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Across its fuel transportation network, Plains All American Pipeline has hit capacity and is expanding to meet the burgeoning need to move fossil fuels across the country, the company’s leaders say.
Oil and natural gas producers’ surging demand for pipeline, storage and fuel processing space in the U.S. nearly doubled Plains All American’s earnings in 2011. The Houston company brought in $966 million in 2011, compared with net income of $505 million the year before.
Strong growth in earnings per share along with revenue last year of $34 billion helped propel the company to No. 4 on the Chronicle 100 list of top public companies. Last year it was No. 33.
Plains has 4,460 employees, and 637 work out of its Houston headquarters.
The company saw its fuel volumes grow across all three business divisions: supply and logistics, transportation and facilities.
“Our existing pipelines are filling up,” Chairman and CEO Greg Armstrong said. “As we are finishing construction and pipeline projects that we started in 2010 and 2011 and as they are placed in service, that will continue to drive growth.”
Plains is funneling billions into expanding its pipelines and facilities. The company capitalized on booming oil production in West Texas by expanding its Basin Pipeline system, which carries crude to Oklahoma, from 400,000 barrels per day to about 450,000.
In addition to the more than $2 billion in capital projects under way, Armstrong expects to spend between $650 million and $850 million annually on expansions and upgrades during the next four years.
Also, the company closed on $1.4 billion in deals to acquire new businesses and assets in 2011. Plains completed the $750 million acquisition of SG Resources Mississippi in February, adding an underground natural gas storage facility in Mississippi to its asset portfolio.
Armstrong said the company will follow a similar path over the next few years. In April, the company closed a $1.7 billion deal buying BP’s Canadian natural gas liquids assets, expanding Plains’ interest in carrying and processing fuels that are used to manufacture plastics and other everyday items.
“We are expecting it to be a better year in 2012 than in 2011,” he said.