PAA Natural Gas Storage, L.P. (FRA:4PN) Unpaid Loss & Loss Reserve

PAA Natural Gas Storage, L.P., is a Delaware corporation formed by Plains All American Pipeline, L.P. on January 15, 2010. The Company is engaged in acquisition, development, operation and commercial management of natural gas storage facilities. The Company owns and operates three natural gas storage facilities located in Louisiana, Mississippi and Michigan. It also leases storage capacity and pipeline transportation capacity from third parties from time to time in order to increase its operational flexibility and enhance the services it offers to its customers. The Company provides natural gas storage services to a broad mix of customers, including local gas distribution companies, or LDCs, electric utilities, pipelines, direct industrial users, electric power generators, marketers, producers, LNG importers and affiliates of such entities. It generates revenue mainly from the provision of fee-based gas storage services to its customers. The majority of its net revenue from firm storage services is derived from contracts with initial terms that generally range from one year to 10 years in length and pursuant to which customers receive the assured or "firm" right to store gas in its facilities. Under its firm storage contracts, its customers are obligated to pay it fixed monthly capacity reservation fees, which is owed to it regardless of the actual storage capacity utilized. The Company also generate net revenue from the provision of hub services at its facilities and through the merchant storage activities of its commercial marketing group, which captures short term market opportunities by utilizing a portion of its storage capacity and engaging in related commercial marketing activities. The Company's merchant storage activities generate revenue through the hedged purchase and sale of natural gas net of any storage related costs incurred. It utilizes physical storage at its facilities and derivatives to hedge expected margin from these activities. The Company competes with several regional high-deliverability storage facilities along the Gulf Coast as well as the storage services offered by interstate and intrastate pipelines. The Company is subject to regulatory oversight by numerous federal, state, and local regulatory agencies.