Express Pipeline System Nov 11
- ID: 2039067
- November 2011
- Standard & Poors
Firm transportation agreements provide for some cash flow visibility; and Supply stems from the growing Canadian oil sands region. The weighted average life of shipper contracts is only two years; and Significant capacity coming on-line from newly constructed pipelines weakens the project's competitive position. The negative rating outlook on Express Pipeline System's longer-term notes reflects greater potential for cash flow volatility once 112,000 barrels per day (bpd), or 48% of the pipeline's ship-or-pay contracts, come due in March 2012. Standard & Poor's Ratings Services' believes management will eventually execute new long-term contracts with shippers, but some volumes will be exposed to market rates until that time. While this recontracting need creates risk, Express' direct connectivity to a number of PADD...
Companies mentioned in this report are: Express Pipeline Partnership,Platte Pipe Line Co.,Express Pipeline LLC (USA),Express Pipeline L.P. (Canada)
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Research Type: Full Analysis