PAA Plains All America Pipeline Jun 2009 Presentation
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Transcript of PAA Plains All America Pipeline Jun 2009 Presentation
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PAA: Tested. Delivered. Posi
2009 Analyst Meeting
New York, NYJune 10, 2009
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2009 Analyst Meeting Agenda
Approximate
Timing Presenter
12:00pm - 1:00pm Registration / Lunch
1:00pm - 1:10pm Opening Remarks Roy Lamoreaux
1:10pm - 1:30pm PAA History, Business Model & Positioning for Greg Armstrong
Current Market Environment
1:30pm - 1:50pm Overview of PAA Business Activities & Impact on PAA During Harry Pefanis
an Extended Period of Economic Weakness
1:50pm - 2:00pm Q&A Session
2:00pm - 2:20pm Commercial Activities John von Berg
2:20pm - 2:40pm US Capital Projects Mark Gorman
2:40pm - 2:50pm Q&A Session
2:50pm - 3:10pm Break
3:10pm - 3:30pm Plains Midstream Canada Dave Duckett
3:30pm - 3:50pm PAA Natural Gas Storage Dean Liollio
3:50pm - 4:00pm Q&A Session
4:00pm - 4:20pm Financial Overview Al Swanson
Charles Kingswell-Smith
4:20pm - 4:35pm PAA Strategic Positioning Pat Diamond
4:35pm - 4:45pm Closing Remarks Greg Armstrong
4:45pm - 5:00pm Q&A Session
5:00pm - 6:00pm Cocktail Reception
Act iv ity / Presentat ion
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333 Clay St., Ste. 1600 Houston, TX 77002
Investor Contact Information
Al SwansonSr. VP and CFODirect: 713-646-4455FAX: 713-646-4564
Email: [email protected]
Pat DiamondVice PresidentDirect: 713-646-4487FAX: 713-646-4572Email: [email protected]
Roy LamoreauxMgr., Investor Relations &Equity Capital MarketsDirect: 713-646-4222FAX: 713-646-4572Email: [email protected]
Charles Kingswell-SmithVice President & TreasurerDirect: 713-993-5318FAX: 713-646-4313
Email: [email protected]
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Plains All American Pipeline, L.P.
Management Bios
Greg L. Armstrong
Chairman and CEO
Greg L. Armstronghas served as Chairman of the Board and Chief Executive Officer since
our formation in 1998. He has also served as a director of our general partner or former
general partner since our formation. In addition, he was President, Chief Executive Officer
and director of Plains Resources Inc. from 1992 to May 2001. He previously served Plains
Resources as: President and Chief Operating Officer from October to December 1992;
Executive Vice President and Chief Financial Officer from June to October 1992; Senior
Vice President and Chief Financial Officer from 1991 to 1992; Vice President and Chief
Financial Officer from 1984 to 1991; Corporate Secretary from 1981 to 1988; and Treas-
urer from 1984 to 1987. Mr. Armstrong is also a director of National Oilwell Varco, Inc.,
and PAA/Vulcan.
Harry N. Pefanis
President and COO
Harry N. Pefanishas served as President and Chief Operating Officer since our formation
in 1998. He was also a director of our former general partner. In addition, he was Execu-
tive Vice President Midstream of Plains Resources from May 1998 to May 2001. He
previously served Plains Resources as: Senior Vice President from February 1996 until
May 1998; Vice President Products Marketing from 1988 to February 1996; Manager of
Products Marketing from 1987 to 1988; and Special Assistant for Corporate Planning from1983 to 1987. Mr. Pefanis was also President of several former midstream subsidiaries of
Plains Resources until our formation. Mr. Pefanis is also a director of PAA/Vulcan and Set-
toon Towing.
W. Dave DuckettPresident - Plains Midstream Canada
W. David Ducketthas served as President of Plains Midstream Canada, formerly known as
PMC (Nova Scotia) Company, since June 2003, and Executive Vice President of PMC(Nova Scotia) Company from July 2001 to June 2003. Mr. Duckett was with CANPET En-
ergy Group Inc. from 1985 to 2001, where he served in various capacities, including most
recently as President, Chief Executive Officer and Chairman of the Board.
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Plains All American Pipeline, L.P.
Management Bios
Mark J. GormanSr. Vice President - Operations & Business Development
Mark J. Gorman has served as Senior Vice PresidentOperations and Business
Development since August 2008. He previously served as Vice President from November
2006 until August 2008. Prior to joining Plains, he worked in various capacities at Genesis
Energy including: Director, Executive Vice President and COO and President and CEO from
1996 through August 2006. From 1992 to 1996, he served as a President for Howell Crude
Oil Company. Mr. Gorman began his career with Marathon Oil Company, spending 13 years
in various disciplines. Mr. Gorman is also a director of Settoon Towing, Butte and Frontier.
Al Swanson
Sr. Vice President and CFO
Al Swanson has served as Senior Vice President and Chief Financial Officer since Novem-
ber 2008. He previously served as Senior Vice PresidentFinance from August 2008 until
November 2008 and as Senior Vice PresidentFinance and Treasurer from August 2007
until August 2008. He served as Vice President Finance and Treasurer from August
2005 to August 2007, as Vice President and Treasurer from February 2004 to August
2005 and as Treasurer from May 2001 to February 2004. In addition, he held finance
related positions at Plains Resources including Treasurer from February 2001 to May 2001
and Director of Treasury from November 2000 to February 2001. Prior to joining Plains
Resources, he served as Treasurer of Santa Fe Snyder Corporation from 1999 to October
2000 and in various capacities at Snyder Oil Corporation including Director of Corporate
Finance from 1998, Controller SOCO Offshore, Inc. from 1997, and Accounting Man-
ager from 1992. Mr. Swanson began his career with Apache Corporation in 1986 serving
in internal audit and accounting.
John P. vonBerg
Sr. Vice President Commercial Activities
John P. vonBerg has served as Senior Vice PresidentCommercial Activities since August
2008. Previously he served as Vice PresidentCommercial Activities from August 2007
until August 2008 and as Vice PresidentTrading from May 2003 until August 2007. Heserved as Director of these activities from January 2002 until May 2003. Prior to joining
us in January 2002, he served in various roles at Genesis Energy including Director, Vice
Chairman, President and CEO from 1996 through 2001, and from 1993 to 1996 he served
as a Vice President and a Crude Oil Manager for Phibro Energy USA. Mr. vonBerg began
his career with Marathon Oil Company, spending 13 years in various disciplines.
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Plains All American Pipeline, L.P.
Management Bios
A. Patrick DiamondVice President
A. Patrick (Pat) Diamond has served as Vice President since August 2007. He previously
served as Director Strategic Planning from July 2005 to August 2007 and as Manager
Special Projects for Plains All American from May 2001 to July 2005 and for Plains Re-
sources from August 1999 to May 2001. Prior to joining the Plains organization, Mr. Dia-
mond was an investment banker in the Global Energy Group of Salomon Smith Barney
from 1994 to 1999 where he was involved in all facets of the energy sector, with particu-
lar emphasis on the area of Master Limited Partnerships (MLPs). Mr. Diamond is a summa
cum laude graduate of Babson College, holding a BS degree in finance and quantitative
studies. He is a member of the Board of Directors of the National Association of Publicly
Traded Partnerships, a trade association representing publicly traded limited partnerships.
Charles Kingswell-Smith
Vice President and Treasurer
Charles (Chuck) Kingswell-Smith joined PAA in 2008 from GE Energy Finance. Mr.
Kingswell-Smith has over 25 years of experience in the energy banking business princi-
pally with JPMorgan Chase. At PAA, Chuck is responsible for coordination of our banking
transactions and lending arrangements, customer credit functions, financial planning at-
tivities, insurance risk management and foreign exchange and interest rate managementactivities.
Roy I. Lamoreaux
Manager, Investor Relations and Equity Capital Markets
Roy I. Lamoreauxhas served as Manager of Investor Relations and Equity Capital Markets
since November 2006. He worked previously at Anadarko Petroleum Corporation in ac-quisitions and divestitures and asset operations groups. Roy received a BBA in Energy
Management from the University of Oklahoma and holds an MBAE from the Acton School
of Business.
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PAA Natural Gas Storage, LLC
Management Bios
Richard S. Tomaski, II
Vice President - PAA Natural Gas Storage LLC
Richard S. Tomaski, II has served as Vice President, PAA Natural Gas Storage, LLC
(formerly known as Energy Center Investments) since 2005. From 2003 to 2005, he served
as Vice President Bluewater Gas Storage Marketing and Development (Bluewater).
From 2002 to 2003, Mr. Tomaski served Bluewater as Vice President Natural Gas Trading
Mid-Continent. From 2000 to 2002, Mr. Tomaski served in several positions with Enron
Corp. and Enron North America. Mr. Tomaski received a B.B.A in Accounting and Finance
from Texas A&M University.
Daniel Noack
VP Operations - PAA Natural Gas Storage LLC
Daniel Noack has served as Vice President, Operations for PAA Natural Gas Storage, LLC
since July 2008. Prior to joining Plains Mr. Noack served as Storage Manager for Energy
Transfer Partners and as a Storage Consultant with El Paso Field Services (Gulfterra)
where he supported the strategic development and daily management of the company's
eight storage assets and twenty-six salt dome cavern wells. Mr. Noack has over 16 years
of experience in the natural gas storage field and is experienced in all aspects of under-
ground salt dome hydrocarbon storage including identifying, permitting, developing, con-
structing, optimizing, and operating.
Dean Liollio
President - PAA Natural Gas Storage, LLC
Dean Liollio has served as President of PAA Natural Gas Storage, LLC since March of
2009. Mr. Liollio has 25 years of experience in the natural gas business, most recently
serving as President and CEO of EnergySouth, Inc., a NASDAQ listed company prior to its
acquisition by Sempra Energy in October 2008. Prior to joining EnergySouth, Mr. Liollio
served with Centerpoint Energy and its subsidiaries for approximately 23 years in various
positions of increasing responsibility including Division President and COO, Southern Gas
Operations.
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Opening Remarks
Roy LamoreauxManager, IR & ECM
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Forward-Looking Statements &Non-GAAP Financial Measures Disclo
This presentation contains forward-looking statementparticular, statements about the plans, strategies and prospAmerican Pipeline, L.P. (the Partnership or PAA). Thesstatements are based on the Partnerships current assumptiand projections about future events.
Although the Partnership believes that the expectations rforward-looking statements are reasonable, the Partnersassurance that these expectations will prove to be correct orother benefits anticipated in the forward-looking statementsImportant factors, some of which may be beyond the Partthat could cause actual results to differ materially froexpectations are disclosed in the Partnerships most recentKs filed with the Securities and Exchange Commission.
This presentation also contains non-GAAP financial meEBITDA. For a presentation of the most directly comparable
and a reconciliation of the two as well as additional detail ritems impacting comparability, please see the reconciliationthe last tab in your presentation materials or you can viswww.paalp.com. Click on the Investor Relations section followed by the Non-GAAP Reconciliations link.
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3
Orientation
Information Package Agenda
Investor Contact Info
Presenter Bios
Presentations
Non-GAAP Reconciliations
Q&A
We will hold several Q&A sessions thrthe meeting
PAA personnel will be stationed in audmicrophones for Q&A
Index cards to capture questions are aprovided on each table
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4
Meeting Agenda
Commercial Activities
Overview of PAA Business Activities & Impact on PAADuring an Extended Period of Economic Weakness
Closing Remarks
PAA Strategic Positioning
ChaFinancial Growth Strategy & Risk Management; Guidance,Segment Performance and Distribution Coverage
PAA Natural Gas Storage
Plains Midstream Canada
US Capital Projects
PAA History, Business Model & Positioning for CurrentMarket Environment
Opening Remarks
Topic
Q&A Sessions
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5
Plains All American Profile 2009(NYSE: PAA)
Total Assets (03/31/09) $9.4 B
Book Equity (03/31/09)A $3.7 B
Book Cap. (03/31/09)A $7.1 B
Enterprise ValueAB $9.3 B
Equity Market Cap. B $5.8 B
Fortune 500 Rank 79 Unitholders ~90,000
Current Yield* ($3.62 annualized) ~8.1%
Aggregate Size/Yield
Assets(2)
:Pipelines (activeStorage LPG Railcars
Truck Fleet
Barge Fleet (Sett
Crude, Product LPG Volumes:
Operational footDomestic Canada
Employees
Operation
A Based on balance sheet data as of 3/31/09 pro-forma for Aprildebt offeringB Based on 06/01/09 closing unit price; excludes value of GP.
(1) EBITDA and Net Income are the midpoint of PAAs public guidance furnished via 8-K on Mayselected items impacting comparability.
(2) Includes owned or leased assets as of 12/31/08
2009 Adjusted EBITDA $977 MM
2009 Adjusted Net Income $517 MM
Public Guidance Midpoint (1)
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PAA Assets Well Positioned to Meet the Dynamof North American Energy Markets
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PAA Quick Progress UpdateSince Last Analyst Meeting in April 2008
2008 was solid year of performance 14% Adjusted EBITDA growth over 2007 (in line/slightly a
acquisition adjusted Plan) Achieved 2008 goals (with a notable cost overrun on SLC Completed and integrated Rainbow and two other LPG-re PAA business model was stress tested and validated, wit
Meltdown of high-profile competitor Multiple Gulf Coast hurricanes Turmoil in economic and financial markets Significant volatility in commodity markets
PAA is cautiously optimistic on 2009 despite macroecoenvironment 2009 Adjusted EBITDA forecasted to increase 10% over 2 Annualized distribution per unit increased in May 2009 to
4.6% from 2008 analyst meeting level)
PAA is well positioned financially Excellent credit metrics
Solid capital structure with significant liquidity
Able to execute business plan and capital program while significant liquidity, even in a challenging economic and environment
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8
2009 Goals & Performance
Raised equity and dof $557 million; Liq$1.8 billion (pro fordeal)
Prudently manage our capital resourcesand preserve our strong capitalizationand liquidity
Completed two acqcombined price of ~
Pursue an average of $200 million to$300 million of strategic and accretiveacquisitions
Capital program geincreased to $350 m
additional costs asbringing RangelandSLC online and shiexpenditures due to
Successfully execute our 2009 capitalprogram, and set the stage for
continued growth in 2010
1Q09 Adjusted EBITmidpoint guidance 2009 guidance midmillion
Deliver baseline operating and financialperformance in line with guidance
PerformanceGoal
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2009 PAA Analyst Meeting Th
Despite being tested by volatility in the cofinancial markets and a variety of other chalbusiness model, financial growth strateg
management practices have delivered stronresults and have positioned PAA to nav
challenging environment, execute its busin
capitalize on potential opportunit
PAA: Tested. Delivered. Pos
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Building Blocks from Previous Meetin
PAA represents a predominantly fee-baseinvestment in essential North American einfrastructure.
PAAs assets are strategically located, op
flexible and positioned to benefit from voestablished industry trends.
PAAs management team has significant depth and is knowledgeable, highly motiv
results oriented.
(Above points confirmed by participant f
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Todays Focus Items
PAA is well positioned strategically and financially relatchallenging global economy and financial markets. PAA game plan in current, challenging and uncertain envi Outlook and impact on fundamental business (volumes, m
current market conditions continue for extended period of Strong liquidity and capitalization has implications for PAA
defense
PAAs proven business model has continued to deliver and financial results during challenging and volatile ma Composition and durability of Marketing segment cash flo
PAA Natural Gas Storage (50% owned JV) is successfulbusiness plan and is positioned for future growth and ex
PAA is well-positioned to act opportunistically upon acqother investment opportunities that may be available dumarket conditions.
PAA represents an attractive investment opportunity cosubstantial current yield with a solid foundation for cont
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Page Intentionally Left B
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PAA History, Business MoPositioning For Current Envir
Greg Armstrong
Chairman & CEO
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14
81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 0 1 2 3
Sep
UpsMid
Sep
Up& M
28+-Year History Of the Plains Orga
(1981-2009YTD)
1981Plains
ResourcesIPO PLX
Upstream E&P Entity
1988Formation of
Plains Marketingas a Sub of PLX
Midstream Transportation Entity
IPO ofPlains All
AmericanPAA
Di
ove
1 2
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1988 1998:Plains Resources (PLX) forms marketingsub to market its gasShifted focus exclusively to crude oiland built Cushing Terminal (initial2MMbls)Began acquiring & building W. TX truckstationsExpanded senior management team
Positioned in lower tier of top 20gatherers & marketersExpanded business & integrated G&Mand T&SEnded 1997 with total assets of $150 MMAcqd AAPL (All American Pipe Line)Completed IPO of PAA
1999 - 2001:Acqd Scurlock Permian & ChevronW.Tx pipeline
Completed Cushing Phases I & IIexpansions (to 4.2 MMbbls)
Trading loss event
Repaired Balance Sheet
Announced plans to enter Canadianmarket
Ended 2000 with total assets of$900 million
Mgmt led buyout of 56% GP(Separated from PLX)
Expanded into Canada
2002- 2009YTDCompleted 43 aCompleted CusIncreased foreigLTM average ofImplemented ~$projects from 20Entered into naproducts busineInitiated St. JamConsummated
$332 mill$2.5 billio$687 mill
Targeted 2009 imillionEnded 1Q09 wit
PAA History and Growth (1988-2009)
$252
$169$130
$110$108$87$34
$408
$511
$77
1988-1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 200
Adjusted EBITDA Growth ($MM)
Note: Adjusted EBITDA excludes the impact of selected items impacting comparability. See website for reconciliation of (www.paalp.com) to comparable Non-GAAP measures. 2009G based on guidance furnished in Form 8-K on May 6,
Less than $10MMper year
Formative PeriodRefinement Period
Execut
1
2
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PAAs Proven Business Model
Qualitative
Understand the markets Fundamental supply/demand Volatility, seasonality, cyclica Performance in different econ Recent, pending and possible
market dynamics (regulatory, changes, etc.)
Build or acquire logistics assetmarket fundamentals
Optimize performance of such interconnectivity and combinatarrangements and counter-cyccommercial activities..thusto exert strong influence over o Capitalize on low risk market o Increase utilization of pipeline Positioned to benefit from vol
+
+
+
=
Assets
Capital
Knowledge
Execution Skills
Value AddedServices
Sustainable, increasingprofits & distributions
Formulaic
=
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0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
1
9
8
3
1
9
8
4
1
9
8
5
1
9
8
6
1
9
8
7
1
9
8
8
1
9
8
9
1
9
9
0
1
9
9
1
1
9
9
2
1
9
9
3
1
9
9
4
1
9
9
5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
198
3
198
4
198
5
198
6
198
7
198
8
198
9
199
0
199
1
199
2
199
3
199
4
199
5
U.S. Imports of Re(Millions of Barrels per Day)
U.S. Natural Gas S(Billions of Cubic Feet per D
Domestic
Seasonal shifts in regionaldemand:
Alternating needs of refineries tostore/blend
Complex transportation logistics Shortage of diluent for Canadian heavy oil
Inefficiency caused by multiple supplysources and numerous regional supply
and demand imbalances
LPG
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
198
3
198
4
198
5
198
6
198
7
198
8
198
9
199
0
199
1
199
2
199
3
199
4
199
5
199
6
199
7
199
8
199
9
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
PAA Business Model Complements Establis& Demand Trends on a U.S. and Regional Ba
Source: Energy Information Administration (through year end 2008)
Refinery Inputs: 14.7 MMbbls
U.S. Crude Oil Supply & Demand(Millions of Barrels per Day)
Production: 5.0 MMbbls
Domestic Supply Shortfall9.7 MMbbls
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PADD II (Midwest): Highly Populated + RegioImbalance + Land-Locked = Maximum Ineffic
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
1984
1985
1986
1987
1988
1 9 8 9
Source: E
PADD II
(Millions
Gulf ofMexico
ForeignImports
V
IV II
I
III
Mid-Continent (Sun)
OXY
PAA (Basin)
PAA (3)
Seaway
BP
W. Tulsa
COP (2)
Osage
Ozark
SUN
PAA (Red River)
Semgroup
PAA Cushing to Broome
Keystone
COPSemgroup (Whitecliffs)
OXY
SpearheadCPS
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Supply/Demand Dynamics, Geopolitical Instability & Capital InHave Contributed To Increased Volatility of Energy Prices
Source: Bloomberg Financial (06/01/09)
NYMEX Crude Oil Prices
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
1990
1991
1992
1993
1994
1995
1996
1997
$
perGallon
Highest High
NY Harbor 87 Promp
$0.00
$2.00
$4.00
$6.00$8.00
$10.00
$12.00
$14.00
$16.00
1991
1992
1993
1994
1995
1996
1997
1 9 9 8
$
perM
cf
Highest High
NYMEX Natu
$0.00
$0.30
$0.60
$0.90
$1.20
$1.50
$1.80
$2.10
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
$
perG
allon
Highest High Lowest Low Avg. Close
NYMEX Propane Prices
$0
$15
$30
$45
$60
$75
$90
$105
$120
$135
$150
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
$perBarrel
Highest High Lowest Low Avg. Close
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20
Crude Oil Grade Differentials to WTI HavMore Volatile Over Time
-$13.00
-$10.00
-$7.00
-$4.00
-$1.00
$2.00$5.00
$8.00
Jan-95
Jul-95
Jan-96
Jul-96
Jan-97
Jul-97
Jan-98
Jul-98
Jan-99
Jul-99
Jan-00
Jul-00
Jan-01
Jul-01
Jan-02
Jul-02
Jan-03
Jul-03
Jan-04
Jul-04
Jan-05
Jul-05
Jan-06
J l 0 6
MIDLAND WTI LLS HLS WTS EIC BONITO
Domestic
-$45.00
-$40.00
-$35.00
-$30.00
-$25.00
-$20.00
-$15.00
-$10.00
-$5.00
$0.00
$5.00
$10.00
May-02
Aug-02
Nov-02
Feb-03
May-03
Aug-03
Nov-03
Feb-04
May-04
Aug-04
Nov-04
Feb-05
May-05
Aug-05
Nov-05
Feb-06
May-06
Aug-06
Nov-06
Feb-07
May-07
Aug-07
Nov-07
Par @ Edmonton 825, 0.5% Ave 4 (I,Sun,Shl,Pex) Sweet @ Edmonton Ave 4 (I, Condensate @ Edmt. Enbridge Adj. Ave 3 (A,I,K) Hard. Light @ Hardisty Ave 4 MSO @ Edmonton (IOL, SUN) Koch AB @ Edmonton Ave 4 Manyberries @ Border (Cenex) LSB @ Cromer Ave 4 (I,Sun, Midale @ Cromer Ave 4 (F,I,Sun,Shl) Bow @ Hardisty Ave 4 (F,I,Ce LLB @ Hardisty (Koch, IOL) Fosterton @ Regina Ave 3 (N
Canadian
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($10.00)
($8.00)
($6.00)
($4.00)
($2.00)
$0.00
$2.00
$4.00
$6.00
1/2/1995
1/2/1996
1/2/1997
1/2/1998
1/2/1999
1/2/2000
1/2/2001
1/2/2002
1/2/2003
1/2/2004
1/2/2005
$perBarrel
Increased Volatility In Crude Oil Market SPrompt Month Spread
Contango
Backwardation
Source: Platts Note: Does not include 9/22/08 data point on which the backwardated spread widened to ove
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PAA Business Model Well Suited ForIncreasingly Volatile Market Environm
PAAs assets and business model should producein nearly all types of market environments as PAAflow is underpinned by
Significant percentage of fee-based cash flow (~70%Transportation and Facilities segments
Counter-cyclically balanced and relatively predictab
flow generated by our Marketing segment, which inequivalent cash flow
Merchant activities provide upside opportunities (during favorable market conditions and can potennegative impacts of certain industry events
Contango storage opportunities Various additional market-related opportunities
Provides opportunities to mitigate impacts of potendeclines, refinery or pipeline outages, weather or ot
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Baseline vs. Baseline Plus Term
Baseline Results Reflects managements assessment
of generally sustainable cash flows from
all three business segments in a variety of
routine market conditions
Used by management in developing its
recommendations regarding distribution growth
Baseline Plus Results Reflects net incremental cash flows derived by the Marketin
optimization activities in favorable market conditions (conta
Incremental contributions not considered by management wrecommendations regarding distribution growth; does resunormal coverage ratio
Incremental cash flows above Baseline estimates are treateto pay down debt or fund capital investments (i.e., not distri
Incremental cash flows are only included in guidance for vewith strong visibility; forward guidance does not assume cofavorable conditions for longer-term
Bas
BaseCash
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Investment of Baseline Plus IncrementalConverting a Recurring But Unpredictable Cash Flow StreaPlus) to a Recurring Predictable Stream (Baseline)
Illustration Only
Real, likely recurring, but unpredictable cash flow usedcapital investment opportunities Assumes Baseline Plus cash flow of $50 MM in Year 1, $2
MM in Year 3 and $30 MM in Year 4 average of ~$40 mil
Baseline Plus Incremental cash flow paired with similar a50% equity / 50% debt financing mix) and invested into con a one year lag at a 7x multiple*
$50
$30
$70
$20
$0$10$20$30$40$50$60$70$80
Yr 1 Yr 2 Yr 3 Yr 4
$inMillion
Recurring Cash Flow from Investment of Yr 1 Baseline Plus CF Recurring Cash Flow from Inv
Recurring Cash Flow from Investment of Yr 3 Baseline Plus CF Recurring Cash Flow from Inv
Baseline Plus Cash Flow
.
* For example, in Year 1 $50 million of baseline plus cash flow is paired with $50 million of debt; thus $100 mat a 7x multiple, which generates annual net cash flow beginning in Year 2 of $10.3 million (($100 MM / 7) 8% interest rate)).
BaselinePlus
Incremental
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$0
$150
$300$450
$600
$750
$900$1,050
2004 2005 2006 2007 20
Adjuste
dEBITDA($MM)
Baseline Guidance (2) Performance Above Baseline Guidance Upda
PAA Has Delivered Significant Growth in BasEBITDA and Solid Performance vs. Annual G
$779
$88
$511$408
$252
(1) Midpoint of annual guidance consists primarily of expected baseline performance, with the anticipfavorable market conditions included only for near-term visibility that exists at the time guidance is
(2) Baseline guidance for 2004-09 periods based on the midpoint of annual guidance from February guUpdated 2009 guidance based on the midpoint from 05/06/09 8-K.
Performance exceeding
baseline guidance due tofavorable market, acquisitionsand/or increases in baseline
performance
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Business Model Reinforced By Performance vPAA Has Delivered Predictable and Durable Results In All T
$25
$50
$75
$100
$125
$150
$175
$200
$225
$250
$275$300
1Q02
2Q02
3Q02
4Q02
1Q03
2Q03
3Q03
4Q03
1Q04
2Q04
3Q04
4Q04
1Q05
2Q05
3Q05
4Q05
1Q06
2Q06
3Q06
4Q06
1Q07
2Q07
3Q07
4Q07
1Q08
2Q08
3Q
AdjustedEBITDA($MM)
Guidance Range Historical Performance Projected Perf
29 Consecutive Quarters of Performance in Line with G
$15.00
$30.00
$45.00
$60.00
$75.00
$90.00
$105.00
$120.00
$135.00
1/2/2002
7/2/2002
1/2/2003
7/2/2003
1/2/2004
7/2/2004
1/2/2005
7/2/2005
1/2/2006
7/2/2006
1/2/2007
7/2/2007
1/2/2008
7/2/2008
1/2/2009
$
perBarrel
NYMEX Crude Oil Prices
Source: Bloomberg Financial
($10.00)
($8.00)
($6.00)
($4.00)
($2.00)
$0.00
$2.00
$4.00
1/1/2002
7/1/2002
1/1/2003
7/1/2003
1/1/2004
7/1/2004
1/1/2005
7/1/2005
1/1/2006
7/1/2006
1/1/2007
7/1/2007
1/1/2008
7/1/2008
1/1/2009
$p
erBarrel
Contango
Backwardation
Crude Oil Market Structure(2,3)
-$13.00
-$10.00
-$7.00
-$4 . 00
-$1.00
$2 . 00
$5.00
$8 . 00
Jan-02
M I D L
WTS
P OS
(D
D
(1) 2Q09 (G) based on mid-point guidance furnished via Form 8-K on 5/06/09. (2) Crude Oil Market Structure Chart doesdata point on which the backwardated spread widened to over $11/barrel. (3) Source: Platts
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Every Day, Producers, Refiners, Traders and SophFinancial Investors Risk Billions Forecasting Crud
$68
.58
$69
.37
$70
.07
$70
.58
$71
.04
$71
.52
$71
.92
$72.2
2
$72.
48
$72
.74
$7
2.99
$
73
.24
$73
.46
$73
.68
$73
.90
$74
.12
$74
.34
$74
.57
$ 7
$65.00
$70.00
$75.00
$80.00
Jul-0
9
Aug-09
Sep-09
Oct-0
9
Nov-09
Dec-09
Jan-10
Feb-
10
Mar
-10
Apr-1
0
May
-10
Jun-10
Jul-1
0
Aug-10
Sep-10
Oct-1
0
Nov-10
Dec-10
Jan-11
Fe
NYMEX Forward Curve as of June 1, 2009
Source: Bloomberg
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Assessing the Accuracy of the MarketVision on Crude Oil Prices
$10.00
$30.00
$50.00
$70.00
$90.00
$110.00
$130.00
$150.00
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2
Actual Price Forward Curve
Source: Bloomberg (06/01/09)
Conclusion: Continued Volatility is Likely
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Looking Forward
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PAAs Scenario Assessment for 20(The Environment For Which We Are Positioning)
General
The global economy may getworse before it gets better expecting a few head fakes
Deleveraging of the globalfinancial system will take a while likely to see tight credit for anextended period
Consolidation of banks willcomplicate overall credit extension
Cost of capital has made a stepchange increase (relative to 2004to early 2008)
Capital markets access will be
selective and potentially sporadic IG rating matters
Differentiation has occurred / willcontinue size and reliability ofbusiness models matter
Energy Sector
Oil and gas cobeen adverseprices
Retracement in response totake time dueeconomy and
Commodity pto be volatile,in short perio(potential for fakes)
Volatility favoassets; espec
complementamodels
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Investment grade credit rating (Baa3/BBB-)
Solid balance sheet
Ample liquidity pro forma availability of ~$1.8 billio2009*
$1.6 Billion Committed Revolving Credit Facility, Maturing in J
$525 Million Annual Committed Hedged Inventory Facility
Includes benefit of $210 million equity offering completed in Mmillion debt offering completed in April 2009
Long-term debt is 99% fixed (@ avg. of 6.7%) with avyears**
Scalable, flexible capital program no major project
Solid distribution coverage Potential to utilize solid financial positioning to act o
on attractive acquisition and expansion opportunitie
PAA is Well Prepared for a Challenging En(even if it extends through 2010)
* Pro forma for $350 million April 2009 senior notes offering; availability would be ~$1.7 billion after repasenior notes due in August 2009.
** Pro forma for $350 million April 2009 senior notes offering and May 2009 termination of $60 million of srepayment of $175 million senior notes due in August 2009.
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What if the Economic Slump and Uncertain FMarkets Extend for Several Years?
(1) Financially well positioned @ 3/31/09; (2) Execution of 2009 Pl
positioning; (3) Recent financings further enhance positioning Strategic role of PAAs assets, counter-cyclical balance of busine
of capital projects, intense focus on liquidity, management expermake mid-course adjustments position PAA to navigate an exten
Many required functions of PAAs asset base cannot be performe
2009 2010 2011 2012 2
PAA surviving
& growing
Conceptual Illustration of
Economy / Financial Markets
PAA
surviving
& growing,
but less
PA
su
m
gr
Absent [Bargain] Acquisitions
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81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 0 1 2
PAA Management Has Successfully NThrough A Number of Challenging Pe
$34$87$108$110
$13
1988-
1996
1997 1998 1999 2000 2001 200
0
1
2
3
4
5
6
7
8
9
10
80 82 84 86 88 90 92 94 96 98 00
Oil mmbls Gas mmboe
PLX Upstream Production Volumes:
/--EnergyEuphoria (vol. I)---/
/--Oil PriceCrash--/
/--Natural Gas
Deregulation,
Price Collapse &
Take-or-pay period---/
/--Major
Recession---//--The
Event--/
/--9/11/
Enron
Energy
Merch
Meltdo
/--PLX
Miami
Fee--/
/--PLX & P
Separate-
/--Energy Sector
Consolidation Period---/
/--Energy Bank Consol & Attrition--/
Carter--/-----------------Reagan----------------------/-------Bush 41-------/----------Clinton---------------------------------/------ Bus
(1981-2009YTD)
/--Oil
Price
Plunge--/
/--Major Recession&
Stagflation ---/
Note: 2009(G) reflects midpoint of PAAs public guidance furnished via 8-K on May 6, 2009 and excludes seleimpacting comparability.
/----------S&L Crisis----------/
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PAA Forward Game Plan
Execute, Execute, Execute Deliver on guidance / plan
Under-promise and over-perform
Maintain significant financial flexibility
Tighten up existing organization eliminate ineffic
during rapid growth periods (Increase revenue andefficiencies/decrease cost)
Pursue attractive incremental acquisition / consoliopportunities: Have raised overall return requirements
Intend to carefully exploit:
Cost of capital and availability advantages Fundamental synergy advantages
Continue development / expansion of natural gas sand related opportunities
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Overview of PAA Business A& Impact on PAA During an E
Period Of Economic Weak
Harry Pefanis
President & COO
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PAAs Activities are Conducted on Four ProduPrimarily Inefficient & Lightly Regulated Portion of the Valu
Crude Oil
Natural GaFacProducers
Undergro
Gathering Pipeline
Injection / Wi
LNG Tanker
Salt
Dome
CommonCarrier
Pipelines
Refined Transportation,Refineries
Barge
Common CPipeline
Tanker
StoragePipeline
LPG
Transportation, Facilities & MarketingProducers Refiners
Truck
Terminal /Storage /ExchangeLocationBarge
Pipeline
Pipeline GatheringInjection Station
Pipeline
Tanker
Refinery
Rail Car
Above Ground or
Underground
Storage
Pipeline
Transportation, Facilities & Marketing
Truck
Gas Plants
Chemical
Plants
Retail
Distribution
Diluent for
Heavy Crude
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Assets(1)
Products
Cash Flow
Transportation
~17,000 miles of Pipelines
24 MMBbls Storage
Capacity
86 Trucks
341 Trailers65 Barges(2)
36 Tugs(2)
~1 MMBbls of Linefill
Crude Oil
Refined Products
Fee Based
Facilities~61 MMBbls Storage
Capacity
~31 BCF Nat Gas
Storage(3)
2 Fractionation Plants
1 Isomerization Unit
~400 MMCFD Processing
Capacity(4)
Crude Oil
Natural Gas
Refined Products
LPG
Fee Based
|------------------- Merchant Optimizatio
Baseline = ~70% Fee Based
ReportingSegments
(1) Includes owned or leased as(2) Ownership through 50% inte(3) Ownership through PAA/Vul(4) Average throughput, design
Activities Conducted via Three SegPAA Cash Flow Underpinned by Fee & Fee-Equivalent Act
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PAA Adjusted Segment EBITDA Cont
21%
30%
49%
2009 Guidance (2)Midpoint Total Adjusted EBITDA = $977 Million
Transportation
Facilities
Marketing
(1) Please see Appendix for reconciliation of Adjusted EBITDA to GAAP measures. Excludes
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Fee Based Activities Have Steadily In
0%
25%
50%
75%
100%
2005 2006 2007 2008
%ofAdjusted
EBITDA
Fee Based Non-Fee Base
AdjustedEBITDA $511 $779 $887$408
49% 51%61%
69%
Note: 2009(G) reflects midpoint of PAAs public guidance furnished via 8-K on May 6, 2009 and exitems impacting comparability.
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Principal Drivers of Segment Perf
Qd
F
Sd
A F
f
Integrity costs,regulatory compliancecosts
API 653 (costs andtiming)
Lease renewals rates Measurement
gains/losses
Volumes variances
PPI Index
Integrity costs,regulatory compliancecosts
Power costs Pipeline Loss
Allowance
InfluencesonProfitability
Vgis
Rb
Leased capacity
Lease rates &throughput fees
Variable operatingcosts
Throughput volumes
Tariffs per barrel
Variable operating
costs
PrincipalPerformanceDrivers
~20%~50%% of 2009AdjustedEBITDA (1)
FacilitiesTransportation
(1) 2009(G) reflects midpoint of PAAs public guidance furnished via 8-K on May 6, 2009 and excludes seleimpacting comparability.
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Transportation Segment UnderpinnedGeographically Diverse Asset Base
33%
9%
12%
15%
18%
13%
28%
4%
25%
10%
16%
17%
Pipeline Miles(1)
By Region By Region
PAAs pipelines represent a diverse blend of supply andassets transporting a variety of both domestic and forei
waterborne) crudes from multiple basins
Southwestern US Western US US Rockies US Gulf Coast Central US Canada
(1) Pipeline miles as of 12/31/08 and pipeline volumes for the quarter ended 03/31/09.
Pipeline Volum
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Transportation Volumes and RevenueRemained Durable Over Time
Pipeline Revenues
$0
$150
$300
$450
$600
$750
$900
2002 2003 2004 2005 2006 2007 2008
$in
Millions
.
Pipeline Volumes
0
500
1,000
1,500
2,000
2,500
3,000
2002 2003 2004 2005 2006 2007 2008
MBP
D
Note: Includes activity associated with subsequent expansion activities for acquired pipelines.
Pre-01 01 02 03 04 05 06 07
Same Store Sales Pipelines Grouped by Yr of Acquisiti
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Facilities Segment Storage CapacGeographic Diversity and Product Composition
41%
4%15%
9%
3%
28%
Mid Continent Rockies
Gulf Coast East Coast
West Coast Canada
Geographic LocationBy Region
ProductBy Servic
15%
10%
5%
Crude Oil
LPG
Note: Capacity as of 03/31/09
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Baseline Marketing Segment ActivitiesCritical to Industry Value Chain
~5%
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Marketing Segment Activities
Represents approximately 10 15% of baseline
Primarily seasonal storage with product pre-sold contracts or hedged on NYMEX or via OTC
Propane primarily wholesaler to large number oconsumers (in excess of 750 customers)
Butane primarily used as feedstock for isomerizCalifornia, as diluent for heavy crude oil movemegasoline blending by refiners
LPG MarketingAverage ~100 mb/d*
Primarily seasonalstorage/sales, although somespot/rack sales
Significant use of captiveassets
Represents approximately 80% of baseline segm
Primarily related to lease gathering and foreign cr
Hedge to protect and optimize margins
Purchases are index related; no outright price ris
Margins impacted by quality, location and inter-m
Provide logistical and administrative services to o ~3-5 million barrels of tankage support these acti
Crude oil activity~630 mb/d*
~60 mb/d Foreign*
Significant use of captiveassets
Ability to capture quality/location arbitrages anddistressed crudes
Overview / CommenActivity
* Based on full year 2009 guidance furnished via Form 8-K on May 6, 2009.
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Marketing Segment Activities(Continued)
Represents less than 5% of segment cash flow
Primarily rack sales that are back to back
Minimal inventory requirements
Entered business in early 2007 with a small acqu
Potential growth area volumes and margins havsince 2007
Refined ProductsMarketing
Average ~ 40mb/d*
Contribution varies, but is approximately 5% of bprofit.
Can be meaningfully additive to baseline during pvolatility and strong contango conditions (i.e., Ba
Hedge to protect and optimize margins
In a contango market this provides counter-cyclic
lease gathering business
Tankage leased from Facilities segment
Merchant storageAn aggregate of ~8 mmbbls ofwhich ~2 mmbbls are inremote locations and areavailable for lease optimizationor contango
Capacity changes based onallocation of assets, 3rd partyleases, etc
Overview / CommenActivity
* Based on full year 2009 guidance furnished via Form 8-K on May 6, 2009.
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Lease Gathering BusinessLargest Contributor to Baseline Marketing Cash Flow
We consider a large part of the business Fee-Equivalent Provide dependable transportation services to our customers
Perform administrative services for our customers, including revetax disbursement services (PAA cuts ~50,000 checks every month
PAA size, past performance and investment grade credit rating a sproducers extend gathering company ~50 days credit)
Total crude oil lease gathering volumes ~ 630,000 b/d (includin
>90% sold on similar floating basis as purchased
No outright price risk
Minimal margin risk, sales are managed against index
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Potential Impact of ExtenPeriod of Economic Weak
on PAA Business
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Potential Impact on PAA of Selected Issuan Extended Period of Economic Weakn
Decrease in the FERC Index (PPI + 1.3
Domestic Production Declines
Demand Destruction
High / Low Oil Prices
Acquisitions
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Impact of Potential Decrease in FER
Minimal impact to PAAs pipelines
Portion of pipelines protected by contractual with shippers
Generally PAA is not charging the maximum
Canadian pipelines are not subject to the PPI
Intra-state pipelines are not subject to the PP
Marketing margins would improve (due ttariff costs)
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Potential Domestic Production D
Transportation Segment Impact Lower volumes on gathering systems and Ba
Higher volumes on Capline and Western Corr
Facilities Segment Impact
Increased demand for tankage to handle impo
Marketing Segment Impact
Lower lease gathering volumes
Increased foreign import volumes
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Potential Longer-Term Demand Destr
Transportation Segment
Lower pipeline volumes
Tariffs would be based on PPI
Facilities Segment
Less demand for operational storage Increased demand for contango/product storage
would exceed demand
Marketing Segment
Minor impact if prices stay at current to higher l
Lower prices would negatively impact gatheringand segment profit
Expect to have favorable acquisition opportuni
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$40 / $100 Crude OilImpact on PAAs Operating / Financial Results
Likely senvironDomeswell
Foreign business natural hedgeagainst domestic depletion
Domestic / Foreign
Higher level of
Lower requirementsHedged inventory workingcapital requirements
No
Minimexposmargi
Long-domesvolum
More pcosts
PLA h
No
Minimal commodity exposure /some potential pressure onmargins
Long-term scenario mayimpact field production declinerates
Less pressure on operatingcosts
PLA hedged through 2012
Meaningful impact toPAAs core cash flow?
$40 OilArea of Concern
Conclusion: No material impact to PAA from either price
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Favorable Outlook for Acquisition
Less competition due to: Higher entry barriers to MLP space Limited access to/depth of equity/debt capital for non Increased focus of many IG MLP's on existing project Higher cost of capital across the board Less leveragability by private equity shops
Increased importance of fundamental synergiegaps PAAs broad asset base, business model and past ex
represent a competitive advantage
Reluctance of some sellers to deal with less e
buyers
More attractive multiples / higher returns May take time for non-distressed sellers to adapt
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Commercial Activities
John von BergSr. Vice President, Commercial Ac
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Purpose of Presentation
Provide overview of Commercial Groupresponsibilities and activities and how tactivities support and augment PAAs bMarketing cash flow
Highlight a sample of the tools and strautilized by the Commercial Group to locand preserve upside potential
Provide overview of risk controls that gcommercial activities
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Commercial Group ResponsibilitSupporting Baseline; Contributing to Bas
Majority of Baseline Marketing segment contributiocomprised of natural margin provided by logisticalperformed for producers and refiners
PAA Commercial Group supports Baseline Marketimargin by
Managing risk inherent in baseline business
Locking-in margin
Minimizing downside exposure
PAA commercial activities play
role in Baseline Plus performance by Preserving & capturing upside potential
Optimizing assets Bas
BaselinCash
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Optimizing An Asset Rich Com
We reduce exposure and optimize assets allocating our assets to protect against anfrom market conditions
Allocation requires us to take a view of the maour business plan
Allocation and optimization process does not losses, but rather locks in profits and determinupside opportunity we retain
Not a question of if we are going to make mhow much we are going to make
We do not speculate on commodity prices
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Business Model Inputs For CommeActivities
ASSETS CAPITA
KNOWLEDGEEXECUT
~630,000 bbls/day of LeaseProduction
~12 MMbls of working capacitytankage(1) currently leased toMarketing group
~10 MMBbls of Linefill andLong-Term Inventory
Extensive fleet of trucks,trailers and barges
10 key employees withincommercial group with >250years of combinedexperience
Extensive understanding ofcrude markets (location,grade and time spreadrisks), resources andfinancial instrumentsavailable to mitigate theserisks
$525 MCommInvento
$1.6 BiFacility
InvestmLinefillInvento
Requirepositionaccordalocationspread
downsicapturemarket
CommercialActivities
(1) Shell capacity = ~14 MMB
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~8
Crude OilLPG MarkCrude OilRefined P
Crude Location, Grade & Timing Differentials
Operating costs (trucks, pipelines) Tariff costs and PLA Pricing (index, grade and location differentials) Inventory
Waterborne Foreign Purchases Pricing differentials (Brent/WTI, CFDs, LLS) Freight Measurement losses
Timing & volume of tankage
Crude Oil Merchant Tankage Tank utilization risk Timing & volume of tankage
Refined Products
Pricing differentials (grade and location differentials)
Utilize NYMEX contracts as a risk management tool Transparent and available 24 hours/day Creditworthy counter-parties (or appropriate credit protection) Flexibility to close / re-establish positions
Risks, Activities and Aspects of MarkSegment Managed by Commercial Tea
As an MLP that pays out a large percentage of its cash flow, PAA must uand mitigate the risks inherent in its business.
Note: LPG MarMidstrea
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PAA Manages Risks to Meet its Busin
Producer Analogy: Producer is naturally long crude oil
Producer has plan based on $60 per barrel crud
Two strategies available to lock-in plan Sell all oil outright for $65 per barrel
Locks-in $5 per barrel above plan, but caps upside
Buy $62 Put for $2 cost (realizes at least $60 per barrel
Locks-in plan, and reserves upside
PAA Similarities: PAA is naturally long assets / infrastructure
PAA does not have a producers price risk, buthave location, time spread and utilization risk
Use combination of strategies to lock-in profitsretain upside
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Tools/Strategies Used To Manage Achieve Baseline or Baseline Plus
Market EnvironmentMarket Structure
Backward
Contango
Transition
Differentials
Basis
Location
Quality
Su
Ship / store / ex
Optimize produ
Calendar time s
Calendar time s(synthetic lease
Short, medium strategies
PAA Tools / Strategies
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Example: Lease Gathering BusineFee-Equivalent Contributor to Baseline
ProductionArea
PAA
MarketHub
Pipelin
*PAA also incurs cost to carry 10 mmbls of pipeline linefill to affect movements in owned and 3rd party pipelin
WellheadPrice
TruckingCosts
PipelineTariff
TotalCost
$50.70 $0.60 $0.50 $52.00
+ + + =
CostKnown
MarginLocked?
NYMEX lesslocation /
qualitydifferential
Projectedfrom
historicalcosts
Tariff isposted
Price
G&ACost
$0.20
*
Projectedfrom
historicalcosts
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PAAs Commercial Activities Cenon Optimizing Diverse Asset B
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Example: Contango MarginCapturing Incremental Value from Strategic Location
Step 1:
PAA buys crudeoil in Month #1and sells crude oil
in Month #2,either from
customers or onthe NYMEX
Step 2:
PAA receives thedelivery of crude oil
at its storagelocation c
Step 3:
PAA stores the crudeoil between the time ofreceipt and the time of
delivery
Purchase InMonth #1
MonthlyTankLease
MonthlyCost ofCapital
TotalCost
$50.00 0.40 0.20 $50.60
+ + =
CostKnown
MarginLocked?
Purchased Negotiatedlong-term
lease
Hedgedinventory
facility andPAA
revolver
Price
Customeror NYMEX
Terminal
PAAPipeline Pipeline
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PAA Commercial Activities Governed bComprehensive Risk Management Polic
Risk Management policy governs various commercial activities including physical pand sale transactions as well as the use ofutures/options/derivative instruments
Prescribes defined limits for certain transactio
Prohibits outright speculation on commodity p
Provides allowance for routine inventory balan
All positions are around a hard asset or a purccontract
Comprehensive risk compliance reports sexecutive management
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Commercial Activities Take-Away
Commercial Activities support baseline maprofitability and help enable baseline plus p
Supported by significant asset base
Minimal risk to changes in the outright price ocommodity
Limited to ongoing inventory balancing
No equity at risk
Only locking-in margin and preserving upside when
Downside is opportunity value given up by locking-according to business plan
Governed by comprehensive risk managemen
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U.S. Capital Projects Over
Mark GormanSr. VP, Operations & Business Dev
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Capital Project Environment: Rapid InGrowth Caused Escalating Costs
Capital investment for organic growth projects, both acroand at PAA, has increased dramatically
The increased activity, which was exacerbated by the impGulf Coast hurricanes, led to increased costs and reduce
experienced construction resources
During this time period, PAA employed an alliance time agreement to ensure access to construction resources
Despite certain favorable contract terms, PAA still experienotable cost pressures
MLP Organic Growth Spending(1)
(2001 2008)
$0
$4,000
$8,000
$12,000
$16,000
$20,000
2001 2002 2003 2004 2005 2006 2007 2008
(1) Source: Wachovia Capital Markets
(dollars in millions)
PAA Organic Gro(2001 2
$0
$100
$200
$300
$400
$500
$600
2001 2002 2003 2004
(dollars in millions)
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Capital Project Environment: Recent CShowing Signs of Improvement
Due to economic slow-down, cost pressures have easeexperienced construction resources have become mor
Contractors showing signs of being hungry again anmore aggressive on pricing
Note: IHS/CERA Downstream Capital Costs Index from Capital Cost Analysis Forum D2009 Market Update dated May 1, 2009.
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PAA Positioning Relative to Changing(Current environment has eased some industry cost press
Virtues of PAAs capital program have enabled PAA to brecent decreases in costs
Composed of larger number of smaller projects (No multi-capital projects)
Can be scaled according to environment (2009 progra~30% decrease from previous years)
Generally shorter permitting & construction times (typmonths)
Mitigates impact of a cost overrun or time delay on an(portfolio effect)
More ratable (versus lumpy) cash flow build-up
Many projects are expansions of existing storage facilities
Easier (than long-haul pipelines) to assess constructigeography and terrain, enabling more fixed-price ty
We have canceled alliance agreement and now require f
As a result, Cushing Phase VII, St. James Phase III and Pabenefited materially from decreased costs resulting from competition
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PAA Has Focused On Strengthening Its Development Process
Developed a more comprehensive project development ensure more consistent execution of project constructiotiming and design expectations due to Ramp-up in organic growth investment
Resulting cost pressures
Continued focus on organic growth
Addressed in mid-2008 by integrating pipeline / terminagroups, engineering and operations under one senior V Commercial: develops project economics for new facilities
existing facilities or process improvements that reduce co
Engineering: design, permit, procure and construct faciliti
Operations: start-up and test facilities, on-going operation
Under project development process, projects are evalua
based on cost, timing, complexity and various other me Project classification determines necessary level of advan
coordination and project oversight
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HurdleHurdle rate if overspentby 25%
Hurdle rate ifoverspent by
50%
Sensitivity
Some riskNo riskEHS Risk
OSomeNone (Inside Fence)CommunityImpacts
CompModify existing orstraightforward
NonePermitting
DependDependent oncooperative 3rd Party
Internal projectInterdependence
Projecupo
Limited flexibility inproject schedule
No economical timeconstraints
Schedule
SignifiMinimal impact tofacility or 3rd Party
No impact to facilityor 3rd Party
Complexity
New application withinPAA of established
technology
RoutineTechnology
$1 15 MM< $1 MMCost
Class IIClass I
PAA Project Development ProcesIllustration of Project Classification Matrix
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PAA Project Portfo
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PAAs Sizable Portfolio of Organic ProjecFoundation for and Visibility of Future Gr
PAAs current portfolio of organic growth projects 2009 capital program of $350 million
Additional portfolio of ~$300 - $600+ million of
Additional portfolio projects are in various stages
Engineering
Customer discussions / negotiations Permitting
Projects generally are not included in announced until project AFE is approved
Not all current portfolio projects will advance to finconstruction; however, PAA is continuously in discustomers for new capital investment opportunitie
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2009 Capital ProgramWeighted Towards Storage Projects
Dpmdp
Phs
St. James Phase III (1) 85$
Rangeland Tankage and Connections 35
Kerrobert Pumping Project 34
Cushing Phase VII 29
Nipisi Storage and Truck Terminal 20Patoka Phase II 20
Salt Lake City 14
Pier 400 13
Paulsboro 8
Other Projects (2) 92Total Expansion Capital 350$
(1) Includes a dock and condensate tanks. (2) Primarily pipeline connections, upgrades astations, new tank construction and refurbishing, and carry-over of projects started in 20
Excerpt from May 6, 2009 Form 8-K (dollars in millions)
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Location of Major U.S. Capital Pro
Patoka
Pier 400Cushing
St. James
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2.3 MMBbl Phase VII $40 million 4 570,000 barrel tanks
To be in service in 2Q 2010
Increases PAAs total capacity to 13.1MMBbls
Per barrel costs have come down by>20% versus original AFE
Expansion supported by long-termleases with large refiner
Refiners use Cushing tankage primarilyfor operations (therefore need tankageregardless of market structure)
Tankage provides refiners ability to
stage barrels for ratable refining runs &pipeline deliveries
Note: Pipelines shown are to Cushing hub and may not be directly connectedto PAA facilities.
Inbound
Outbou
Propose
Sun
OXY
Keysto
OXY
SEM
PAA (3)
SEM
Osage
COP
COPCu
PAA (Basin)
Cushing Phase VIIContinuing to Expand our Flagship Facility
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Phases I & II
~6 MM barrels of crude oil capacity
Manifold & header system capable of receivingand delivering at main line rates
Phase III: Mississippi River Dock &Condensate Storage ~$131 Million
Dock to accommodate 2 barges and 1 ship(room to construct an additional ship bay)
Dedicated crude & condensatemanifolding, pre-built for additionalproducts
Expected in service 4Q09
900K bbls condensate storage ( 3 300k bbltanks) to be in service 2Q10
Expect condensate to be received at St. James,transported up Capline, into Patoka and on toCanada for diluent
Expansion Capabilities
Only ~163 acres of >1,850 acres utilized bycurrent operations & expansions
Given strategic land position with river accessand proximity to railroad, believe that theremay be additional expansion possibilities
Ship Shoal
SPR /Shell
XOM (3)
Shell
St J
Inb
OuInb
St. James Phase III Dock & Condensate StorLeveraging Strong Positioning
CanadianCrude
US/FoCru
Note: Pipelines shown are to St. Jammay not be directly connected to
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Patoka Terminal Fundamental D
We believe that new supply patterns will transform Patoka from
intersection to an important market hub/trading location
Third-party storage capacity at Patoka = ~12 MMBbls
New pipeline projects to/from Patoka require
additional operational storage Keystone (24 lateral from Wood River)
Southern Access
Southern Lights
Significant influx of new crude grades requires
tankage for segregation & blending Heavy bitumen from Canada
Synthetic grades
Condensate for Southern Lights
New expansions potentially used for: Segregating crude grades
Custom blending for refinery requirements
Staging batches
Market structure (Contango)
XOM
Capwood
WoodPat
Southern Acces
Keystone
Mu
Note: Pipelines shown are to the Patoka hub and may not be directly connected to PAAs facility.
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Phase I -- $89 million total cost 2.8 million bbls of crude oil capacity
3 670,000 barrel tanks
2 400,000 barrel tanks
Majority leased to 3rd parties
In service Q1 2009
Phase II -- $25 million total cost 600,000 bbls of condensate tankage
2 300,000 barrel tanks
Supported by long-term 3rd party lease
agreement
Projected in-service 2Q 2010
Highly flexible Pipeline connected to PAA terminals at St.
James, Cushing, Edmonton & Kerrobert
Able to receive and deliver at line rates
Designed for expansion Sufficient land position
Oversized manifoldInbound pipelines
Outbound pipelines
Proposed or Announced
PAA Patoka Facility Phases I & II
XOM
Capwood (PAA)
WoodPat
Southern Access
Keystone
Musta
Pa
CanadianCrude
US/FoCru
Note: Pipelines shown are to Patoka hub and may notbe directly connected to PAAs facility.
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Paulsboro, NJ Terminal
Refined Product Tank Expansion $44 million 8-tank expansion for total of 1 million additional bar
Placed 450,000 barrels into service during 4Q08 and550,000 barrels into service during 2Q09
Increased PAAs total storage capacity in the Philad~4 MMBbls
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Pier 400 Project Still out there, but
Deep water berth, will accommodate ULCC vessels with barrel cargos, up to 4 million barrels of drain-dry storagethroughput capacity of up to ~350,000 barrels per day baemission levels.
Project initiated by Pacific in 2003. Achieved major milesNovember 2008, by obtaining approval of EIR / EIS. In ACity Council ratified the EIR. One objection still under a
Added costs and uncertain economy will likely slow dowadvancements, absent compromises (redesign of facilityincreased cost sharing of customers / port).
Will continue to advance efforts,but shifted project to potentialstatus in early 2008 (vs. plannedstatus). Continue to believe it isa when not if project.
Project Tanks
San
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Capital Projects To Be Placed In ServicMulti-Year Period, Providing Growth Vis
Major Projects 2008 1H2009 2H2009 1H2010
Cushing Phase VI In Service
Ft. Laramie In Service
West Hynes Expansion In Service
Patoka Phase I In Service
Salt Lake City Expansion In Service
St. James Phase II In Service In Service
Paulsboro Tankage (1) In Service In Service
Kerrobert Expansion
Edmonton Expansion
Gas Storage JV (1,3) In Service In Service
St. James Phase III (2)
Patoka Phase II
Cushing Phase VII
Martinez Terminal In Service
Pier 400
Future Projects
Note: PAAs capital program is composed of numerous other projects in addition to those listed above. (1in service in stages. A portion of the storage capacity attributable to these expansions is in service. (2) Prodock and condensate tankage, coming in service in stages. (3) Includes 24 BCF at the PAA/Vulcan Pine Prstorage facility, the first ~14 BCF of which is online, with additional capacity expected to come into servicethrough 2010. Cash flow in the joint venture is expected to be initially used to fund ongoing construction reduce project debt.
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Take-Away Points
In recent years, the industry and PAA have grappled costs and reduced resource availability, but we are fsigns that conditions are improving
PAAs has a sizeable project portfolio that is favorabrelative to changing market conditions, which we belcompetitive advantage
Scalable portfolio of diverse projects Flexibility to adapt to changing economic and financia
Not committed to multi-year, multi-billion dollar projec
PAA has implemented a more comprehensive projecprocess designed to more efficiently bring projects otargeted cost and time parameters
PAAs current projects are supported with third-partyare progressing as planned and provide visibility fornext several years
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Plains Midstream CanadStrategically Positionedfor Continued Success
Dave DuckettPresident
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Plains Midstream Canada: Overview
2001 PAA acquisition of Canadian marketing and tassets of Murphy Oil Company Ltd. (primarily fee-and CANPET Energy Group (primarily entrepreneumanagement) formed subsidiary now operated as:
Plains Midstream Canada (PMC)
PMCs strengths: Operationally flexible, strategically located assets
Predominantly fee-based Proven business model and proven management
Safe, reliable, experienced operator
Focused on creating and sustaining excellence in core co
Extensive crude oil and LPG marketing experience
Favorably positioned for future growth
Since 2001: $1.8 billion cumulative CAPEX 10-fold increase in adjusted EBITDA Increased percentage of fee-based revenues
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PMC Significant Growth in Assets since 200Driven by Organic Projects and Acquisitions
2001
Crude Oil
Pipeline (active miles) ~800
Crude Oil Tankage (barrels) 1.3 MM
Crude Oil Pipeline Volumes 180 mbpd 4
Truck units 72 Trailers
1 Truck
24
LPG
LPG Storage (barrels) 0.005 MM
LPG Railcars (leased) 150
Truck units 6 Trailers 9
Employees
Calgary Office 61Field (Canada) 47
(U.S.) 22
Total 130
Calgary OfField (Cana
(U
T
*As of March 31, 2009
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PMCs Strategic Crude Oil Pipeline Posit
MANITOBA
SASKATCHEWAN
ALBERTA
Regina
Edmonton
Wapella
Manito
WascanaSouth Sask
Calv
en
Rainbow
Milk River
Rangeland
Joarcam
KM
IPF
AthabascaOilsands
IPF
TransMountain
(KM)
Enbridge
Enbridge
Pembina
Pembina
PMC Assets Hig
Fee-based reven
Location in key
Strong competit
Supply growth a
offset to areas odecline
IPF
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MANITOBA
SASKATCHEWAN
ALBERTA
PMC Crude Oil Facilities
Regina
Hardisty
Red Earth
Red Jacket
Edmonton
Atlantis
Gull Lake
MidaleCromer
Cantuar
Central Alberta
Rimbey
High Prairie
Wapella
Manito
Marshall
WascanaSouth Sask
Calv
en
Rainbow
Milk River
Rangeland
Joarcam
Kerrobert
IPF
AthabascaOilsands
IPF
TransMountain
(KM)
Enbridge
Enbridge
Pembina
Milk River
KM
Pembina
PMC Asset H
Handle multiple
Many facilities lopipelines providaccessibility
Flexible transpoalternatives (railat certain facilitiprofitability
Unity
Sundre
IPF
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Crude Oil Growth Opportunities
Well positioned for continued organic groacquisitions
Valley Pipeline acquisition April 2009
Completed $687 million Rainbow Pipe Linin May 2008
Performing in line with expectations; pursuing orgaprojects identified at purchase
Q4 2008 Westlock Truck Terminal expansion co Q1 2009 Cal Ven Diversion project completed Nipisi Terminal Diluent Return Line (potential project)
Other Organic Growth Projects/Initiatives Manito: Kerrobert Pumping Project
Rangeland: Storage, Connections, Expansion Later
Increasing Efficiency of Existing Capacity
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Rainbow: Nipisi Terminal Project
~$18 million total cost
Expected in service in Q4 2009
Construct truck and storageterminal along Rainbow PipelineSystem to provide:
Raw Heavy Crude Blending Condensate Marketing
Blended Heavy Terminalling
Diluent Supply
Future expansion potential from
related projects Crude Oil Treater
Rainbow Diluent Return Line
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Rainbow: Diluent Return LinePotential project in early stages of development
Diluent returntime of acquiterm upside p
Potential to rdiluent volum
Development
oil productiondemand
Th
ree
Cre
eks
Rainbow
L.
Bu
ffa
lo
Red Earth
Cal
Ven
Pelican Lake
Utikuma Station
Mitsue Station
Westlock Station
Edmonton
Flatbush Station
Ca
lVen
Atlantis
Nipisi
Cadotte Station
Gold
en
Wabasca
Seal P/L
Proposed Diluent LineRainbow
Plains terminal
Plains truck terminal
Plains pipeline
3rd party pipeline
ALBERTAALBERTA
Edmonton
Calv
enRainbow
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Manito: Kerrobert Pumping Proje
~$43 million total cost Expected in Service
Q4 2009
Kerrobert Terminal isPMCs largest storageasset with ~1.7 million
barrels of storagecapacity
Project entailsconstructingadditional receipt anddelivery flexibility topump into storage and
Enbridge at line rates
Will provide access to multiple Western Canadian heavy crude oil, enabling significant additional flexsupply diversity
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Rangeland: Storage, Connections, Expans
Total Cost: ~$48 million Modifications, upgrades and
expansions to Rangeland systemincluding:
Sundre Piping Modifications
Tanks to be reconfigured to maximize
operations and marketing storage Expected in Service: Q3 2009
Edmonton Storage Construct additional 240,000 bbl of crude oil
storage capacity
Expected In Service: Early Q4 2009
Expansion Laterals Construction of a 6 condensate and 4
butane pipeline from Harmattan, AB toSundre, AB
Proposed construction of a 6 condensatepipeline from Madden, AB to Harmattan, AB Proposed ex
Expansion la
Plains truck
Plains pipeli
3rd party pip
Sundre
Ma
Ra
ngeland
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LPG Business Strategy
Overview Inefficient market similar to crude oil market
Logistical assets/flexibility storage, pipeline and truck/r
Opportunity to capitalize on regional supply/demand imbaweather, refinery upsets, seasonal rotation) utilizing invenassets
Dual purpose facilities (both Propane & Butane)
Propane
Wholesale focus
Demand based business model hub and spoke distribut
Volume and margins lock in margin up front on base bu
Butane
Supplying refineries for gasoline blending and diluent for(primarily in Canada)
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Propane Marketing Overview
Product purchased in bulk and sold into wholesalers/retailers
PMC storage capability key to meet sedemand
Many small customers results in very dcredit exposure
Very flexible transportation logistics wtransportation methods utilized (pipeliand rail)
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PMCs LPG Facilities Favorably LocatMajor Population Centers
Portland ORPortland OR UpperUpperPeninsula MPeninsula M
TulsaTulsaOKOK
Davenport IADavenport IA
GrandGrandRapids MIRapids MI
CharloCharlo
Moline ILMoline IL
Phoenix AZPhoenix AZ
Bakersfield CABakersfield CA
Grande PrairieGrande PrairieABAB
Seattle WASeattle WA
San Pedro CASan Pedro CACaverns
Terminals
Cold Storage
Fractionation
Third-PartyMarket Hub
Mont Belvieu TX
ConwayConway
KSKS
POPULATION CENTERSPOPULATION CENTERS
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Butane Marketing Overview
Shafter fractionator in Bakersfield, CAsource
Transportation logistics key to meet bodemand and to supply diluent for heav
Trucks and rail are widely used
Seasonal demand for refiners handledstorage frequently storage facilities hboth propane and butane
Heavy oil pipeline operators like PMC hnatural demand base
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LPG Growth Opportunities
Acquisitions / Internal growth
Internal Growth Projects ~$12 millio
Shafter expansion (California)
Liquefied hydrogen tank to process high olefin butan
Reactivate existing V-3 column (Q1 2010)
Harmattan C3 Batching Project (Alberta)
Expand product slate to include propane from HarmaKeyera Rimbey pipeline to increase HVP pipeline utili
Our growth strategy includes expan
Customer base
Geographical footprint
Strategic assets
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PMC Outlook and Conclusion
PMC has grown significantly over the yea
PMC believes there are numerous growthopportunities within Canada
PMC has solid strategic positioning for fugrowth in Canadian crude oil as well as Cand U.S. LPG markets.
We continue to actively pursue both acquisitioorganic investment opportunities
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Financial Growth Strate& Risk Management
Al SwansonSenior VP & CFO
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