Investments in Unconsolidated Entities

6 Months Ended

Jun. 30, 2020

Equity Method Investments and Joint Ventures [Abstract]

Our investments in unconsolidated entities consisted of the following (in millions, except percentage data):


		Ownership Interest at June 30, 2020	Investment Balance
Entity ⁽¹⁾	Type of Operation				June 30, 2020			December 31, 2019
BridgeTex Pipeline Company, LLC	Crude Oil Pipeline	20%	$	424		$	431
Cactus II Pipeline LLC	Crude Oil Pipeline	65%	789			738
Capline Pipeline Company LLC	Crude Oil Pipeline ⁽²⁾	54%	503			484
Diamond Pipeline LLC	Crude Oil Pipeline	50%	479			476
Eagle Ford Pipeline LLC	Crude Oil Pipeline	50%	375			382
Eagle Ford Terminals Corpus Christi LLC (“Eagle Ford Terminals”)	Crude Oil Terminal and Dock	50%	122			126
Red Oak Pipeline LLC (“Red Oak”)	Crude Oil Pipeline	50%	35			20
Saddlehorn Pipeline Company, LLC (“Saddlehorn”)	Crude Oil Pipeline	30%	198			234
STACK Pipeline LLC	Crude Oil Pipeline	50%	114			117
White Cliffs Pipeline, LLC	Crude Oil Pipeline	36%	197			196
Wink to Webster Pipeline LLC	Crude Oil Pipeline ⁽³⁾	16%	242			136
Other investments			303			343
Total investments in unconsolidated entities			$	3,781		$	3,683

⁽¹⁾Except for Eagle Ford Terminals, which is reported in our Facilities segment, the financial results from the entities are reported in our Transportation segment.

⁽²⁾The Capline pipeline was taken out of service pending the reversal of the pipeline system.

⁽³⁾Asset is currently under construction and has not yet been placed in service.

Impairments

In March 2020, the partners of Red Oak announced they were deferring the Red Oak pipeline project and suspending actions that would require additional capital spending on the project, and that they would re-evaluate demand for the project in light of recent market developments. During the second quarter, we (“PAA”) determined that we would not proceed with the project as previously contemplated, and we determined that there was an other-than-temporary impairment of our investment in Red Oak. We wrote our investment in Red Oak down to the estimated residual value of our share of the net assets. In addition, during the first quarter of 2020, we recorded a write-down of certain of our investments included in “Other investments” in the table above due to an other-than-temporary impairment related to a decline in market conditions. As a result of these write-downs, during the three and six months ended June 30, 2020, we recognized losses of $69 million and $112 million, respectively. These losses are reflected in “Gain on/(impairment of) investments in unconsolidated entities, net” on our Condensed Consolidated Statement of Operations.

Divestitures

Saddlehorn. In February 2020, we sold a 10% ownership interest in Saddlehorn for proceeds of approximately $78 million, including working capital adjustments, and have retained a 30% ownership interest. We recorded a gain of approximately $21 million related to this sale, which is included in “Gain on/(impairment of) investments in unconsolidated entities” on our Condensed Consolidated Statement of Operations. We continue to account for our remaining interest under the equity method of accounting.