PAA Natural Gas Storage, L.P. completes IPO

 

PNG Natural Gas Storage, L.P. (NYSE:PNG) announced on May 5, 2010 that it has completed its initial public offering of 13.478 million common units at $21.50 per common units, including 1.758 million common units issued pursuant to the full exercise of the underwriters' over-allotment option.

Net proceeds received by PAA Natural Gas Storage from the sale of the common units were approximately $269 million. PNG expects to use these net proceeds, together with $200 million of borrowings under its new credit facility, to repay intercompany indebtedness owed to Plains All American Pipeline, L.P. (NYSE: PAA). PAA expects to use all or a portion of these proceeds to repay amounts outstanding under its credit facilities and for general partnership purposes.

 

The common units offered represent approximately 23.2 percent of the outstanding equity of PNG. Plains All American Pipeline, L.P. owns the remaining equity interests in PNG.

 

Barclays Capital, UBS Investment Bank, Citi, and Wells Fargo Securities acted as joint book-running managers for the offering. Bank of America Merrill Lynch, J.P. Morgan, Raymond James, Madison Williams, Morgan Keegan & Company, Inc., RBC Capital Markets, and Stifel Nicolaus acted as co-managers for the offering.

 

PAA Natural Gas Storage was formed by PAA to own and operate two natural gas storage facilities acquired by PAA in 2005 and to grow the natural gas storage business.  The facilities, located in Louisiana and Michigan, have an aggregate working gas storage capacity of 40 Bcf and an aggregate peak injection and withdrawal capacity of 1.7 Bcf per day and 3.2 Bcf per day, respectively. It also leases storage capacity and pipeline transportation capacity from third parties from time to time in order to increase operational flexibility and enhance the services offered to customers.

 

For additional information, visit PAA Natural Gas Storage's website at www.pnglp.com or contact:

Roy I. Lamoreaux
Director, Investor Relations

Phone:  713-646-4222

Fax:      713-646-4572