Plains All American acquires and sells assets
Published by Anna Nicklin,
Assistant Editor
World Pipelines,
Plains All American Pipeline, L.P. (PAA) recently announced that it had entered into definitive agreements to acquire a Permian Basin crude oil gathering system for approximately US$1.2 billion. The company also announced it had entered into definitive sales agreements totalling US$380 million, which includes two pending transactions aggregating approximately US$310 million and the completion of a third transaction in January 2017 for approximately US$70 million.
The acquisition and pending sale transactions are subject to customary closing conditions, including receipt of regulatory approvals. They are expected to close during 2H17.
The crude oil gathering system is located in the northern portion of the Delaware Basin. It is supported by substantial acreage dedications from several producers active in this portion of the Delaware Basin.
Greg Armstrong, Chairman and CEO of PAA, commented: “The Permian Basin is a world class resource play and we are pleased to announce this strategic acquisition, which complements our existing assets that provide transportation and related services throughout the Permian Basin.
“The Northern Delaware Basin is an area that is experiencing increased activity levels and significant industry investment. We expect aggregate crude oil production on the dedicated acreage to double over the next two to three years, and we believe that overall Permian Basin crude oil volumes have the potential to grow as much as 50% or more during this same time period.”
Armstrong also noted that this system and planned enhancements will provide additional flexibility and a greater range of options for area producers, including connectivity to PAA’s pipelines with access to markets in Cushing, Houston and Corpus Christi.
PAA recently announced it was expanding the capacity on its Cactus pipeline from McCamey to Gardendale (Texas) to approximately 390 000 bpd. This expansion is anticipated to be completed in 3Q17 and will allow PAA to move increasing production volumes from the Permian Basin to Corpus Christi and other delivery points along the system.
Additionally, BridgeTex Pipeline Company, LLC, in which PAA owns a 50% interest, announced it was expanding the capacity on the BridgeTex pipeline from Colorado City to Houston, Texas to approximately 400 000 bpd. This expansion is anticipated to be completed in the second quarter of 2017 and will also move increasing production volumes from the Permian Basin to the Houston Gulf Coast area.
To read more about financial related topics and for information with respect to acquisition and sales agreements, please click here.
Read the article online at: https://www.worldpipelines.com/business-news/25012017/plains-all-american-acquires-and-sells-assets/
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