Pine Prairie Energy Center, LLC ("PPEC"), an indirect subsidiary of PAA/Vulcan Gas Storage LLC, in which Plains All American Pipeline, L.P. (NYSE: PAA - News) owns a 50% interest, announced today that it is conducting a non-binding open season for an additional 16 billion cubic foot (BCF) of natural gas storage capacity. PPEC intends to file an application for this Phase II development with the Federal Energy Regulatory Commission later this year and is targeting to have the capacity available beginning in 2010.
PPEC is currently constructing the 24 BCF first phase of its salt cavern natural gas storage facility near Pine Prairie, Louisiana. The facility is located approximately 50 miles from the Henry Hub in Louisiana, a nexus of interstate and intrastate natural gas pipeline systems and the delivery point for the NYMEX natural gas futures contract.
The Phase I development will consist of three storage caverns with working capacity of eight BCF per cavern and an extensive pipeline header system. PPEC has completed drilling operations on all three currently permitted cavern wells. Construction of the gas handling and compression facilities, pipeline and interconnects are expected to be completed later this year. A portion of the first cavern is targeted for service in early 2008, with the remaining capacity being placed into service over the next three years. PPEC has reached agreements with a variety of customers for substantially all of the Phase I storage capacity. The 16 BCF Phase II development is expected to consist of two additional eight BCF caverns.
"We believe the PPEC facility offers customers unparalleled connectivity to desirable markets," said Greg L. Armstrong, Chairman and CEO of Plains All American. "PPEC customers can access natural gas markets in the Midwest, Northeast and Southeast regions of the United States through the facility's interconnections with seven interstate pipeline systems. We believe that such market access, coupled with its proximity to the Henry Hub, make PPEC one of the most strategically located natural gas storage facilities in the country. Moreover, we believe our extensive land position surrounding the facility positions us to cost effectively expand the facility over time as market conditions warrant."
By submitting a non-binding proposal, bidders are expressing an indication of interest to contract for storage services based on the terms in their proposal. Interested parties should contact Richard Tomaski at (713) 652-3669 or Brad Ledbetter at (713) 652-3671 or visit http://www.pineprairieenergycenter.com. The open season will end at 5:00 pm CST on July 31, 2007.
Plains All American Pipeline, L.P. is a publicly traded master limited partnership 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% ownership in PAA/Vulcan Gas Storage LLC, the Partnership also develops and operates natural gas storage facilities. The Partnership is headquartered in Houston, Texas, and its 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. They include statements regarding the expected timing, capacity and benefits of the Pine Prairie facilities. 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, unanticipated shortages or cost increases in power supplies, materials and skilled labor, weather interference with business operations or project construction, disruption of domestic and foreign natural gas supplies, regulatory uncertainties and other factors and uncertainties inherent in the marketing, transportation, terminalling, gathering and storage of natural gas, as well as those factors and uncertainties inherent in the Partnership's business as discussed in the Partnership's Annual Report on Form 10-K for the year ended December 31, 2006 and other filings with the Securities and Exchange Commission.
Source: Pine Prairie Energy Center, LLC
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