U.S. Markets closed

PAA to Extend Okla. Crude Pipeline

Zacks Equity Research

Plains All American Pipeline L.P. (PAA) announced to build a crude oil pipeline extension, stretching from Reydon, Roger Mills County, Okla. to the partnership’s existing Orion station in Major County, Okla. The new Western Oklahoma Pipeline will span 95 miles (152.9 kilometers) and is expected to be online by the end of first-quarter 2014.

Western Oklahoma Pipeline is the extension of Plains All American Pipeline’s existing Oklahoma crude oil pipeline system. The pipeline will be able to carry roughly 75,000 barrels per day.

The partnership increases crude oil transportation capacity to cope up with higher production from the Granite Wash, Hogshooter and Cleveland Sands in western Okla. and the Texas panhandle. As a result of this extension, crude oil will flow on Plains All American Pipeline’s existing pipeline system to the partnership’s terminal in Cushing, Okla.

Pipeline operators normally invest substantial amounts to set up new pipelines after getting long-term service commitment from petroleum companies. Plains All American Pipeline’s new pipeline is supported by long-term producer assurances.

During the first three months of 2013, Plains All American Pipeline had cash flow from operating activities totaling $979 million. Favorable financial position enables the partnership to invest additional $300 million in 2013 for several projects, which will drive the capital expenditure to $1.4 billion.

It is evident from Plains All American Pipeline’s recent strategies that the partnership continues to strengthen its footprint in Texas and Oklahoma. In Apr 2013, the partnership announced that it will build a new 310 miles (498.9 kilometers) crude oil pipeline, stretching from McCamey to Gardendale, Texas.

We believe that the installation of a number of new crude oil pipelines will allow Plains All American Pipeline to strengthen its presence in the region and serve customers in a better way.

Houston, Texas-based Plains All American Pipeline L.P. is a publicly traded master limited partnership engaged in the transportation, storage, terminalling and marketing of crude oil, refined products and liquefied petroleum gas and other natural gas related petroleum products.

Plains All American Pipeline currently has a Zacks Rank #3 (Hold). Other stocks from the industry that are presently performing better are Zacks Ranked #1 (Strong Buy) Delek Logistics Partners LP (DKL), and Zacks Ranked #2 (Buy) Summit Midstream Partners, LP (SMLP) and Kinder Morgan Management LLC (KMR).

Read the Full Research Report on PAA

Read the Full Research Report on KMR

Read the Full Research Report on DKL

Read the Full Research Report on ^SMLP

Zacks Investment Research

More From Zacks.com