"The acquisition of the Capline and Capwood interests provides Plains All American with a direct pipeline link to crude oil markets in the Midwestern U.S.," said Greg L. Armstrong, Chairman & Chief Executive Officer of the Partnership. "These assets are a complementary balance to our Cushing related transportation and storage assets as they provide the Partnership with an additional means to participate in the increasing movements of crude oil into PADD II from the south. Over the long term, as onshore domestic oil production continues to deplete, we believe these assets are well-positioned to benefit from increasing volumes of crude oil from the Gulf of Mexico or from foreign imports."
The principal asset of SPLC Capline Company is an approximate 22% undivided joint interest in the Capline Pipeline System, a 633-mile, 40-inch mainline crude oil pipeline originating in St. James, Louisiana and terminating in Patoka, Illinois. The Capline system is one of the primary transportation routes for crude oil shipped into the Midwestern U.S., accessing over 2.7 million barrels of refining capacity. With a total system operating capacity of 1.14 million barrels per day of crude oil, approximately 248,000 barrels per day are subject to the interest being acquired by the Partnership. For the first nine months of 2003, throughput on the interest being acquired averaged approximately 139,000 barrels per day. Armstrong noted that, for a variety of reasons, SPLC's Capline interest has provided the swing transportation service for shipments on the Capline system.
The principal asset of SPLC Capwood Company is an approximate 76% undivided joint interest in the Capwood Pipeline System, a 57-mile, 20-inch mainline crude oil pipeline originating in Patoka, Illinois and terminating in Wood River, Illinois. The Capwood system has an operating capacity of 277,000 barrels per day of crude oil. Of that capacity, approximately 211,000 barrels per day are subject to the interest being acquired by the Partnership. For the first nine months of 2003, throughput on the interest being acquired averaged approximately 112,000 barrels per day.
The Partnership has sufficient immediate availability under its revolving credit facilities to consummate this transaction and, consistent with its financial growth strategy, intends to fund the transaction with 50% equity.
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