PAA Natural Gas Files for IPO

NEW YORK (Reuters) – PAA Natural Gas Storage LP, an operator of natural gas storage facilities, filed for an initial public offering of up to $200 million on Monday.

The Houston-based company owns and operates two natural gas storage facilities in Louisiana and Michigan and sometimes leases additional capacity and pipeline transportation from third parties.

The company said in a filing with the U.S. Securities and Exchange Commission that substantially all of its revenue is derived from providing fee-based storage services under multiyear contracts.

PAA Natural Gas Storage LP is a wholly-owned subsidiary of Plains All American Pipeline LP (PAA.N), a master limited partnership that transports, stores and markets crude oil, refined products and LPG.

Plains All American became the sole owner of the company on Sept. 3 after paying $220 million plus a contingent cash consideration of $40 million for the 50 percent stake owned by Paul Allen’s Vulcan Capital.

As of Dec. 31, PAA Natural Gas Storage said it had $451 million worth of debt outstanding to Plains All American, with a fixed interest rate of 6.5 percent. The company said it plans to use proceeds from the IPO, along with additional credit, to pay back Plains All American, and for general corporate purposes.

PAA plans to list on New York Stock Exchange under the symbol “PNG.”

Underwriters on the IPO are being led by Barclays Capital and UBS Investment Bank. (Reporting by Clare Baldwin; Editing by Steve Orlofsky)