| Jan 23, 2007 |
| PAA/Vulcan Gas Storage Acquires Potential Expansion Acreage at Pine Prairie; Provides Status Report on Gas Storage Activities |
Contacts:
Phil D. Kramer
Executive Vice President & CFO
713/646-4560 – 800/564-3036
Roy I. Lamoreaux
Manager, Investor Relations
713-646-4222 – 800/564-3036
FOR IMMEDIATE RELEASE
PAA/Vulcan Gas Storage Acquires Potential Expansion Acreage at Pine Prairie; Provides Status Report on Gas Storage Activities
(Houston – January 23, 2007) PAA/Vulcan Gas Storage LLC ("PAA/Vulcan"), in which Plains All American Pipeline, L.P. (NYSE: PAA) owns a 50% interest, announced today that one of its wholly owned subsidiaries had purchased an additional 240 acres of land adjacent to its existing Pine Prairie gas storage project to support future expansion activities. Including existing land holdings, the acquisition of the additional acreage could support the development of up to 11 additional storage caverns, bringing potential storage capacity at the facility to 112 BCF, subject to market conditions and demand for storage. Pine Prairie Energy Center, LLC ("PPEC") has begun the process to expand the facility and intends to file an application with the Federal Energy Regulatory Commission in the near future.
PPEC is an indirect wholly owned subsidiary of PAA/Vulcan and is constructing a 24 billion cubic foot (BCF) salt cavern natural gas storage facility near Pine Prairie, Louisiana. The facility is located approximately 50 miles from the Henry Hub in Louisiana, a nexus of interstate and intrastate natural gas pipeline systems and the delivery point for the NYMEX natural gas futures contract. The initial phase of the facility will consist of three storage caverns with working capacity of eight BCF per cavern and an extensive header system. Agreements have been executed for the 75-mile header system to be connected to a total of seven interstate pipeline systems serving consumer markets in the Midwest, Northeast and Southeast. In addition, PPEC intends to pursue additional interconnects with pipeline infrastructure to be constructed in support of liquefied natural gas ("LNG") regasification facilities along the Gulf Coast.
PPEC has completed drilling operations on two of the three cavern wells and drilling operations on the third cavern commenced in late December. Leaching operations on the first cavern well began in November 2006, construction of the gas handling and compression facilities began in December 2006 and construction on the pipeline interconnects is anticipated to begin during January 2007. The caverns are expected to be placed in service in stages over the next three years. PPEC has commitments from a variety of customers for substantially all of the storage capacity of the first three caverns for periods ranging from three to five years. These customers include utilities, marketers, producers and LNG-related participants.
"Construction of the Pine Prairie facility began in earnest following the acquisition of PPEC's parent company by PAA/Vulcan in late 2005," said Greg L. Armstrong, Chairman and CEO of Plains All American. "We believe PPEC is poised to become an important part of the infrastructure required to support increasing demand for natural gas storage, including the new LNG regasification terminals currently being constructed in the Gulf Coast area. We believe that the Pine Prairie facility, with at least eight direct interconnects with seven interstate pipelines serving key consumer markets as well as its close proximity to the Henry Hub, is in a prime location. Our expanded land position will support up to 11 additional storage caverns and our business strategy, which is comparable to that of our crude oil storage facility in Cushing, is to build additional storage to meet rising demand over time."
For more information on PPEC, please visit www.pineprairieenergycenter.com.
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 also develops and operates natural gas storage facilities. The Partnership is headquartered in Houston, Texas, and its common units are traded on the New York Stock Exchange under the symbol "PAA."
Forward Looking Statements
Certain statements made herein are forward-looking statements, including statements regarding the expected timing, operational and storage capacity, expansion capabilities and benefits of the Pine Prairie facilities. These statements are based on management's current expectations and estimates; actual results may differ materially due to certain risks and uncertainties. These risks and uncertainties include, among other things, unanticipated shortages or cost increases in power supplies, materials and skilled labor, unexpected subsurface conditions, weather interference with business operations or project construction, disruption of domestic and foreign natural gas supplies, regulatory uncertainties, and other factors and uncertainties inherent in the terminalling and storage of natural gas, including those discussed in PAA's Annual Report on Form 10-K for the year ended December 31, 2005, Quarterly Report on Form 10-Q for the quarter ended June 30, 2006 and other filings with the Securities and Exchange Commission.
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