stockrowWhat it does
Plains GP Holdings, L.P. (PAGP) gives shareholders an indirect economic interest in Plains All American Pipeline, L.P. (PAA), a North American energy infrastructure and logistics business. PAGP is a limited partnership that elected to be taxed as a corporation for U.S. federal income tax purposes. It was formed in 2013.
PAGP does not directly own operating assets. Its cash-generating asset is an interest in Plains AAP, L.P. (AAP), which owns PAA common units. PAA and its subsidiaries conduct the operations described below. PAGP also owns the managing member of AAP’s general partner.
PAA gathers crude oil near production areas, transports it through pipelines and stores it at terminals. Its network connects producers with refineries, market hubs and export terminals. It also buys crude oil, moves it using its own or other companies’ assets, and sells it to customers. Producers, refiners and other customers can use its transportation, storage and related services.
The business also has a natural gas liquids (NGL) segment. PAA agreed to sell substantially all of its Canadian NGL business to Keyera Corp., with the transaction expected to close around the end of the first quarter of 2026, subject to closing conditions. PAA’s retained NGL assets are in the United States. The company intends to focus on crude oil following the divestiture.
How it makes money
PAA operates through Crude Oil and NGL segments. In crude oil, it earns transportation tariffs and fees under pipeline capacity and other agreements. Terminal and processing arrangements can run month to month or for multiple years, with charges for storage, throughput and loading or unloading. Pipeline fees are typically based on the volume moved and vary by receipt and delivery point; storage and terminal fees can depend on leased capacity or throughput.
PAA also purchases crude oil and sells it after moving it to locations such as terminals, connecting carriers, regional hubs and refineries. Merchant results are affected by purchase volumes and differences in prices between crude grades, locations and delivery periods. Its assets serve third parties as well as its own merchant business. Long-term transportation contracts and acreage dedications provide volume support for some assets, though contracts can be reset to market rates.
For FY2025, product sales revenues were $42.5 billion and services revenues were $1.8 billion. Product sales revenues fell from $47.2 billion in FY2024, while services revenues rose from $1.7 billion. Product sales revenues and related purchases are generally based on the same pricing indices, so a change in commodity prices does not necessarily produce an equivalent change in the margin between them.
The continuing NGL segment earns fees for storage and terminal services and revenue from transporting, storing and selling NGL products. PAGP itself receives cash through distributions from AAP, which receives distributions on its PAA common units.
| Product or service | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Product sales revenues | $42.5 billion | 96.0% | −9.95% |
| Services revenues | $1.8 billion | 3.98% | 4.20% |
Customers and how it sells
PAA serves crude oil producers, refiners and other customers through its pipelines, gathering systems, terminals and storage facilities. Its merchant business also sells purchased crude oil at terminals, regional hubs, connecting carriers and refineries. In NGL, customers pay for storage and terminal services, and PAA transports and sells products.
ExxonMobil Corporation and its subsidiaries accounted for 31.0% of revenue in FY2025. The majority of revenue from the large customers identified by the company relates to crude oil merchant activities, with sales occurring at multiple locations. Losing one of these customers could leave PAA unable to find a replacement market at a comparable margin.
The network spans the United States and Canada. The Permian Basin is PAA’s largest asset presence, and its terminals connect to markets including Cushing, Midland and the Gulf Coast. In FY2025, United States revenue was $39.8 billion and Canada revenue was $4.5 billion.
As of December 31, 2025, the crude oil assets included 20,405 miles of active transportation pipelines and gathering systems and 76 million barrels of commercial crude oil storage capacity. The pipeline mileage includes the full length of pipelines in which PAA owns less than the whole interest.
| Region | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| United States | $39.8 billion | 89.8% | −8.67% |
| Canada | $4.5 billion | 10.2% | −15.9% |
Suppliers and costs
PAA buys crude oil for its merchant activities and moves it on company-owned or third-party assets before selling it. Purchases and related costs are a major part of that business. Both product sales revenues and purchases generally follow the same commodity pricing indices; the company uses derivatives to manage commodity price exposure.
Operating the network also entails direct fixed and variable field costs, along with allocated operating and administrative expenses. Field operating costs in 2025 reflected higher expenses from acquisitions, higher volumes and property taxes, partly offset by costs recognized in the prior year for a settlement. Depreciation and amortization increased in 2025 largely because of acquisitions.
PAA routinely uses short-term debt for merchant transactions involving simultaneous purchases and forward sales, and for certain exchange margin requirements. It also incurs costs to comply with transportation, environmental, safety and other regulations. The company identifies supply disruptions, inflation and the cost of materials used in its business as risks. It does not identify a sole-source supplier.
- Revenue$44.3B
- Cost of revenue−$41.6B
- Selling, general and administrative−$348.0M
- Other operating costs−$899.0M
- Operating income$1.4B
Competitive position
PAA competes with other pipeline and terminal operators, NGL processors, integrated oil companies and their marketing affiliates, gatherers, trading platforms, brokers and marketers. Pipelines also compete with trucks, rail and barges. No individual competitor is named as such in the company’s description of competition.
Pipeline competition depends on transportation charges, access to production and supply, and end-user demand. Existing pipelines with unused capacity can compete for additional barrels at relatively low incremental operating cost. Pipeline expansions and changes in expected production growth have increased competition for uncommitted barrels and contract renewals, putting pressure on tariffs and margins.
PAA’s network connects gathering systems, pipelines and terminals, with its largest asset presence in the Permian Basin. Some assets are supported by long-term transportation contracts, acreage dedications or other commitments. Its merchant activities and market knowledge also help it arrange crude oil supply and delivery.
Our reading: The interconnected network and existing customer commitments support PAA’s competitive position by linking production to several markets. Our reading: That position is not immune to competing spare capacity or contract renewals at lower rates. Our reading: Commercial knowledge can help PAA find merchant opportunities, but the margin available from those activities varies with market conditions and competition.
Growth opportunities
PAA’s strategy combines its infrastructure network with commercial services to address regional supply and demand imbalances. It plans to optimize its assets through capital investments and pursue emerging energy opportunities. The company expects the Permian Basin to remain a contributor to global supply for years to come, and it expects its asset base and integrated model to support positive free cash flow over multiple years.
In 2025, PAA acquired the Cactus III pipeline, which connects Permian Basin and Eagle Ford production to Corpus Christi. It also acquired additional gathering systems in the Delaware Basin and Eagle Ford. Crude Oil Segment Adjusted EBITDA increased in 2025, helped by higher pipeline tariff volumes, acquisition contributions and tariff escalations. Fewer market-based opportunities and certain contracts resetting to market rates offset part of those gains.
The agreed sale of the Canadian NGL business is intended to concentrate PAA on crude oil and reduce exposure to commodity price fluctuations and seasonality. The company expected the sale to close around the end of the first quarter of 2026, subject to conditions including regulatory approvals. PAGP may also support PAA’s growth through loans, equity purchases or other financial support.
- $42.1BFY2021
- $57.3BFY2022
- $47.3BFY2023
- $48.9BFY2024
- $44.3BFY2025
Structural risks
- Volumes and capacity: PAA’s results depend on the volumes shipped, purchased, stored and gathered. Infrastructure overbuild and slower production growth can increase competition for barrels and contract renewals. The pace of natural gas infrastructure development could also affect expected crude oil production growth in the Permian Basin.
- Customer and counterparty exposure: Losing a large customer could leave PAA unable to find a replacement market at a comparable margin. Customers and other counterparties also present credit risk.
- Operations and regulation: Pipeline or facility accidents, equipment failures, natural disasters and cyberattacks can disrupt operations. Environmental, safety, transportation and other requirements can increase costs or lead to penalties and liabilities.
- Cash distributions and capital: PAGP depends on distributions from PAA through AAP. Distributions are not guaranteed, and reserves or other limitations can reduce cash available to shareholders. PAA also faces debt, interest-rate and access-to-capital risks.
- Transactions and market conditions: PAA may not realize expected benefits from acquisitions, divestitures or joint ventures. Commodity market conditions and changes in price differences can affect merchant results, while maintenance and repair costs can affect asset operations.
Leadership
PAGP has Class A, Class B and Class C shares. Class C shares provide a pass-through voting mechanism for eligible PAA unitholders in director elections; the company identifies the significant number of shares held by Class B shareholders as a factor that may make removal of its general partner difficult.
| Name | Role | Since | Total pay, FY2025 |
|---|---|---|---|
| Willie Chiang, | — | $12.3 million | |
| Al Swanson, | — | $3.2 million | |
| Richard McGee, | — | $3.3 million | |
| Chris Chandler, | — | $9.1 million | |
| Jeremy Goebel, | — | $11.6 million |
Bottom line
Our reading
Our reading: PAGP is an indirect ownership vehicle for a crude oil infrastructure and merchant business, rather than an operator with separate assets of its own. Its business rests on an interconnected network and customer commitments, but faces tariff pressure from competing capacity and exposure to large customers. Cash reaching PAGP shareholders also depends on distributions passing through PAA and AAP.