Pacific Energy Partners, L.P. to Build Crude Oil Pipeline to Cheyenne, Wyoming
04 April 2006 - 11:00PM
Business Wire
Pacific Energy Partners, L.P. (NYSE:PPX) ("Pacific Energy")
announced that Rocky Mountain Pipeline System LLC ("RMPS"), its
wholly-owned subsidiary, has signed a transportation agreement with
Frontier Oil and Refining Company, a subsidiary of Frontier Oil
Corporation (NYSE:FTO) ("Frontier Oil"), pursuant to which RMPS
will construct a new pipeline system from Guernsey to Cheyenne,
Wyoming in exchange for Frontier Oil's ten year firm commitment to
ship 35,000 barrels per day to support this expansion project. RMPS
will also lease to Frontier Oil, on a concurrent basis,
approximately 300,000 barrels of storage capacity at Fort Laramie.
RMPS will construct a new pipeline system consisting of a 24-inch
crude oil pipeline, approximately 10 miles in length, from Guernsey
to RMPS' Fort Laramie, Wyoming tank farm and a 16-inch crude oil
pipeline, approximately 85 miles in length, from Fort Laramie,
Wyoming to Frontier Oil's Cheyenne refinery. This project is a
natural extension of Pacific Energy's existing pipeline system
serving Guernsey and Fort Laramie. Construction will begin in the
second quarter of 2006 and is expected to be completed in the
second quarter of 2007. The estimated cost of the project is $59
million, $31 million to be spent in 2006 and the remaining $28
million to be spent in 2007. Initial capacity will be 55,000
barrels per day, which can be expanded to a capacity of 90,000
barrels per day. "We are excited to be able to construct this new
pipeline that will provide additional capacity to satisfy Frontier
Oil's growing crude oil feedstock needs," stated Irv Toole,
President and Chief Executive Officer. "In addition, there will be
a seamless integration of this new pipeline into our existing Rocky
Mountain activities. When completed, this pipeline extension is
expected to be immediately accretive to distributable cash flow to
our limited partners." Pacific Energy's previously announced
expansion capital budget of $118 million in 2006 will be increased
$31 million to $149 million to accommodate this new project. About
Pacific Energy: Pacific Energy Partners, L.P. is a master limited
partnership headquartered in Long Beach, California. Pacific Energy
is engaged principally in the business of gathering, transporting,
storing and distributing crude oil, refined products and other
related products. Pacific Energy generates revenues by transporting
such commodities on its pipelines, by leasing capacity in its
storage facilities and by providing other terminaling services.
Pacific Energy also buys and sells crude oil, activities that are
generally complementary to its crude oil operations. Pacific Energy
conducts its business through two business units, the West Coast
Business Unit, which includes activities in California and the
Philadelphia, PA area, and the Rocky Mountain Business Unit, which
includes five Rocky Mountain states and Alberta, Canada. This news
release may include "forward-looking" statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. All
statements other than statements of historical fact included or
incorporated herein may constitute forward-looking statements.
Although Pacific Energy believes that the forward-looking
statements are reasonable, it can give no assurance that such
expectations will prove to be correct including the estimated
capital cost of the new pipeline. The forward-looking statements
involve risks and uncertainties that may affect Pacific Energy's
operations and financial performance. Among the factors that could
cause results to differ materially are those risks discussed in
Pacific Energy's filings with the Securities and Exchange
Commission, including our Annual Report on Form 10-K for the year
ended December 31, 2005. For additional information about the
partnership, please visit www.PacificEnergy.com.
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