Phillips 66 Partners LP proposed raising tariff rates on its Gray Oak crude oil pipeline, which connects the Permian Basin to the U.S. Gulf Coast, according to a filing on May 19.
The company will increase all committed rates on the roughly 900,000 bbl/d line by 2% per year, the filing with the Federal Energy Regulatory Commission (FERC) said. Uncommitted rates would be assessed separately and would amount to increases of around 2%.
The uncommitted rates will be increased by the FERC index factor, while the committed rates have a contractual inflation adjustment factor.
The rates are set to take effect by July 1.
The Gray Oak pipeline is one of the biggest new pipelines connecting the Permian Basin, the nation's largest oil field, to the U.S. Gulf Coast.
It became fully operational last month after a segment was added in the Eagle Ford shale region, completing the project.
The company’s shares were down 5% after the news and have lost nearly 70% of their value this year.
Total had expected the oil price to be about $60 per barrel this year, but as the price is now about $30, it will leave the company with a much bigger shortfall, CEO Patrick Pouyanne said.
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