Mar 04, 2003 |
PAA Completes Second Pipeline Acquisition of 2003 |
(Houston – March 4, 2003) Plains All American Pipeline, L.P. (NYSE: PAA) announced
today that it has acquired a West Texas crude oil gathering system from Navajo Refining
Company, L.P. (“Navajo”). The assets are located in the Permian Basin in West Texas and
consist of approximately 367 miles of crude oil gathering lines that currently transport
approximately 24,000 barrels per day of predominantly sour crude oil. The purchase price for the
assets is approximately $24 million.
“These Permian Basin assets complement our existing assets in West Texas,” said
Greg L. Armstrong, Chairman & Chief Executive Officer of the Partnership. “Combined with
our first quarter acquisition of an East Texas pipeline system, we have now made two strategic
and accretive acquisitions this year for a total of $43 million.”
During the first quarter, the Partnership acquired a 347-mile crude oil pipeline that
originates at Sabine Station in East Texas and terminates near Cushing, Oklahoma. The
transaction also includes approximately 700,000 barrels of crude oil storage capacity. The
Partnership intends to upgrade certain sections of this pipeline and to construct a 12-mile
extension of the system to connect it to the Partnership’s Cushing Terminal. The system
currently moves approximately 8,000 barrels of oil per day, but will have a capacity of
approximately 20,000 barrels per day upon completion of the new construction and
refurbishments. The Partnership anticipates making approximately $15 million in capital
expenditures on the assets acquired in the two transactions, with approximately half being spent
in 2003 and half in 2004.
“We fully expect both of these assets to enhance the strategic positioning of the
Partnership in two of our core operating areas,” said Armstrong. “Upon completion of the capital
projects for the East Texas pipeline assets, we will have another direct mainline connection to
our Cushing Terminal.”
The Partnership funded both transactions with borrowings under its revolving credit
facility. Armstrong noted that the Partnership will continue to follow a balanced approach to
financing its growth and places a high value on maintaining Plains All American’s strong capital
structure and high level of liquidity.
Except for the historical information contained herein, the matters discussed in this news
release are forward-looking statements that involve certain risks and uncertainties. These risks
and uncertainties include, among other things, successful integration and future performance of
assets acquired, availability of third party production volumes for transportation and marketing,
demand for various grades of crude oil and resulting changes in pricing conditions, the effects of
competition, successful third party drilling efforts, continued creditworthiness of, and
performance by, counterparties, regulatory changes, the availability of acquisition opportunities
on terms favorable to the Partnership, unanticipated shortages or cost increases in materials and
skilled labor, weather interference, and other factors and uncertainties inherent in the marketing,
transportation, terminalling, gathering and storage of crude oil discussed in the Partnership’s
filings with the Securities and Exchange Commission.
Plains All American Pipeline, L.P. is engaged in interstate and intrastate crude oil
transportation, terminalling and storage, as well as crude oil gathering and marketing activities,
primarily in Texas, California, Oklahoma, Louisiana and the Canadian Provinces of Alberta and
Saskatchewan. The Partnership’s common units are traded on the New York Stock Exchange
under the symbol “PAA.” The Partnership is headquartered in Houston, Texas.
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