Plains All American to buy Canadian NGL, LPG business from BP

Plains All American Pipeline LP’s wholly owned subsidiary Plains Midstream Canada ULC will buy BP PLC’s Canadian NGL and LPG business. Assets include ownership interests of varying levels in and contractual rights relating to roughly 2,600 miles of pipeline, 20 million bbl of LPG storage, seven fractionation plants with about 232,000 b/d of capacity, multiple straddle plants, and two field gas processing plants with an aggregate capacity of 8 bcfd.

The purchase also included about 10 million bbl of long-term and seasonal NGL inventory as of Oct. 1.

The business includes various supply contracts at other field gas processing plants, shipping arrangements on third-party NGL pipelines, and long-term leases on 720 rail cars used to move product among various locations. The BP assets and activities collectively provide access to 140,000-150,000 b/d of NGL transported through a fully integrated network to fractionation facilities and markets in Western and Eastern Canada and the US Great Lakes region.

Barclays Capital served as financial advisor and Bennett Jones LLP as legal counsel to PAA in connection with the transaction, expected to close late first-quarter or early second-quarter 2012 for about $1.67 billion, subject to regulatory approval and customary closing conditions.

Plains announced expansion of its crude transportation capacity serving the Bone Spring play in West Texas’ Delaware basin earlier this year (OGJ Online, June 17, 2011).

Contact Christopher E. Smith at chriss@ogjonline.com.

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