PAA Plains All American Pipeline

HOUSTON, Dec. 13 /PRNewswire-FirstCall/ -- Plains All American Pipeline, L.P. (NYSE:PAA) announced today a new $77 million terminal project at Patoka, Illinois and provided a preliminary forecast of its 2007 expansion capital program totaling approximately $500 million. In addition, the Partnership also announced that it had received aggregate equity commitments for $300 million from a group of institutional and private investors. The Partnership intends to complete the equity issuance by mid-December. "Plains All American continues to enhance the visibility of its future growth through the development and execution of additional internal growth projects," said Greg L. Armstrong, Chairman and Chief Executive Officer of the Partnership. "Our preliminary 2007 expansion capital program contemplates an approximate 60% increase over 2006 levels. The program will include the Patoka Terminal project and ongoing activities on previously announced projects such as Cushing Phase VI and St. James Phase II, as well as projects gained through the Pacific merger." "Notably, we continue to execute on our financial growth strategy by proactively and prudently raising the equity capital needed to support our current and future growth," continued Armstrong. "During 2006, we have invested approximately $3.3 billion of capital, including the $2.4 billion Pacific merger. Combined with equity financings completed earlier this year, equity issued in conjunction with the Pacific merger and cash flow generated in excess of distributions, these equity commitments will enable us to not only complete the target equity funding for our 2006 activities and exit the year with a strong balance sheet, but also to enter 2007 with a significant portion of our 2007 expansion capital program pre-funded." The Partnership has acquired approximately 120 acres of land at the Patoka interchange and intends to build a 2.6 million barrel crude oil storage and terminalling facility. Subject to unforeseen weather or permitting delays, the Partnership anticipates the new facility will become operational during the second half of 2008, with a total investment of approximately $77 million, including land costs. Approximately half of that amount is projected to be invested in 2007 with the remainder to be invested in 2008. Matrix Service Industrial Contractors Inc., a subsidiary of Matrix Service Company of Tulsa, Oklahoma, will act as primary contractor for the project. "Patoka, Illinois, is a strategic location for the movement of foreign and domestic crude oil into PADDs II and III and the movement of condensate into Canada," said Armstrong. "As a growing regional market hub, Patoka has access to foreign crude oil volumes moving north on the Capline and Capwood pipelines as well as Canadian barrels moving south, which makes it an important crude oil sourcing point for refineries. This project is consistent with PAA's continued build-out of strategically located storage facilities at key market hubs and, similar to our other major terminal projects, will have the ability to be expanded should market conditions warrant." The Partnership owns a 22% interest in the Capline Pipeline System and a 76% interest in the Capwood Pipeline System. Plains All American also provided a preliminary forecast of approximately $500 million for its 2007 expansion capital program. The Partnership is currently in the process of completing its annual planning process and intends to provide more detailed guidance on its capital program in conjunction with its year-end conference call in late February. Armstrong noted that in addition to the projects included in the preliminary 2007 capital program, the Partnership continues to advance additional organic growth projects for potential implementation in 2007 and beyond and to evaluate and pursue additional acquisition opportunities that complement its asset base and business model. The Partnership received equity commitments from a group of entities affiliated with sixteen institutional and private investors led by GPS Partners LLC and co-led by Swank Capital, LLC, Kayne Anderson Capital Advisors, Zimmer Lucas Capital, LLC and EnCap Investments. The commitments provide for the sale by PAA of approximately 6.2 million common units, which will generate aggregate net proceeds of approximately $306 million, including the general partner's proportionate capital contribution and estimated expenses associated with the issuance. The common units will be issued under an existing shelf registration statement of the Partnership. The price to the investors is $48.67 per unit, which represents an approximate 4.5% discount to the closing price of the Common Units on December 11, 2006 and an approximate 3.0% discount to the average closing price for the twenty trading day period ending on December 11, 2006. Plains All American Pipeline, L.P. is 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% equity ownership in PAA/Vulcan Gas Storage, LLC, the Partnership also develops and operates natural gas storage facilities. Headquartered in Houston, Texas, the Partnership's 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 under the Private Securities Litigation Reform Act of 1995. They include statements regarding the expected timing, cost, capacity and benefits of the Patoka Terminal project, projected expansion capital expenditures and the sale of common units. 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: our failure to successfully integrate the respective business operations of Pacific or our failure to successfully integrate any future acquisitions; the failure to realize the anticipated cost savings, synergies and other benefits of the merger with Pacific; the success of our risk management activities; environmental liabilities or events that are not covered by an indemnity, insurance or existing reserves; maintenance of our credit rating and ability to receive open credit from our suppliers and trade counterparties; abrupt or severe declines or interruptions in outer continental shelf production located offshore California and transported on our pipeline system; declines in volumes shipped on the Basin Pipeline, Capline Pipeline and our other pipelines by us and third party shippers; the availability of adequate third- party production volumes for transportation and marketing in the areas in which we operate; demand for natural gas or various grades of crude oil and resulting changes in pricing conditions or transmission throughput requirements; fluctuations in refinery capacity in areas supplied by our main lines; the availability of, and our ability to consummate, acquisition or combination opportunities; our access to capital to fund additional acquisitions and our ability to obtain debt or equity financing on satisfactory terms; risks associated with operating in lines of business that are distinct and separate from our historical operations; unanticipated changes in crude oil market structure and volatility (or lack thereof); the impact of current and future laws, rulings and governmental regulations; the effects of competition; continued creditworthiness of, and performance by, counterparties; interruptions in service and fluctuations in tariffs or volumes on third party pipelines; increased costs or lack of availability of insurance; fluctuations in the debt and equity markets, including the price of our units at the time of vesting under our Long-Term Incentive Plans; the currency exchange rate of the Canadian dollar; shortages or cost increases of power supplies, materials or labor; weather interference with business operations or project construction; general economic, market or business conditions; risks related to the development and operation of natural gas storage facilities and other factors and uncertainties inherent in the marketing, transportation, terminalling, gathering and storage of crude oil and liquefied petroleum gas discussed in the Partnership's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2005 and Quarterly Reports on Form 10-Q for the quarterly periods ended June 30, 2006 and September 30, 2006. DATASOURCE: Plains All American Pipeline, L.P. CONTACT: Phillip D. Kramer, Executive Vice President and CFO, +1-713-646-4560, or A. Patrick Diamond, Director, Strategic Planning, +1-713-646-4487, both of Plains All American Pipeline, L.P., 1-800-564-3036 Web site: http://www.paalp.com/

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