Plains All American Progresses with Aggressive Growth Program

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Researched by Industrial Info Resources (Sugar Land, Texas)--Crude oil production in the U.S. is at record levels, particularly in the Permian Basin, where an excess of crude is facing a transmission bottleneck. Pipeline companies are rushing to carry this crude in various markets throughout the U.S. Among these is Plains All American Pipeline LP (NYSE:PAA) (Houston, Texas), which has launched growth projects in the Permian and elsewhere.

In the company's recent fourth-quarter earnings conference call, Plains Chief Executive Officer Willie Chiang gave an update on some of the company's projects, including a joint venture with Exxon Mobil Corporation (NYSE:XOM) (ExxonMobil) (Irving, Texas) and Lotus Midstream (Sugar Land) for a crude oil pipeline running approximately 650 miles from Wink in West Texas to Webster, along the Texas Gulf Coast.

Chiang said, "Last week, we announced, along with ExxonMobil and Lotus Midstream, the execution of definitive agreements forming the Wink to Webster Pipeline LLC joint venture, sanctioning the project with long-term shipper commitments sufficient to proceed with the development of a new 36-inch, long-haul Permian pipeline targeted to be placed into service in the first half of 2021."

Plains will lead construction activities on behalf of the joint venture. The company has ordered line pipe and land acquisition, and permitting activities are now underway. The pipeline is designed to transport more than 1 million barrels a day (BBL/d) of crude and condensate in a batch system from the Permian Basin to the Texas Gulf Coast with origination points at Wink and Midland. Plains has a 20% ownership interest in the joint venture and expects a net 2019 capital investment of approximately $250 million."

Construction is expected to kick off by the end of the year. The project has an estimated total investment value of $1.18 billion. For more information, see Industrial Info's project report and February 4, 2019, article - ExxonMobil to Boost Capex to $30 Billion in 2019.

Among Plains' other projects is a joint venture with Marathon Petroleum Corporation (NYSE:MPC) (Findlay, Ohio) outside of the Permian region: the reversal of the Capline crude oil pipeline. Capline currently runs from the Gulf Coast to refineries in the Midwest (St. James, Louisiana, to Patoka, Illinois) and has traditionally carried oil produced offshore in the Gulf of Mexico. However, with the recent boom in onshore shale oil production, volumes on the line have declined.

Chiang said, "We've finalized joint venture agreements with the Capline owners, and Marathon Petroleum Corporation, as operator, has launched binding open seasons for the Capline reversal that would support movements from Patoka to St. James and from Cushing [Oklahoma] to St. James via a joint tariff. The target in-service date is third-quarter 2020 for light oil service and early 2022 for heavy oil service. Pending a successful open season, the Cushing-to-St. James movement would include a 200,000-BBL/d expansion." For more information, see Industrial Info's project reports on the Louisiana, Tennessee, Mississippi, Kentucky and Illinois segments of the pipeline.

Another Plains project is the Cactus II grassroot crude oil pipeline, which will run from the Permian Basin to the Corpus Christi/Ingleside area on the Texas Gulf Coast. The pipeline will carry 585,000 BBL/d. Following a fully committed open season, construction kicked off last summer. Chiang said, "We also continue to progress our Cactus II pipeline on schedule, with partial service expected in late third-quarter 2019 and full service planned by April 2020." For more information, see Industrial Info's project reports on the Wink-McCamey segment and the McCamey-Corpus Christi/Ingleside segment.

Plains is underway with construction of a crude oil storage terminal and dock in Corpus Christi with joint venture partner Enterprise Products Partners (NYSE:EPD) (Houston). The facility is being constructed on a former zinc plant waste site and will include two 270,000-barrel crude tanks and two 350,000-barrel tanks. Construction began in late 2017 and is expected to be completed this summer. For more information, see Industrial Info's project report.

Plains All American reported fourth-quarter 2018 of $1.18 billion, compared with $191 million in fourth-quarter 2017. Full year income was $2.22 billion, compared with $856 million in 2017.

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.