Plains, Oryx to consolidate US pipeline networks
USA
HOUSTON, July 15, 2021 – US pipeline players Plains All-American and Oryx Midstream Holdings have agreed to share pipeline infrastructure in the Permian Basin through a joint venture.
The companies agreed on Tuesday to create a joint venture to manage the midstream assets, with Plains All-American taking a 65% operating stake and Oryx the remainder. The cashless agreement will allow Plains to scrap its plans to build its own pipeline to transport goods from the basin.
“This expands our collective portfolio of high-quality, long-term committed acreage, which in both the Delaware and Midland basins is underpinned by drilling activity at current rig counts with an average life of 30-plus years with the vast majority of drilling locations having projected internal rates of return of 25-50% or even higher percentages at USD 50 [per barrel of] West Texas Intermediate crude,” said Jeremy Goebel, executive vice-president and chief commercial officer of Plains All-American.
Most shale production from US independents is expected to flatline in the coming months, but production from the Permian Basin is expected to rise by more than 100,000 bpd between June and August and surpass 4.7 million bpd.
The basin sits in western Texas and southeastern New Mexico and is close to export terminals on the Gulf Coast.
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