Plle Plains All American Pipeline raises profit forecast for 2021

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Aug 3 - Plains All American Pipeline LP raised its forecast for 2021 adjusted core income, as the oil and gas industry benefits from easing travel curbs and a recovering economy firing up fuel demand.

The pipeline company also trimmed its Invest Capital estimate in 2021 by about $50 million to $325 million, mostly because the Byhalia Connection construction project was scrapped last month after the pandemic hit U.S. oil production.

Plains forecast adjusted earnings before interest, taxes, depreciation and amortization of about $2.175 billion, $5 million more than its prior outlook.

In the second quarter, boosted crude oil demand drove volumes for the company and drew a 25% increase in its transport segment's adjusted EBITDA. Deficiency payments - or penalties paid to producers for not shipping oil - also helped the pipeline operator.

The transportation segment is expected to bring in adjusted EBITDA of about $1.635 billion in 2021 compared to earlier estimate of $1.58 billion

Average daily volumes on the company's pipelines rose 5.6% to 6.2 million barrels of oil per day in the first quarter of the reported period, compared with last year.

Higher volumes transported reflect a steady recovery in the oil and gas industry as a rebound in fuel demand from pandemic lows encourages companies to bring back shut production.

Willie Chiang's demand for crude will continue to rebalance, the chief executive officer said in an earnings call with analysts.

Plains also raised its 2021 forecast for free cash flow after distributions to about $1.35 billion from a previous outlook of $1.315 billion in 2021 (ppi):