BridgeTex owners seek more than $300 MM from shipper
HOUSTON (Reuters) -- Plains All American Pipeline and Magellan Midstream Partners filed an amended breach of contract lawsuit seeking more than $300 MM in damages from Stampede Energy over an oil transport deal, according to court documents.
Stampede, a privately held midstream operator, failed to meet its minimum volume requirements on the BridgeTex pipeline beginning in March 2015, and breached its contract through the following year, according to documents filed on March 22 in the Harris County District Court in Houston.
The 300,000 bpd BridgeTex Pipeline runs from Colorado City, Texas, in the Permian Basin to the Gulf Coast.
Oil prices slid more than 70% from mid-2014 to early 2016, driving many energy companies to bankruptcy and prompting cuts in production. Pipelines, which are considered better shielded from commodity price risk because they act as tollroads, were hit by output declines because there were fewer barrels available to ship on their systems.
Stampede as of Feb. 28 owed the companies more than $311.8 MM for breaching current and future shipping obligations, including late fees and interest, according to an amended petition filed BridgeTex on March 22.
BridgeTex also filed a claim for $313.4 MM against Ballengee Interests, which had guaranteed payments and interest owed by Stampede.
In August 2014, just as oil prices began a downward spiral, Stampede agreed to ship 30,000 bpd of crude and condensate on the line, representing 10% of BridgeTex's total capacity. The company said it would ship on the pipeline for 29 quarters beginning March 1, according to the Transportation Service Agreement they executed in 2014 and court filings.
Magellan, the operator of the BridgeTex pipeline, and Plains warned investors in company earnings calls in early 2016 it expected a shipper to default on its contract.
A representative associated with Stampede did not immediately respond to requests for comment. Plains did not respond a request for comment. A Magellan spokesman Bruce Heine said in an email the lawsuit was ongoing and declined to provide further comment.
Ballengee also declined to comment.
BridgeTex Pipeline Company LLC vs Stampede Energy LLC and Ballengee Interests LLC, Case No. 2016-57036 in District Court of Harris County, Texas - 157th Judicial District
Reporting by Liz Hampton; Additional reporting by Jarrett Renshaw in New York; Editing by Richard Chang
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