Plains All American Pipeline LP (PAA) last week took several steps to expand its North American oil and natural gas operations with the biggest an agreement to buy BP plc’s Canadian natural gas liquids (NGL) and liquefied petroleum gas (LPG) business.

Subsidiary Plains Midstream Canada LLC agreed to pay $1.67 billion to acquire the BP assets, which were put on the market last year (see NGI, Jan. 3). The acquisition is expected to close by mid-2012, subject to regulatory approval and customary closing conditions.

“BP’s Canadian NGL business is an asset-rich platform that significantly expands our LPG asset footprint, providing a supply-based complement to our existing demand-focused business and making PAA one of the largest LPG service providers in North America,” said PAA CEO said Greg L. Armstrong. “We expect to be able to generate meaningful operating and commercial synergies by more fully connecting, integrating and utilizing these assets together with our existing North American LPG assets and our Canadian crude oil assets and activities.”

The assets to be acquired include ownership stakes in and contractual rights relating to about 2,600 miles of pipelines, 20 million bbl of LPG storage capacity, seven fractionation plants with 232,000 b/d of capacity, multiple straddle plants and two field gas processing plants with an aggregate capacity of 8 Bcf/d. In addition the acquisition would include close to 10 million bbl of long-term and seasonal NGL inventory as of Oct. 1, 2011.

BP’s Canadian business also 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. Collectively the BP assets and activities provide access to 140,000-150,000 b/d of NGL supply transported through a fully integrated network to fractionation facilities and markets in Western and Eastern Canada, as well as the Great Lakes region of the United States.

PAA also announced that it has put in place four other acquisitions since the start of October, with two completed and two agreements in place that together total around $620 million.

The two completed transactions include the acquisition of Velocity South Texas Gathering LLC, a crude oil and condensate gathering system. The gathering system, when completed, is expected to have a throughput capacity of 150,000 b/d and an aggregate of 185,000 bbl of condensate storage capacity at Catarina and Gardendale.

The system, which extends through portions of Dimmit, Webb and La Salle counties in Texas, is underpinned by long-term acreage dedications or volume commitments from several large producers, PAA noted. The pipeline system has the ability to be expanded up to 185,000 b/d and both terminal locations have room for future expansion.

The Gardendale storage hub would have access to PAA’s Eagle Ford Shale pipeline as well as other transportation alternatives, including third party pipelines, truck and rail. Over the next 18-24 months, PAA expects to complete current construction, extend the system to access additional condensate barrels and other crude oil-oriented portions of the Eagle Ford resource play, as well as increase terminal capacity at Gardendale from 150,000 bbl to 250,000 bbl.

The partnership also has acquired a Canadian trucking operation and signed definitive agreements with Western Refining to purchase a multi-product storage facility in Yorktown, VA, and a pipeline in the Permian Basin.

“These four transactions are bolt-on acquisitions and provide an excellent complement to our existing infrastructure,” said Armstrong. “We expect to generate meaningful synergies as we interconnect and integrate these assets into our operations. Including our planned expansion activities, we currently expect to invest an additional $100-150 million in these assets over the next 24 months.”

PAA, based in Houston, now owns a network of around 16,000 miles of liquids pipelines, 90 million bbl of liquids storage capacity and handles more than 3 million bbl of physical product on a daily basis.

©Copyright 2011Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.