(Houston - September 17, 2008) -- Plains All American Pipeline, L.P. (NYSE:PAA) announced today that it had performed an assessment of the impact of Hurricane Gustav and a preliminary assessment of the impact of Hurricane Ike on certain of its operations and Gulf Coast assets. In advance of the onset of the hurricanes, the Partnership activated its Hurricane Preparedness Plan for facilities that were expected to be impacted by the storms. Depending upon the facility, steps taken by the Partnership included suspending operations, securing the facilities, relocating equipment and evacuating employees.
The Partnership has taken all reasonable steps to assess the condition of its assets, including aerial reconnaissance, on-site inspections where possible, and review of available aerial photography. Based on these preliminary damage assessments, the Partnership noted that it believes uninsured costs associated with physical damage will not be material.
Water and wind damage along parts of the Gulf Coast have caused widespread power and communications outages, and many transportation routes normally used to access the Partnership's assets are currently impassable or subject to traffic limitations. These conditions are impacting the entire industry and make it difficult to perform on-site inspections at certain of the Partnership's facilities. At the majority of the Partnership's Gulf Coast facilities, personnel are on-site and are actively working to identify and repair damage, complete clean-up operations and mitigate any adverse effects caused by the hurricanes.
The Partnership cautioned that the aggregate impact of the hurricanes on its operations may not be known for several days or weeks and may be dependent upon when power is restored to the Partnership's various facilities and connecting third-party facilities, the extent of the damage to Partnership and third-party assets, and the potential impact of shut-in crude oil production and refining capacity. The Partnership also noted that it is too early to estimate the full financial impact to PAA resulting from reduced volumes associated with shut-in production or damage to production and refining facilities that are serviced by PAA's pipelines and terminals; however, as a result of strong performance early in the quarter and other unforecasted favorable third-quarter contributions, the Partnership continues to expect that its adjusted earnings before interest, taxes, depreciation and amortization for the full quarter will fall within the previously forecast range indicated in the Partnership's Form 8-K furnished on August 6, 2008. Because of the uncertainties regarding restoration of power and the potential damages to and delays in returning third-party offshore production platforms, refining facilities and connecting carriers to routine operations, at this time the Partnership is unable to fully assess the impact on its fourth-quarter results. The Partnership will provide guidance on the fourth quarter in connection with its third-quarter earnings release and conference call, which are scheduled for November 5th and 6th, respectively.
In response to recent events in the financial community and various inquiries, the Partnership stated that Lehman Brothers was neither a participant in its various credit facilities nor a significant industry counter-party, and that the Partnership did not have any material credit exposure to Lehman Brothers.
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 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 is headquartered in Houston, Texas.
Forward Looking Statements
Except for the historical information contained herein, the matters discussed in this news 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: shortages or cost increases in power supplies, materials or labor; weather interference with business operations or project construction; 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; continued creditworthiness of, and performance by, our counterparties, including financial institutions and trading companies with which we do business; abrupt or severe declines or interruptions in outer continental shelf production located offshore California and transported on our pipeline system; 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; unanticipated changes in crude oil market structure and volatility (or lack thereof); the effects of competition; interruptions in service and fluctuations in tariffs or volumes on third-party pipelines; increased costs or lack of availability of insurance; fluctuations in the debt and equity markets, including the price of our units at the time of vesting under our long-term incentive plans; general economic, market or business conditions; and other factors and uncertainties inherent in the marketing, transportation, terminalling, gathering and storage of crude oil and liquefied petroleum gas ("LPG") discussed in the Partnership's filings with the Securities and Exchange Commission.
Contacts:
Roy I. Lamoreaux
Manager, Investor Relations
713-646-4222 – 800-564-3036
A. Patrick Diamond
Vice President
713-646-4487 – 800-564-3036
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