Plains All American Pipeline, L.P. (NYSE: PAA),
announced today that it is proceeding with its Phase IV expansion at the
Partnership's St. James, Louisiana terminal facility. This expansion
will include construction of an additional 1.2 million barrels of crude
oil storage capacity and is targeted to be completed in the third
quarter of 2012 at a cost of approximately $50 million. The project is
supported by multi-year contracts and throughput arrangements with
third-party customers and is part of the Partnership's ongoing program
to increase its cash flow contributions from fee based activities.
The Partnership also provided comments with respect to its adjusted
earnings before interest, taxes, depreciation and amortization
("EBITDA") for the third quarter of 2011. "All three of our business
segments continue to perform well. As a result of strong fundamentals,
generally favorable market conditions and solid execution in our supply
and logistics segment, we are meaningfully outperforming our guidance
estimates," said Greg L. Armstrong, PAA's Chairman and CEO.
"Third-quarter results for the transportation segment will also benefit
from the re-start of the Rainbow pipeline in late August. As a result,
we currently expect our adjusted EBITDA will likely exceed the midpoint
of our guidance range for the third quarter of 2011 by as much as 20% to
25%." In connection with its second quarter conference call on August 4,
2011, the Partnership provided a guidance range for adjusted EBITDA for
the third quarter of 2011 of $310 million to $340 million.
The St. James expansion represents PAA's third facility expansion since
its original completion in 2007, and will bring total storage capacity
at St. James to 8.3 million barrels. The St. James facility has a
manifold and header system designed to allow receipts and deliveries
with connecting pipelines at their maximum operating capacity. Located
adjacent to the Mississippi river, the St. James facility also contains
a barge and ship dock, which receives crude oil and condensate from
ships and inter-coastal barges. Additionally, the dock will be capable
of loading barges near the end of 2011. The St. James facility is also
directly connected with a crude oil rail terminal that has a current
capacity to offload approximately 65,000 barrels per day, which will
double to 130,000 barrels per day by the fourth quarter of 2011.
PAA owns and operates a network of approximately 16,000 miles of liquids
pipelines, approximately 90 million barrels of liquids storage capacity
and handles over 3 million barrels of physical product on a daily basis.
Plains All American Pipeline, L.P. is a publicly-traded master limited
partnership engaged in the transportation, storage, terminalling and
marketing of crude oil, refined products and liquefied petroleum gas and
other natural gas related petroleum products. Through its general
partner interest and majority equity ownership position in PAA Natural
Gas Storage, L.P. (NYSE: PNG), PAA is also engaged in the development
and operation of natural gas storage facilities. PAA is headquartered in
Houston, Texas.
Non-GAAP Financial Measures
EBITDA is a non-GAAP financial measure. Net income and cash flows from
operations are the most directly comparable GAAP measures to EBITDA.
Adjusted EBITDA excludes selected items impacting comparability. The
Partnership's Form 8-K furnished on August 3, 2011 presents a
calculation of Adjusted EBITDA and a reconciliation of EBITDA to net
income. A copy of the August 3rd Form 8-K is available on the
Partnership's website (www.paalp.com)
under "Investor Relations – Operating and Financial Guidance." In
addition, the Partnership maintains on its website a reconciliation of
all non-GAAP financial information, such as EBITDA, that it reconciles
to the most comparable GAAP measures. To access the information,
investors should click on the "Investor Relations" link on the
Partnership's home page and then the "Non-GAAP Reconciliations" link on
the Investor Relations page.
Forward Looking Statements
Except for the historical information contained herein, the matters
discussed in this release are forward-looking statements that involve
certain risks and uncertainties that could cause actual results to
differ materially from results anticipated in the forward-looking
statements. These risks and uncertainties include, among other things,
failure to implement or capitalize on planned internal growth projects;
maintenance of our credit rating and ability to receive open credit from
our suppliers and trade counterparties; continued creditworthiness of,
and performance by, our counterparties, including financial institutions
and trading companies with which we do business; the effectiveness of
our risk management activities; unanticipated changes in crude oil
market structure, grade differentials and volatility (or lack thereof);
environmental liabilities or events that are not covered by an
indemnity, insurance or existing reserves; shortages or cost increases
of supplies, materials or labor; the availability of adequate
third-party production volumes for transportation and marketing in the
areas in which we operate and other factors that could cause declines in
volumes shipped on our pipelines by us and third-party shippers, such as
declines in production from existing oil and gas reserves or failure to
develop additional oil and gas reserves; fluctuations in refinery
capacity in areas supplied by our mainlines and other factors affecting
demand for various grades of crude oil, refined products and natural gas
and resulting changes in pricing conditions or transportation throughput
requirements; the impact of current and future laws, rulings,
governmental regulations, accounting standards and statements and
related interpretations; the effects of competition; interruptions in
service on third-party pipelines; increased costs or lack of
availability of insurance; weather interference with business operations
or project construction; general economic, market or business conditions
and the amplification of other risks caused by volatile financial
markets, capital constraints and pervasive liquidity concerns; and other
factors and uncertainties inherent in the transportation, storage,
terminalling and marketing of crude oil, refined products and liquefied
petroleum gas and other natural gas related petroleum products discussed
in the Partnership's filings with the Securities and Exchange Commission.
Plains All American Pipeline, L.P.
Roy I. Lamoreaux,
713/646-4222 – 800/564-3036
Director, Investor Relations