MPLX Abandons Permian NGL Pipeline Amid Industry Downturn
HOUSTON (UC) — MPLX LP said it is no longer pursuing its BANGL pipeline project in the current downcycle and will focus instead on increasing the capacity of its existing pipelines.
The BANGL pipeline was to have delivered Permian Basin natural gas liquids (NGL) to the Texas Gulf Coast. The project's associated fractionation capacity and export facility also were deferred.
The company cut its planned capital spending for 2020 by more than $700 million to about $1 billion.
CEO Michael Hennigan said during a quarterly conference call with analysts that MPLX is working with others to optimize existing capacity while continuing to meet producers' needs for flow assurance and future growth.
"We are still committed to an NGL solution. It just won't be the original scope that we had envisioned early on," Hennigan said.
"We wanted to not commit to that full scope until we were really sure that the volume commitments would be there," he said, adding that volume commitments are slower in the current market.
MPLX reiterated that construction is continuing on two other significant projects in which it has an ownership interest. The Wink-to-Webster Permian crude oil project and the Whistler natural gas pipeline project are both advancing.
All of the contractable capacity on the Wink-to-Webster pipeine is covered by minimum volume commitments or long-term contracts, executives said during the call. MPLX has a 15% equity interest in that project, which is scheduled to start service in the first half of 2021.
The Whistler Pipeline is designed to to transport about 2 Bcfd of natural gas from Waha, Texas, in the Permian Basin to the Agua Dulce market in south Texas. It is scheduled for completion in the second half of 2021.
MPLX reported a net loss of $2.7 billion in the first quarter of 2020, compared with net income of $503 million in the same period of 2019.
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