| HOUSTON, April 4
HOUSTON, April 4 Plains All American Pipeline
and Magellan Midstream Partners filed an amended
breach of contract lawsuit seeking more than $300 million 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 barrel per day BridgeTex Pipeline runs from
Colorado City, Texas, in the Permian Basin to the Gulf Coast.
Oil prices slid more than 70 percent 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
million 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 million 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 barrels per day of crude and
condensate on the line, representing 10 percent 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
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
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)