Plains All American Pipeline Reports Rebounding Earnings in 4th Quarter

[Houston Chronicle] – Plains All American Pipeline on Wednesday said it returned to the black in the fourth quarter as demand for oil and gas rebounded from historic lows earlier in the pandemic.

The Houston-based company reported a $450 million profit in the last three months of the year, compared with a $28 million loss during the same period in 2020, when the pandemic’s economic fallout was still taking a toll on oil and gas industry earnings. Revenue more than doubled to $13 billion from $6 billion a year earlier.

“It’s really quite remarkable what a difference a year can make,” said Chairman and CEO Willie Chiang.

For the full year, the company said it made $593 million, compared with a $2.6 billion loss in 2020. Annual revenue jumped 80 percent to $42 billion from $23.3 billion a year earlier.

Plains joined other pipeline companies in reporting similar revenue and profit growth in 2021. Kinder Morgan last year made $1.78 billion, a whopping 15 times the $119 million it earned in 2020 as revenue jumped 42 percent to $16.6 billion from $11.7 billion the year before. At Enterprise Products Partners, profit jumped 23 percent to $4.63 billion from $3.77 billion in 2020 and revenue increased by 50 percent to $40.81 billion from $27.20 billion.

The growing profits in 2021 are part of an industrywide turnaround that saw Big Oil capitalize on surging demand as the coronavirus pandemic waned.

“Looking forward, Plains is well-positioned to generate significant cash flow on a multiyear basis,” Chiang said. “The fundamentals supporting our business have meaningfully improved with the Permian Basin positioned to drive U.S. production growth, and Plains is well positioned to service this growth.”

Meanwhile, stagnating investment in oil and gas infrastructure has led to mounting pressure to get a growing reserve of gas to market. Like executives at other pipeline companies, Chiang said, “there’s going to have to be a solution.”

Analysts said some companies are considering converting crude pipelines to gas, but Plains executives said that’s not something it could do because its crude pipelines are too small.

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