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Plains emphasizes flexible value chain for getting hydrocarbons on the water from SNL Energy Finance Daily Plains emphasizes flexible value chain for getting hydrocarbons on the water BYLINE: Allison Good SECTION: Extra Plains All American Pipeline LP is committed to helping shippers access other companies' export facilities even as more midstream firms compete for market share on the water by expanding its suite of services. "We want to give solutions to people to get to whatever market they want to get to," Willie Chiang, CEO and director of Plains' general partner, said during a May 7 earnings conference call. "One thing that we've found over the last year as we've developed some of these projects is that there's actually a preference sometimes to use one person's pipe and others' docks, so rather than a single solution where you have to go through a pipe and a dock, having the flexibility to get to other docks as well as your own docks I think gives the shippers the most flexibility possible." Peers like Enterprise Products Partners LP have stressed integration as a means for attracting customers who want a single solution from the wellhead to Gulf Coast docks. The master limited partnership's first pipeline from Midland, Texas, to its ECHO terminal on the Houston Ship Channel is proof of that concept, according to Enterprise CEO Jim Teague. "You have only one contract that doesn't have an associated dock deal with it and I think that contract is in negotiations with us for a dock deal, so that's evidence that the bundle service is quite valuable," he said May 1. Plains, Exxon Mobil Corp. and Lotus Midstream LLC are developing the Wink to Webster pipeline to move more than 1 million barrels of crude and condensate per day from the Permian Basin to Gulf Coast markets beginning in the first half of 2021. Plains' Cactus II crude pipeline project is due to transport 525,000 bbl/d from the Permian to the Corpus Christi, Texas, area beginning in the third quarter of 2019. Executive Vice President and COO Chris Chandler did acknowledge, however, that Cactus II is "seeing some cost pressure on both the material and labor side" as it nears the finish line. "As you would expect, there's multiple pipelines being installed in the area and there is quite a bit of competition," he said. On the topic of private equity-backed activity in West Texas and New Mexico, meanwhile, Executive Vice President Jeremy Goebel said some customers still prefer to work with industry partners even though private firms have deeper pockets. "Certain of our customers that we're aligned with, you don't necessarily see that pressure," he said. "We spend a lot of our business development time on opportunities where we can win and not necessarily have to compete directly with that capital." Plains separately on May 7 posted first-quarter adjusted EBITDA of $862.0 million, an increase from $593.0 million in the year-ago quarter. The S&P Global Market Intelligence consensus estimate of adjusted EBITDA was $749.1 million. The partnership's distributable cash flow available to common unitholders for the quarter was $654.0 million, up from $443.0 million a year earlier. Chiang also noted during the conference call that Plains had increased its full-year adjusted EBITDA guidance by $100 million to plus or minus $2.85 billion for 2019. |
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