Phillips 66 Partners LP has officially pulled out of the long-deferred Liberty Pipeline, which was proposed to support oil production growth in the Rockies and the Bakken shale regions.
In a release on April 5, Phillips 66 Partners said it will record an estimated impairment of between $180 million and $210 million in the first quarter due to its decision to exit the Liberty Pipeline project. The Houston-based pipeline operator also cited effects of recent winter storms on asset utilization and utility costs.
The Liberty Pipeline was a proposed 700-mile pipeline transporting light crude oil from Guernsey, Wyoming to the Cushing, Oklahoma, hub. The roughly $1.6 billion project, to be constructed by joint venture between Phillips 66 Partners and Bridger Pipeline, had been put on hold more than a year ago due to the oil market crash at the onset of the COVID-19 pandemic.
Phillips 66 Partners had previously canceled the planned Red Oak Pipeline from Cushing to the Texas Gulf Coast last October. Both the Red Oak and Liberty pipeline projects were proposed and, subsequently, deferred at the same time.
Despite the divestiture to Enerplus, Hess CEO John Hess reaffirmed the importance of the Bakken in the independent E&P company’s portfolio, which includes assets offshore Guyana.
In connection with its emergence from Chapter 11, Diamond Offshore also announced that Marc Edwards has retired as chairman, president and CEO, effective immediately.
Twenty-seven of the 30 upstream E&P companies, or 90%, surveyed had hedges on the books at year-end 2020, up from 83% in the prior year, according to a recent survey of how oil and gas producers hedge.