Plains All American Pipeline to acquire West Texas pipeline assets from Unocal
The following news release was issued by Plains All American Pipeline, L.P.
HOUSTON, Oct. 1 -- Plains All American Pipeline, L.P. (NYSE: PAA) announced today that it has entered into an agreement to acquire the Dollarhide Pipeline System and Midland Tank Farm Facilities from Unocal Pipeline Company for approximately $2.6 million.
"The acquisition of the Dollarhide Pipeline System and the Midland Tank Farm Facilities will augment our gathering and marketing and pipeline transportation efforts in the West Texas market," commented Harry Pefanis, President and Chief Operating Officer of Plains All American. "This transaction is another example of the way in which the Partnership has been able to make attractive, step-out acquisitions in areas where we have existing operations. We expect this transaction to be accretive to earnings per unit and cash flow per unit, generating an annual 15% - 20% return on capital."
The Dollarhide Pipeline System currently transports approximately 4,500 barrels per day of crude oil to the Midland market. The acquisition also includes approximately 215,000 barrels of crude oil storage capacity located along the system and in Midland. In conjunction with the transaction, PAA has agreed to enter into a connection agreement with a large independent producer that provides for the dedication of additional volumes to the system for an initial term of five years. Both transactions are expected to close in the next several weeks.
Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements that involve certain risks and uncertainties. These risks and uncertainties include, among other things, successful integration and future performance of assets acquired, availability of third party production volumes for transportation and marketing, demand for various grades of crude oil and resulting changes in pricing conditions, successful third party drilling efforts, regulatory changes, the availability of acquisition opportunities on terms favorable to the Partnership, unanticipated shortages or cost increases in materials and skilled labor, weather interference, 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, terminalling and storage, as well as crude oil gathering and marketing activities, primarily in Texas, California, Oklahoma, Louisiana, the Gulf of Mexico 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.
Updated: October 2001