PAA Natural Gas Storage, L.P. (NYSE: PNG) today announced a modification to the terms of certain of its Series B Subordinated Units, all of which are owned by Plains All American Pipeline, L.P. (NYSE: PAA) . PNG’s Series B Subordinated Units do not participate in quarterly distributions. Instead, the Series B Subordinated Units convert into Series A Subordinated Units or Common Units in five distinct tranches upon the achievement of defined benchmarks tied to the amount of capacity in service at PNG’s Pine Prairie Energy Center (“PPEC”) and increases in PNG’s quarterly distributions. The modification increases the quarterly distribution benchmark for the first three of the five tranches to an annualized level of $1.71 per unit. Previously, the quarterly distribution levels required to cause conversion for these three tranches were at annualized levels of $1.44, $1.53 and $1.63 per unit. Consistent with the prior terms, any Series B Subordinated Units not converted by December 31, 2018 will be canceled. “Given the dramatic deterioration in natural gas storage market conditions since PNG’s IPO in the first half of 2010, we believe this modification is prudent and appropriate for PAA and clearly in the best interests of PNG and its common unitholders,” said Greg L. Armstrong, Chairman and CEO of PAA and PNG. “By increasing the distribution benchmarks necessary for the conversion of the first three tranches of Series B Subordinated Units, we have eliminated a potential structural impediment to PNG’s distribution growth, while preserving the optionality for PAA and its unitholders to realize incremental value through a longer-term recovery in natural gas storage market conditions.” Armstrong noted that through its ownership of PNG’s general partner, incentive distribution rights, common units, Series A Subordinated Units and Series B Subordinated Units, PAA owns approximately 64% of PNG (57% excluding the Series B Subordinated Units).