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Jul. 10, 2015, 4:47 PM
- The California beach fouled by oil will reopen July 17 to swimmers and campers two months after a pipeline owned by Plains All American Pipeline (NYSE:PAA) ruptured and spewed thousands of gallons of crude along the coast.
- Crews still need to finish scraping oil off cobblestones before the public can use the beach next week, and certain areas will remain off limits as cleanup continues, but officials say the work would not affect beachgoers.
- An underground pipeline ruptured May 19, releasing up to 101K gallons of oil, ~20% of which flowed into the Pacific Ocean.
Jul. 7, 2015, 4:21 PM
- Plains All American Pipeline (NYSE:PAA) declares $0.695/share quarterly dividend, 1.5% increase from prior dividend of $0.685.
- Forward yield 6.38%
- Payable Aug. 14; for shareholders of record July 31; ex-div July 29.
Jun. 26, 2015, 9:53 AM
- Plains All American Pipeline (PAA -1.1%) is facing increased scrutiny from U.S. regulators and lawmakers over the recent oil spill off the coast near Santa Barbara, Calif., which released up to 101K gallons and washed up goo on beaches as far as 100 miles away.
- PAA is being criticized for how long it took to relay information on the break to federal authorities.
- A PAA employee at the scene initially suggested to firefighters that the spill “was too big to be from their pipeline," according to the documents obtained by Associated Press.
- A congressional committee has opened a probe into the spill, wanting to know what PAA did in the hours leading up to the break and how it reported the problem.
- Meanwhile, PAA says the cost of cleaning up the spill has climbed to $92M.
Jun. 23, 2015, 10:15 PM
- Exxon Mobil (NYSE:XOM) says it has been forced to suspend production at three offshore platforms off the Santa Barbara, Calif., coast following the shutdown of a pipeline that spilled 100K gallons of oil on the area's beaches last month.
- XOM blames the recent refusal by Santa Barbara County authorities to approve an emergency application to transport its offshore crude by truck from its Las Flores Canyon processing facility while the crippled line owned by Plains All American Pipeline (NYSE:PAA) remains shut down.
- Current output from XOM's shuttered platforms was estimated at 30K bbl/day out of California's daily crude diet of ~1.7M bbl/day.
Jun. 17, 2015, 8:47 AM
- Magellan Midstream Partners (NYSE:MMP) is considering opening an oil trading operation for the first time, CEO Michael Mears tells Reuters, a move that could help it take advantage of wide price gaps that have become a fixture of the shale oil revolution.
- Mears says that while MMP is considering trading oil, the company is first looking at supporting a service that would buy barrels at the wellhead from producers, provide logistics to get it to a long haul pipeline or to a delivery hub in Cushing, Okla., and then sell it in bulk; traders would manage the price risk.
- MMP always has declined to run its own trading operation because it would compete with its own oil drilling customers, who often also trade, but as a result, it has been handing off potential profits to traders making a large margin off market inefficiencies.
- Two of Magellan's main rivals, Enterprise Product Partners (NYSE:EPD) and Plains All American (NYSE:PAA), have been trading oil for years, adding over $1B/year to their books.
Jun. 11, 2015, 6:25 PM
- MLPs and other yield-oriented securities have been hit in recent weeks by rising interest rates, but Rob Thummel, portfolio manager at energy investment firm Tortoise Capital Advisors, thinks the downturn may provide an opportunity to buy some of the strongest companies at a lower price.
- Thummel says there is still a lot of need for improved energy infrastructure, and his favorite MLPs are Plains All American Pipeline (NYSE:PAA), Enterprise Products Partners (NYSE:EPD) and Magellan Midstream Partners (NYSE:MMP) for their strong management, current yields of 4%-6%, and backlogs of new projects.
- Thummel says despite the recent oil spill, PAA has a history of operating its assets safely and spill costs should not be material to its finances; earlier today, PAA filed an 8-K that estimates clean-up costs through June 9 at $65M, or $3M/day.
- Earlier: Plains All American is defended by some portfolio managers, analysts
Jun. 10, 2015, 7:28 PM
- The cost of cleaning up the oil spill near Santa Barbara, Calif., last month has reached $62M so far, according to Plains All American Pipeline (NYSE:PAA), operator of the onshore pipeline that ruptured and leaked ~100K gallons of crude.
- PAA's on-scene coordinator says costs are running at $3M/day and there is no timetable for when the cleanup will be complete, but that "the responsibility here is to get [the spill] cleaned up as quickly as possible."
- About 76% of 97 miles of coastline, mostly sandy beaches, have been cleared of oil.
Jun. 9, 2015, 9:49 PM
- A local official in Santa Barbara, Calif., has rejected an emergency request by Exxon Mobil (NYSE:XOM) to use large trucks to haul its crude oil until the pipeline that recently ruptured and caused a spill is fixed, saying there is not enough evidence that a defined emergency exists.
- XOM was using the pipeline owned by Plains All American Pipeline (NYSE:PAA) to haul 30K bbl/day of crude oil, and is now being forced to cut production at offshore California fields as its storage facilities fill up.
- In XOM's request for an emergency permit, it said it needed to maintain crude oil supply for California refineries so it could also maintain natural gas supplies to local utilities.
- Environmentalist groups had urged Santa Barbara to reject the request, saying it might lead to another oil spill.
Jun. 9, 2015, 11:59 AM
- Western Canadian producers of natural gas liquids will actively seek export opportunities in Asia, as output is projected to increase ~23% by 2020 and domestic demand from Alberta's oil sands sector slows down, industry officials said yesterday at the CERI 2015 Petrochemical Conference in Alberta.
- Current NGL output in the Western Canadian Sedimentary Basin is estimated at 650K bbl/day but that will grow by nearly 150K in the coming five years, with the potential to rise by another 370K and reach 1.17M bbl/day a decade later.
- With Alberta's oils sands producers putting on the backburner since January ~1.2M bbl/day of new capacity additions targeted by 2017-18, domestic demand will not show growth, leaving NGL companies with little option but to seek export markets.
- Atco Energy and Pembina (NYSE:PBA) have crossed the border and signed agreements to invest at Portland and Ferndale facilities on the U.S. west coast for exports; storage and fractionation facilities are planned by other western Canadian players such as Atco, Keyera (OTC:KEYUF), Plains Midstream (NYSE:PAA) and PBA.
Jun. 8, 2015, 5:55 PM
- Plains All American Pipeline (NYSE:PAA) fell 1.3%, capping a 8.5% drop since the May 19 oil spill near Santa Barbara caused by a leak in one of its pipelines, but Barron's Amey Stone reports some positive analyst commentary today.
- A decline in the price of crude and general seasonal weakness in large-cap MLPs contributed to today’s decline, says Infracap MLP portfolio manager Jay Hatfield, but he also says investors generally have overreacted to the spill, and that the pipeline is not core to PAA's operations.
- Tortoise Energy Infrastructure portfolio manager Rob Thummel lists PAA among his firm’s top holdings, partly because of its backlog of new projects, its 6% yield and growing dividend; he says insurance will cover much of the cost of the spill and clean up.
- Wunderlich's Jeff Birnbaum says PAA's record "on a relative basis is better than reported, and a majority of incidents have been minor," but that the spill could affect the company's long-term ability to grow its business in highly-regulated California.
Jun. 8, 2015, 10:58 AM
- Plains All American Pipeline (PAA -1.3%), whose ruptured pipeline created the largest coastal oil spill in California in 25 years, had assured the government that a break in the line was “extremely unlikely" and state-of-the-art monitoring could quickly detect possible leaks and alert operators, documents show.
- "The pipeline and its operation are state-of-the-art,” according to the analysis submitted to the state. “Spills are still possible, though extremely unlikely."
- The cause of the break has not been determined, but preliminary information released by federal regulators suggests that corrosion was the culprit.
Jun. 4, 2015, 8:19 AM
- Last month's pipeline rupture that spilled ~101K gallons of crude oil near Santa Barbara, Calif., occurred along a badly corroded section that had worn away to 1/16th of an inch in thickness, according to preliminary findings released by U.S. regulators.
- The Pipeline and Hazardous Materials Safety Administration found that more than 80% of the metal pipe wall had worn away over time because of corrosion.
- The agency also said its findings conflicted with the results of inspections conducted at the break area for operator Plains All American Pipeline (NYSE:PAA) on May 5, two weeks before the rupture, which pinpointed a 45% loss of wall thickness and concluded the pipe was in far better condition.
- PAA says it has not set a timeline to restart the pipeline but does not expect to restart before June 30; it reaffirms its Q2 adjusted EBITDA forecast of $435M-$485M.
Jun. 2, 2015, 3:22 PM
- Exxon Mobil (XOM +0.1%) says it will ask Santa Barbara County, Calif., for permission to temporarily transport its crude oil in trucks after a pipeline it was using ruptured two weeks ago, spilling more than 100K gallons of oil off the coast.
- XOM says the pipeline, owned by Plains All American Pipeline (PAA +1.5%), pumped ~30K bbl/day of crude oil from its Las Flores Canyon facility to a pumping station in Gaviota, where the crude then continued on to refineries inland.
- PAA says the pipeline has been out of service since the spill and that no timeline for restarting the pipeline has been set as federal regulators investigate the cause of the spill.
May 28, 2015, 9:45 PM
- Plains All American Pipeline (NYSE:PAA) braces for intensified scrutiny over the "insufficient" response to the recent oil spill off the California coast, as U.S. Sens. Boxer and Feinstein question why the ruptured pipeline lacked an automatic shut-off valve and whether some workers were left on the sidelines while the leak spread.
- Among the concerns: According to disclosures so far, it took PAA 90 minutes after the spill was confirmed to notify the National Response Center, which coordinates responses to hazardous material releases.
- "The response was extremely tardy that allowed oil to get in the water," says Environmental Defense Center chief counsel Linda Krop.
- Also today, the ruptured section of pipeline was removed for analysis to determine what caused it to fail, and cleanup continued with nearly 1,000 people and 16 boats involved in the effort.
- PAA has been involved in a number of previous infractions in California, including a pipeline that spilled an ~10K gallons of oil near Los Angeles a year ago.
May 28, 2015, 11:34 AM
- The federal government orders Plains All American Pipeline (PAA -0.7%) to continue its efforts to clean up the pipeline breach that dumped crude oil onto a pristine stretch of California coastline and into the Pacific Ocean.
- The order from the EPA and the Coast Guard also requires PAA to submit a written plan by June 6 that will outline measures for analyzing the spill's effects on the environment.
- Representatives from the two agencies say such an order is common in oil spills and is not in response to any inaction by PAA.
- Also, a conservation group is urging California regulators to reject a proposed expansion of the only offshore drilling operation still permitted in state waters along the Santa Barbara coastline.
May 26, 2015, 9:35 PM
- Plains All American Pipeline (NYSE:PAA) has revised downward the amount of oil believed spilled from the ruptured pipeline off the coast of Santa Barbara, Calif., now estimating that the maximum amount spilled is 101K gallons, or 4,200 gallons lower than previous estimates.
- PAA is still attempting to dig down to the pipe and look at the ruptured area, a crucial step toward determining the cause of the break, but it has been a slow process because workers cannot use heavy equipment on the soil above the broken pipe; PAA says it has “identified four locations on Line 901 that we plan to investigate as part of our customary procedures.”
- However, at least one analyst - Wunderlich's Jeff Birnbaum - believes the spill is not a "thesis changer" for PAA or Plains GP Holdings (NYSE:PAGP) despite the potential for one-time fines and clean-up expenses.
Plains All American Pipeline LP is engaged in the transportation, storage, terminalling and marketing of crude oil and refined products, as well as in the processing, transportation, fractionation, storage and marketing of natural gas liquids.
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