Ladies and gentlemen thank you for standing by and welcome to the Plains All American Pipeline's and PAA Natural Gas Storage Third Quarter 2010 Results Conference Call. During today's call, in addition to reviewing the results of the prior period, the participants will provide forward-looking comments on the partnership's outlook for the future, which may include words such as believe, estimate, expect, anticipate or other words that indicate a forward view. The partnership intends to avail themselves of Safe Harbor precepts that encourage companies to provide this type of information and directs you to the risks and warnings set forth in Plains All American Pipeline's and PAA Natural Gas Storage most recently filed prospectus 10-K, 10-Q, 8-K, is applicable and other current and future filings with the Securities and Exchange Commission. Throughout the call participants may reference the company's by their respective New York Stock Exchange ticker symbol of PAA or Plains All American Pipeline and PNG or PAA Natural Gas Storage. In addition, the partnership encourages you to visit the website at www.paalp.com and www.pnglp.com and in particular, the section entitled non-GAAP Reconciliation, which presents certain commonly used non-GAAP financial measures such as EBIT and EBITDA, which may be used here today in the prepared remarks and in the Q&A session. This section of the website also reconciles the non-GAAP financial measures to the most directly comparable GAAP financial measures, and includes a table of selected items that impact compatibility with respect to the Partnership's reported financial information. Any reference during today's call to adjust EBITDA, adjust net income and the like, is a reference to the financial measure, excluding the effect of selected items impacting compatibility also for PAA also references to net income or references to net income attributable to claims. Today's conference call will be chaired by Greg L. Armstrong, Chairman and CEO of PAA and PNG. Also participating in the call are Harry Pefanis, President and COO of PAA and Vice Chairman of PNG, Dean Liollio, President of PNG, and Al Swanson, CFO of PAA and PNG. I will now turn the call over to Mr. Greg Armstrong.

Thank you Gael and good morning and welcome to everyone. In addition to Harry, Dean and Al, we also have several of the members of our management team available for the question and answer session including Roy Lamoreaux, Director of Investor Relations. As a reminder, the slide presentation we will be referring to in this call is available on our website at www.paalp.com and www.pnglp.com. Yesterday afternoon, Plains All American reported third quarter performance between the mid-point and high end of our guidance range. As illustrated on slide 3 for the third quarter of 2010, PAA reported EBITDA of $205 million and net income of $81 million or $0.28 per diluted unit. Excluding the selected items impacting comparability, which are included in the table at the bottom of the slide, our adjusted EBITDA was $264 million and adjusted net income was $140 million or $0.70 per diluted unit. Adjusted EBITDA results, adjusted net income and adjusted net income per diluted unit for the third quarter of 2010 increased 13%, 23% and 19% respectively over last years third quarter. In compression to guidance PAA's overall results were bear the top of the range and were highlighted by over performance in our fee based transportation facility segments and in line performance in our supply and logistic business. Slide 4 graphically presents this quarters aggregate and performance versus guidance; highlight the fact that we have now delivered 35 consecutive quarters or results inline with guidance. PAA Natural Gas Storage also reported third quarter performance slightly ahead of the mid-point of this guidance range and Dean will cover those results later in the call. Last month PAA had incurred a 3.3% year-over-year increase in our run rate distributions to $3.80 per unit on an annualized basis which met our distribution growth goal for the year. This equates to a 3.7% increase in distributions paid in 2010 versus 2009. As of the distribution payable next week, PAA will have increased this distribution in 24 out of the last 26 quarters. During the remainder of the call today will focus on the following items for both PAA and PNG which are highlighted on slide 5. They include comparison of actual performance to guidance and operational assumptions that are incorporated into that guidance. Capital projects and acquisition activities update, our capitalization liquidity at the end of the third quarter, fourth quarter 2010 financial guidance and preliminary 2011 EBITDA guidance in growth capital investment plans. With that I'll turn the call over to Harry.

Thanks Greg. I'll now review our third quarter operating results compared to the mid point of our guidance issued on August 4, 2010, discuss the operational assumptions used to generate our fourth quarter guidance, and discuss the progress of our expansion capital programs and acquisition activities. Dean will, then, cover the PNG specific information in just a moment. Overall, our third quarter operating results were favorable to the mid point of our guidance. As shown on slide 6, adjusted segment profits for the transportation segment was a $142 million or $0.50 per barrel, which is about $7 million above the mid point of our guidance range. These favorable results are due to the combination of higher revenues associated with our Pipeline and also barrels and operating expenses were a little lower than forecasted. Volumes for the quarter were in line with the mid point of our guidance. Adjusted segment profit for the facility segment was $75 million or about $0.35 per barrel, which is approximately $5 million above the mid point of our guidance. Segment capacity with 71 million barrels per month, which was in line with our guidance. Segment profit benefited from higher ancillary fees, primarily related to higher throughput volumes as well as lower operating expenses. Adjusted segment profit for the Supply and Logistic segment was $48 million or $0.63 per barrel, which was in line with mid point guidance. With the exception of our waterborne 400 crude oil imports, volumes were in line with guidance also. The variance in our waterborne volumes were due to arrival of a carload that was anticipated to be received in the fourth quarter. As a result, we will see lower waterborne volumes in our fourth quarter guidance. Maintenance capital expenditures were $29 million for the third quarter, resulting in a total…

Thanks Harry. In my part of the call, I will provide an update on PNG's activities, address our third quarter operating and financial results and share a few comments about our fourth quarter guidance and preliminary 2011 outlook. Execution of PNG's 2010 capital program continues to progress. Overall, we remained on time and we currently expect to come in approximately 5% under the amount we had budgeted for 2010, primarily due to lower expenditures on base gas. A recap of this capital program is included on slide 13. At Pine Prairie, leaching operations continue at Cavern Well 4 and we currently estimate we have created approximately 4 Bcf of working gas capacity. We remained on track to bring Cavern Well 4 into service in the second quarter of 2011 at approximately 7.5 Bcf or working gas capacity. In late September, we began leaching operations on Cavern Well 5 and we expect to bring approximately 10 Bcf or working gas capacity into service in the second quarter of 2012. Negotiations are ongoing with respect to leasing capacity that will be available in the second quarter of 2011. That said, as a general rule for competitive reason, we don't comment on pricing levels or contracted volumes prior to their effective date. However I do want to make a few comments about overall storage market conditions. As we've discussed in August, market conditions for natural gas storage have weakened rather abruptly over the past five to six months. In our opinion the softer market conditions were primarily caused by the confluence of two significant factors. First, substantial domestic natural gas projection and second one of the hottest summers on record which led to high levels of gas fired power generation demand. We believe that either of these factors independent of the other would…

Thanks, Dean. During my portion of the call, I will discuss capitalization and liquidity for both, PAA and PNG, PAA recent financing activity and PAA's guidance for fourth quarter of 2010. As summarized on slide 18, PAA exited the quarter with solid capitalization approximately $1.3 billion of committed liquidity and credit metrics in line with our target. The committed liquidity I mentioned include approximately $180 million of availability under the PNG revolver. At September 30, our adjusted long-term debt to capitalization ratio was 49% and our total debt to capitalization ratio was 56%. Excluding the 500 million of notes used to fund inventory, our adjusted long-term debt balance was approximately $4.1 billion. The total debt ratio includes $1.4 billion of debt that support our hedged inventory. This debt is eventually self-liquidating from the proceeds when we sell the inventory. For reference, our short-term hedged inventory at September 30 was comprised of approximately 24 million barrels equivalent with an aggregate value of $1.5 billion. In addition to these inventory volumes and values which carry as a current assets, we also have approximately 13 million barrels equivalents of linefill and base gas carried as a long-term asset that has a historical book cost of $630 million. Our adjusted long-term debt to adjusted EBITDA was 3.8 times and our adjusted EBITDA, the interest coverage is 4.1 times. As reflected on slide 19, PAA's long-term debt primarily consists of senior unsecured notes and including PNG's credit facility has an average tenure of approximately 9 years. We have no maturities until September 2012 and 89% of our long-term debt is fixed at an average rate of 6%. With respect to PNG's capitalization as shown on slide 20, PNG exited the quarter with a debt-to-cap ratio of 23%, adjusted EBITDA, the interest coverage of almost 20…

Thanks Al. For several years PAA has used the third quarter conference call that typically is held in November of each year to provide preliminary guidance for the following year. Generally this information is provided on a more summarized basis than our detailed quarterly guidance but it does include a preliminary range for adjusted EBIDTA, interest expense and cash expenditures and now income taxes. We are still in the early to mid stages of our detailed 2011 planning process and in addition, as Harry noted during his comments, we remain very active on the acquisition front. Accordingly the 2011 information is very much preliminary and subject to refinement as we progress with annual planning and forecasting process and is also subject to modifications as a result of acquisition related developments or capital market activities. As shown on slide 23, the preliminary guidance range that we furnished last night in our 8-K filing forecast an increase in 2011 adjusted EBITDA from 1.12 billion to 1.17 billion for a mid point of 1.145 billion. This compares to the 1.07 billion that Al just mentioned for the mid point of our most recent guidance for 2010 and translates into a forecasted adjusted EBITDA growth range of 5% to 9% or a mid point of roughly 7%. Although we are looking for solid year-over-year growth in EBITDA, we'll point out that 2011 will be somewhat of a transitional year for distributable cash flow as a fair amount of this increase in EBITDA is also by incremental taxes on our Canadian operations during 2011. You may recall from prior conference call updates on this subject that effective January 1st 2011, our Canadian entities that are passed entities for Canadian tax purposes will become tax paying entities. For U.S. tax purposes, these entities will continue to…

(Operators Instructions), we'll go to Yves Siegel with Credit Suisse, please go ahead.

Good morning everybody, I have to honest that's a lot of information to digest.

It's a lot of information prepared.

So I'll just try to stick to a couple of questions, first when we thing about natural gas storage and the soft economic environment that we're in, overlaid that with that fact hat you have very low expansion cost opportunities in front of you. How should we think about the rates that you are looking for going forward within the context what we just mentioned and within the context of that fact that you will be having additional storage rolling over from Legacy contracts? Does that make sense of that question?

Yeah. And make a few comments as being to jump in. I guess, firstly, we actually have very few contracts rolling over in 2011 and not much in the way of 2012. We get out in 2013-14, we start having some contracts roll over. And then obviously, we have new space that would bring in on in both 11 and 12 that as Dean mentioned we're in the process of contracting portions of that and we're not going to give any real comment on rates there. What I can say is that, and we'd talked about this in the IPO, you know, based upon the tight market, and we're certainly seeing a tight market. We can generate very attractive double digit returns, at costs that we are approaching $10 million per Bcf and the numbers that Dean just gave you, which includes, kind of little bit of fine tuning of our relations. We look at how we best expanded and we slowed down the volume of growth. But we look at the quality of that volume growth. We can generate 8 Bcf more at roughly $1 and $2 and we can generate an additional 24 Bcf on that in the $6 range. Those economics are extremely attractive even in this low environment. So, we certainly don't want to get into an overbuilt situation and have our capacity unavailable. We don't think that's the case. We're not the price setters for the market. But I think, we're ones that can generate attractive returns even at a tight market for an extremely long period of time. The analogy would be, if you can hold your breath, we think, we can hold our breath a lot longer than everybody else.

But I guess the question also is, when you think about the returns, are you thinking about the returns from the total investment or are you thinking about returns on the incremental investments in terms of moving forward?

Both. But primarily because, again, so much of our activity is leased up. We've got two different markets. Again, the Pine Prairie market is different than the market in Bluewater. That one held up very constantly. And that's why we're not too worried about longer term relations up there and in fact, we're generating exactly where we thought we would be in Bluewater, even in this environment. So, it's really Pine Prairie it's the incremental investments and making sure we're not cannibalizing ourselves. But again, we're small factor in the big market in terms of total storage. But I think we're a meaningful factor and becoming more so in terms of the high-performance storage.

Okay.

So, the answer is it looks good in both cases, both on an incremental and overall. It just looks better for us on incremental and probably just about everybody else.

Okay. And then if I could, two more questions, and I'll move forward I promise. Dean, the second question is, as you look at acquisitions, could you give a little bit more, just elaborate a little bit more on the, sort of type and size of acquisitions that you're thinking about? And within the context as well of, what type of returns that you think that you can achieve and given the fact that cost of capital has come down a bunch, how does that also play into the thought process?

Yves, is your question limited to gas storage or PAA or both?

It's both.

Well, I mean, the acquisition that we're looking, it's really no change in our approach to PAA. It's everything within crude oil and LPG and natural gas storage. So, the nature of the assets we're looking hasn't changed. We've always been looking normally for assets. But we also look for entity opportunities we've recently increased our management strength here to be able to I think widen our bandwidth to be able to chase more things at the same time and to return to looking forward on – are still in well-above our cost to capital. Right now, we categorize our cost to capital PAA is probably in the 8% range, may be a little bit higher than that when you're in bet the expectations in future growth in that and PNG is probably may be 125 basis points less than that and so we're looking at transactions that are certainly accretive. I think part of the challenge that we look at is cash flow profile of any acquisition whether it's a PNG or PAA, you know, we've got an expectation of growth. PNG is a little steeper than PAA simply because of the relatively small size and the significance of the organic growth. So when we look at those acquisitions of PNG for example, we have say what can we do on our own and generate attractive growth for our existing unit other and then also how do we lower our risk or expand our platform and make sure we don't take away from that right of growth and in fact we don't actually add to it. That's about a combination of accretion measurement and then also right to return because if you think about it, right to return doesn't really give effect to the near-term accretion as you would just I said a total over of our return our standard period of time and these are very long life assets. So we look at in contact and quite candidly all of this whole units that we all look at it just the way you would look at it is what best for the unit over and we don't want to lose something acquisitions that we make a good headlines but don't make good money but we do want to do acquisitions that people may not initially understand but six months or a year if you look back so – a damn, good move.

Could you see a transforming transaction in 2011? Is that part of the stuff that you're look at?

There're certainly other MLPs that have made those statements pretty bold about transforming transactions, I don't want to get into that. I do think we've done two MLP mergers acquisitions in our history. I don't think we're done in doing those. I think there are big assets as well as big entities out there to be acquired and quite candidly I think our guys there is good, as a manager team there's anybody out there to be able to not only get our arms around it but to extract at least as much as the seller if not quite a bit more value on top of that. So I certainly wouldn't want you to think to fall up the table. I want to make sure you know it's on the table but I'm not going to make you promises about 2011.

All right. Thank you very much. Greg.

We'll go to Brian Zarahn with Barclays Capital. Please go ahead.

Good morning.

Good morning, Brian.

On your Cushing expansions, the projects obviously is favorable for your fee-based growth. With your competitors also building out storage in Cushing, is there any concern that future can tangle opportunities, may diminish?

Sure, I'm sure there's possibility. If you look at the way we've designed our facility and we've designed it for – to handle guys that are going to use our Cushing Terminals sort of on operation basis. So a lot of thing had impacted, can tangle and availability of storage of Cushing is certainly one of them.

Brian, I might just point out we're at a little over 14 million barrels right now and going with this new expansion to that 18.5 million barrels. Just use the bigger number because I think that would be your -- 18.5 million barrels. I think we've got 16 to 16.5 million barrels of that is termed out under leases. They quite away into the future and our customers that make up that lease space are all operational users. They don't really use our tanks for -- they optimize their business but that's not why their buying it. And from a functionality and I know you've been to Cushing but just to kind of put it in perspective for those -- others on the call I mean, the total throughput in Cushing is probably in the aggregate volume that moves among all facilities in and out is probably in the neighborhood of 1 million to 1.1 million barrels a day. We have 800,000 barrels a day of throughput capacity through every significant pipeline in and out of there and we've got new and better systems. So we can do all this in different grades and quality. That's why people really to be at PAA's because the functionality -- and we think we give good service by the way at a fair price. When you look at some of these facilities that are being built, there is absolutely no question of significant expansion but as many of those facilities are located far away from the actual interconnect and they've got single lines going from their tank to a manifold. In some cases it's our manifold. But those things have a relatively less lower value. You can put oil it and you can leave it in there or you can take oil out but can't put oil in and out of those at the same time. And so I think those are being built -- our tanks are not being built for contango. They are being built for our customers to operate with and they can be used for contangos. So I think again at some point in time I don't k now of any market that somehow doesn't get overbuilt at some point in time but ultimately what happens is those that have true value add tend to do much better in that market and we protected our self by a functionality but we've protected our self with having the right customers with long term leases.

The only thing I'd add Brian is your going to have more operational requirements in Cushing going forward. When you look at Keystone bringing some more capacity to bring Canadian crude in, Oxy and (inaudible) were some of their lines that Canadian crude oil Texas. We -- the first one of our lines, just recently to move Canadian crude from Cushing down to Southern Oklahoma refineries. Third party they have done the same. We're originating station for all of those connections. So there is a greater need for operational capacity at Cushing today than ever and piece gets their XL project and that's additional operational storage requirements.

I appreciate the color on Cushing. I also have one more question also on storage. Can you comment on additional expansions you're looking at, at your other storage locations, storage hubs?

We are looking at looking at expansions at the 0:03:16 (inaudible). I can say that.

We don't any we aren't doing it down. But seriously we're looking at and certainly have a lot of interest as we said in our press releases and all of our facilities I have to stay tuned.

Okay, thanks guys.

We'll go to Darren Horowitz with Raymond James. Please go ahead.

Hey guys, good morning. Greg, a quick question for you as it relates to St. James. With a lot of the condensate coming up from south of the border and arguably evolving out of the EagleFord, how do you leverage your footprint at St. James to move a lot of that condensate North, either through Patoka or either up North to Canada.

Our last phase at Cushing, we built $900,000 barrels of tankage for handling compound and condensate at Cushing and then St. James and then added 750,000 barrels at Patoka.

It's not like we position ourselves there and very well for the current market and the one that you forecasted is coming which is – there is going to be a lot more like product on the market. The steps we've taken – we've certainly increased our interest in cat line from 22 to 44, now at roughly 54% and as you said that will be a primary conduit to moving condensate up into Canada and then we've got the tanks, the token tanks at St. James and we have expansion capacity at both places sufficient, I think to double the both. We do and then we've also added the docket St. James because they aren't capable of handling barges or small ships. I think we're as well positioned as anybody and we need to execute and as Brain asked kind of where we at on some of the things and I just say stay tuned.

Okay. As it relates to the basin system, just kind of a quick house keeping questions, you surpassed the third quarter volume guidance and it looks like now in the fourth quarter you're projecting it to be down about 8% sequentially. What do you see in the South Texas kind of Southern New Mexico market, is there anything that stands out as kind of contra seasonal to you?

What's caused Permian Basin? Is that what you are asking?

Right.

Basically in the third quarter you had a lot of crude commodative tankage in the – actually in the second quarter – I mean third quarter and then the third quarter you had crude commodative tankage that went on base. Fourth quarter we're saying, we would go into tankage, which took some crude of the basin. So if that happens from time to time, so storage increases or decreases can have an impact on basin, that's really cause of the saying, other than that we're seeing more drilling, more volume in Texas and in New Mexico.

Okay I appreciate it and then just kind of one final for Dean, kind of bigger picture Dean, obviously when you look at your advantageous cost bring on incremental storage capacity at Pine Prairie it would seem like maybe some other feed based complementary infrastructure might be higher on that priority list. Certainly as you look to become more vertically intergraded and enhance your conductivity, can you give us any big picture, 10,000 foot view what you saw out there?

Yeah well a touch on that we always lure in and I think I've spoke on this a couple of times, at our existing storage asset and see what we can do to compliment the – what customers would desire as far pipelines close to those assets, so I would say from a big picture level probably it would be other priority on our list there and would be intrastate facilities that are in close proximity to those existing facilities.

Okay I appreciate the color, thanks guys.

Next is John Tysseland with Citigroup, please go ahead.

Hi guys, Greg in the past plains and the consolidator I think of several underutilized crude pipelines as domestic production kind of was in a steady state of decline for a while and now some of these assets underutilized and producers targeting more liquid rich reserves, with there summery showing some growth. Are there any opportunities to bring some of those idled assets back up and where do you think some of those are? Is it West Texas or where do you seek some of those opportunities to bring those assets back online?

Yeah that's a really good question, we see lots of opportunities particularly in West Texas to put lines back in service; we didn't get the call back quiet a bit we had a lot of areas where we had two or three lines in the same corridors. And as we've seen some additional drilling we've gone in, we've tested lines, spent some capital refurbishing the lines, and putting some of the lines back in service. So, it has been a benefit to have sort of right way and the ability to move quickly and put lines in service. Then also point out, that's really what we're doing with what Canada system as well. That Canada system that is currently not in service. It was part of kind of the old eastern corridor system where crude could come down a bit from Canada down into currency. So, that's another area we're taking advantage of having a pipe that is currently not in service and putting into active service again.

And then, some of the stuff that was released on, I think, Tuesday, the mid continent expansion project involved basically optimizing the lines that we have done, some reconnects and increasing capacity, in some cases it may not actually be by reactivating an old line as much as modifying the flow directions and the quality of crude oil in there and the increasing the pump capacity to do that. And then in general, I would say, in Harry's reference, both right away as well the over lines, we've probably taken, I going guess, 3,000 to 4,000 miles of pipe out of service over the last six or seven years. In some cases, those were economic decisions. In some cases, they were environmental decisions. We would always make sure we run safe heights. And some of these pipes are old. But you when you have the right of way, and as Harry said, when you are basically tracking each other or actually in the same right away, we don't necessary have to activate an old pipe as much as we may have to lay right beside an existing pipe and put a brand new one. And if we have got long-term view on that. So, again, I think we're well positioned to service the market, the need to expand today as anybody.

And then also, with lot of these plays being more, I guess, associated kind of crude oil production with the gas well. Is there any kind of quality differentials that are going to make tightening some of these new areas out or is there any blending opportunities for you there or batching in their system?

I don't want to get too specific because their in lies some competitive issues. But I will say this. On a geographic basis, there is a likelihood that you are going to end up with too much of a particular quality of crude in a regional area. And you're going to have not only get it away from the well, but you are going to have get it out of the area. And we handle over 300 million barrels a day and can provide a better solution or a one-stop shop to producers that want to get the value at an end market that they might not have direct transportation to.

Yeah, I would want to give you our roadmap of where we think differentials are going to go because you just going to start on your company to compete with it.

I don't think that's, I don't think words of the. All right guys. Thanks for the detail.

Thank you.

We have Michael Cerasoli with Goldman Sachs. Please go ahead.

Thanks. Just a couple of quick questions. On the Wascana reversal is pipeline currently utilized and then separately, do you think the mid continent Bakken projects may offer up many supply and logistics opportunities?

The first question is what's Bakken, is not currently in service. It used to move crude south into deep pipeline system. Bute is full with basically with rocky mountain production. So, it's currently inactive. What was the second question?

Just separately on the mid continent Bakken projects, did you think you will have any supply and logistics opportunities going forward once the projects are on line?

I think, we will. Yes. We typically, when we are engaged in projects like that, there are in areas where we already have commercial presence and our supplying logistics groups are very involved in that – in those projects.

Okay.

And Michael, I just point out that somebody has taught you about – that happens. Some of these stuffs are hand-in-hand because again once you get that takeaway capacity, you've got to get that product to a major hub and then certainly said the increase volumes and varieties of crude or create more and more terminal needs at Cushing, Patoka and St. James. Ultimately, some of the Bakken for example is being railed all the way down to ST. James. We just activate our rail facility in the third quarter in August. So I'm telling we're again well-positioned there too.

Okay. And then just probably a little nitpicky but your preliminary 2011 maintenance guidance is around 85 million roughly in line with 2010, 2009. I was just wondering about the stand here and your thoughts on potentially higher regulatory scrutiny following third-party slows earlier in the year?

Is your question – would you – your thought it would have been higher than main?

That doesn't take into account anyhow your spend, your integrity spending or so on.

Yeah, and I don't want to be too allusive in this comment but I mean quite candid, we better been doing a good job last year if you quote. I think we did put a range this year of 80 to 90 and we have been on a program Michael for some period of time, well beyond what regulatory requirements are to extend the same type or similar type of integrity manager rules to non-regulated types or types to handling and carried by the integrity manager program. And so it's already built into our cost structure. Could that number turn out to be 82 million instead of 90 million or it's going to be 92 million. The answer is sure but I don't think it's going to be far outside that range.

Okay. Great. And then finally for Dean. How do you expect the expansion around Dawn storage to impact demand for storage at Bluewater?

Mike did you – say the first part of that question.

A couple of competitors are expanding capacity around Dawn storage at the Dawn area and I was just wondering how that may impact your operations at Bluewater.

Yeah, right now Bluewater continues to stay cool as far as what we're doing over there. I think there is still a need in that part of the area for more storage. It's really area by area specific but we should be okay with what's on the Board right now.

Thanks, that's it for me.

We'll go to Selman Akyol, Stifel Nicolaus. Please go ahead.

Good morning. On the crude oil imports I know you talked about one tank coming in this quarter as opposed to next quarter. But is there anything else as it relates to your guidance for the decline in the fourth quarter?

No, it was simply just kind of a –

It's just strictly one ship?

Yes.

And then if we talk a look at the St. James expansion, it looks like cost went up there from last quarter to this quarter. Anything going on there?

No. Basically, there are two pieces to the projects and just the one piece have been reported last quarter in that in the other category.

Okay. And then in terms of, may be I misunderstood this, but the midpoint of your 2011 guidance is – is that based strictly on internal growth projects or you guys also affect during an acquisitions to get to that?

No acquisition based on well, assets we already have, Selman.

All right. And then last question for me. It relates more to Dean. You guys mentioned the optimization group in your press release. If PNG and I guess is there anymore color on that as its starting to contribute or your outlook for 2011 and then distribution policy at PNG, is that independent of the optimization group?

Yeah, just give you a quick update. So we expect that group to be functional in December of this year and they will contribute some in 2011, particularly given what the markets show us and so that is baked into our plan. And then the last part of your question?

Is it related to the distribution policy? Is it independent of the optimization group?

Yeah, said differently, we wouldn't include in the distribution characterizing any home runs or triples or even doubles that they may hit. We're -- they're going to be able to cover their cost -- I bet you make a base level of profit that we would include in every -- your talking in the low yield -- million or two range. With what they -- hope to be able to just keep the market honest against leasing storage and then also have the opportunity when we have periods of volatility to capture incremental upside above that. That incremental upside would not be included in the distribution policy and the mid single digit distribution that I didn't talk about it, it's really based on the base line, not what may happen.

All right. Thank you very much.

We'll go to Jeremy Tonet with UBS. Please go ahead.

Hi, good morning.

Good morning Jeremy.

Just wanted to touch on a couple of the questions I've already asked before. Other teams in the MLP space have commented on increased deal four. Would you agree with this now? Would you say that deal flow has increased the opportunities that are out there and also with the trend of GP consolidation out there, do you see -- do you think that there is going to be an opportunity for PAA to take advantage of that as far as entry level consolidation in the MLP space going forward?

Yeah, on the last one I sure as heck hope so. I think there are some good opportunities out there that we like their business platforms and again I think we realize we could extract equal if not more value if we could acquire right. So those deals are very difficult to do though I should say and -- but we have the ability to work through complicated structures and have done so in the past. As far on deal flow, at the risk of sounding like a broken record, we've been saying this for the last seven or eight years. We're as busy now as we've ever been and we've got more people doing it now than we ever have. So yeah, I have to concur. I think the deal flow has picked up and we're doing our best to keep up with a higher grade and we don't happen to basically say no to certain projects, not because they may not be good projects, just till we've attractive high grade ones that we've achieved.

Okay. And then I was wondering if you had any comments as far as refined product demand out there, what your thoughts are in trends? Do you see that improving?

Yeah, I think its going to be tied to the economy and this is not a political space until the elections are over. We just -- we're still looking for the green juice that can actually survive and so refined products demand I think is going to be a gradual increase. At a sudden we'd drop from total petroleum consumption in the '05 to '07 range was probably 20.7 million barrels a day. We're probably in the 18.5 to 18.8 range right now. So that's down quite a bit. But that recovery we think will be a gradual recovery. It will be influenced by government programs; if there are subsidies out there for alternative energy then you're going to see some of that recovery be a little bit slower. You can take it as a way to be a little bit faster. The one thing I would point out Jeremy and I think the U.S. refineries for all the upgrades they have done has increased there competitive position and we're probably actually right now exporting more refined products, I think now that we have in many, many, many years and the actual net imports are down, so in some cases what I'm saying is even though U.S. consumption may not have been increasing that much, total refinery product generation is actually doing okay base upon exports, that fair enough? John bombarded the plan this one in particular, so you almost have to grade specific when you talk – product specific when you are talking about refined products in the class.

Great that's helpful and then one last question I guess in regards to your relationship with Oxy, do you have any updated thoughts or comments as far as potential joint effort between the two.

We still like them, we think they still like us and we're still having discussion on how best to do win-win situations but I can't comment more than that.

Great thank you very much.

And we'll go to John Edwards with Morgan Keegan, please go ahead.

Good morning everybody, just translate – I just want to make sure I translate your commentary regarding committee and taxes that means your expecting not a strong or perhaps lot of distribution, in 2011?

No, I guess what we're trying to say is if you just looked at a 7% growth using the mid-point and EBIDTA and you assume that we maintain a 101 to 103 coverage, you'd probably come away with a higher growth next year than what will be because we're going to have to absorb about 30 to 35 million of Canadian taxes. We've talked about that in the past, we've just haven't been able to put a spot of point on the range of the impact I think at point in time we talked we talked about anywhere from 20 to 40 and so from our perspective, you do put that down the takeaways we wanted to make sure that you had John was. Number one there will be a one year filling of tax returns which is a good thing, two is there will be a de facto distribution increase whether we change the actual pretext distribution or not, the after tax distribution will increase roughly about 3% based upon that range of $0.11 to $0.13 per unit in the form of the tax credit, you're going to file your tax return, you are going to look and calculate your U.S. taxes and then you are going to reduce it about at $0.11 to $0.13,that's map taxed basis, it's the same as the muni bond calculation. I think if you look at our distribution guidance for next year and the CapEx distribution coverage, at the current level a 380 – we're about 106 I believe it was, if you wanted to say, okay look forget the Canadian tax situation, its already imbedded in the numbers, what will that coverage go near, I think you can go to 390 each range and at a 101 to 102 coverage range and…

Okay. All right, fair enough. That concludes for me. And then just, I guess the question for Dean, you know, you were talking little bit about the market, in terms of natural gas storage. So, you were attributing it to production and weather. I guess if the weather hadn't been as hot, you would have a greater demand for storage, which would have made it stronger. And then you made a comment also on the production side, that you don't have as much fear, I guess, as you put it. So, I guess, in terms of strength in the market to translate, then to what conditions, do you think, have to be present to make a stronger? Is it simply the opposite of what we've had? Or is that too simplistic?

No. I think, you break it down. I think what has happened is, John, your question is good. It's just a confluence of both those things and generally you don't see that if we had one or the other thing, we would have been fine. We certainly, in the long-term I would tell you, our preference is that demand grow over time and it is not supply driven. It just helps the overall fundamental. So, as we go through time, natural gas, in our opinion is still very much in favor. And we look for that growth, particularly, in the power generation area, and supply will. The market will respond to the pricing and such over time. And we will see that work its way out. I do think it's going to take a couple of storage seasons to work off this supply build up that we have. Producers have at least in our opinion, have yet to blink. But sooner or later, it's going to get painful.

John, just that kind of, elaborate and add just a little bit. I mean, we believe storage has value, whether it's oversupplied or undersupplied and because, quite candidly, if there's too much production and not enough demand, you have to put it into storage. And if there's too much demand and not enough production, you have to store it, you have to bring it in from (inaudible) another thing you have to store it so you have it in the winter. The bad situation for storage is when you adequately supplied and demand is low, and that's what happening. You still have a summer/winter spread that has a big impact on storage. What happened, the supply was up. What Dean's saying is takes the summer, hitting demand away. And we're probably worried about where we are going to stick out this gas that continues to come at us, takes that excess supply away, and we would have be having, but have the increased heat that we had and inventories down in the summer where people would have worried about running out of gas in the winter. So, I think what solved this is right now there is gas wells that are being drilled for non-economic reasons to whole leases and to the other things. I am not saying that's a bad decision or good decision. I just don't think you can do it in perpetuity. Because the whole thing you're making money on some of these wells. And so, it would take $2 gas price or 250 gas price and you will start seeing these rigs lay down. And then actually what happens is, the cycle starts all over again. If you give 250 gas prices, you're going to find a lot of industrial and commercial customers who want to…

All right, I appreciate the additional detail and that's all I have this time. Thank you.

Thanks John.

And we'll go to Joseph Siano with Credit Suisse. Please go ahead.

Hi, good morning.

Good morning.

Just to dive a little deeper into your growth CapEx plans. First quickly, is the Bakken North Project included in the 2011 guidance, CapEx guidance?

No, we don't have that specifically in the guidance. Looking at 2011, we got some identified projects, and some portfolio projects that are sort of risk way to get into that project. It's not typically in those – We probably got right now improved or pending approval probably 400 to 450 million of the 500 and 600 range. If we stop right now the only additional project that we added to that was the Bakken and then number would go up quite in the middle of that range and we have to kill all the other projects. Well, we actually help happens over the next several months and that we crystallize some of these and we'll be able to give you the full detail in February and what makes up. Just saying the number comes in at 525. We'll give you the detail there on that but here I'm saying is if we have 525, we don't have the Bakken projects in there. If we come back in February with a $600 million number, if it turns there everything else we would have not made it. So I will feel pretty confident about our 500 to 600 range.

Right, got it. Okay. And then you touched upon several potential different areas that the 500 to 600 – the projects are around. Can you may be give a little bit more color on may be just generally what area is your most excited about or have the largest potential to put the capital of the work or –

It's quite about all. Yeah, each areas because it adds – it's critical land span it's the once cause that from being a potential project or project. So and in some cases, those are negotiations with producers or with customers that we supplied to and in some cases it's competition. So I don't think it would benefit our e-mailer to get in too much detail on that.

Okay. Got it, thanks.

Thank you.

And we have no further questions at this time.

I want to appreciate everybody dialing in and on one hand we apologize for the length of the call and the level of information, on the other hand, it makes a lot easier if you know what we know. So we look forward to update you on the February conference call. Thanks.

Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation and for using AT&T Executive TeleConference Service. You may now disconnect. Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited. THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS. If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!