Plains All American Pipeline Reaffirms Guidance

Globe and Mail

08-08-2025

Plains All American Pipeline (NASDAQ:PAA) reported adjusted EBITDA of $672 million for Q2 2025 and reaffirmed its full-year 2025 EBITDA guidance of $2.8 billion to $2.95 billion. The company announced in June 2025 the approximately $3.75 billion sale of its Canadian NGL business to Keyera, an expanded 40% stake in the BridgeTex Pipeline, and updated its 2025 growth capital expenditure guidance to $475 million.
Insights below cover the impact of its asset divestiture, capital redeployment plans, and operational trends.
Asset sale streamlines Plains All American Pipeline's strategic focus
The $3.75 billion divestiture of the Canadian Natural Gas Liquids (NGL) business substantially reduces Plains All American Pipeline's commodity exposure and repositions the portfolio almost entirely around its core U.S. crude oil midstream assets. The reclassification of most of the NGL segment to discontinued operations signals a decisive exit from the Canadian NGL market, creating a simplified operating model and providing approximately $3 billion in anticipated net proceeds for capital deployment.
"In June, we announced the execution of definitive agreements to sell substantially all of our NGL business to Keyera for approximately $3.75 billion, with an expected close in 2026. Initial investor feedback has been positive, and we view this as a win-win transaction for both parties. Plains will exit the Canadian NGL market at an attractive valuation while Keyera will receive highly complementary critical infrastructure in a strategic market. From a Plains perspective and as highlighted on Slide four, this transaction will result in a streamlined crude oil midstream entity. With less commodity exposure, a more durable and steady cash flow stream, and substantial financial flexibility to further execute on our capital allocation framework. With approximately $3 billion of net proceeds from the sale, we expect to continue focusing on disciplined bolt-on M&A to extend and expand our crude oil-focused portfolio as well as opportunities to optimize our capital structure, including potential repurchases of Series A and B preferred units, along with opportunistic common unit repurchases."
— Willie Chiang, CEO
By divesting its NGL business at a premium valuation (approximately $3.75 billion), Plains increases its operational predictability, leverages scale in crude logistics, and positions itself to more actively manage balance sheet and payout strategies through a less volatile earnings base and reduced commodity price risk.
Plains All American Pipeline capitalizes on bolt-on M&A and redeployment of divestiture proceeds
Year-to-date through Q2 2025, Plains completed five bolt-on acquisitions totaling approximately $800 million, and expanded its interest in BridgeTex Pipeline Company LLC to 40% as of Q2 2025. The company raised its 2025 growth capital guidance by $75 million to $475 million, citing incremental Permian Basin and South Texas terminal and pipeline projects as drivers, while maintenance capex is trending $10 million below forecast at $230 million for 2025.
"Year to date, we have completed five bolt-on transactions totaling approximately $800 million, and we have consistently maintained the view that there is a runway of opportunities for Plains to advance its bolt-on strategy. As illustrated on Slide five and as proven over the last few years, we continue to execute on that backlog of opportunities. Additionally, the financial flexibility that will be created by our recent NGL announcement further enhances our commitment and capacity to pursue these and other opportunities provided they offer attractive returns."
— Willie Chiang, CEO
Strategically deploying divestiture capital into targeted, return-accretive M&A and organic infrastructure extensions enables Plains All American Pipeline to maximize operational synergies and maintain a disciplined, opportunity-driven capital allocation approach.
Crude oil segment benefits from Permian tailwinds and resilient demand
The crude oil segment generated adjusted EBITDA of $580 million for Q2 2025, with sequential improvement in adjusted EBITDA driven by Permian system volume growth, recent bolt-on acquisition contributions, and increased refinery throughput following downtime. Robust downstream demand—especially for diesel—and steady refiner activity countered expectations of a broader demand slowdown.
"Turning to the second quarter, we reported crude oil segment adjusted EBITDA of $580 million, which benefited sequentially from Permian volume growth, contributions from recent bolt-on acquisitions, and higher throughput associated with our refiner customers returning from downtime in 2025. Moving to the NGL segment, we reported adjusted EBITDA of $87 million, which stepped down sequentially due to normal seasonality and lower quarter-on-quarter frac spreads."
— Al Swanson, CFO
Near-term volume uplift and customer utilization across Plains All American Pipeline's Permian and interconnected networks validate the company's basin exposure and reinforce its ability to generate stable cash flows in a variable macro demand landscape.
Looking Ahead
Management confirmed its full-year 2025 adjusted EBITDA guidance of $2.8 billion to $2.95 billion (non-GAAP) and expects adjusted free cash flow of approximately $870 million for 2025, before changes in assets and liabilities. Adjusted EBITDA and Permian volume forecasts for 2025 are projected to land in the lower half of their guided ranges, reflecting contract rate roll-offs, offset by recontracting and production growth for the full year. No shift in the distribution policy was signaled; Plains targets multi-year sustainable distribution growth once NGL sale proceeds are redeployed accretively.
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