Plains All American Pipeline company has been denied a request for an exemption from steel import tariffs. This will hit plans to build much needed takeaway capacity for the evacuation of oil from the Permian Basin. The capacity bottleneck has already manifested in large discounts for Midland-Permian crude which is trading at a discount of c.USD12/bbl to WTI.
Plains sought an exemption for high-grade steel from Greece for its 585mbopd Cactus II pipeline to the port of Corpus Christi. However the government purports that the steel is domestically produced in “sufficient and reasonably available” quantities in denying the request. Plains is now looking to challenge the decision.
Plains released a strong statement criticising the government following the decision: “Collecting a tariff on steel pipe orders for projects like this constitutes a tax on the construction of critical U.S. energy infrastructure…and is a significant unintended consequence of current trade policy and risks U.S. energy security and American jobs.”
