Plains All American announces acquisitions

July 7, 2003
Plains All American Pipeline LP, Houston, said Monday it completed three acquisitions of crude oil pipeline and LPG storage assets for a total $29 million during the second quarter.

By OGJ editors

HOUSTON, July 7 -- Plains All American Pipeline LP, Houston, said Monday it completed three acquisitions of crude oil pipeline and LPG storage assets for a total $29 million during the second quarter.

The partnership obtained an 8.8% interest in the Mesa Pipeline System in Permian basin of West Texas from Unocal Corp., with an effective acquisition date of May 5. That system originates at Midland and terminates at Colorado City, Tex.

That transaction gives the partnership access to net capacity for 28,000 b/d of crude on the system, officials said.

Effective June 30, the partnership acquired from Marathon Ashland Pipe Line LLC, a subsidiary of Marathon Ashland Petroleum LLC, a 16 in. diameter, 95-mile mainline crude pipeline that originates at the Iraan station in Pecos County, Tex., and stretches north to its terminus in Midland, where it can deliver crude to the Basin Pipeline system and the Mesa Pipeline system, which is operated by an affiliate of ChevronTexaco Inc.

The Iraan-to-Midland Pipeline system currently is delivering 38,000 b/d of oil, up from 21,000 b/d in 2002, said officials.

The underground Alto storage facility in Alto, Mich., was acquired from Ohio-Northwest Development Inc. effective Apr. 1. That facility, located 20 miles southeast of Grand Rapids, is capable of storing over 38 million gal. of LPG.

"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," said Greg L. Armstrong, chairman and CEO of the Partnership.

"The Alto facility will further support the expansion of our LPG business in Canada and the northern tier of the US, as we combine the facility's existing fee-based storage business with our wholesale propane marketing expertise," Armstrong said. "In addition, there may be opportunities to expand this facility as LPG markets continue to develop in the region."

He said all three acquisitions are expected to be immediately accretive to the partnership's earnings and cash flow. The company declined to give a breakdown of the total paid for these acquisitions.

With these latest transactions, Plains All American completed six acquisitions this year, officials said. The partnership is engaged in interstate and intrastate crude oil transportation, terminals, 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.