Plains All American (PAA) Updates on $620M of Acquisitions; Sees Q4 EBITDA Exceeding Midpoint
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General and administrative expenses: 70M
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Financial Fact:
General and administrative expenses: 70M
Today's EPS Names:
EDXC, BICX, FBPI, More
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Plains All American Pipeline, L.P. (NYSE: PAA), has completed two acquisitions and entered into definitive agreements for two additional acquisitions since the beginning of the 2011 fourth quarter. Aggregate consideration for these four acquisitions is approximately $620 million.
The Partnership recently closed the acquisition of 100 percent of the member interests in Velocity South Texas Gathering, LLC (“Velocity”) from Velocity Midstream Partners, LLC. The assets acquired include approximately 120 miles of crude oil and condensate gathering and transportation pipelines currently in advanced stages of construction in the Eagle Ford area of South Texas.
Upon completion, this gathering system will have a throughput capacity of approximately 150,000 barrels per day and an aggregate of 185,000 barrels of condensate storage capacity located at Catarina and Gardendale. The system, which extends through portions of Dimmit, Webb and La Salle counties, is underpinned by long-term acreage dedications or volume commitments from several large producers. The pipeline system has the ability to be expanded up to 185,000 barrels per day and both terminal locations have room for future expansion.
The Gardendale storage hub will have access to PAA’s Eagle Ford pipeline as well as other transportation alternatives, including third party pipelines, truck and rail. Over the next 18 to 24 months, PAA expects to complete current construction, extend the system to access additional condensate barrels and other crude oil-oriented portions of the Eagle Ford resource play, and increase terminal capacity at Gardendale from 150,000 barrels to 250,000 barrels.
Simmons & Company International served as financial advisor to PAA in its acquisition of the member interests in Velocity and Evercore Partners served as the financial advisor to Velocity Midstream Partners, LLC.
In early October, the Partnership also closed the acquisition of a small trucking operation in Canada.
The first transaction with Western includes a 6.6 million barrel crude oil, refined products and LPG storage and distribution terminal located on an idled refinery site in Yorktown, Va. Over the next 18 to 24 months, PAA plans to disassemble and sell surplus equipment located at the acquired site and enhance the connectivity and performance of the Yorktown terminal. The facility will have access to a number of transportation alternatives, including the Colonial Pipeline, deep-water port access on the York River capable of receiving and loading ships and barges, and access to rail and truck loading and unloading facilities. The Yorktown facility will be capable of terminalling and storing crude oil, refined products, propane, butane, ethanol and other bio-diesel fuels.
The second transaction with Western includes an 82-mile, 16-inch pipeline segment and associated connections and tankage in New Mexico. The pipeline will provide up to 100,000 barrels per day of crude oil transportation capacity from southeastern New Mexico (an area with increased drilling activity) to the Jal, New Mexico station, the origination of PAA’s Basin Pipeline system.
PAA owns a network of approximately 16,000 miles of liquids pipelines, approximately 90 million barrels of liquids storage capacity and handles more than 3 million barrels of physical product on a daily basis.
PAA expects Adjusted EBITDA for the fourth quarter to exceed the midpoint of its quarterly guidance by approximately 10% to 15%. This expected performance is the result of strong fundamentals, generally favorable market conditions and solid execution in all three business segments.
The Partnership recently closed the acquisition of 100 percent of the member interests in Velocity South Texas Gathering, LLC (“Velocity”) from Velocity Midstream Partners, LLC. The assets acquired include approximately 120 miles of crude oil and condensate gathering and transportation pipelines currently in advanced stages of construction in the Eagle Ford area of South Texas.
Upon completion, this gathering system will have a throughput capacity of approximately 150,000 barrels per day and an aggregate of 185,000 barrels of condensate storage capacity located at Catarina and Gardendale. The system, which extends through portions of Dimmit, Webb and La Salle counties, is underpinned by long-term acreage dedications or volume commitments from several large producers. The pipeline system has the ability to be expanded up to 185,000 barrels per day and both terminal locations have room for future expansion.
The Gardendale storage hub will have access to PAA’s Eagle Ford pipeline as well as other transportation alternatives, including third party pipelines, truck and rail. Over the next 18 to 24 months, PAA expects to complete current construction, extend the system to access additional condensate barrels and other crude oil-oriented portions of the Eagle Ford resource play, and increase terminal capacity at Gardendale from 150,000 barrels to 250,000 barrels.
Simmons & Company International served as financial advisor to PAA in its acquisition of the member interests in Velocity and Evercore Partners served as the financial advisor to Velocity Midstream Partners, LLC.
In early October, the Partnership also closed the acquisition of a small trucking operation in Canada.
The first transaction with Western includes a 6.6 million barrel crude oil, refined products and LPG storage and distribution terminal located on an idled refinery site in Yorktown, Va. Over the next 18 to 24 months, PAA plans to disassemble and sell surplus equipment located at the acquired site and enhance the connectivity and performance of the Yorktown terminal. The facility will have access to a number of transportation alternatives, including the Colonial Pipeline, deep-water port access on the York River capable of receiving and loading ships and barges, and access to rail and truck loading and unloading facilities. The Yorktown facility will be capable of terminalling and storing crude oil, refined products, propane, butane, ethanol and other bio-diesel fuels.
The second transaction with Western includes an 82-mile, 16-inch pipeline segment and associated connections and tankage in New Mexico. The pipeline will provide up to 100,000 barrels per day of crude oil transportation capacity from southeastern New Mexico (an area with increased drilling activity) to the Jal, New Mexico station, the origination of PAA’s Basin Pipeline system.
PAA owns a network of approximately 16,000 miles of liquids pipelines, approximately 90 million barrels of liquids storage capacity and handles more than 3 million barrels of physical product on a daily basis.
PAA expects Adjusted EBITDA for the fourth quarter to exceed the midpoint of its quarterly guidance by approximately 10% to 15%. This expected performance is the result of strong fundamentals, generally favorable market conditions and solid execution in all three business segments.
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