05-12-2012

Plains All American Pipeline to acquire crude oil rail terminals from U.S. Development Group

Plains All American Pipeline, L.P., 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.