As part of El Paso Corp.’s work to strengthen its balance sheet, the company has sold $10 million worth of South Louisiana condensate and crude terminalling and gathering assets to Plains All American Pipeline LP, a master limited partnership based in Houston.

Assets sold include El Paso’s 33% interest in the Atchafalaya Pipeline; 38%-56% interest in the Eugene Island Flow System (based on the segment of the line and level of throughput); 38% interest in the Burns Terminal; the Cote Blanche Gathering System; the Patterson Terminal, which has 455,000 barrels leased; and the Bay St. Elaine Gathering System. Plains expects to become the operator of all the assets.

“These assets comprise an integrated condensate and crude oil gathering and marketing business and complement our existing operations in south Louisiana,” said Greg L. Armstrong, Plains CEO. “In addition, we believe the system is favorably leveraged to the growing volume of crude oil and natural gas production in the Gulf of Mexico.” Plains funded the transaction with cash on hand and its revolving credit facility, and the effective date of the transaction was June 13.

Three years ago, El Paso bought a portion of Plains’ All American oil pipeline to convert into a natural gas pipe (see Daily GPI, Feb. 4, 2000). The pipe segment extends 1,088 miles from McCamey, TX, to Emidio, CA, and added 230 MMcf/d of capacity in 2002 on the southern system from the Permian Basin in West Texas to markets in Arizona and California (see Daily GPI, May 16, 2002).

Plains’ operations are concentrated in Texas, Oklahoma, California and Louisiana, as well as Alberta and Saskatchewan. Its primary businesses are crude oil pipeline transportation and gathering, marketing, terminalling and storage operations. Its flagship facility is the 5.3 million bbl state-of-the-art crude oil terminalling and storage facility in Cushing, OK. Cushing is the largest crude oil market hub in the United States and the designated delivery point for New York Mercantile Exchange crude oil futures contracts.

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