Return Potential May Be Up and Away for Plains All American PART 6 OF 14
The Facility segment’s services
Plains All American Pipeline’s (PAA) Facilities segment contributes ~31% to the company’s total profits. It provides storage, terminaling, and throughput services for crude oil, NGLs (natural gas liquids), natural gas, and refined products.
The segment also provides NGLs fractionation services and processes natural gas and condensate. Condensate generally refers to heavier NGLs components such as iso-butane and natural gasoline.
The segment generates revenue via fees charged for storage, terminaling, fractionation, and processing services offered for different oil and gas products. As the majority of the segment’s revenues are fee-based, they’re also not directly sensitive to changes in commodity prices. The above graph shows the Facilities segment’s average monthly volumes and profits over the last five years.
The Facilities segment has a storage capacity of ~80 million barrels in which crude oil and refined products can be stored. It has an NGLs storage capacity of ~25 million barrels and a natural gas storage capacity of ~97 Bcf (billion cubic feet). The segment has ten natural gas processing plants and seven fractionation plants. It owns a condensate processing facility, which extracts NGLs from condensate.
There was a marginal 4% rise in the segment’s volumes in 2015 compared to 2014, but its profits fell $5 million due to falling margins driven by lower commodity prices. For 2015, the segment’s profit was $0.38 per barrel.
PAA forms ~3.2% of the First Trust North American Energy Infrastructure ETF (EMLP). EMLP invests in the equity securities of companies in the energy infrastructure sector.
Next, let’s next take a look at PAA’s Supply and Logistics segment’s performance.
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