Released August 08, 2019 | SUGAR LAND
en
Researched by Industrial Info Resources (Sugar Land, Texas)--Midstream company Plains All American Pipeline LP (NYSE:PAA) (Houston, Texas) has beefed up its capital expenditures (capex) outlook by $150 million as it pushes ahead with crude oil takeaway projects in the Permian Basin and other regions. Its 2019 capex outlook now stands at $1.5 billion.
Industrial Info is tracking $2 billion in Plains project activity.
Click on the image at right for a graph showing Plains project activity by state.
Among the projects tracked by Industrial Info is the 670,000-barrel-per-day (BBL/d) Cactus II crude oil pipeline, which Plains plans to put into partial service next week. The pipeline will carry Permian Basin crude oil from McCamey, Texas, to ports in Corpus Christi and Ingleside, Texas.
Cactus II is mechanically complete from Wink, Texas, to Ingleside, Chief Executive Officer Willie Chiang said on Tuesday during Plain's second-quarter earnings conference call. "As of today, the line is approximately 50% filled with crude, and we anticipate entering initial commercial service sometime next week. We expect to have direct Cactus II connectivity to Corpus in service by the end of the first quarter 2020," he told industry analysts.
Plains plans to charge shippers using the Cactus II pipeline an additional surcharge of 5 cents per barrel next year to pay for pipeline steel import tariffs imposed by the Trump administration, according to Reuters. The company had to pay an additional $40 million for the imported steel for the project.
Chiang said Plains bought imported steel for Cactus II "because the U.S. steel producers were not able to produce the pipe in the spec that we wanted. The key point on this is we purchased the steel before the tariffs were implemented."
Chiang said Plains is continuing to work with the U.S. Department of Commerce to try to resolve the issue. He added: "As a parallel path, we have moved forward with the surcharge and if we're able to get an (tariff) exemption, clearly, we would stop the surcharge and rebate it as appropriate."
For more information, see Industrial Info's project reports on the Corpus Christi/Ingleside and the Wink-McCamey segments of the Cactus II pipeline.
Chiang gave an update on several other projects, including the Wink-to-Webster joint-venture pipeline, which includes about 650 miles of 36-inch-diameter pipeline to transport as much as 1 million barrels per day (BBL/d) of crude oil and condensate from Wink to multiple locations near Houston, Baytown, Beaumont and Webster, all in Texas.
MPLX LP (NYSE:MPLX) (Findlay, Ohio), Delek US Holdings, Incorporated (NYSE:DK) (Brentwood, Tennessee) and Rattler Midstream LP (NASDAQ:RTLR) (Midland, Texas) have joined as partners on the pipeline, which already has Plains, Exxon Mobil Corporation (NYDE:XOM) (Irving, Texas) and Lotus Midstream LLC (Sugar Land) as joint venture partners. An additional undisclosed third party is expected to announce ownership in the project in the near future, Chiang said. As a result of all the new partners, Plains' equity interest in the project has dropped to 16% from 20%.
"We are targeting Wink-to-Webster capacity to be in service beginning in early 2021," Chiang added.
Industrial Info is tracking six Wink-to-Webster pipeline projects worth $1.18 billion. Click here for the list of projects.
Chiang said preconstruction activities have begun on the Red Oak pipeline, a 50:50 joint venture with Phillips 66 (NYSE:PSX) (Houston, Texas), which will connect the pipeline hub at Cushing, Oklahoma, to multiple locations along the Gulf Coast, including Corpus Christi, Ingleside, Houston and Beaumont. Construction on the 400,000-BBL/d, 430-mile pipeline is expected to begin in mid-2020.
"We expect the project, which is underpinned by long-term ship agreements, to begin initial service as early as the first quarter of 2021," Chiang said. For more information, see Industrial Info's project reports on the Oklahoma and Texas portions of the pipeline. For related information, see July 29, 2019, article - Phillips 66 Progresses with 'Robust Portfolio of Midstream Growth Projects'.
Plains reported $446 million in net income for the second quarter, up from $100 million a year earlier. The results "reflect strong performance in our margin-based supply and logistic segment, and fee-based earnings that were in line with expectations," Chiang said.
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.
Click on the image at right for a graph showing Plains project activity by state.
Among the projects tracked by Industrial Info is the 670,000-barrel-per-day (BBL/d) Cactus II crude oil pipeline, which Plains plans to put into partial service next week. The pipeline will carry Permian Basin crude oil from McCamey, Texas, to ports in Corpus Christi and Ingleside, Texas.
Cactus II is mechanically complete from Wink, Texas, to Ingleside, Chief Executive Officer Willie Chiang said on Tuesday during Plain's second-quarter earnings conference call. "As of today, the line is approximately 50% filled with crude, and we anticipate entering initial commercial service sometime next week. We expect to have direct Cactus II connectivity to Corpus in service by the end of the first quarter 2020," he told industry analysts.
Plains plans to charge shippers using the Cactus II pipeline an additional surcharge of 5 cents per barrel next year to pay for pipeline steel import tariffs imposed by the Trump administration, according to Reuters. The company had to pay an additional $40 million for the imported steel for the project.
Chiang said Plains bought imported steel for Cactus II "because the U.S. steel producers were not able to produce the pipe in the spec that we wanted. The key point on this is we purchased the steel before the tariffs were implemented."
Chiang said Plains is continuing to work with the U.S. Department of Commerce to try to resolve the issue. He added: "As a parallel path, we have moved forward with the surcharge and if we're able to get an (tariff) exemption, clearly, we would stop the surcharge and rebate it as appropriate."
For more information, see Industrial Info's project reports on the Corpus Christi/Ingleside and the Wink-McCamey segments of the Cactus II pipeline.
Chiang gave an update on several other projects, including the Wink-to-Webster joint-venture pipeline, which includes about 650 miles of 36-inch-diameter pipeline to transport as much as 1 million barrels per day (BBL/d) of crude oil and condensate from Wink to multiple locations near Houston, Baytown, Beaumont and Webster, all in Texas.
MPLX LP (NYSE:MPLX) (Findlay, Ohio), Delek US Holdings, Incorporated (NYSE:DK) (Brentwood, Tennessee) and Rattler Midstream LP (NASDAQ:RTLR) (Midland, Texas) have joined as partners on the pipeline, which already has Plains, Exxon Mobil Corporation (NYDE:XOM) (Irving, Texas) and Lotus Midstream LLC (Sugar Land) as joint venture partners. An additional undisclosed third party is expected to announce ownership in the project in the near future, Chiang said. As a result of all the new partners, Plains' equity interest in the project has dropped to 16% from 20%.
"We are targeting Wink-to-Webster capacity to be in service beginning in early 2021," Chiang added.
Industrial Info is tracking six Wink-to-Webster pipeline projects worth $1.18 billion. Click here for the list of projects.
Chiang said preconstruction activities have begun on the Red Oak pipeline, a 50:50 joint venture with Phillips 66 (NYSE:PSX) (Houston, Texas), which will connect the pipeline hub at Cushing, Oklahoma, to multiple locations along the Gulf Coast, including Corpus Christi, Ingleside, Houston and Beaumont. Construction on the 400,000-BBL/d, 430-mile pipeline is expected to begin in mid-2020.
"We expect the project, which is underpinned by long-term ship agreements, to begin initial service as early as the first quarter of 2021," Chiang said. For more information, see Industrial Info's project reports on the Oklahoma and Texas portions of the pipeline. For related information, see July 29, 2019, article - Phillips 66 Progresses with 'Robust Portfolio of Midstream Growth Projects'.
Plains reported $446 million in net income for the second quarter, up from $100 million a year earlier. The results "reflect strong performance in our margin-based supply and logistic segment, and fee-based earnings that were in line with expectations," Chiang said.
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.
