Plains All American Wraps Up Latest in String of New Permian Basin Assets

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Researched by Industrial Info Resources (Sugar Land, Texas)--In the past few years, Plains All American Pipeline LP (NYSE:PPA) (Houston, Texas) has made about $440 million in investments for 13 projects in the Permian Basin, expanding the capacity of its existing assets and building new infrastructure. Most of these investments already have been brought online. Plains also has brought online its Cactus pipeline.

Most of the work for the remaining Barilla Draw pipeline is complete, with the second part set for commissioning in October 2015. With the completion of this pipeline, producers will gain cheaper access to long-haul pipelines to carry their crude to the Gulf Coast market.

The Permian Basin Expansion project was completed in March 2015. The expanded system transports 200,000 barrels per day (BBL/d) of crude oil from central Reagan and central Upton counties to McCamey, Texas, where it interconnects with the Cactus Pipeline. The Cactus Pipeline moves crude oil from the Permian Basin into the Eagle Ford region, then to the Gulf Coast, where refineries can make use of the oil.

Barilla Draw to be Final Step in Permian
The Barilla Draw pipeline, also known as the Wolf Bone Ranch pipeline, is to be constructed in two parts. Phase I will consist of 20 miles of 16-inch pipe and is set to be complete the last week of August. Phase II, which is 28 miles of 16-inch pipe, will be commissioned in October. This pipeline will run from a gathering station south of Pecos, Texas, to a terminal in Wink, Texas. This pipeline will transport a total of 150,000 BBL/d.

The completion of the Barilla Draw pipeline will conclude Plains' investments in the Permian Basin for the next few years. Plains' decision to invest in one of the largest producing regions will increase revenue for the company. The few factors affecting revenue for Plains is change in government regulations or oil prices. Keeping those two factors in mind will assist Plains' in making any future investments in the Permian Basin.

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