Plains All American Pipeline Announces Cactus II Pipeline is Fully Committed with Long-Term Third-Party Contracts
February 22 2018 - 6:06PM
Business Wire
A subsidiary of Plains All American Pipeline, L.P. (NYSE: PAA)
today announced the successful conclusion of the recent open season
for its Cactus II pipeline, a new pipeline system with an initial
capacity of 585,000 barrels per day extending from the Permian
Basin to the Corpus Christi/Ingleside area.
Cactus II pipeline capacity is fully committed with long-term
third-party shipper contracts totaling 525,000 barrels per day,
composed of 425,000 barrels per day of long-term minimum volume
commitments and an additional 100,000 barrels per day of
commitments associated with long-term acreage dedications.
Approximately 60,000 barrels per day is reserved for walk-up
shippers. Affiliates of certain third-party contracted shippers
have options (exercisable no later than mid-2018) to participate as
joint venture partners for up to 35% of Cactus II. PAA is expected
to retain 65% ownership and will serve as operator.
The Cactus II pipeline system will have origination points at
Orla, Wink, Midland, Crane and McCamey, Texas and will be capable
of transporting multiple quality segregations. The system includes
a combination of capacity on existing pipelines and two new 26-inch
pipelines and is expandable to approximately 670,000 barrels per
day through the addition of incremental pumping capacity. The first
new pipeline will extend from Wink to McCamey, TX, and the second
new pipeline (which is expected to be owned within the Joint
Venture) will extend from McCamey to the Corpus Christi/Ingleside
area, and have flexibility to access multiple docks.
The capital cost of the two new pipelines is expected to total
approximately $1.1 billion, with PAA’s portion representing
approximately $700 to $750 million, which amount was included in
PAA’s capital plan disclosed earlier this month and assumes
exercise of the third party options to participate in the joint
venture. Permitting, right-of-way and procurement activities are
underway, and the pipeline system is targeted to be operational in
the third quarter of 2019.
Forward Looking Statements
Certain matters discussed in this release are forward-looking
statements that involve risks and uncertainties that could cause
actual results or outcomes to differ materially from results or
outcomes anticipated in the forward-looking statements. These risks
and uncertainties include, among other things, shortages, cost
increases or delays in receipt of supplies, materials or labor;
inability to obtain, delays in the receipt of, or other issues
associated with necessary licenses, permits, approvals, consents,
rights of way or other governmental or third party requirements;
the impact of current and future laws, rulings, orders,
governmental regulations, accounting standards and statements and
related interpretations; weather interference with business
operations or project construction, including the impact of extreme
weather events or conditions; environmental liabilities, issues or
events that result in construction delays or otherwise impact
targeted in-service dates; interruptions in service on third-party
pipelines or facilities; general economic, market or business
conditions and the amplification of other risks caused by volatile
financial markets, capital constraints and pervasive liquidity
concerns; and other factors and uncertainties inherent in the
transportation, storage, terminalling and marketing of crude oil as
discussed in PAA's filings with the Securities and Exchange
Commission.
Plains All American Pipeline, L.P. is a publicly traded master
limited partnership that owns and operates midstream energy
infrastructure and provides logistics services for crude oil,
natural gas liquids ("NGL"), and natural gas. PAA owns an extensive
network of pipeline transportation, terminalling, storage and
gathering assets in key crude oil and NGL producing basins and
transportation corridors and at major market hubs in the United
States and Canada. On average, PAA handles more than 5 million
barrels per day of crude oil and NGL in its Transportation segment.
PAA is headquartered in Houston, Texas. More information is
available at www.plainsallamerican.com.
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version on businesswire.com: http://www.businesswire.com/news/home/20180222006631/en/
Plains All AmericanInvestors:Brett Magill, (866)
809-1291Manager, Investor RelationsorMedia:Brad Leone, (866)
809-1290Director, Communications
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