$388m in the pipeline

plans to invest approximately $388m to further expand the 550-mile CALNEV pipeline system. CALNEV transports petrol, diesel and jet fuel from

refineries and marine terminals through 14- and 8-inch diameter pipelines that originate in

,

, and extend to terminals in

,

, and

.

The proposed expansion involves construction of a new 16-inch diameter pipeline from Colton to Las Vegas. System capacity would increase to approximately 200,000 barrels per day (bpd) upon completion of the new pipeline, and capacity could be increased as necessary to over 300,000bpd with the addition of pump stations.

The expansion is subject to environmental permitting, right-of-way acquisition and the receipt of approvals from the Federal Energy Regulatory Commission (FERC) authorising rates that are economic to CALNEV. Environmental permitting and right-of-way acquisition is expected to take 24 to 30 months with construction anticipated to be completed within nine months thereafter. Start-up of the new pipeline is scheduled for late 2009 or early 2010, assuming all necessary environmental approvals and rate determinations are obtained.