Plains All American announces Shafter expansion project

HOUSTON, Texas - Plains All American Pipeline, L.P. (NYSE: PAA) on Feb. 9 announced plans to construct its Shafter Expansion Project, which consists of a new Liquefied Petroleum Gas (LPG) pipeline system and related upgrades to its Shafter LPG processing facility near Bakersfield, Calif.

The project is underpinned by a five-year transportation agreement with a subsidiary of Occidental Petroleum Corp. and is currently expected to cost approximately $50 million. The pipeline will link the Shafter facility with Occidental's Elk Hills gas processing plant and related infrastructure. PAA has targeted placing the project into service during the third quarter of 2012.
The Shafter Expansion Project involves constructing a 15-mile LPG pipeline system with a designed throughput capacity of over 10,000 barrels per day as well as enhancing PAA's storage and rail capabilities at its Shafter facility. PAA's Shafter facility currently includes approximately 200,000 barrels of Natural Gas Liquid (NGL) storage, and a processing facility with butane isomerization capacity of 14,000 b/d and NGL fractionation capacity of 12,000 b/d.

PAA anticipates investing approximately $30 million on the Shafter Expansion Project during 2011, and making the balance of the investment during 2012. (Source: Business Wire, Feb. 9, 2011)

Occidental divesting Argentine assets, buying new U.S. assets

Occidental Petroleum Corp. (NYSE: OXY) on Dec. 10 announced it has executed an agreement with a subsidiary of China Petrochemical Corp. (Sinopec) to sell its Argentine oil and gas operations for after-tax proceeds of approximately $2.5 billion.

Occidental also announced that it had executed agreements to purchase oil and gas properties in South Texas and North Dakota for about $3.2 billion. Additionally, Occidental announced that it has signed an agreement to increase its General Partner (GP) ownership in Plains All-American Pipeline Corp. (NYSE: PAA) to approximately 35 percent; and it has agreed to acquire the remaining 50 percent joint venture interest in the Elk Hills Power Plant.

Occidental expects all of these transactions to be completed no later than the end of the first quarter of 2011, subject to normal regulatory approvals.

Dr. Ray R. Irani, chairman and CEO of Occidental, said "In light of our outlook for improved free cash flow, the Board has agreed to increase our common dividend rate by 21 percent from 38 cents per quarter to 46 cents per quarter effective with the April 15th payment. The formal dividend declaration will be made by the Board of Directors in February."

The South Texas assets will be purchased from Shell for about $1.8 billion and currently produce approximately 200 million cubic feet per day of gas equivalent. Shell has owned and operated the properties for many years. The assets will be 100 percent operated by Occidental.

Occidental is purchasing, from a private seller, approximately 180,000 net contiguous acres in North Dakota which produce from the Bakken formation and are prospective in the Three Forks formation. The purchase price is approximately $1.4 billion. The assets currently produce approximately 5,500 BOEPD and Occidental's net risked reserve exposure is in excess of 250 million barrels of oil equivalent. Combined with Occidental's other interests in the Williston Basin, Occidental will have an interest in over 200,000 net acres and over 6,000 BOEPD of production. Occidental expects to grow production in the Williston Basin to at least 30,000 BOEPD over the next five years.

Occidental is purchasing an incremental 13 percent ownership in PAA's general partner, bringing its total ownership in the GP to approximately 35 percent. PAA's operations compliment Occidental's domestic oil and gas operations. Plains is one of the largest operators of oil pipelines in North America with operations in Texas, California, and North Dakota, among other areas. (Source: Market Wire, Dec. 10, 2010)

PAA Natural Gas Storage Pine Prairie facility listed as ICE market hub

PAA Natural Gas Storage Pine Prairie facility listed as ICE market hub
HOUSTON, Texas - PAA Natural Gas Storage (PNGS), LLC on April 28 announced that IntercontinentalExchange (NYSE: ICE), a leading operator of regulated global futures exchanges and over-the-counter markets, has listed the PNGS Pine Prairie facility in Evangeline Parish, La., as a natural gas market hub on the ICE OTC trading platform. PNGS is indirectly owned 50 percent by Plains All American Pipeline, L.P. (NYSE: PAA) and 50 percent by Vulcan Capital.
"The listing of Pine Prairie Hub as a trading point by ICE is a meaningful step in the evolution of our Pine Prairie franchise," said Dean Liollio, president of PNGS. "ICE is a well-respected market platform that offers customers price discovery and the ability to buy and sell natural gas at a variety of physical market hubs throughout North America. The addition of Pine Prairie to the ICE system facilitates our customers' ability to efficiently utilize their leased storage and wheeling capacity at Pine Prairie to balance their system-wide natural gas needs and improves the liquidity of the Pine Prairie facility. Enhanced liquidity around a market hub is attractive for customers and we believe will ultimately improve the value of our asset."