From the Houston Business Journal
Houston-based Plains All American Pipeline LP (ticker: PAA) has started an open season to measure interest among potential shippers for a new pipeline out of the Permian Basin.
The new line would feature origin points in Midland and Colorado City, both in Texas, and deliver the crude to the storage hub in Cushing, Oklahoma, according to a Plains All American press release.
If it receives sufficient commitments from shippers and the regulatory process goes smoothly, the project could bring as much as 350,000 barrels per day of Permian Basin takeaway capacity to the market by the middle of 2019, according to the release.
Unlike many recently announced pipeline projects, this one doesn’t take crude to the Gulf Coast from the Permian Basin. Plains CEO Greg Armstrong hinted that the company might consider adding takeaway capacity to Cushing in a recent earnings call.
“Most of the pipes are pointed toward the Gulf Coast,” Armstrong said at the time. “That’s why we think there may be support for something going to Cushing.”
Plains is also expanding its storage footprint in the hub. It is spending about $30 million in 2017 to add about 2 million barrels of crude storage capacity. Armstrong said on the company’s fourth-quarter earnings call that the Cushing storage expansion would be in service by the middle of the year, but that time period has since been moved back to some time in the second half of 2017, according to a recent presentation.
Plains has been fairly active recently, as interest in midstream projects picks up on the end of the oil downturn. The company completed a joint venture acquisition of Advantage Pipeline LLC, and it bought Alpha Holding Company LLC, the owner of the Alpha Crude Connector system, for more than $1.2 billion. Plains also plans to expand the capacity of its Cactus Pipeline and the BridgeTex Pipeline Company LLC, of which Plains owns half.
