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BP Midstream pipeline volumes fall 10% in second quarter, but revenues up
BP Midstream Partners LP pipeline volumes fell roughly 10% in the second financial quarter as efforts to curb the spread of the coronavirus pandemic slashed fuel demand, company executives said on Thursday.
Despite lower volumes, revenue of BP’s U.S. pipeline unit rose to $31.50 in the three months ending June 30 from $28.6 million in the same period last year as it clamped down on expenses.
Onshore pipelines, including the BP2 crude oil line and the River Rouge refined products line, which connect to BP’s Whiting, Indiana refinery, saw 13% fewer barrels, the company said.
Volumes on offshore pipelines, including the 400,000 barrel-per-day Mars crude oil pipeline off the Louisiana coast, fell 8%. BP Midstream still plans to expand the Mars crude oil pipeline system starting next year.
Activity on those lines have picked up in the current quarter, company officials said.
“The impact of COVID-19 and broader market volatility on pipeline throughput was much more apparent across our portfolio in the second quarter compared to the first quarter, set against the backdrop of significant product demand destruction across the U.S.,” Craig Coburn, BP Midstream’s chief financial officer, said on a company earnings call.
“Industry-wide we saw reduced refinery utilization during the quarter,” Coburn said.
U.S. refinery utilization fell from record highs to 68% of the 19 million barrels-per-day total capacity in April as states and local governments attempted to combat COVID-19 by restricting travel and business activity.
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