With new leadership at the top, MPLX LP on Thursday outlined plans to continue pursuing its integrated crude oil and natural gas conduit from the Permian Basin to the Gulf Coast, bankrolled with a proposed $2 billion capital expenditure (capex) program next year.
Marathon Petroleum Corp. (MPC) CEO Gary Heminger introduced new MPLX CEO Mike Hennigan. Hennigan was named to replace Heminger, who served more than eight years at the helm, to assuage the concerns of activist investors.
Hennigan noted that MPLX has more than $2 billion in growth prospects for 2020 with an emphasis on the logistics and storage (L&S) sector. Some 75% of next year’s capex is earmarked for the L&S segment, he said.
In implementing its Permian-to-the-Gulf strategy in 3Q2019, design and construction progressed on the Whistler Pipeline, a 2 Bcf/d joint venture project that involves 472 miles of 42-inch diameter pipe, from the Waha Hub to Agua Dulce in south Texas.
“We expect to eventually deliver gas to MPC’s Galveston Bay refinery,” said Hennigan. Whistler is expected to be in service by 3Q2021.
Hennigan added that MPLX has also joined the 650-mile, 36-inch diameter Wink-to-Webster (Permian to Houston area), which would move more than 1 million b/d of crude oil from the Permian Basin to the Houston area. MPLX has a 15% interest in the project, as its market includes the MPC Galveston refinery. It is slated to be in service in early 2021.
As part of its Andeavor Logistics LP acquisition that closed last quarter, MPLX has a 250,000 b/d gathering system in the Permian Basin running from New Mexico into Lubbock County, TX. Volumes on the system continued to grow, averaging 205,000 b/d in the last quarter, up 8% from 2Q2019. In addition, it is targeting a final investment decision by the end of this year on another Permian-to-Gulf project carrying natural gas liquids to insure a 2021 startup, Hennigan said.
MPLX reported third quarter net income of $629 million (61 cents/unit), compared to $513 million (62 cents) for the same quarter last year.
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