Buckeye Partners, L.P. (NYSE:BPL) (“Buckeye”) announced today that Buckeye Pipe Line Company, L.P. (“Buckeye Pipeline”) filed an application with the Federal Energy Regulatory Commission (“FERC”) seeking authority to charge market-based rates for deliveries of refined petroleum products to the New York City-area market (“Application”).
In the Application, Buckeye Pipeline seeks market-based rates from its three origin points in northeastern New Jersey to its five destinations on its Long Island System, including deliveries of jet fuel to the Newark, LaGuardia, and JFK airports. These jet fuel delivery rates were the subject of a complaint filed by Delta Air Lines, United/Continental Airlines, JetBlue Airways, and US Airways on September 20, 2012 in FERC Docket No. OR12-28. If the Application is granted by FERC, Buckeye Pipeline would be permitted prospectively to set its rates with respect to these origins and destinations in response to competitive forces.
The airlines’ September 20th complaint alleged that Buckeye Pipeline’s jet fuel delivery rates to the New York City airports are unjust and unreasonable under the Interstate Commerce Act based on a cost over-recovery rationale. This issue would no longer be relevant with respect to Buckeye Pipeline’s future rates upon the granting of the Application.
As the Application indicates, Buckeye Pipeline believes that the New York City-area market is robust and highly competitive-the New York Harbor is one of the world’s most active refined petroleum products markets. Within this market, Buckeye Pipeline’s customers have access to numerous existing alternatives, via pipeline, barge, and truck, to transport refined products and, with reasonable investment, the three airports should be able to access alternative jet fuel supplies efficiently and economically.
Consequently, Buckeye believes it is appropriate that it be permitted to charge market-based rates for its services in this market. Buckeye remains committed to providing safe and economic transportation of refined products to its customers in the New York City-area market.
Buckeye Pipeline’s application for market-based rates and any other documents or filings that are officially included in the record of this proceeding will be made available through the FERC’s “eLibrary” (http://www.ferc.gov/docs-filing/elibrary.asp).
Buckeye Partners, L.P. (NYSE:BPL) is a publicly traded master limited partnership that owns and operates one of the largest independent liquid petroleum products pipeline systems in the United States in terms of volumes delivered, with over 6,000 miles of pipeline. Buckeye also owns approximately 100 liquid petroleum products terminals with aggregate storage capacity of approximately 70 million barrels.
In addition, Buckeye operates and/or maintains third-party pipelines under agreements with major oil and chemical companies, owns a high-performance natural gas storage facility in Northern California, and markets liquid petroleum products in certain regions served by its pipeline and terminal operations. Buckeye’s flagship marine terminal in The Bahamas, BORCO, is one of the largest crude oil and petroleum products storage facilities in the world, serving the international markets as a premier global logistics hub. More information concerning Buckeye can be found at www.buckeye.com.
This press release includes forward-looking statements that we believe to be reasonable as of today’s date. Such statements are identified by use of the words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “should,” and similar expressions. Actual results may differ significantly because of risks and uncertainties that are difficult to predict and that may be beyond our control. Among them are (i) changes in federal, state, local, and foreign laws or regulations to which we are subject, including those governing pipeline tariff rates and those that permit the treatment of us as a partnership for federal income tax purposes, (ii) terrorism, adverse weather conditions, including hurricanes, environmental releases, and natural disasters, (iii) changes in the marketplace for our products or services, such as increased competition, better energy efficiency, or general reductions in demand, (iv) adverse regional, national, or international economic conditions, adverse capital market conditions, and adverse political developments, (v) shutdowns or interruptions at our pipeline, terminal, and storage assets or at the source points for the products we transport, store, or sell, (vi) unanticipated capital expenditures in connection with the construction, repair, or replacement of our assets, (vii) volatility in the price of refined petroleum products and the value of natural gas storage services, (viii) nonpayment or nonperformance by our customers, (ix) our ability to integrate acquired assets with our existing assets and to realize anticipated cost savings and other efficiencies and benefits, and (x) an unfavorable outcome with respect to the proceedings pending before FERC regarding Buckeye Pipeline’s tariff rates.
You should read our filings with the U.S. Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2011 and our most recently filed Quarterly Report on Form 10-Q, for a more extensive list of factors that could affect results. We undertake no obligation to revise our forward-looking statements to reflect events or circumstances occurring after today’s date.