Permian Pipeline Expansions Boost Plains' Q3 Volumes

HOUSTON (P&GJ) — Plains All American reported strong earnings Tuesday for the third quarter of 2019 as growing demand for pipeline transport drove revenues higher.  The results, however, fell short of prior-year earnings for the quarter, when Plains recognized its sale of an interest in BridgeTex Pipeline.

Plains Sunrise II expansion, completed in 2018, added Permian volumes this year. (source: PAA)

Plains reported net income of $449 million on revenues of $7.9 billion for the three months ended Sept. 30, 2019, compared with net income of $710 million on revenues of $8.8 billion during the same period of 2018. For the first nine months of this year, Plains reported a 69% increase in net income to $1.5 billion from $916 million during January-September of 2018.

Third-quarter 2019 Transportation Segment adjusted earnings grew 19% over the same quarter of 2018 due primarily to increased Permian Basin volumes.  The Sunrise II expansion started up in the fourth quarter of 2018, and the Cactus II pipeline started up during the third quarter of this year.

"In the near-term we are positioned to grow our fee-based business in 2020 and complete multiple previously announced, highly contracted and capital efficient projects from late 2020 through 2021, which provide strong visibility for fee-based growth, Plains CEO Willie Chiang said.

"Looking forward, we expect meaningful reductions in our growth capital program in 2021 and beyond as we prioritize further lowering our leverage and returning capital to investors," he said.

Plains and Magellan Midstream completed the $1.4 billion sale of a 50% stake in BridgeTex Pipeline to a Canadian pension plan investment manager during the third quarter of 2018.  Plains retains a 20% interest in BridgeTex, while Magellan is operator and owns a 30% interest.

Detailed quarterly results are available on the Plains website.

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