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Phillips 66 Partners Starts Gray Oak Pipeline's Open Season

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Phillips 66 Partners announced an open season for the Gray Oak Pipeline’s new takeaway capacity. The partnership added that the pipeline’s new destination will be Victoria County, TX.

The open season will gauge shippers’ interest to transport crude volumes under binding transportation services agreements for a long period of time. The partnership expects the in-service date of the new takeaway capacity to be the first half of 2022. Notably, the commencement date of the open season is on Sep 1, 2020.

Importantly, Phillips 66 Partners is seeking capacity expansion, especially when the coronavirus pandemic has led to excess of long-term transportation capacity from the prolific Permian basin. Analysts opine that by the time the Gray Oak Pipeline’s new takeaway is online, the demand for crude will recover fully.

The Gray Oak Pipeline has commenced full operations during the June quarter of 2020, from the West Texas and Eagle Ford to destinations in the Texas Gulf Coast. In the pipeline project, with transportation capacity of 900,000 barrels per day and connecting to multiple terminals in Corpus Christi, TX, the partnership has a 42.25% effective ownership interest.  

Headquartered in Houston, TX, Phillips 66 Partners currently carries a Zacks Rank #4 (Sell). Meanwhile, three better-ranked players in the energy space are Cimarex Energy Co , Concho Resources Inc. and EOG Resources, Inc. (EOG - Free Report) , each holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Cimarex Energy has seen upward earnings estimate revisions for 2020 in the past 30 days.

Concho is likely to see earnings growth of 21.6% in 2020.

EOG Resources’ 2020 bottom-line estimates have risen more than 200% over the past 30 days.

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