Report Volume XXIII, Number 5, November 1st, 2011

INDUSTRY NEWS (Houston, TX) – GulfStar Group is pleased to announce the acquisition of Wasatch Supply, Inc. by Pipeline Supply & Service, LLC a portfolio company of Cadent Energy Partners, LLC (”Cadent”). GulfStar served as exclusive financial advisor to PSS. The transaction closed on September 30, 2011. PSS’ legal advisor was DuBois, Bryant & Campbell, LLP of Austin, Texas.

Wasatch provides consumable supplies and equipment to the oil and gas, pipeline and construction industries in the US and abroad. Since its inception, Wasatch Supply has experienced steady growth under the direction of its president, Karma Newberry, and has forged a great reputation in the industry for its expedited delivery.

PSS, headquartered in Houston, Texas, is one of the largest independent providers of industrial products and services to the domestic oil and gas transmission industry. PSS stocks and distributes one of the industry’s most comprehensive industrial and safety product offerings.

“This partnership strengthens our commitment to help our customers succeed by providing more competitive pricing, more locations for increased availability and accessibility, and service that continues to exceed expectations,” said Chuck Dalio, Chief Executive Officer of PSS.

The GulfStar transaction team included Managing Director Tom Hargrove, Vice President Justin Moers, Associate Jay Stone, and Analyst Kristie Ganss. “The acquisition of Wasatch Supply expands PSS’ geographic presence in the northwest and northeast regions of the United States, providing PSS access to the important Bakken, Niobrara and Marcellus oil and gas pipeline markets,” said Tom Hargrove. “We were pleased to represent PSS on this acquisition and look forward to future initiatives that will continue to allow PSS to achieve its strategic objectives.”

INDUSTRY NEWS (St. Louis, MO) – Insituform Technologies, Inc. recently announced the completion of an internal reorganization whereby a new Delaware parent holding company, Aegion Corporation, has been created to provide corporate and administrative services for its operating subsidiaries (Insituform Technologies, The Bayou Companies, Corrpro Companies, United Pipeline Systems, CRTS, Fibrwrap Construction Services and Fyfe). In the new structure, Aegion replaces Insituform as the public company, and Insituform and its former direct subsidiaries are now direct subsidiaries of Aegion. Aegion’s common stock is traded on the Nasdaq Global Select Market under its new symbol “AEGN.”

Upon completion of the reorganization and without any action on the part of the Insituform stockholders, each share of Insituform common stock (with its attached preferred stock right) was converted into one share of Aegion common stock (with an attached preferred stock right). The management and board of directors of Aegion are identical to that of Insituform prior to the reorganization, as are the certificate of incorporation, bylaws and other corporate governance documents.

J. Joseph Burgess, President and Chief Executive Officer of Insituform, and now Aegion, said: “There are inflection points in every company’s evolution, moments that reflect a major shift in strategy. That moment came for Insituform in 2011 when for the first time our global sewer contracting business will represent less than 50 percent of our revenue, after representing approximately 88 percent of our revenue in 2007. This transition was the direct result of the implementation of our strategic plan to diversify into higher growth and higher return products and services in the energy and mining and high growth commercial and structural rehabilitation markets.”

Burgess continued: “The Insituform name represents where we came from. It identified the flagship technology that is closely aligned to the trenchless sewer rehabilitation business upon which this company depended for so many years. As one of that industry’s most powerful and recognizable brands, we will continue to use the Insituform name for our subsidiaries and products that operate in the water and wastewater business segments.”

“This company has now developed beyond those roots. Aegion (a combination of the Greek roots “Aegis” meaning a protective shield and “Eon” meaning a long period of time) reflects our new mission of extending our leadership capabilities to furnish products and services to provide long-term protection for water and wastewater pipes, oil and gas pipelines, as well as commercial and governmental structures and transportation infrastructure. Our new corporate name and our new corporate structure are recognition of the company’s strategy to continue development in these new directions.”

“We also expect that the new holding company structure will allow us to reorganize our various operating subsidiaries in a more tax efficient manner, facilitate a more cost-effective repatriation of cash to the United States and better manage possible legal liabilities.”

The formation of the holding company will not have any federal or state tax consequences to the stockholders of Insituform. Stockholders will not be required to do anything to convert their Insituform shares and the accompanying preferred stock rights to Aegion shares and preferred stock rights. Share certificates evidencing Insituform shares and rights will, automatically and without any further action, be deemed to evidence an identical number of shares and rights of Aegion. As Insituform share certificates are presented to the transfer agent for transfers in the ordinary course, Aegion stock certificates will be issued to the new stockholders. If any stockholder wishes to exchange the current Insituform stock certificate for an Aegion certificate prior to an ordinary course transfer of the underlying shares, the stockholder may do so by contacting American Stock Transfer Company, the Company’s transfer agent, at American Stock Transfer & Trust Company, LLC, Attn. Shareholder Services Department, 6201 15th Avenue, Brooklyn, New York 11219, telephone no: 1-800-937-5449 for instructions as to how to complete the exchange.

INDUSTRY NEWS (Wyomissing, PA) – UGI Energy Services is planning to invest about $150m to extend its Auburn natural gas gathering system in Pennsylvania, US. The company will expand the gathering system 30 miles from its terminus in Wyoming County to Luzerne County, including a planned connection to Transcontinental Gas Pipeline.

Upon completion, this project will link Marcellus Shale production areas in Susquehanna and Wyoming Counties with multiple Pennsylvania and interstate markets.

The extension of the gas gathering system is expected to be completed in 2013. UGI Corporation chairman and CEO Lon Greenberg said the expanded Auburn gathering system will enhance UGI’s ability to bring competitively priced, locally produced gas to consumers in Pennsylvania and throughout the US Northeast.

INDUSTRY NEWS (Dallas, TX) – Energy Transfer Partners, L.P. announced recently it has entered into a long-term, feebased agreement with XTO Energy, a subsidiary of Exxon- Mobil, to provide natural gas gathering, processing and transportation services from both the Woodford and Barnett Shale regions. ETP will construct a 117-mile natural gas gathering pipeline from the Woodford Shale located in Oklahoma to its existing gathering and processing infrastructure in the Barnett Shale. As part of the project, the Partnership also will construct a new 200 million cubic feet per day cryogenic processing plant at its existing Godley processing facility in Johnson County, Texas.

“We are excited to have the opportunity to expand the footprint of our Godley processing and gathering system into the Woodford Shale in Oklahoma,” said Roy Patton, Senior Vice President of Energy Transfer Partners. “This expansion, which also benefits our customers in the Barnett Shale, increases the long-term utilization of our Godley processing facility by giving us access to some of the most active liquidrich drilling plays in the region. This project complements the Partnership’s other assets by increasing downstream transportation on our intrastate segment as well as providing additional NGL volumes for transportation and fractionation through our Lone Star NGL system.”

“This new pipeline system will provide XTO Energy the necessary infrastructure to operate effectively in the region, access markets beyond the region, and help pave the way for additional job creation and economic growth in Southern Oklahoma,” said Terry Schultz, Senior Vice President of Marketing, XTO Energy.

The 117-mile, 24- and 30-inch Red River Gathering Pipeline will originate in Carter County, Oklahoma and will have an initial capacity of 450 million cubic feet per day, with anticipated capacity expansion exceeding 550 million cubic feet per day. The pipeline is expected to be in service by the fourth quarter of 2012. The new processing plant will increase the Partnership’s processing capacity at Godley from 500 million cubic feet per day to 700 million cubic feet per day and is expected to be in service by the third quarter of 2013. The total cost to build the pipeline and processing plant is estimated to be approximately $360 million.

INDUSTRY NEWS (Denver, CO) – As DCP Midstream continues to move toward a fourth-quarter close on the acquisition of the Seaway Products Pipeline Company, it announces recently a request for binding expressions of interest in the proposed Southern Hills Pipeline.

DCP Midstream announced in June an agreement to acquire the Seaway Products Pipeline Company from ConocoPhillips to create a new natural gas liquids pipeline for transportation capacity from the Midcontinent to the premium Texas Gulf Coast markets, including Mont Belvieu. The pipeline will be renamed Southern Hills Pipeline and converted from refined products service to an interstate natural gas liquids pipeline. DCP Midstream will add extensions into Mont Belvieu, Texas, along with various receipt points in the Midcontinent region and associated gathering infrastructure.

Southern Hills Pipeline will have a target capacity of close to 150,000 barrels per day of Y-grade NGLs and be connected to several DCP Midstream processing plants. Southern Hills Pipeline is expected to be in service as early as mid-2013.

DCP Midstream will operate Southern Hills Pipeline as a common carrier pipeline.

“We are seeing tremendous producer interest in our Southern Hills Pipeline project,” said Bill Waldheim, president of DCP Midstream’s northern business unit. “Similar to our Sand Hills 720-mile, 20-inch, Y-grade NGL pipeline that is currently under construction, which will alleviate NGL bottlenecks in the Permian basin, so, too, will Southern Hills Pipeline provide Midcontinent producers access to the premium priced Gulf Coast NGL markets.”

DCP Midstream announced in June an agreement to acquire the Seaway Products Pipeline Company from ConocoPhillips, rename it Southern Hills Pipeline and convert it from refined products service to an interstate NGL pipeline. DCP Midstream will add extensions to Mont Belvieu, Texas, along with various receipt points in the Midcontinent region and associated gathering infrastructure. The pipeline will run more than 700 miles.

In September, DCP Midstream announced a request for binding expressions of interest in Southern Hills Pipeline from shippers (open season). For information, contact Rick Paul at 713-735-3739 or rmpaul@depmidstream.com.

DCP Midstream will operate Southern Hills as a common carrier pipeline. The regulated pipeline will carry Y-grade NGLs and be connected to several DCP Midstream processing plants and third-party NGL producers. Southern Hills Pipeline is a game changer for Midcontinent NGL values. This critical piece of midstream infrastructure will increase the value producers realize for their growing Rockies and Midcontinent NGL production through enhanced connectivity to the premium priced Gulf Coast NGL markets.

Southern Hills Pipeline will afford DCP Midstream the ability to provide producers with integrated natural gas gathering, processing and NGL transportation services through a timely solution that leverages pipe already in place. The acquisition and the start of the conversion are expected at the end of 2011. The in-service date is expected as early as mid-2013.

INDUSTRY NEWS (Calgary, AB and Houston, TX) – Enbridge Inc. and Enbridge Energy Partners announced recently two projects that will provide increased access to refineries in the U.S. upper midwest and in Ontario, Canada for light crude oil produced in western Canada and the U.S. The project involves the expansion of EEP’s Line 5 light crude line between Superior, Wisconsin and Sarnia, Ontario by 50,000 barrels per day, at a cost of approximately $100 million. Complementing the Line 5 expansion, Enbridge plans on reversing a portion of Line 9 in western Ontario to permit crude oil movements eastbound from Sarnia as far as Westover, Ontario, at a cost of approximately $20 million. Subject to regulatory approvals, both projects are targeting to be in service in late 2012.

The expansion of Line 5 and reversal of Line 9 between Sarnia and Westover can be economically achieved with upgrades or modifications of facilities and does not require installation of new pipeline.

The project will enable growing light crude production from the Bakken shale and from Alberta to meet refinery needs in Michigan, Ohio and Ontario. The project provides another much needed transportation outlet for light crude, mitigating the current discounting of supplies in this basin while also providing more favourable supply costs to refiners currently dependent on crudes priced off of the Atlantic basin.

“We are pleased to be able to provide this high value solution to our shippers,” said Stephen J. Wuori, President, Liquids Pipelines, Enbridge Inc. “With a Brent-to-WTI differential running in excess of $20 per barrel, compared with the historical parity relationship, there is significant value to be captured by increasing the pipeline capacity to move western Canadian and Bakken light crude supply to eastern refiners. This project will utilize the international joint toll (IJT) feature provided for in the new Enbridge Competitive Toll Settlement, which will enable us to provide an attractive toll from western Canada all the way through to refiners in the U.S. upper Midwest and Ontario. “This is an attractive project for EEP,” added Mark Maki, President of the Partnership. “The project can be undertaken generally within our existing rights of way and will utilize a standard FERC cost of service model that will provide additional distributable cash flow to the Partnership once the project is placed into service.”

INDUSTRY NEWS (Houston, TX) – Spectra Energy:

• Spectra Energy entered into agreements with 2 customers to deliver new volumes of natural gas supply along our Texas Eastern Transmission, LP (Texas Eastern) system.
  • Grays Ferry Cogeneration, a subsidiary of Veolia En ergy, has contracted for an additional 20 million cubic feet per day
  • PBF Energy Company LLC, formerly Valero Energy Corp, has contracted for an additional 7,000 cubic feet per day
• Both customers can expect this additional delivery by November of 2012. We are happy to be continuing our relationship with, and appreciate they recognize that our Texas Eastern system is in place and ready to be efficiently expanded to bring additional firm supply to their power plant.
• Replacement of a 16-inch diameter natural gas pipeline with a new 30-inch diameter natural gas pipeline for approximately 0.4 miles eastward from the Chester Junction valve site in Delaware County, PA. This replacement will generally be within the existing Texas Eastern pipeline easement.
• Construction of new “launcher / receiver” facilities at Chester Junction meter station and the terminal end of the 0.4 miles of 30-inch pipe construction to allow for internal pipeline inspection and preventative maintenance, if necessary.