were $8.4 billion, compared with $6.67 billion the same period last year.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
