ExxonMobil's Proposed Permian Oil Pipeline Takes Another Step Forward
September 29, 2018
The Motley Fool
Back in June, Exxon and oil pipeline company Plains All American Pipeline (NYSE: PAA) signed a letter of intent to pursue the creation of a joint venture that would build another oil pipeline out of the Permian Basin. Exxon and Plains All American envisioned a more than 1 million barrel-a-day pipeline that would move oil produced by Exxon and others to refining and export markets along the Gulf Coast.
That multi-billion-dollar project recently got a boost after Lotus Midstream agreed to participate. The private equity-backed company recently made waves after sealing a deal to buy Occidental Petroleum's (NYSE: OXY) Centurion pipeline system, as well as its Southwest New Mexico oil-gathering system.
Meanwhile, it provides Lotus with a premier midstream business in the heart of the Permian, backed by Occidental Petroleum's production. That system, which features a long-haul oil pipeline to the nation's oil storage hub in Cushing, Oklahoma, would be even more valuable to customers if they could also access oil markets along the Gulf Coast, which is why this partnership with Exxon and Plains makes sense.