PAA to Acquire Crude Oil Pipeline Systems

Plains All American Pipeline's subsidiary, Plains Pipeline L.P., has signed a definitive agreement to acquire interests in certain Gulf Coast crude oil pipeline systems from BP Oil Pipeline Company for approximately $133.5 million. The transaction is expected to close on June 30, 2006, subject to satisfaction of Hart-Scott-Rodino requirements and other customary closing conditions as well as the expiration of preferential purchase rights on certain of the assets.

The assets to be acquired consist of a 100% interest in the Bay Marchand-to-Ostrica-to-Alliance Pipeline ("BOA"), a 64.35% interest in a segment of the Clovelly-to-Meraux Pipeline ("CAM") and various interests in segments of the High Island Pipeline System ("HIPS"). BOA and CAM are the two primary suppliers of ConocoPhillips' Alliance refinery, which is located in Belle Chasse, Louisiana. Substantially all of the acquired capacity on these two systems is subject to long-term leases whereby the pipeline owner receives an annual service payment and reimbursement for the vast majority of the pipeline's direct costs, as well as an annual index-based escalator. HIPS is a network of offshore gathering pipeline systems that delivers crude oil to various points in or around Texas City, Texas. Total pipeline mileage for these three systems is approximately 320 miles.

"These quality assets will be an excellent addition to our existing crude oil operations in the Gulf Coast region," said Greg Armstrong, Chairman and CEO. "In addition, we expect the long-term contracts associated with these assets to provide stable, fee-based cash flow for many years to come." Armstrong stated that the multiple of purchase price to expected annual EBITDA from these assets is expected to be approximately 9.0x.

Plains All American Pipeline, L.P. is engaged in interstate and intrastate crude oil transportation and crude oil gathering, marketing, terminalling and storage, as well as the marketing and storage of liquefied petroleum gas and other petroleum products, in the United States and Canada. Through its 50% ownership in PAA/Vulcan Gas Storage LLC, the Partnership is also engaged in the development and operation of natural gas storage facilities.

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