HOUSTON—Energy Transfer Partners LP (NYSE: ET) will no longer pursue the Permian Gulf Coast (PGC) pipeline as it was initially announced, but will evaluate participating in other projects to transport crude from the largest U.S. oil field, company CFO Thomas Long said on May 9.
One of Energy Transfer’s partners in the PGC pipeline, Magellan Midstream Partners LP (NYSE: MMP), said in March it was not likely the project would go forward as planned. The proposed project would have carried 1 million barrels per day (bbl/d) to the Gulf Coast.
The Dallas-based pipeline operator has almost completed a 120,000 bbl/d expansion of its Permian Express System, a joint venture with Exxon Mobil Corp. (NYSE: XOM), with the system’s full capacity coming into service by the end of third-quarter 2019, Long told investors on a conference call.
The company received “sufficient commitments to make this project accretive,” Long said.
The parties must now renegotiate a deal that would transfer Breitburn's Permian reserves to investors including Elliott and WL Ross through their participation in a $775 million rights offering.
Sustained lower oil prices may lead to Permian consolidation, the return of tough times to other shale plays and U.S. E&Ps helping rebalance global inventories.
These 25 offshore key players are increasing production and efficiencies.