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Pacific Energy Partners, L.P. (NYSE:PPX) ("Pacific
Energy") announced that Rocky Mountain Pipeline System LLC ("RMPS"),
its wholly-owned subsidiary, has signed a transportation agreement
with Frontier Oil and Refining Company, a subsidiary of Frontier Oil
Corporation (NYSE:FTO) ("Frontier Oil"), pursuant to which RMPS will
construct a new pipeline system from Guernsey to Cheyenne, Wyoming in
exchange for Frontier Oil's ten year firm commitment to ship 35,000
barrels per day to support this expansion project. RMPS will also
lease to Frontier Oil, on a concurrent basis, approximately 300,000
barrels of storage capacity at Fort Laramie.
RMPS will construct a new pipeline system consisting of a 24-inch
crude oil pipeline, approximately 10 miles in length, from Guernsey to
RMPS' Fort Laramie, Wyoming tank farm and a 16-inch crude oil
pipeline, approximately 85 miles in length, from Fort Laramie, Wyoming
to Frontier Oil's Cheyenne refinery. This project is a natural
extension of Pacific Energy's existing pipeline system serving
Guernsey and Fort Laramie. Construction will begin in the second
quarter of 2006 and is expected to be completed in the second quarter
of 2007. The estimated cost of the project is $59 million, $31 million
to be spent in 2006 and the remaining $28 million to be spent in 2007.
Initial capacity will be 55,000 barrels per day, which can be expanded
to a capacity of 90,000 barrels per day.
"We are excited to be able to construct this new pipeline that
will provide additional capacity to satisfy Frontier Oil's growing
crude oil feedstock needs," stated Irv Toole, President and Chief
Executive Officer. "In addition, there will be a seamless integration
of this new pipeline into our existing Rocky Mountain activities. When
completed, this pipeline extension is expected to be immediately
accretive to distributable cash flow to our limited partners."
Pacific Energy's previously announced expansion capital budget of
$118 million in 2006 will be increased $31 million to $149 million to
accommodate this new project.
About Pacific Energy:
Pacific Energy Partners, L.P. is a master limited partnership
headquartered in Long Beach, California. Pacific Energy is engaged
principally in the business of gathering, transporting, storing and
distributing crude oil, refined products and other related products.
Pacific Energy generates revenues by transporting such commodities on
its pipelines, by leasing capacity in its storage facilities and by
providing other terminaling services. Pacific Energy also buys and
sells crude oil, activities that are generally complementary to its
crude oil operations. Pacific Energy conducts its business through two
business units, the West Coast Business Unit, which includes
activities in California and the Philadelphia, PA area, and the Rocky
Mountain Business Unit, which includes five Rocky Mountain states and
Alberta, Canada.
This news release may include "forward-looking" statements within
the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
All statements other than statements of historical fact included or
incorporated herein may constitute forward-looking statements.
Although Pacific Energy believes that the forward-looking statements
are reasonable, it can give no assurance that such expectations will
prove to be correct including the estimated capital cost of the new
pipeline. The forward-looking statements involve risks and
uncertainties that may affect Pacific Energy's operations and
financial performance. Among the factors that could cause results to
differ materially are those risks discussed in Pacific Energy's
filings with the Securities and Exchange Commission, including our
Annual Report on Form 10-K for the year ended December 31, 2005.
For additional information about the partnership, please visit
www.PacificEnergy.com.