NEW YORK—MPLX LP said on Aug. 3 that any closures of the Dakota Access Pipeline (DAPL) and the Tesoro High Plains Pipeline in North Dakota could potentially reduce its pre-tax earnings by about $100 million annually.
MPLX has about a 9% indirect interest in the DAPL pipeline and fully owns the Tesoro High Plains pipeline system in the Bakken shale basin. Both projects are facing regulatory and legal challenges.
DAPL is the largest crude pipeline out of North Dakota’s Bakken shale basin. It could potentially be shut this week if a U.S. District of Columbia court does not allow it to remain open as a legal dispute over the permitting of that line continues.
A U.S. judge in July ordered the line closed, saying it did not conduct a comprehensive environmental review during construction. DAPL has appealed the judge’s order.
“In the event of both of these pipelines were to be impacted for any period of time, we estimate a maximum annual EBITDA impact to MPLX of less than $100 million,” CFO Pamela Beall said during a call with analysts.
MPLX’s Tesoro High Plains Pipeline supplies crude to Marathon Petroleum’s Mandan refinery and is facing challenges after the Bureau of Indian Affairs issued a notice of trespass determination in July.
Overall crude and fuel pipeline and terminal throughput volumes declined 15% and 26%, respectively, in the second quarter as processing rates at Marathon Petroleum’s refineries slumped due to the coronavirus pandemic.
“We would expect that the volumes would be picking back up here in the third quarter, reflecting a rebound in demand from the trough that we all experienced probably around April,” Beall said.
Marathon Petroleum said it would close two small U.S. oil refineries due to lower fuels demand.
The Wink-to-Webster crude pipeline and the Whistler natural gas pipeline are expected to be placed in service in the first half and the second half of 2021, respectively.
Recommended Reading
Exxon Slips After Flagging Weak 4Q Earnings on Refining Squeeze
2025-01-08 - Exxon Mobil shares fell nearly 2% in early trading on Jan. 8 after the top U.S. oil producer warned of a decline in refining profits in the fourth quarter and weak returns across its operations.
Phillips 66’s NGL Focus, Midstream Acquisitions Pay Off in 2024
2025-02-04 - Phillips 66 reported record volumes for 2024 as it advances a wellhead-to-market strategy within its midstream business.
Equinor Commences First Tranche of $5B Share Buyback
2025-02-07 - Equinor began the first tranche of a share repurchase of up to $5 billion.
Q&A: Petrie Partners Co-Founder Offers the Private Equity Perspective
2025-02-19 - Applying veteran wisdom to the oil and gas finance landscape, trends for 2025 begin to emerge.
Rising Phoenix Capital Launches $20MM Mineral Fund
2025-02-05 - Rising Phoenix Capital said the La Plata Peak Income Fund focuses on acquiring producing royalty interests that provide consistent cash flow without drilling risk.