FOR IMMEDIATE RELEASE
For further information, call: Susan Castiglione, Senior Manager, Corporate & Public Affairs, (678) 762-2211

COLONIAL PIPELINE BEGINS CONSTRUCTION OF NEW LINE IN EAST TENNESSEE

August 25, 2003

Latest Expansion will Upgrade Service by up to 1 Million Gallons per Day

ALPHARETTA, Ga. (Aug. 25, 2003) – Colonial Pipeline today began initial stages of construction on a 43-mile expansion of its liquid petroleum products pipeline in East Tennessee. When completed later this year, the project will add capacity of 1 million gallons a day to local markets.

The expansion project began with clearing right of way from the northern tip of Hamilton County across Bradley County to Highway 309 in McMinn County. Colonial met with landowners and government officials in designing plans that will cause minimal disruption in traffic and ensure the safety and protection of the East Tennessee environment.

Colonial, based in Alpharetta, Ga., delivers gasoline and diesel fuels, home heating oils, jet fuels and fuels for the U.S military. On average, Colonial delivers more than 93 million gallons of fuel over a 5,500-mile system serving the Southern and Eastern Unites States.

“We are excited to provide a safe and economical solution to East Tennessee’s demand for a larger, more reliable supply of liquid fuels,” said Dave Lemmon, Colonial’s President and CEO. “As a company, we are committed to operating safely and supplying growing markets with the fuels they need.”

The economic impact will be significant. Colonial will pay an estimated $700,000 in state sales taxes during construction. Ad valorem taxes paid annually in Hamilton, Bradley and McMinn counties and in the cities of Cleveland and Athens are expected to more than double, from current payments of $320,000 per year to approximately $724,000.

"Colonial's expansion in Cleveland, once complete, will generate additional revenue for the city in the form of increased utility tax payments," said City Manager Joe Cate. "Because the value of Colonial's investment will increase, so will its payment to the city."

Colonial’s new pipe was manufactured in Birmingham, Ala., and has undergone rigorous inspection. Quality control inspections will continue throughout the construction and testing phases of the project.

After the right of way is prepared, crews will dig a trench in which the line will be buried. After welding sections together, the new pipeline will be pressure-tested with water to ensure it is safe to operate. Only then will new service begin. Colonial projects the line will begin delivering fuel later this year.

“We have carefully engineered this project to provide the greatest protection for the residents and for the environment of East Tennessee,” said Project Leader Gerald Beck. “Colonial’s No. 1 priority is safety, and this new line will be safe both in the construction phase and the way we operate the line.”

Questions about the construction project may be directed to Grace McDougald, Community Relations Manager for Colonial Pipeline, at (678) 762-2255.

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