Industry faces many political uncertainties including time-consuming permitting requirements, which can be costly for pipeline companies, Greg Armstrong, chairman and chief executive officer of Plains All American Pipeline LP, said during CERAWeek by IHS Markit on Mar. 5 in Houston.
“We are seeing an atmosphere of partnership right now,” Armstrong said of some regulators, adding performance benchmarks would help the permitting process. “There is nothing that starts the clock when you file a permit.”
Different agencies sometimes “wrestle” during the permitting process regarding jurisdiction overlaps, Armstrong said. He also said paperwork requirements call for thousands of pages of documentation.
On other topics, Armstrong advocated a modernized North American Free Trade Agreement (NAFTA). He said abandoning the existing NAFTA could prove damaging to US energy.
Armstrong said PAA is trying to figure out proposed changes to tariffs on steel and aluminum as suggested by US President Donald Trump.
“We buy pipe and valves that aren’t manufactured in the United States, so we don’t think that it would be appropriate to put a tariff on something that you can’t buy here in the United States,” Armstrong said.
He noted his company has its own steel standards based on experience, and that the standards are higher than the American Petroleum Institute standards.
Pipeline plans
A subsidiary of PAA recently concluded an open season for its Cactus II pipeline, a system with an initial capacity of 585,000 b/d extending from the Permian basin to the Corpus Christi-Ingleside area in Texas.
PAA is expected to retain 65% ownership and to operate Cactus II. The system includes a combination of capacity on existing pipelines and two 26-in. pipelines and is expandable to 670,000 b/d through the addition of incremental pumping capacity.
The first pipeline will extend from Wink to McCamey, Tex., and a second pipeline will extend from McCamey to the Corpus Christi-Ingleside area, and have flexibility to access multiple docks. Cost of the two pipelines is estimated at $1.1 billion total.
Permitting, right-of-way, and procurement activities are under way, and the pipeline system is scheduled to be operational in third-quarter 2019.
Contact Paula Dittrick at [email protected].
