Buckeye Partners Reviewing FERC Order

Buckeye Partners, L.P.

announced that it is reviewing an order recently issued by the Federal Energy Regulatory Commission regarding the market-based methodology used by one of its operating subsidiaries, Buckeye Pipe Line Company, L.P., to set tariff rates on that subsidiary's pipeline system. The Order does not impact any of the pipeline systems or terminals owned by Buckeye's other operating subsidiaries. In 1991, Buckeye sought and received FERC permission to determine rate changes on the Buckeye System using a unique methodology that constrains rates based on competitive pressures in markets that FERC found to be competitive as well as certain other limits on rate increases. FERC permitted the continuation of this methodology for the Buckeye System in 1994, subject to FERC's authority to cause Buckeye to terminate the program in the future. On March 30, 2012, FERC issued the Order, which, among other things, states that FERC will review the continued efficacy of Buckeye's unique program and directs Buckeye to show cause why it should not be required to discontinue the program and avail itself of the generic ratemaking methodologies used by other oil pipelines. Buckeye has thirty days to respond to the Order. Pending FERC's review of the program, the Order also disallowed proposed rate increases on the Buckeye System that would have become effective April 1, 2012. The proposed rate increases were expected to increase Buckeye's revenues on an annual basis by approximately $8 million. Buckeye believes that the short-term impact of the Order will not be material, and expects to provide additional information of significance to investors as FERC's review of the program progresses.