Midstream - Pipelines | Top Story | Capital Markets | Private Equity Activity

Plains Spending $400 Million on Permian Trunk Lines and Pipelines

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Plains All American provided the following update to its 2014 capital program in its latest conference call.

During 2013 we invested approximately $1.62 billion in organic growth projects which is in line with the guidance range provided last quarter. Our expansion capital expenditures for 2014 are expected to total about $1.7 billion and as is typical with our capital program this is composed primarily of a number of smaller to medium sized projects spread across most of the liquid rich resource plays.

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Our 2014 expansion capital number reflects our estimate and the amount of work we can complete throughout the year. Consistent with past practice we will adjust our expected capital investment quarterly based on our progress up on approved projects and the potential approval of additional projects within our multi-billion dollar portfolio.

Permian Basin

We’re expected to invest about $430 million in 2014. Approximately 290 million relates to trunk line projects including a new 20 inch pipeline from Midland Colorado City, a line from our driver station in Sprayberry, to McCamey a 12 inch line from Monahan Station to Crane and a new 20 inch line from Jal to Hendricks, replaces existing lines and expands capacity from Jal.

These lines are all expected to be in service in early 2015 and will enhance our ability to move Permian Basin crude to multiple takeaway pipelines. We also expect to invest approximately $90 million expanding our gathering system in the Illinois basin and about $50 million expanding our Sprayberry gathering system.

We expect to start construction of our Cactus pipeline early in the second quarter of 2014 and we expect the line to be in service in the first quarter of 2015. This is a $440 million project and we expect to invest approximately 310 million in 2014.

Canada, North Dakota and California

We expect to invest approximately $185 million in 2014 expanding our rail loading and unloading capacity. This includes a new loading facility in Saskatchewan, Canada, a new unloading facility in Bakersfield, California and the expansion of existing facilities in Van Hook, North Dakota and Carr, Colorado.

We are also evaluating a couple of other rail loading opportunities in Alberta, Canada. At our Fort Saskatchewan facility in Canada, we expect to invest approximately $180 million in 2014. Our capital program at Fort Sask includes a development of two high delivery 350,000 barrel propane caverns, conversion of two existing 1 million barrel caverns from propane servers to an alternative servers and the development of 2.5 million barrels of volume pond. We expect a small portion of these projects to be in service in the third quarter of 2014 with the balance of the investments coming into service throughout 2015 and into the second quarter of 2016.