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Plains All American to buy BP NGL, LPG business
Plains All American Pipeline LP's wholly owned subsidiary Plains Midstream Canada ULC will buy BP PLC's Canadian NGL and LPG business. Assets include ownership interests of varying levels in and contractual rights relating to roughly 2,600 miles of pipeline, 20 million bbl of LPG storage, seven fractionation plants with about 232,000 b/d of capacity, multiple straddle plants, and two field gas processing plants with an aggregate capacity of 8 bcfd.
The purchase also included about 10 million bbl of long-term and seasonal NGL inventory as of Oct. 1.
The business includes various supply contracts at other field gas processing plants, shipping arrangements on third-party NGL pipelines, and long-term leases on 720 rail cars used to move product among various locations. The BP assets and activities collectively provide access to 140,000-150,000 b/d of NGL transported through a fully integrated network to fractionation facilities and markets in Western and Eastern Canada and the US Great Lakes region.
Barclays Capital served as financial advisor and Bennett Jones LLP as legal counsel to PAA in connection with the transaction, expected to close late first-quarter or early second-quarter 2012 for about $1.67 billion, subject to regulatory approval and customary closing conditions.
Plains announced expansion of its crude transportation capacity serving the Bone Spring play in West Texas' Delaware basin earlier this year (OGJ Online, June 17, 2011).
BP sees two pipeline choices from Shah Deniz
BP PLC said two alternative pipeline projects are under consideration for the transport of natural gas from its giant Shah Deniz field in the wake of recent agreements signed by Azerbaijan and Turkey.
"The agreements allow two alternative pipelines to be considered in parallel," said BP. One alternative consists of "an upgrade of the existing Turkish Petroleum Pipeline Corp., or BOTAS, pipeline network, while the other would entail construction of an entirely new standalone pipeline across Turkey."
The statement came after the boards of BP, BOTAS, and State Oil Co. of the Azerbaijan Republic (SOCAR) ratified 14 agreements reached last month by Turkey's Prime Minister Recep Tayyip Erdogan and Azerbaijan's President Ilham Aliyev on development of Shah Deniz field.
"The agreements provide a legal framework for the sale of Shah Deniz gas to Turkey and its transportation to the European markets through Turkey, starting in 2017," BP said.
It added that the agreements represent "a major step towards the opening of the so-called Southern Gas Corridor—bringing gas from the Caspian Sea to Europe for the very first time."
Four pipeline projects, including the European Union-backed Nabucco, are currently competing for gas from Shah Deniz. The others include the Trans-Adriatic Pipeline (TAP), IGI-Poseidon (ITGI), and the South-East European Pipeline (SEEP). The four proposed lines are now under consideration by the Shah Deniz consortium with a decision expected during first-quarter 2012.
According to analyst Andrew Neff of IHS Global Insight, BP's comments on the issue suggest that it is "not sold on Nabucco, nor TAP, or ITGI, but may instead be lobbying Azerbaijan to support its own recently unveiled proposal, the [SEEP system]."
BP operates Shah Deniz field and holds a 25.5% stake. Statoil also holds 25.5%, while SOCAR, Lukoil Holdings, Total, and National Iranian Oil Co. hold 10% each. TPAO holds 9%.
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