Stampede Energy, known as privately-held midstream operator, is said to fail in making penalty payments after shipping commitments on a major Texas pipeline failed, according to sources.
Magellan Midstream Partners and Plains All American Pipeline have mentioned during result details this month about the unnamed troubled client that has 10% committed capacity on their co-owned 300,000 barrels per day BridgeTex Pipeline coming from the Permian Basin to the U.S. Gulf Coast.
Few well-positioned sources told Reuters that the unnamed shipper is no other than Stampede Energy. The company did not respond to emails and did not provide any comment through phone. This 30-year-old energy is composed of veteran companies namely, Marathon, Plains, Shell Gavilon, and the most recent one, JP Energy.
Plains and Magellan did not make any statements regarding Stampede. Magellan mentioned that the unknown client has not shipped on the line, and that it does not expect to have enough payment shippers normally rent for spaces on pipelines but of no use.
Mike Mears, Magellan's CEO, was asked if whether the payment would still be possible and his response was "highly doubtful," told investors, cited from MidStream Business.
According to the company's website, Stampede gets 30Mbbl/d of capacity. This is 10% of the total allotted on the line of BridgeTex. As oil prices went into a dive, Stampede formed as an LLC about a year ago, cited by Texas regulators. This development is a clear sign of troubles in the pipeline industry.
Small midstream businesses quickly increased their income during the great developments of oil professionals-turned-entrepreneurs reached contacts in their Rolodexes to capitalize on fast growing industry. These companies, such as Stampede, through the help from many employees and private funding, made amazing effort in connecting oil producers to bigger pipelines and even to storage companies.
Since the situation has now changed with oil prices, short production of some clients would affect these midstream companies, resulting to fewer barrels to move and weakening their promises to ship on pipelines.
This situation has pressured the share prices of huge pipeline companies. Investors are getting doubtful about the decreasing volumes and payments.
According to Baker Hughes, the major focus of Energy Stampede's business is the number of oil rigs in Permian Basin. It has shown huge changes from 365 a year ago to 169 now.
Companies like Stampede only represents a small portion to the overall pipeline industry. From the statement of Magellan, the company did not expect the revenues to really be affected.
