Apr 23, 2004 |
PAA Announces New Pipeline Construction Project |
Contacts:
Phillip D. Kramer
Executive Vice President and CFO
713/646-4560 – 800/564-3036
A. Patrick Diamond
Manager, Special Projects
713/646-4487 – 800/564-3036
FOR IMMEDIATE RELEASE
Plains All American Pipeline Announces
New Pipeline Construction Project
(Houston – April 23, 2004) Plains All American Pipeline, L.P. (NYSE: PAA), through its subsidiary Plains Pipeline, L.P., announced today that it has signed a pipeline transportation service agreement with Coffeyville Resources Refining & Marketing, LLC (“CRRM”). Under the agreement, Plains Pipeline will construct, own and operate a 100-mile, 16-inch pipeline that will transport crude oil from Plains All American’s terminal in Cushing, Oklahoma, to the Broom Station in Caney, Kansas. At Caney, the new pipeline will connect to an existing third-party pipeline that will transport crude oil to CRRM’s refinery in Coffeyville, Kansas.
The new pipeline is subject to a long-term agreement that provides the point of origination for shipments on the pipeline will be Plains All American's Cushing Terminal. In addition the agreement requires CRRM to meet minimum shipment requirements during the initial 5-year term of the contract. The Partnership has scheduled the mill runs for the pipe, is actively working on adapting the Coffeyville right-of-way for the new line and expects to begin generating revenue during the first quarter of 2005. The expected cost for the project is approximately $33 million.
“We are pleased to announce this ‘win-win’ arrangement with CRRM,” said Greg L. Armstrong, Chairman & Chief Executive Officer of Plains All American. “This organic growth project highlights the flexibility of our assets and our ability to provide value-added services to our customers. In addition, this project offers the Partnership an attractive rate of return on its incremental investment and also increases the anticipated utilization of our current Phase IV expansion project at our Cushing Terminal.”
Philip L. Rinaldi, Chief Executive Officer of Coffeyville Resources, said "We are delighted to be working closely with Plains on this important project, the completion of which will ensure our refinery access to Cushing-based crude oil for the foreseeable future."
Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements that involve certain risks and uncertainties, including risks and uncertainties typically associated with construction projects, such as unanticipated cost increases, particularly with respect to labor and steel prices, or shortages of materials or skilled labor, unavailability of equipment and weather interference. Other risks and uncertainties associated with the Partnership’s business include, among other things, refinery downtime, changes in demand for various grades of crude oil and resulting changes in pricing conditions or transmission throughput requirements, successful third party drilling efforts, availability of third party production volumes for transportation and marketing, political and economic stability of foreign sources of crude oil, continued creditworthiness of, and performance by, our counterparties, the effects of competition, the success of our risk management activities, regulatory changes 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, and crude oil gathering, marketing, terminalling and storage, as well as the marketing and storage of liquefied petroleum gas and other petroleum products, 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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