Jul 07, 2003 |
PAA Announces Three Acquisitions of Pipeline and Storage Assets |
(Houston – July 7, 2003) Plains All American Pipeline, L.P. (NYSE: PAA) announced today that during the second quarter it completed three additional acquisitions of crude oil pipeline and liquefied petroleum gas (“LPG”) storage assets for aggregate consideration of approximately $29 million, including estimated transaction costs.
The acquired assets are as follows: Mesa Pipeline System. The Partnership acquired an 8.8% interest in the Mesa Pipeline System from Unocal Corporation (NYSE: UCL) with an effective date of May 5, 2003. The Mesa Pipeline System is located in the Permian Basin in West Texas, originating at Midland, Texas, and terminating at Colorado City, Texas. As a result of the transaction, the Partnership will have access to net capacity of approximately 28,000 barrels of crude oil per day on the system. Iraan to Midland Pipeline System. The Iraan to Midland Pipeline System was acquired from Marathon Ashland Pipe Line LLC, a subsidiary of Marathon Ashland Petroleum LLC, with an effective date of June 30, 2003. The Iraan to Midland Pipeline System is a 16-inch, 95-mile mainline crude oil pipeline that originates at the Iraan Station in Pecos County, Texas, and traverses north through McCamey and Crane before it reaches its terminus in Midland. At Midland, the system has the ability to deliver crude oil to the Basin Pipeline System and the Mesa Pipeline System, which is operated by an affiliate of ChevronTexaco. In 2002, the Iraan to Midland Pipeline System delivered approximately 21,000 barrels per day of crude oil and it is currently delivering approximately 38,000 barrels per day of crude oil. Alto Storage Facility. The Alto Storage Facility was acquired from Ohio-Northwest Development Inc. with an effective date of April 1, 2003. The underground facility, which is located in Alto, Michigan, approximately 20 miles southeast of Grand Rapids, is capable of storing over 38 million gallons of LPG.
“We are pleased to add another set of strategic assets to our portfolio,” said Greg L. Armstrong, Chairman & Chief Executive Officer of the Partnership. “The Iraan to Midland Pipeline System and the Mesa Pipeline System are bolt-on transactions that fit nicely with the assets that we acquired from Shell last year as both systems connect to our Basin Pipeline System. In addition, the Iraan to Midland system also has the ability to deliver into the Mesa system.” Armstrong continued, “The Alto facility will further support the expansion of our LPG business in Canada and the northern tier of the U.S. as we combine the facility’s existing fee-based storage business with our wholesale propane marketing expertise. In addition, there may be opportunities to expand this facility as LPG markets continue to develop in the region.” Armstrong noted that all three transactions are expected to be immediately accretive to earnings and cash flow. With these transactions, the Partnership has now completed six acquisitions in 2003, including the recently announced acquisition of South Louisiana assets from El Paso and the first quarter acquisitions of the Red River Pipeline System in East Texas and southern Oklahoma from BP and the Itaan Pipeline System in West Texas from Navajo.
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, continued creditworthiness of, and performance by, our counterparties, the effects of competition, the success of our risk management activities, successful third party drilling efforts, regulatory changes, 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 and LPG 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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