NAME- DARPAN KULSHRESTHA
SECTION- Q2010
SUBJECT CODE- MGNM571
REGISTRATION NO- 12010426
INTRODUCTION OF PLAINS GP HOLDINGS,LP
Plains GP Holdings LP (Plains GP) operates as an oil and gas company. It engages
in the provision of transportation, facilities, and supply and logistics services. In
addition, the company provides other services such as storage, terminalling, and
marketing of crude oil and refined products. It also involves in the storage of
natural gas and the processing, transportation, storage, fractionation, and
marketing of natural gas liquids. The company has operations in Canada and the
US. Plains GP is headquartered in Houston, Texas, the US.
The company began in 1981 as a small oil and gas exploration and production
company called Plains Resources. The company became a public company via
an initial public offering in 1998.
Major acquisitions include:
1998 - All American Pipeline System
1999 - Scurlock Oil Company Permian and west Texas pipeline from Chevron
Corporation for $35 million
2001 - Midstream operations of Murphy Oil for $155 million
2001 - CANPET Energy Group, a liquified gas marketing company based in
Canada, for $42 million
2004 - Capline Pipeline System
2004 - Link Energy pipeline system for $273 million
2005 - Assets in Louisiana from Shell Oil Company for $12 million
2006 - Pacific Energy Partners for $2.4 billion
2008 - Rainbow oil pipeline in Northern Alberta
2012 - Canadian NGL business from BP
2017 - Alpha Crude Connector gathering system and pipeline in the Permian
Basin for $1.2 billion.
BUSINESS STRATEGY
Our cash flows will only be produced by the cash distributions we receive on the
Class A units of AAP ("AAP units") we directly and indirectly possess, barring any
future acquisition and holding of assets and businesses. All of AAP's cash flows
at the moment come from distributions on the PAA common units it owns.
As a result, our main business goal is to enhance the amount of cash that can be
distributed to our Class A shareholders through PAA's implementation of its
business plan strategy.
Additionally, we might support PAA's expansion plans in a number of ways,
including, but not limited to, by providing loans, buying stock stakes, or in other
ways.
sources of funding for PAA.
We keep our Class A shares and the underlying PAA common units in a one-to-
one relationship.
Offering producers, refiners, and other customers competitive and effective
midstream infrastructure and logistics services is PAA's main business approach.
PAA combines the strategic location and capabilities of its transportation,
terminalling, storage, processing, and fractionation facilities with its supply,
logistics, and distribution skills to manage regional supply and demand
imbalances for crude oil and NGL in the United States and Canada. PAA plans to
carry out its approach through:
• Strictly adhering to operational excellence, continuous improvement, and
operating in a manner that is secure, dependable, and considerate to the
environment and society;
• Providing market access, flexibility, and value chain by utilising its strategically
placed network of midstream infrastructure in conjunction with its commercial
capabilities.
solutions to its clients, seize market chances, correct physical market
imbalances, reduce risks, and produce a dependable cash flow and profit;
• streamlining its operations and asset portfolio to maximise returns on capital
spent.
We think that PAA's capacity to maintain sizable financial flexibility has a
significant impact on its ongoing success. The dedication of PAA to generate
positive free cash flow after distributions with a continuous focus on
deleveraging and wisely increasing cash distributed to its unitholders is a crucial
component of the company's financial strategy.
In this regard, PAA plans to keep up a credit profile it considers to be in line with
investment grade credit ratings. The following credit profile is what PAA seeks
to target:
attributes:
• an average long-term debt-to-adjusted EBITDA multiple of 3.0x to 3.5.
"Management's Discussion and Analysis of Financial Condition and Results of
Operations").
For our definition of Adjusted EBITDA and a description of our chosen items, see
"Results of Operations—Results of Operations—Non-GAAP Financial
Measures." our non-GAAP measures and comparability;
• a long-term debt to total capitalization ratio that is typically about 50%
CORPORATE STRATEGY
In February 2020, we acquired Felix Midstream LLC, now known as FM Gathering
LLC ("FM Gathering”) from Felix Energy Holdings II, LLC for approximately
$300million, net of working capital and other adjustments. FM Gathering owns
and operates a newly constructed crude oil gathering system in the Delaware
Basin, with associated crude oil storage and truck offloading capacity, and is
supported by a long-term acreage dedication. The assets acquired are included
in our Transportation and Supply and Logistics segments. This acquisition was
accounted for using the acquisition method of accounting and the
determination of the fair value of the assets acquired and liabilities assumed was
determined in accordance with the applicable accounting guidance. The assets
acquired primarily consisted of property and equipment of $115million and
intangible assets of $187million. The fair value of the tangible assets is a Level
3measurement in the fair value hierarchy and was determined using a cost
approach. The cost approach was based on costs incurred on similar recent
construction projects. The fair value of the intangible assets is also a Level
3measurement in the fair value hierarchy and was determined by applying a
discounted cash flow approach. Such approach utilized discount rates varying
from18% to 19%, based on our estimate of the risk that a theoretical market
participant would assign to the respective intangible assets.
During the second quarter of 2019, we acquired a crude oil terminal, including
tank bottoms and line fill, in Cushing, Oklahoma for cash consideration of
$44million, which was accounted for as an asset acquisition.
GROWTH
PAA’s principal business strategy is to provide competitive and efficient
midstream transportation, terminalling, storage, processing, fractionation and
supply and logistics services to producers, refiners and other customers. Toward
this end, PAA endeavors to address regional supply and demand imbalances for
crude oil and NGL in the United States and Canada by combining the strategic
location and capabilities of its transportation, terminalling, storage, processing
and fractionation assets with its supply, logistics and distribution expertise. We
believe PAA’s successful execution of this strategy will enable it to generate
sustainable earnings and cash flow. PAA intends to manage and grow its
business by:
developing and implementing growth projects that (i) address evolving crude
oil and NGL needs in the midstream transportation and infrastructure sector
and (ii) are well positioned to benefit from long-term industry trends and
opportunities;
using its transportation, terminalling, storage, processing and fractionation
assets in conjunction with its supply and logistics activities to provide flexibility
for customers, capture market opportunities, address physical market
imbalances, mitigate inherent risks and increase margin;
running a safe, reliable, environmentally and socially responsible operation,
which includes driving operational excellence, cost savings, asset optimization
and improved efficiencies throughout the organization; and
selectively pursuing strategic and accretive acquisitions that complement its
existing asset base and distribution capabilities
THANK YOU