Plains All American Pipeline (NASDAQ:PAA) reported third-quarter adjusted EBITDA attributable to Plains of $711 million and narrowed its full-year outlook, as executives pointed to operating efficiencies, tariff increases and growth opportunities in its crude oil pipeline network.
The company expects 2026 adjusted EBITDA of $2.83 billion to $2.93 billion, with a midpoint of $2.88 billion. Chief Financial Officer Al Swanson said Plains would expect to finish at or slightly above the midpoint based on the prevailing market environment.
Swanson said third-quarter results benefited from operating efficiencies, annual Federal Energy Regulatory Commission tariff escalations and lower environmental remediation expenses compared with the second quarter. Plains now reports a single consolidated segment following the May sale of its Canadian natural gas liquids business.
Permian agreement and production outlook
Plains announced a 10-year agreement with a large integrated producer to expand its Permian Midland gathering system. The agreement includes 270,000 dedicated acres and brings Plains’ total dedicated Permian acreage to more than 5.3 million acres, according to Chairman, CEO and President Willie Chiang.
Chief Commercial Officer Jeremy Goebel said the agreement covers existing production rather than volumes that need to ramp up. Its contribution will likely begin in late 2027 or early 2028, when the connection is completed, he said. Plains expects to provide more information on capital spending and timing next year.
Chiang said Plains expects 2026 Permian production growth to reach about 200,000 barrels per day on a year-end exit-to-exit basis, toward the high end of its previous range. He cited improving natural gas transportation capacity, higher rig counts and advances in drilling and recovery techniques as factors that could support momentum into 2027.
Goebel said current activity suggests Permian production could grow by 200,000 to 300,000 barrels per day for the foreseeable future. He said pipelines to the coast are already close to 90% full, but the basin should have sufficient capacity for several more years.
Additional expansions of existing pipelines could come to market in 2028 or early 2029, Goebel said, adding that he does not see a need for a large new pipeline at this time. Plains is evaluating incremental expansions of Cactus III and could announce a series of projects as market demand and contracts warrant, rather than one large addition, he said.
Silver Spur integration
Plains closed its acquisition of Silver Creek, renamed Silver Spur, on Oct. 1. The Powder River Basin gathering system transports approximately 125,000 barrels per day and has 915,000 dedicated acres supported by long-term contractual commitments, Chiang said.
Management expects the acquisition to complement Plains’ existing Rockies network and provide connections to Cushing. Goebel said the company plans to continue building out the system through 2027, with the asset expected to gain momentum in 2028 and beyond.
Swanson described the fourth quarter as a transition period for the acquisition, with costs related to integration and transition services and without the benefit of anticipated synergies. He said the company’s guidance implies about $700 million of fourth-quarter adjusted EBITDA, roughly $10 million below the third quarter, partly reflecting a step-down in market opportunities captured earlier in the year.
Capital structure and 2027 considerations
Plains raised $1.5 billion in September through 30-year junior subordinated notes and subsequently redeemed all of its Series A and Series B preferred units, using the proceeds along with cash and commercial paper borrowings. Swanson said the transactions are expected to increase annual distributable cash flow to common unitholders by approximately $60 million, or $0.09 per unit.
Chiang said Plains has captured $50 million in synergies from its Cactus III acquisition and remains on track to achieve $50 million of organizational efficiencies by the end of 2026.
Looking ahead, Swanson identified Permian volume growth, investment projects, the Silver Spur acquisition and efficiency gains as potential benefits for 2027. He cautioned, however, that recent quarterly results included market opportunities that Plains would not assume will recur next year. The company plans to issue formal 2027 guidance on its February call.
About Plains All American Pipeline (NASDAQ:PAA)
Plains All American Pipeline, L.P. is a midstream energy infrastructure company that provides logistics services for crude oil and natural gas liquids (NGLs). Rather than primarily exploring for or producing hydrocarbons, the company operates assets that help gather, transport, store and deliver energy commodities from production areas to refineries, processing facilities and other markets.
The company’s operations include pipeline transportation systems, gathering networks, storage facilities, rail and truck transportation, and terminal and export infrastructure.
