Pipeline Systems Agreement: Joint Venture to be Formed by ARCO Pipe Line and Pacific Pipeline

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16 September 1998

An agreement which will combine two pipeline systems carrying crude oil from San Joaquin Valley and Outer Continental Shelf oil producers to Los Angeles basin refineries was announced today by ARCO Pipe Line Company and Pacific Pipeline System, Inc.
The new joint venture, Pacific Pipeline System, LLC, will combine ARCO's Line 63 pipeline system and supporting facilities and the Pacific Pipeline system that is currently under construction by Pacific Pipeline System, Inc. (PPS), a subsidiary of The Anschutz Corporation, and is scheduled for startup during the 4th quarter of 1998.

This new common carrier pipeline system will carry both light and heavy crude oils from the San Joaquin Valley to Los Angeles basin refineries. The combined system will be capable of moving an average of 235,000 barrels of oil per day and will provide additional operational flexibility to better serve the needs of customers in the Los Angeles basin. The system will also include gathering lines in the San Joaquin Valley and crude oil distribution lines in the Los Angeles basin.

PPS's pipeline is a 20-inch insulated line that runs from Kern County to the Long Beach and El Segundo areas, with an average capacity of 130,000 barrels per day. ARCO's Line 63 is a 14-inch pipeline that runs approximately 118 miles from Kern County to the City of Carson, with an average capacity of 105,000 barrels per day.

The new company will require approval by the California Public Utilities Commission before the joint venture can be formed.

"This venture will improve the crude oil transportation business, especially on the west coast, where ARCO has a long history of service and demand for crude oil continues to be strong," said Larry Shakley, president of ARCO Pipe Line Company, based in Houston, Texas. "The project will provide a package of services to customers unmatched in the industry," he added.

Irv Toole, former president of Santa Fe Pacific Pipelines, has been named President and Chief Executive Officer of Pacific Pipeline System, LLC, and will assume his duties once all regulatory approvals have been granted. Toole said, "I am excited to be involved at the outset with a quality venture having such excellent capabilities to serve customers."
Pending regulatory approval, Mr Toole will serve as President of Pacific Pipeline System, Inc., with ARCO Pipe Line providing certain operational services for Pacific Pipeline on a contract basis.

ARCO Pipe Line Company is a subsidiary of Los Angeles-based ARCO [NYSE:ARCO]. Pacific Pipeline System, Inc., is a subsidiary of The Anschutz Corporation, based in Denver.

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