Contacts: Phillip D. Kramer Executive Vice President and CFO 713/646-4560 – 800/564-3036
Brad A. Thielemann Manager, Special Projects 713/646-4222 – 800/564-3036
FOR IMMEDIATE RELEASE
(Houston – May 11, 2006) Plains All American Pipeline, L.P. (NYSE: PAA) announced today that a subsidiary of PAA/Vulcan Gas Storage, LLC ("PAA/Vulcan") has closed on a $320 million credit facility that will provide funding to complete the construction of the Pine Prairie Energy Center gas storage project located in Evangeline Parish, Louisiana. The credit facility consists of a $100 million five-year revolver and a $220 million term loan that matures in December 2013. The facility is non-recourse to Plains All American, which manages the operations of, and owns a 50% interest in, PAA/Vulcan.
A group of 37 financial institutions participated in the credit facility. SunTrust Robinson Humphrey served as lead arranger, bookrunner and administrative agent, ING Capital LLC acted as syndication agent, and Bank of America, N.A. and Cobank, ACB served as co-documentation agents.
"The completion of this credit facility marks a significant milestone in the development of the Pine Prairie project and underscores the value of this strategically located natural gas storage facility," stated Al Swanson, Vice President – Finance and Treasurer of Plains All American. "We were pleased with the investor interest expressed in this credit facility and are very appreciative of the support displayed by our capital providers." Swanson also noted that while the cash flow from its investment in PAA/Vulcan is expected to ramp up significantly in the next several years, PAA has already raised and injected the equity capital necessary to fund the development of Pine Prairie and its investment in PAA/Vulcan.
The Pine Prairie project is being developed as a high deliverability salt dome storage facility. When completed, the facility is expected to provide approximately 24 Bcf of working gas storage capacity in three 8 Bcf underground caverns and is designed to accommodate future expansion if market conditions warrant. It is located approximately 50 miles northwest of the Henry Hub and will have direct interconnects to 7 major interstate pipelines. The current forecast is for the facility to be in a position to begin receiving and storing gas in the second quarter of 2007, with approximately 4.5 Bcf of projected working capacity coming on-stream in 2007 and the remaining 19.5 Bcf of working capacity coming online in stages throughout 2008 and 2009. Significant progress has been made on the construction of the facility, and the first cavern well spud on May 11, 2006. In addition, approximately 98% of 2007's projected available capacity and 78% of 2008's projected capacity are subject to contracts entered into following an open season that concluded in early 2005.
Plains All American Pipeline, L.P. is engaged in interstate and intrastate crude oil transportation and crude oil gathering, marketing, terminalling and storage, as well as the marketing and storage of liquefied petroleum gas and other petroleum products, in the United States and Canada. Through its 50% ownership in PAA/Vulcan Gas Storage LLC, the Partnership is also engaged in the development and operation of natural gas storage facilities. The Partnership's common units are traded on the New York Stock Exchange under the symbol "PAA." The Partnership is headquartered in Houston, Texas.
Forward Looking Statements Certain statements made herein, other than statements of historical fact, are forward-looking statements under the Private Securities Litigation Reform Act of 1995. They include statements regarding the timing and expected benefits and capacity of the Pine Prairie project, as well as its expected impact on future cash flows. These statements are based on management's current expectations and estimates; actual results may differ materially due to certain risks and uncertainties. These risks and uncertainties include, among other things: shortages or cost increases in power supplies, materials, labor or third-party services; weather interference with business operations or project construction; successful integration and future performance of acquired assets or businesses and the risks associated with operating in lines of business that are distinct and separate from our historical operations; the success of our risk management activities; the availability of, and ability to consummate, acquisition or combination opportunities; our access to capital to fund additional acquisitions and our ability to obtain debt or equity financing on satisfactory terms; environmental liabilities or events that are not covered by an indemnity, insurance or existing reserves; maintenance of our credit rating and ability to receive open credit from our suppliers and trade counterparties; supply and demand for natural gas and competing energy sources; the effects of competition; continued creditworthiness of, and performance by, our counterparties; the impact of natural gas price fluctuations; the impact of current and future laws, rulings and government regulations from local, state and federal agencies; increased costs or lack of availability of insurance; fluctuations in the debt and equity capital markets; general economic, market or business conditions; risks inherent in the development and operation of natural gas storage facilities; and other factors and uncertainties as discussed in the Partnership's Annual Report on Form 10-K for the year ended December 31, 2005 as filed with the Securities and Exchange Commission.
End
|