Plains All American Pipeline
| File:Plains All American Pipeline 2022 logo.png | |
| Company type | Public |
|---|---|
| Industry | Petroleum industry |
| Founded | 1981 |
| Headquarters | Houston, Texas, United States |
Key people | Willie Chiang (chairman and CEO) |
| Services | Pipeline transport Oil terminal |
| Revenue | Increase $57.342 billion (2022) |
| Increase $1,037 billion (2022) | |
| Total assets | Decrease $23.892 billion (2022) |
| Total equity | Increase $13.325 billion (2022) |
| Website | www |
Plains All American Pipeline, L.P. operates as a master limited partnership focused on the transportation, marketing, and storage of petroleum and liquefied petroleum gas throughout the United States and Canada. The firm holds interests in roughly 18,370 miles of pipelines and maintains storage capacities approximating 75 million barrels of crude oil, 28 million barrels of NGLs, and 68 billion cubic feet of natural gas. Additionally, it runs five natural gas processing facilities. Based in Houston’s Allen Center, Plains (NASDAQ: PAA) oversees an extensive network of pipeline transportation, terminalling, storage, and gathering assets situated in prominent crude oil and NGL production regions as well as major market hubs across North America.
History
Established in 1981 under the name Plains Resources as an exploration and production company within the oil and gas sector, the business went public through an initial public offering in 1998. Since its IPO, Plains has expanded its infrastructure and market reach by executing targeted acquisitions:
- 1998 – Integrated All American Pipeline System
- 1999 – Acquired Scurlock Oil Company’s Permian and West Texas pipeline assets from Chevron for $35 million
- 2001 – Purchased Murphy Oil’s midstream operations for $155 million and CANPET Energy Group, a Canadian liquefied gas marketer, for $42 million
- 2004 – Enhanced portfolio with Capline Pipeline System acquisition along with Link Energy pipeline system for $273 million
- 2005 – Procured Louisiana-based assets from Shell Oil Company valued at $12 million
- 2006 – Completed acquisition of Pacific Energy Partners for $2.4 billion
- 2008 – Added Northern Alberta’s Rainbow oil pipeline to holdings
- 2012 – Bought Canadian NGL operations from BP
- 2017 – Finalized $1.2 billion purchase of Alpha Crude Connector gathering system and pipeline in the Permian Basin
- 2019 – Commissioned Cactus II Pipeline System with throughput capacity of 670,000 barrels per day running from Wink, Texas to Corpus Christi
- 2021 – Established Plains Oryx Permian Basin joint venture alongside Oryx Midstream Services; combined pipeline network totals approximately 5,500 miles with capacity near 6.8 million barrels per day and operational storage around 16.9 million barrels
These strategic acquisitions have bolstered Plains’ position by enlarging its presence in critical U.S. shale regions and Canadian markets, thereby increasing its operational scale and market influence within the midstream petroleum sector.
Financial performance and credit ratings
Between 2013 and 2022, the company recorded profits in nine out of ten years, with the exception of a significant $2.59 billion loss in 2020, which was primarily driven by reduced energy demand amid the COVID-19 pandemic. This deficit incorporated $3.4 billion attributed to goodwill impairment and other non-cash expenses.
| Year | $ billions |
|---|---|
| 2013 | $1.39 |
| 2014 | $1.39 |
| 2015 | $0.90 |
| 2016 | $0.73 |
| 2017 | $0.86 |
| 2018 | $2.21 |
| 2019 | $2.17 |
| 2020 | ($2.59) |
| 2021 | $0.59 |
| 2022 | $1.03 |
As of August 2023, Plains All American’s senior unsecured bonds maintained investment-grade status, rated Baa3 by Moody’s Investors Service and BBB− by both Fitch Ratings and S&P Global Ratings.
Carbon footprint
For the fiscal year ending December 31, 2020, Plains All American disclosed total CO2 equivalent emissions (Scope 1 plus Scope 2) amounting to 1,929 kilotonnes, marking a 13.1% decrease compared to the previous year, indicative of its continued commitment to sustainability initiatives.
| Dec 2018 | Dec 2019 | Dec 2020 |
|---|---|---|
| 2,367 | 2,219 | 1,929 |
2010 settlement
In 2010, the company consented to pay a $3.25 million civil fine for violations of the Clean Water Act and pledged $41 million towards upgrading more than 10,000 miles of crude oil pipelines. This settlement followed EPA allegations regarding ten pipeline spills occurring between 2004 and 2007 across Texas, Louisiana, Oklahoma, and Kansas that discharged over 273,000 gallons of crude oil into water bodies.
Little Buffalo oil spill
The Little Buffalo oil spill in 2011 stands as one of North America’s largest terrestrial spills and Alberta’s most severe in over three decades, involving a breach in Plains Midstream Canada’s Rainbow Pipeline system. On April 29, 2011, approximately 28,000 barrels of oil were released into a remote boreal forest near Little Buffalo, Alberta. The incident resulted in school closures due to hazardous fumes and led to charges against the company in 2013. Additionally, Alberta’s Energy Resources Conservation Board issued a reprimand to Plains Midstream Canada for operational shortcomings connected to the event.
Rangeland Pipeline Incident
In June 2012, intense rainfall caused a rupture on a four-decade-old Plains Midstream Canada pipeline at Jackson Creek in Alberta, releasing an estimated 1,000 to 3,000 barrels of light sour crude oil into the Red Deer River. The company faced legal action in 2014 concerning this environmental breach.
Refugio oil spill
On May 19, 2015, a pipeline managed by the company ruptured northwest of Santa Barbara, California, discharging roughly 105,000 US gallons of oil; about 20,000 gallons flowed into the Pacific Ocean. The spill contaminated nearly nine miles of Santa Barbara’s coastline and forced closure of El Capitán State Beach and Campground during the critical Memorial Day weekend, adversely affecting summer tourism revenues. Cleanup expenses reached $92 million by June of that year.
The company did not immediately notify the National Response Center about the spill, triggering a federal probe led by the United States House Committee on Energy and Commerce alongside the Pipeline and Hazardous Materials Safety Administration. Early investigations revealed pipeline corrosion had thinned its wall thickness to less than one inch. Local firefighters acted as first responders to contain environmental harm prior to official reporting.
In March 2020, Plains All American agreed to pay over $60 million in penalties related to this event, highlighting significant financial liabilities and reputational damage. This incident emphasized the critical need for stringent operational risk controls and regulatory compliance within the company's operational framework worldwide.
Byhalia Connection pipeline
In December 2019, the company partnered with Valero Energy Corp. to create the Byhalia Connection pipeline, a 49-mile crude oil conduit linking Memphis to Marshall County, Mississippi. This pipeline aimed to serve as a connection between the Diamond and Capline pipelines. Nevertheless, the plan to route it through the Memphis Sand aquifer and predominantly African American neighborhoods generated strong resistance from environmental advocates and social justice organizations. Prominent individuals such as Jane Fonda, Danny Glover, and former Vice President Al Gore—who described it as a “reckless, racist rip-off”—voiced their opposition publicly. U.S. Representative Steve Cohen called on President Joe Biden to withdraw the federal permit for the project. After initially supporting the initiative and subsequently halting construction in May 2021, the company formally canceled the pipeline in July 2021. The decision was celebrated by community leaders as a significant demonstration of public impact on corporate actions.