Aug 3 (Reuters) - Plains All American Pipeline LP on
Tuesday raised its forecast for 2021 adjusted core income, as
the oil and gas sector benefits from easing travel curbs and a
recovering economy firing up fuel demand.
The pipeline company also trimmed its 2021 investment
capital estimate by about $50 million to $325 million, mainly
because the Byhalia Connection construction project was scrapped
last month after the pandemic hit U.S. oil production.
Plains forecast adjusted earnings before interest, taxes,
depreciation, and amortization (EBITDA) of about $2.175 billion,
$25 million higher than its prior outlook.
Improved crude oil demand boosted volumes for the company
and drove a 25% increase in its transportation segment's
adjusted EBITDA in the second quarter. Deficiency payments - or
penalties paid by producers for not shipping oil - also helped
the pipeline operator.
The transportation segment is expected to bring in adjusted
EBITDA of about $1.635 billion in 2021 versus an earlier
estimate of $1.58 billion.
Average daily volumes on the company's pipelines rose 5.6%
to 6.2 million barrels per day (bpd) in the reported quarter,
compared with last year.
The higher volumes transported reflect a steady recovery in
the oil and gas industry as a rebound in fuel demand from
pandemic lows encourages companies to bring back shut
Global crude supply and demand will continue to rebalance,
Chief Executive Officer Willie Chiang said during an earnings
call with analysts.
Plains also raised its 2021 forecast for free cash flow
after distributions to about $1.35 billion from a previous
outlook of $1.315 billion.
(Reporting by Arunima Kumar in Bengaluru; Editing by Devika