Plains All American Raises 2022 Profit Forecast as Permian Ramps Up

(Reuters) — Plains All American Pipeline LP raised its profit forecast for the year by 3.4% on Wednesday, partly as higher oil and gas prices are expected to boost production and volumes shipped on pipelines from the top U.S. shale field.

U.S. shale companies are ramping up output as crude prices have climbed over $100 a barrel, and output is projected to hit a record 5.1 million barrels per day (bbl/d) in May, according to U.S. government data, boosting volumes on pipelines.

The pipeline operator increased full-year adjusted earnings guidance by $75 million to about $2.28 billion and expects its Permian gathering volume to grow around 280,000 bbl/d in 2022. 

Plains said it added additional 45,000 barrels a day of contracted short-term volumes to its Permian long-haul pipelines.

"We expect U.S. shale production, led by the Permian, will continue to be crucial to supplying and meeting global energy demand," CEO Wilfred Chiang said on an earnings call.

Crude oil pipeline tariff volumes rose 32% to average 7.2 million barrels per day, with Permian climbing 39%.

Still, earnings from its crude oil business fell 4% compared with the year-ago quarter as the company sold its natural gas storage facilities in August and registered gains a year earlier from hedged power costs related to a winter storm.

Adjusted net income attributable to Plains rose 15% to $266 million, helped by higher prices for natural gas liquids and increased fractionation spreads.

On a per unit basis, earnings fell 1 cent short of Refinitiv IBES analysts' estimate of 32 cents per unit.

Plains also raised its annual common distribution by 15 cents to 87 cents per unit and said it repurchased $25 million of units in the first quarter.

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