A Conversation with Plains All American's (PAA/PAGP) COO Chris Chandler
Why It Matters
Flat production guidance amid geopolitical volatility signals steady cash flow, but new pipelines and higher crude differentials could unlock incremental growth for Plains All American’s midstream business.
Key Takeaways
- •Production expected flat in 2026, matching 2025 levels.
- •Gas takeaway constraints persist, but new pipelines promise relief.
- •Iran war spikes volatility, prompting strategic reserve draws worldwide.
- •Higher crude price curve tail benefits producers and Plains’ pipeline demand.
- •Expansion potential on newly acquired Cactus 3 line highlighted.
Summary
In a brief interview, Plains All American’s chief operating officer Chris Chandler outlined the company’s outlook for its Perian midstream assets. He reaffirmed that 2026 production is expected to remain flat, essentially mirroring 2025 volumes, while acknowledging ongoing volatility driven by the Iran‑Israel conflict and intermittent weather‑related disruptions.
Chandler highlighted two operational pressures: limited gas takeaway capacity that still throttles throughput, and the looming lift‑off from several large pipelines slated to come online later this year. He also noted that strategic reserve drawdowns worldwide are creating a near‑term demand surge, which, coupled with a higher‑priced tail on the crude curve, should underpin producer activity and bolster Plains’ pipeline utilization.
A memorable line from the discussion was, “It’s typically 6‑9‑12 months from a producer’s drilling decision to when we connect that flow,” underscoring the lag between upstream investment and midstream revenue. He pointed to the newly acquired Cactus 3 line as a concrete expansion opportunity that could capture additional volumes as the market stabilizes.
The implications are clear: if geopolitical tensions ease, Plains could see a modest upside from higher crude differentials and new capacity, while prolonged conflict would pose a macro‑economic headwind. Investors should watch pipeline fill‑rates and reserve‑replenishment trends as leading indicators of Plains’ near‑term earnings trajectory.
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