Plains All American Pipeline L.P.
Enterprise Products Partners, L.P.
) announced that they would expand the capacity of their Eagle
Ford Joint Venture (JV) crude oil pipeline. After completion of
the project, the capacity of the pipeline would increase to
470,000 barrels per day (bpd) from 350,000 bpd. The cost of the
expansion project is expected to be $120 million and will be
online in second-quarter 2015.
Plains All American Pipeline and Enterprise Products Partners
will complete the pipeline project in phases that would include
adding pumping capacity and looping certain sections of the
existing operations. In addition, the partnerships will build an
extra 2.3 million barrels of operational storage capacity in
Gardendale, Tilden and Corpus Christi.
These initiatives will enable the JV to cope with additional
volumes of crude oil that will be generated from Plains All
American's Cactus pipeline, currently in the construction phase.
In Aug 2012, Plains All American Pipeline and Enterprise Products
Partners inked a 50/50 JV agreement. Per the deal, the
partnerships will construct a 175-mile (281.6 kilometers) crude
oil and condensate pipeline, a marine terminal facility and
roughly 1.8 million barrels of storage capacity across the
system. The pipeline system is expected to be completed by Sep
The venture is expected to reduce the partnerships' construction
costs, while enhancing the market accessibility of the shippers.
Eagle Ford JV crude oil pipeline is supported by the long-term
producer commitment. The long-term commitment prompted Plains All
American Pipeline to invest substantial amounts to set up new
pipelines in the region. Most of the upstream players including
Chesapeake Energy Corp.
Murphy Oil Corp.
) are active in South Texas-based mineral-rich Eagle Ford area
and continues with their steady exploration and production
We believe installation of the new pipelines as well as expanding
the existing ones in the region will allow Plains All American
Pipeline to serve more number of customers, subsequently
improving revenues going forward.
Plains All American Pipeline currently has a Zacks Rank #3
CHESAPEAKE ENGY (CHK): Free Stock Analysis
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ENTERPRISE PROD (EPD): Free Stock Analysis
MURPHY OIL (MUR): Free Stock Analysis Report
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