Plains All American announced Friday that it purchased an additional 20% interest in BridgeTex Pipeline Company LLC in July, bringing its total ownership stake to 40%.
This comes on the heels of ONEOK boosting its ownership from 30% to 60% in the pipeline.
With these two deals totalling 50%, Ontario Municipal Employees Retirement System (OMERS) has sold its entire stake and no longer holds any ownership interest in BridgeTex. OMERS purchased its 50% stake in BridgeTex for $1.4 billion in August 2018. While both ONEOK and Plains disclosed their new ownership during their quarterly earnings calls, OMERS has not issued a public statement explaining why it ended its BridgeTex pipeline investment.
We know from OMERS' most recent annual report that it has said it wants to focus on broader strategic issues such as sustainability and did not mention BridgeTex by name.
In its earnings call this week, ONEOK president and CEO Pearce Norton described the deal as “opportunistic.” In the Plains All American earnings call, the company explained the initiative is to bolster its Permian Basin infrastructure by owning a higher percentage of the 440-Mb/d BridgeTex Pipeline (light-purple line in the map below).
“Separately, we continue to execute our bolt-on acquisition opportunity set by acquiring an incremental interest in the BridgeTex Pipeline joint venture, which further strengthens our Permian footprint,” Willie Chiang, president, CEO and chairman of the board, said in the earnings call. We discussed this pipeline and others recently in West Texas Highway.
Our new Drill Down Report examines the pipelines connecting the Permian Basin to Houston, including their history, supply points, flows and delivery points, challenges and advantages. To read our new report, click here.
