Winter Storms Hit Phillips 66 Partners' Q1 Pipeline Volumes
NEW YORK (Reuters) — The amount of oil and gas shipped on Phillips 66 Partners LP pipelines fell about 6% in the first quarter as winter storms disrupted service and the COVID-19 health crisis continued to hamper fuel demand, company officials said on Friday.
Pipeline revenues were down to $104 million in the three months ended March 31 from $111 million last quarter as volumes fell to roughly 1.6 million bpd from more than 1.7 million bpd following severe winter weather that shut in production and forced refiners to temporarily close shop, Phillips 66 Partners said on a call with investors.
The Houston, Texas-based energy transportation and storage company completed its C2G ethane pipeline in Texas and the South Texas Gateway Terminal for oil storage and exports, executives said, but it continues to face a difficult environment for expansion and financial lending.
"We're now in a position where there is a lot less midstream growth opportunities out there in this environment," said Kevin Mitchell, Phillips' chief financial officer.
Adding to the uncertainty are legal troubles facing the Dakota Access Pipeline (DAPL). Phillips, an investor in the 570,000 bpd crude oil pipeline out of North Dakota, faces the possibility DAPL will be forced to shut by a federal court while an environmental review of the line is carried out.
A U.S. District Court judge is expected to rule as early as next week on whether to order the pipeline closed during the months-long review.
"Regardless of the outcome of what happens next week, we believe the legal process will continue progressing so I still think there's quite a bit of uncertainty around DAPL despite our views that it should continue to operate," Mitchell said.
The company's first-quarter revenues were $376 million, down from $390 million the previous quarter.
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