PAA’s capital expenditures
Plains All American Pipeline (PAA) invested ~$279 million in capital projects in 3Q17 and ~$893 million in the nine months ended September 30, 2017. PAA expects to spend ~$1,050 million on capital projects in 2017. Its preliminary estimate for its 2018 capital program is $700 million.
Cactus II Pipeline
On January 22, Plains All American Pipeline announced receiving “sufficient binding commitments” for its initial open season for Cactus II Pipeline. This pipeline system includes existing pipelines and two new pipelines. The first new pipeline is to connect Wink South to McCamey, Texas. The second pipeline is to run from McCamey to the Corpus Christi area. The project is expected to become operational in 3Q19.
On the same day, Matador Resources Company (MTDR) announced a strategic relationship with Plains All American to gather and transport oil for Matador Resources and third-party customers in Eddy County, New Mexico. Services to third-party customers should be offered through a joint-tariff arrangement between PAA and MTDR.
Key project updates
Commissioning is in the process for Plains All American’s Diamond Pipeline. The company expected to ramp up volumes on the system meaningfully in 1Q18. The Cushing section of Plains All American’s STACK JV Pipeline was placed in service in 4Q17. The Cactus I pipeline expansion completed in 4Q17. Plains All American’s Fort Saskatchewan project was expected to be in service in December 2017. The company should provide updates on these projects in the upcoming earnings release.
BridgeTex Pipeline expansions were completed in 3Q17. The company expects downstream constraints on this pipeline to be resolved in 1Q18. Sunrise Pipeline extension was announced in 3Q17. The project is expected to be in service in the first half of 2019.
Learn about Enterprise Products Partners’ (EPD) key capital projects in Enterprise Products Partners’ Key Projects in 4Q17.
Let’s take a look at the recent changes in short interest for Plains All American stock in the next part of this series.