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Oil pipeline companies, producers seek exemptions from steel tariffs

  • Major U.S. energy companies including Plains All American Pipeline (NYSE:PAA), Kinder Morgan (NYSE:KMI) and Hess (NYSE:HES) are among many seeking exemptions from steel import tariffs, Reuters reports.
  • The U.S. Commerce Department has received nearly 21K requests for exclusions, nearly a quarter of them involving pipes and related materials, since the Trump administration imposed levies this year; initial decisions are expected later this month.
  • The pipeline industry could face higher costs from tariffs as 77% of steel used in U.S. pipelines is imported, and benchmark hot-rolled U.S. steel coil prices are up more than 50% from a year ago.
  • PAA is seeking a tariff exclusion for its 500-mile Cactus II oil pipeline, which will connect west Texas oil fields to export docks near Corpus Christi; it expects to receive its first material from a Greek manufacturer this month.
  • KMI wants an exclusion for its Gulf Coast Express natural gas pipeline from west Texas to the Gulf Coast, and it has ordered 47% of specialized pipe needed for the project from a Turkish steel maker; KMI says only one U.S. producer could meet its needs but would be unable to supply the volume required within the necessary timeline.
  • HES cites safety concerns in its request to use Japanese pipe for its Stampede offshore project in the Gulf of Mexico.

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