MPLX says main segment of 1 million bpd Permian oil pipeline started up in October

NEW YORK (Reuters) - MPLX LP MPLX.N said on Monday that the main segment of the more than 1 million barrels per day (bpd) Wink-to-Webster crude pipeline in Texas started transporting oil in October and service for shippers is expected to be available by the fourth quarter.

Pipeline companies raced to add capacity out of the Permian basin, the biggest in the country, as shale production boomed. But a collapse in global oil demand and prices due to the COVID-19 pandemic has already forced output lower, making midstream companies cancel or defer some projects.

However, the Wink-to-Webster pipeline system already has 100% of its contractable capacity secured under long-term commitments from shippers, MPLX said.

The company said the main segment of the pipeline system was commissioned in October and service from Midland, Texas, to Houston, Texas, is expected to be available to shippers earlier than expected, in the fourth quarter. Additional segments offering shippers further service are expected to be placed in service throughout 2021.

MPLX has a 15% equity interest in the Wink-to-Webster joint venture. Other affiliates include Exxon Mobil Corp XOM.N, Plains All American Pipeline LP PAA.N and Delek US DK.N.

Volumes across MPLX’s pipeline and terminal systems were lower in the third quarter compared with a year earlier primarily due to lower refinery utilization at Marathon Petroleum’s refineries.

Marathon Petroleum’s crude capacity utilization in the third quarter was 84%, excluding idled facilities, up from 71% in the second quarter, but still below last year’s 98%.

The 2 billion cubic feet per day (bcfd) Whistler natural gas pipeline project also continued to progress and the start-up of the project is expected in the second half of 2021.

MPLX shares were up 5.4% at $18.14 in late morning as the company announced a program for the repurchase of up to $1 billion of its common units.

Reporting by Devika Krishna Kumar in New York; Editing by Matthew Lewis