PAA Expects No Material Credit Exposure in SemGroup Bankruptcy
Plains All American Pipeline, L.P. (NYSE:PAA) today reiterated statements made in a press release issued July 17, 2008, that it does not expect to have any material credit exposure to SemGroup, L.P. and its affiliates. SemGroup, L.P. yesterday announced that it and certain of its subsidiaries have filed petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. The trade debt amounts attributed to PAA in such bankruptcy filings were gross amounts and, as noted in the bankruptcy filing, are “Subject to Set-Off.” However, the presence of such amounts in SemGroup, L.P.’s bankruptcy filing (and subsequent media reports reciting such gross amounts) have precipitated calls from PAA’s stakeholders and customers seeking clarification. As indicated in the SemGroup filings, PAA has various arrangements in place to mitigate credit exposure, such as net-out agreements that allow for set-off of payables and receivables between counterparties. Accordingly, PAA is today reaffirming that it anticipates no material credit exposure to SemGroup, L.P. and its affiliates.
Plains All American Pipeline, L.P. is a publicly traded master limited partnership engaged in the transportation, storage, terminalling and marketing of crude oil, refined products and liquefied petroleum gas and other natural gas related petroleum products. Through its 50% ownership in PAA/Vulcan Gas Storage LLC, the partnership is also engaged in the development and operation of natural gas storage facilities. The Partnership is headquartered in Houston, Texas.
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