Plains All American Pipeline, L.P. (NYSE: PAA),
announced today that it has agreed to acquire four operating crude oil
rail terminals, one terminal under development and various contractual
arrangements from U.S. Development Group (USD) for approximately $500
million. The transaction received early termination of the required
waiting period under the Hart-Scott-Rodino Act and is expected to close
before the end of this year.
The assets to be acquired include three crude oil rail loading terminals
located in the Eagle Ford, Bakken and Niobrara producing regions with an
aggregate daily loading capacity of approximately 85,000 barrels per
day, a rail unloading terminal at St. James, Louisiana with capacity of
approximately 140,000 barrels per day and a project to construct a crude
oil unloading terminal near Bakersfield, California.
"These assets represent a very attractive addition to our existing North
American rail activities, substantially improving our scale, scope, and
flexibility," said Greg L. Armstrong, Chairman and CEO of PAA. "Given
recent and projected increases in North American crude oil production
and volumetric and quality imbalances expected to occur in certain
regions over the next several years, we believe that strategically
located rail loading and unloading assets will continue to play an
important role in the transportation of crude oil in North America."
The Partnership stated that following the acquisition and taking into
account projects currently under development, PAA's North American crude
oil rail business platform will include five loading terminals and three
unloading terminals. Crude oil loading capacity is expected to total
approximately 250,000 barrels per day, with five facilities located in
or near key producing areas extending from the US Rockies to South
Texas. Unloading capacity is expected to total 335,000 barrels per day
with terminals located on the East Coast, Gulf Coast and West Coast. The
West Coast project will connect with PAA's West Coast pipeline and
terminal network and will have access to refinery markets in both
Northern and Southern California.
PAA also owns an extensive network of rail facilities for natural gas
liquids (NGLs) that extends throughout the U.S. and Canada and includes
18 active loading and/or unloading terminals.
To support its current and planned activities for crude oil and NGL
movements by rail, the Partnership expects to have approximately 6,700
railcars under lease by the end of 2013.
Shortly after the announcement of closing the pending transaction, the
Partnership intends to post to its website a presentation that contains
additional information regarding PAA's network of crude oil and NGL rail
assets.
PAA owns a network of approximately 18,000 miles of liquids pipelines,
120 million barrels of liquids storage capacity and handles more than 3
million barrels of physical product on a daily basis.
Plains All American Pipeline, L.P. is a publicly traded master limited
partnership engaged in the transportation, storage, terminalling and
marketing of crude oil and refined products, as well as in the
processing, transportation, fractionation, storage and marketing of
natural gas liquids. Through its general partner interest and majority
equity ownership position in PAA Natural Gas Storage, L.P. (NYSE:PNG),
PAA owns and operates natural gas storage facilities. PAA is
headquartered in Houston, Texas.
Forward Looking Statements
Except for the historical information contained herein, the matters
discussed in this release are forward-looking statements that involve
certain risks and uncertainties that could cause actual results or
outcomes to differ materially from results or outcomes anticipated in
the forward-looking statements. These risks and uncertainties include,
among other things, various factors that could frustrate or delay our
ability to consummate the transaction; various factors that could
adversely impact our ability to complete ongoing or planned expansion
projects relating to the assets to be acquired or relating to PAA's
existing assets or projects, including among other things, shortages,
cost increases or delays in receipt of supplies, materials or labor;
inability to obtain, delays in the receipt of, or other issues
associated with necessary licenses, permits, approvals, consents, rights
of way or other governmental or third party requirements; weather
interference with business operations or project construction;
environmental liabilities, issues or events that result in construction
delays or otherwise impact targeted in-service dates; the successful
integration and future performance of the acquired assets or businesses;
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 crude oil volumes transported by
rail, 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 served by our rail facilities and other
factors affecting demand for various grades of crude oil and resulting
changes in pricing conditions or transportation requirements; our
ability to obtain debt or equity financing on satisfactory terms to fund
our expansion and development projects; the impact of current and future
laws, rulings, governmental regulations, accounting standards and
statements and related interpretations; the effects of competition;
interruptions in service on third-party pipelines; general economic,
market or business conditions and the amplification of other risks
caused by volatile financial markets, capital constraints and liquidity
concerns; and other factors and uncertainties inherent in the
transportation, storage, terminalling and marketing of crude oil as
discussed in the Partnership's filings with the Securities and Exchange
Commission.
Plains All American Pipeline, L.P.
Investors:
Roy I.
Lamoreaux, 713/646-4222 – 800/564-3036
Director, Investor Relations
or
Media:
Brad
Leone, 713/646-4196
Manager, Communications