Plains All American (PAA) is on the hunt for oil assets as it transforms into a crude oil midstream pure play. One obvious target is the company’s 50/50 joint venture in the Eagle Ford with Enterprise Products (EPD). East Daley Analytics sees upside for both companies from a possible transaction.
Plains has doubled down on crude oil assets while the company divests its NGL properties. The recent acquisition of a 55% interest in the EPIC crude oil pipeline and associated infrastructure gives PAA full control of Permian barrels at the wellhead to the waterfront in Corpus Christi.
The Eagle Ford JV with Enterprise includes a pipeline system and a dock in Corpus Christi. The pipeline moves volumes from Gardendale Station to the dock for storage and export, supported by gathering systems that PAA wholly owns. The EPIC deal includes an export dock just half a mile from the Eagle Ford JV dock (see map). Owning the remaining 50% of the Eagle Ford JV would allow PAA to:
- Extend its wellhead-to-water integration to include the Eagle Ford.
- Physically connect the Eagle Ford and EPIC docks, creating operational synergies.
- Potentially expand capacity with a third berth, enhancing PAA’s ability to compete with the Buckeye terminal four miles upriver.
A sale could make sense for Enterprise, since crude oil has become less central to the company. In 2020, crude pipelines and services represented nearly 25% of EBITDA. By 2024, that share had fallen to 16%, with East Daley’s EBITDA forecast holding flat. Meanwhile, natural gas and NGLs have become EPD’s growth engines.
In crude, EPD’s footprint is geographically concentrated at the Houston Ship Channel and in Texas City. The Eagle Ford JV is outside that core. Earnings pressure also looms when joint tariffs with PAA’s Cactus system are re-contracted, potentially reducing returns. Selling the JV interest would allow EPD to:
- Monetize a non-core asset at an attractive multiple.
- Free up capital for higher-return projects aligned with its gas and NGL strategy.
In our view, the strategic incentives align.
- PAA gains scale and integration, improving its competitive position in Corpus Christi.
- EPD exits a peripheral crude position, recycling capital into growth priorities.
The key question is whether both sides could agree on terms. If they do, this transaction could reshape the competitive landscape for the Eagle Ford and Corpus Christi crude exports. Clients can browse Equity Coverage on Energy Data Studio to find more details behind asset-level earnings that roll up into company EBITDA outlooks. – London Spivey, CFA Tickers: EPD, PAA.
Meet Daley, the Best AI Tool in Energy
Meet Daley, the newest member of our energy team. Our new AI assistant is live and available to all East Daley Analytics clients. Early feedback has been phenomenal. Daley is platform-specific and only pulls from East Daley’s own proprietary data and content. It’s not open-source or generic AI, but built to understand our structure, language and analytics. Whether you’re looking for a specific metric, forecast or explanation, Daley can get you there quicker. — Reach out to learn more about Daley!
Get the FERC Intrastate Pipeline Data
East Daley Analytics’ FERC 549D Intrastate Contract Data delivers contract shipper data for intrastate pipelines — scrubbed and ready to use. Use the 549 data to identify which intrastate pipelines have available capacity, understand pipeline rate structures, gain insights into shippers, and spot contract cliffs and opportunities for higher rate renewals. Reach out to East Daley to learn more.
The Daley Note
Subscribe to The Daley Note for energy insights delivered daily to your inbox. The Daley Note covers news, commodity prices, security prices and EDA research likely to affect markets in the short term.