Plains All American, Magellan Midstream Launch Open Season

Plains All American Pipeline, L.P. (NYSE:PAA) and Magellan Midstream Partners, L.P. (NYSE:MMP) launched an open season at Midland, TX, through their jointly-owned BridgeTex Pipeline Company, LLC. This open season will give the potential customers an opportunity to come out with binding commitments by Aug 4, 2017.

The rise in drilling activity in the Permian basin is the driving factor behind the recent open season activities. The active rig count in the region has been on the rise for quite some time now. Therefore more pipeline manufacturers are taking additional interest in the area.

About BridgeTex Pipeline

BridgeTex Pipeline is a 50/50 joint venture between Plains All American and Magellan Midstream Partners. The company recently increased their transportation capacity to 400,000 barrels per day (bpd) from 300,000 bpd. The Permian Basin crude oil will be delivered from Colorado City, TX to the Houston Gulf Coast area. If the open season gets positive response from customers, BridgeTex will focus on expanding the capacity of the pipeline system to as much as 440,000 bpd approximately.

Expansion Plans

Earlier in June, Plains All American Pipeline, L.P. started an open season, through one of its subsidiaries, for the committed crude oil pipeline capacity from the Delaware Basin to Cushing, OK. It will end on Jul 17, 2017.

In April, the company conducted another open season to gauge the demand for its planned new crude oil pipeline extending from Permian Basin to Cushing, OK. (Read More: Plains All American Commences Open Season for New Pipeline)

Back in April, Plains All American along with another midstream operator announced that they have completed the joint acquisition of Advantage Pipeline, LLC for $133 million. This acquisition put the midstream service providers in an advantageous position since the acquired pipeline operates in a liquid-rich area. (Read More: Plains All American & Noble Midstream Close Advantage Deal)

Open Seasons In Permian

Plains All American is not the only company who is conducting open seasons. With increasing drilling activities in the region, other midstream companies are also reaching out to potential customers in the same way.

In Mar 2017, Kinder Morgan, Inc. (NYSE:KMI) commenced a non-binding open season for its Gulf Coast Express Pipeline project. The pipeline, which will span across more than 430 miles, is expected to carry natural gas from the Permian Basin to the Texas Gulf Coast. (Read more: Kinder Morgan Starts Gulf Coast Pipeline Open Season)

In May 2017, Energy Transfer Partners, L.P. (NYSE:ETP) announced that Permian Express Terminal LLC and Permian Express Partners LLC will conduct a binding open season for Permian Express 3. The project is meant to deliver crude oil produced from the Permian Basin to multiple markets. (Read more: Energy Transfer Partners to Conduct a Binding Open Season)

Price Movement

Plains All American’s Units have returned 3.3% in the last one month compared to Zacks categorized Oil/ Gas Production Pipeline MLP industry’s decline of 4.2%.

The company’s systematic capital investment strategy, pipeline of new projects and its strategic Permian acquisitions have driven its performance.

Zacks Rank

Plains All American carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

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