Pipelines launch across the US in 2013

The coming year is expected to see a boom in pipeline launches as oil companies seek to improve their margins.

According to Bloomberg, refiners such as Tesoro Corp and Phillips 66 are investing in pipelines in order to add a new area of revenue.

Despite these companies experiencing increased margins in 2012, the margin for turning oil into gasoline is expected to fall from its record highs.

It comes as an increase in US production as enabled them to buy oil at $17.46 a barrel less than the global average price, creating significant savings.

As a result, around 20 new pipelines are expected to enter service in 2012 to direct oil to new buyers on the Gulf Coast, the newspaper reported.

Speaking to Bloomberg, Harold York, principal oils analyst in Houston for Wood Mackenzie Ltd, said that diversity will be important to help these refiners maintain their margins.

“When one segment gets hot and the other gets cool, the ability to shift emphasis from the waning segment to the hot segment, that’s going to be a critical path for them," he said.

The news follows an announcement by US gas producer Chesapeake Energy that it has raised billions of dollars selling pipeline packages.

Chesapeake has raised around $2.16 billion from the deals, which have seen assets sold to Macellus, Utica, Eagle Ford, Haynesville and Niobrara.

Further sales are expected until the end of 2013 quarter one, with the US gas producer hoping to raise close to $2.75 billion in total for the year, and the figure for the entire midstream exit to $4.875 billion.

This falls significantly short of the $13 billion the firm initially expected.

"We are pleased to announce further progress towards our asset sale goals for 2012-13. We look forward to completing additional asset sales and achieving our goals of strengthening our balance sheet, tightening our asset focus and increasing returns to shareholders," said Aubrey K McClendon, Chesapeake's chief executive officer.

Posted by Joseph Hutton