Pipeline Operator Plains All American Raises 2022 Profit Forecast
(Reuters) — Oil and gas pipeline operator Plains All American on Wednesday raised its profit forecast for the third time this year, helped by higher volumes on its Permian basin pipelines and increased commodity prices.
Plains is the latest U.S. energy pipeline operator to boost full-year earnings view on higher demand as oil and gas production has kept growing after cutbacks during the pandemic.
Earlier, rivals Magellan Midstream Partners and Energy Transfer also raised their earnings outlooks.
Crude oil pipeline tariff volumes rose 23% to 7.5 million barrels per day (bpd), Plains said, with volumes in the Permian basin of Texas and New Mexico climbing about 30%.
Higher commodity prices also helped lift full-year adjusted earnings guidance by $75 million, to about $2.45 billion. The latest guidance is a $250 million increase compared to the company's initial forecast in February.
Plains and Canadian pipeline company Enbridge Inc. purchased Western Midstream Partners' 15% interest in Cactus II Pipeline LLC for an aggregate amount of $265 million, the companies said in a separate statement.
Enbridge acquired 10% and Plains acquired 5% of Cactus II, with each paying a proportionate share of the purchase price. Plains and Enbridge are now the sole owners of Cactus II, with 70% and 30%, respective, interests. Plains will continue to serve as the operator.
The Cactus II pipeline moves 670,000 barrels per day of oil from the Delaware basin in West Texas to Corpus Christi, the top U.S. oil export port.
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