As filed with the Securities and Exchange Commission on April 19, 2001
                                                     Registration No. 333-
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                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

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                                   FORM S-3
                         REGISTRATION STATEMENT UNDER
                          THE SECURITIES ACT OF 1933

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                      PLAINS ALL AMERICAN PIPELINE, L.P.
            (Exact name of registrant as specified in its charter)
             Delaware                              76-0582150
  (State or other jurisdiction of        (I.R.S. Employer Identification
  incorporation or organization)                      No.)

                                ---------------

                               500 Dallas Street
                             Houston, Texas 77002
                                (713) 654-1414
  (Address, including zip code, and telephone number, including area code, of
                   registrant's principal executive offices)

                                ---------------

                                   Tim Moore
                               500 Dallas Street
                             Houston, Texas 77002
                                (713) 654-1414
(Name, address, including zip code, and telephone number, including area code,
                             of agent for service)

                                ---------------

                                   Copy to:

                            Vinson & Elkins L.L.P.
                                  1001 Fannin
                             Houston, Texas 77002
                                (713) 758-2222
                             Attn: David P. Oelman

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   Approximate date of commencement of proposed sale to the public: From time
to time after this registration statement becomes effective.

   If the only securities being registered on this Form are being offered
pursuant to dividend or reinvestment plans, please check the following box:
[_]

   If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, please check the following box: [X]

   If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [_]

   If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [_]

   If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [_]

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                        CALCULATION OF REGISTRATION FEE

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                                             Proposed Maximum
                                                Aggregate
     Title of Each Class of Securities           Offering        Amount of
              to be Registered                   Price(1)     Registration Fee
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Common units representing limited partner
 interests..................................   $125,000,000       $31,250
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(1) We have estimated the proposed maximum aggregate offering price solely to
    calculate the registration fee under Rule 457(o).

   The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
files a further amendment specifically stating that this registration
statement is effective in accordance with Section 8(a) of the Securities Act
of 1933. Otherwise, this registration statement will become effective on the
date the Commission, acting pursuant to said Section 8(a), determines.

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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the     +
+Securities and Exchange Commission is effective. This prospectus is not an    +
+offer to sell these securities, and it is not soliciting an offer to buy      +
+these securities in any state where the offer or sale is not permitted.       +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
                  SUBJECT TO COMPLETION, DATED APRIL 19, 2001

PROSPECTUS

                                  $125,000,000

                                  -----------

                                  Common Units

                       Plains All American Pipeline, L.P.

  Under this prospectus we may from time to time offer common units
representing limited partner interests in Plains All American Pipeline, L.P.

  Our common units are traded on the New York Stock Exchange under the symbol
"PAA."

                                  -----------

  Each time we sell common units we will provide a prospectus supplement that
will contain specific information about the terms of that offering. The
prospectus supplement may also add, update or change information contained in
this prospectus. You should read this prospectus and any supplement carefully
before you invest. You should also read the documents we have referred you to
in the "Where You Can Find More Information" section of this prospectus for
information on us and for our financial statements.

  Limited partnerships are inherently different from corporations. You should
consider each of the factors described under "Risk Factors," which begin on
page 2, in deciding whether or not to buy any of our common units.

  Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of our securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.

                  The date of this prospectus is      , 2001.

                               TABLE OF CONTENTS

                                                                          
ABOUT THIS PROSPECTUS.......................................................   i
WHO WE ARE..................................................................   1
RISK FACTORS................................................................   2
USE OF PROCEEDS.............................................................  10
DESCRIPTION OF OUR COMMON UNITS.............................................  10
CASH DISTRIBUTION POLICY....................................................  12
DESCRIPTION OF OUR PARTNERSHIP AGREEMENT....................................  12
TAX CONSIDERATIONS..........................................................  16
PLAN OF DISTRIBUTION........................................................  29
WHERE YOU CAN FIND MORE INFORMATION.........................................  30
FORWARD-LOOKING STATEMENTS..................................................  31
LEGAL MATTERS...............................................................  31
EXPERTS.....................................................................  31

                             ABOUT THIS PROSPECTUS

   This prospectus is part of a registration statement that we filed with the
SEC using a "shelf" registration process. Under this shelf process, we may
offer from time to time up to $125,000,000 of our common units. Each time we
offer our common units, we will provide you with a prospectus supplement that
will describe, among other things, the specific amounts and prices of the
common units being offered and the terms of the offering. The prospectus
supplement may also add, update or change information contained in this
prospectus. Therefore, before you invest in our common units, you should read
this prospectus and any attached prospectus supplements.

                                       i

                                   WHO WE ARE

   We are engaged in interstate and intrastate crude oil transportation,
terminalling and storage, as well as crude oil gathering and marketing
activities. We were formed in September 1998 to acquire and operate the
midstream crude oil business and assets of Plains Resources Inc. Our operations
are concentrated in California, Texas, Oklahoma, Louisiana, Illinois and the
Gulf of Mexico.

   Our business strategy is to capitalize on regional crude oil supply-and-
demand imbalances by combining the strategic location and unique capabilities
of our transportation and terminalling assets with our extensive marketing and
distribution expertise to generate sustainable earnings and cash flow for our
unitholders.

   We intend to execute our business strategy by:

  . increasing and optimizing throughput on our various pipeline and
    gathering assets;

  . realizing cost efficiencies through operational improvements and
    potential strategic alliances;

  . utilizing our Cushing Terminal and our other assets to service the needs
    of refiners and to profit from merchant activities that take advantage of
    crude oil pricing and quality differentials;

  . pursuing strategic and accretive acquisitions of crude oil pipeline
    assets, gathering systems and terminalling and storage facilities that
    complement our existing asset base and distribution capabilities; and

  . establishing a midstream crude oil presence in Canada through gathering
    and pipeline systems and strategically located terminal assets.

   We regularly evaluate potential acquisitions of assets and businesses that
would complement our existing business. Because our general partner receives
incentive distributions when our operations generate distributions that exceed
the minimum quarterly distribution, our management has a strong incentive to
maximize distributions through the successful growth of our business.

   We are a Delaware limited partnership. Plains All American Inc., a Delaware
corporation, serves as our sole general partner. Our U.S. operations are
conducted through, and the operating assets are owned by, Plains Marketing,
L.P., a Delaware limited partnership and All American Pipeline, L.P., a Texas
limited partnership (collectively the "Operating Partnerships"). Our general
partner is also the general partner of our operating partnerships. Our Canadian
operations will be conducted through Plains Marketing Canada, L.P., a Canadian
limited partnership.

   Our principal executive offices are located at 500 Dallas Street, Suite 700,
Houston, Texas 77002, and our phone number is (713) 654-1414.

                                       1

                                  RISK FACTORS

   You should carefully consider the following risk factors together with all
of the other information included in this prospectus in evaluating an
investment in the common units. If any of the following risks were actually to
occur, our business, financial condition or results of operations could be
materially adversely affected. In that case, the trading price of our common
units could decline and you could lose all or part of your investment.

Risks Inherent in Our Business

   Cash distributions are not guaranteed and may fluctuate with our performance
and the establishment of financial reserves.

   Because distributions on the common units are dependent on the amount of
cash we generate, distributions may fluctuate based on our performance. We
cannot guarantee that the minimum quarterly distributions will be paid each
quarter. The actual amount of cash that is available to be distributed each
quarter will depend upon numerous factors, some of which are beyond our control
and the control of our general partner. Cash distributions are dependent
primarily on cash flow, including cash flow from financial reserves and working
capital borrowings, and not solely on profitability, which is affected by non-
cash items. Therefore, cash distributions might be made during periods when we
record losses and might not be made during periods when we record profits.

   Our profitability is dependent upon an adequate supply of crude oil from
fields located offshore and onshore California. Production from the offshore
fields has experienced substantial production declines since 1995.

   A significant portion of our gross margin is derived from the Santa Ynez and
Point Arguello fields located offshore California. For the year ended December
31, 2000, gross revenues less fuel and power expenses attributable to the Santa
Ynez field were $24.6 million, or 18%, of our gross margin and gross revenues
less fuel and power expenses attributable to the Point Arguello field were
approximately $7.8 million, or 6%, of our gross margin. Although we have
entered into contracts with the producers of most of the production from these
fields under which they have agreed to ship all of their production from these
fields on the All American Pipeline through August 2007, they are not obligated
to produce or ship any minimum volumes. Volumes received from the Santa Ynez
and Point Arguello fields have declined from 92,000 and 60,000 average daily
barrels, respectively, in 1995 to 56,000 and 18,000 average daily barrels,
respectively, in 2000. We expect that there will continue to be natural
production declines from each of these fields. In addition, any production
disruption from these fields due to production problems, transportation
problems or other reasons would have a material adverse effect on our business.

   We recently suffered a large loss from unauthorized crude oil trading by a
former employee. A loss of this kind could occur again in the future in spite
of our best efforts to prevent it.

   Generally, it is our policy that as we purchase crude oil, we establish a
margin by selling crude oil for physical delivery to third-party users, such as
independent refiners or major oil companies, or by entering into a future
delivery obligation under futures contracts on the NYMEX. Through these
transactions, we seek to maintain a position that is substantially balanced
between purchases, on the one hand, and sales or future delivery obligations,
on the other hand. Our policy is not to acquire and hold crude oil, futures
contracts or derivative products for the purpose of speculating on price
changes. We discovered in November 1999 that this policy was violated by one of
our former employees, which resulted in losses of approximately $174.0 million,
including estimated associated costs and legal expenses. In 2000, we recognized
an additional charge of approximately $7.0 million for litigation related to
the unauthorized trading losses. We have taken steps within our organization to
enhance our processes and procedures to prevent future unauthorized trading. We
cannot assure you, however, that these steps will detect and prevent all
violations of our trading policies and procedures, particularly if deception or
other intentional misconduct is involved.

                                       2

   Our trading loss resulted in the termination of some of our crude oil
purchase contracts. We also are incurring additional expense for letters of
credit to support our trading operations.

   In the period immediately following the disclosure of the unauthorized
trading losses, a significant number of our suppliers and trading partners
reduced or eliminated the open credit previously extended to us. Consequently,
the amount of letters of credit we needed to support the level of our crude oil
purchases then in effect increased significantly. In addition, the cost of
letters of credit increased under our credit facility. Some of our purchase
contracts were terminated. As a result of these changes, aggregate volumes
purchased have declined from an average of 528,000 barrels per day for the
fiscal quarter preceding the trading loss to an average of 302,000 barrels per
day in the fourth quarter of 2000. Approximately 72,000 barrels per day of the
decrease is related to barrels gathered at producer lease locations and 154,000
barrels per day is attributable to bulk purchases. As a result of the increase
in letter of credit costs and reduced volumes, adjusted EBITDA and net income
for the year 2000 was adversely affected by approximately $6.0 million,
excluding the positive impact of current favorable market conditions.

   Our indebtedness may limit our ability to borrow additional funds, make
distributions to unitholders or capitalize on business opportunities.

   As of March 31, 2001, our total outstanding long-term debt was approximately
$316.6 million. As of March 31, 2001, we had a $500 million senior secured
revolving credit facility and a $200 million senior secured letter of credit
and borrowing facility. As of March 31, 2001, approximately $316.6 million was
outstanding under the revolving credit facility and $10.5 million in borrowings
and $60.0 million letters of credit were outstanding under the secured letter
of credit and borrowing facility.

   Our debt may:

  . adversely affect our ability to finance future operations and capital
    needs;

  . limit our ability to pursue acquisitions and other business
    opportunities; and

  . make our results of operations more susceptible to adverse economic or
    operating conditions.

   Our payment of principal and interest on the debt will reduce the cash
available for distribution on the units. We will be prohibited from making cash
distributions during an event of default under any of our indebtedness. Various
limitations in our indebtedness may reduce our ability to incur additional
debt, to engage in some transactions and to capitalize on business
opportunities. Any subsequent refinancing of our current indebtedness or any
new indebtedness could have similar or greater restrictions.

   The success of our business strategy to increase and optimize throughput on
our pipeline and gathering assets is dependent upon our securing additional
supplies of crude oil.

   Our operating results are dependent upon securing additional supplies of
crude oil from increased production by oil companies and aggressive lease
gathering efforts. The ability of producers to increase production is dependent
on the prevailing market price of oil, the exploration and production budgets
of the major and independent oil companies, the depletion rate of existing
reservoirs, the success of new wells drilled, environmental concerns,
regulatory initiatives and other matters beyond the control of the general
partner. There can be no assurance that production of crude oil will rise to
sufficient levels to cause an increase in the throughput on our pipeline and
gathering assets.

   Our operations are dependent upon demand for crude oil by refiners in the
Midwest and on the Gulf Coast. Any decrease in this demand could adversely
affect our business.

   Demand also depends on the ability and willingness of shippers having access
to our transportation assets to satisfy their demand by deliveries through
those assets, and any decrease in this demand could adversely

                                       3

affect our business. Demand for crude oil is dependent upon the impact of
future economic conditions, fuel conservation measures, alternative fuel
requirements, governmental regulation or technological advances in fuel economy
and energy generation devices, all of which could reduce demand.

   We face intense competition in our terminalling and storage activities and
gathering and marketing activities.

   Our competitors include other crude oil pipelines, the major integrated oil
companies, their marketing affiliates and independent gatherers, brokers and
marketers of widely varying sizes, financial resources and experience. Some of
these competitors have capital resources many times greater than ours and
control substantially greater supplies of crude oil.

   The profitability of our gathering and marketing activities depends
primarily on the volumes of crude oil we purchase and gather.

   To maintain the volumes of crude oil we purchase, we must continue to
contract for new supplies of crude oil to offset volumes lost because of
natural declines in crude oil production from depleting wells or volumes lost
to competitors. Replacement of lost volumes of crude oil is particularly
difficult in an environment where production is low and competition to gather
available production is intense. Generally, because producers experience
inconveniences in switching crude oil purchasers, such as delays in receipt of
proceeds while awaiting the preparation of new division orders, producers
typically do not change purchasers on the basis of minor variations in price.
Thus, we may experience difficulty acquiring crude oil at the wellhead in areas
where there are existing relationships between producers and other gatherers
and purchasers of crude oil.

   We are exposed to the credit risk of our customers in the ordinary course of
our gathering and marketing activities.

   In those cases where we provide division order services for crude oil
purchased at the wellhead, we may be responsible for distribution of proceeds
to all parties. In other cases, we pay all of or a portion of the production
proceeds to an operator who distributes these proceeds to the various interest
owners. These arrangements expose us to operator credit risk. Therefore, we
must determine that operators have sufficient financial resources to make such
payments and distributions and to indemnify and defend us in case of a protest,
action or complaint. Even if our credit review and analysis mechanisms work
properly, there can be no assurance that we will not experience losses in
dealings with other parties.

   Our operations are subject to federal and state environmental and safety
laws and regulations relating to environmental protection and operational
safety.

   Our pipeline, gathering, storage and terminalling facilities operations are
subject to the risk of incurring substantial environmental and safety related
costs and liabilities. These costs and liabilities could arise under
increasingly strict environmental and safety laws, including regulations and
enforcement policies, or claims for damages to property or persons resulting
from our operations. If we were not able to recover such resulting costs
through insurance or increased tariffs and revenues, cash distributions to
unitholders could be adversely affected.

   The transportation and storage of crude oil results in a risk that crude oil
and other hydrocarbons may be suddenly or gradually released into the
environment, potentially causing substantial expenditures for a response
action, significant government penalties, liability for natural resources
damages to government agencies, personal injury or property damages to private
parties and significant business interruption.

   Our pipeline systems are dependent upon their interconnections with other
crude oil pipelines to reach end markets.

   Reduced throughput on these interconnecting pipelines as a result of
testing, line repair, reduced operating pressures or other causes could result
in reduced throughput on our pipeline systems, which would adversely affect our
profitability.

                                       4

Risks Inherent in an Investment in Plains All American Pipeline

   Cost reimbursements due to our general partner may be substantial and will
reduce our cash available for distribution to you.

   Prior to making any distribution on the common units, we will reimburse the
general partner and its affiliates, including officers and directors of the
general partner, for all expenses incurred on our behalf. The reimbursement of
expenses and the payment of fees could adversely affect our ability to make
distributions. The general partner has sole discretion to determine the amount
of these expenses. In addition, our general partner and its affiliates may
provide us services for which we will be charged reasonable fees as determined
by the general partner.

   Even if you wish to remove our general partner, you cannot do so without our
general partner's consent.

   Our general partner manages and operates Plains All American Pipeline.
Unlike the holders of common stock in a corporation, you will have only limited
voting rights on matters affecting our business. You will have no right to
elect the general partner or the directors of the general partner on an annual
or other continuing basis. The ownership of a majority of the outstanding units
by the general partner and its affiliates gives the general partner the
practical ability to prevent its removal.

   In addition, the following provisions of the partnership agreement may
discourage a person or group from attempting to remove our general partner or
otherwise change our management:

  . if the holders of at least 66% of the units vote to remove the general
    partner without cause, all remaining subordinated units will
    automatically convert into common units and will share distributions with
    the existing common units pro rata, existing arrearages on the common
    units will be extinguished and the common units will no longer be
    entitled to arrearages if we fail to pay the minimum quarterly
    distribution in any quarter. Cause is narrowly defined to mean that a
    court of competent jurisdiction has entered a final, non-appealable
    judgment finding the general partner liable for actual fraud, gross
    negligence or willful or wanton misconduct in its capacity as our general
    partner.

  . any units held by a person that owns 20% or more of any class of units
    then outstanding, other than the general partner and its affiliates,
    cannot be voted on any matter; and

  . the partnership agreement contains provisions limiting the ability of
    unitholders to call meetings or to acquire information about our
    operations, as well as other provisions limiting the unitholders' ability
    to influence the manner or direction of management.

   These provisions may discourage a person or group from attempting to remove
our general partner or otherwise change our management. As a result of these
provisions, the price at which the common units will trade may be lower because
of the absence or reduction of a takeover premium in the trading price.

   We may issue additional common units without your approval, which would
dilute your existing ownership interests.

   During the subordination period, our general partner may cause us to issue
additional common units without your approval. Our general partner may also
cause us to issue additional common units, without your approval, in a number
of circumstances, such as:

  . the issuance of common units in connection with acquisitions that
    increase cash flow from operations per unit on a pro forma basis;

  . the conversion of subordinated units into common units;

  . the conversion of the general partner interest and the incentive
    distribution rights into common units as a result of the withdrawal of
    our general partner; or

  . issuances of common units under our long-term incentive plan.

                                       5

   The issuance of additional common units or other equity securities of equal
or senior rank will have the following effects:

  . your proportionate ownership interest in Plains All American Pipeline
    will decrease:

  . the amount of cash available for distribution on each unit may decrease;

  . since a lower percentage of total outstanding units will be subordinated
    units, the risk that a shortfall in the payment of the minimum quarterly
    distribution will be borne by the common unitholders will increase;

  . the relative voting strength of each previously outstanding unit may be
    diminished; and

  . the market price of the common units may decline.

   After the end of the subordination period, we may issue an unlimited number
of limited partner interests of any type without the approval of the
unitholders. Our partnership agreement does not give the unitholders the right
to approve our issuance of equity securities ranking junior to the common
units.

   Our general partner has a limited call right that may require you to sell
your units at an undesirable time or price.

   If at any time our general partner and its affiliates own 80% or more of the
common units, the general partner will have the right, but not the obligation,
which it may assign to any of its affiliates, to acquire all, but not less than
all, of the remaining common units held by unaffiliated persons at a price
generally equal to the then current market price of the common units. As a
result, you may be required to sell your common units at a time when you may
not desire to sell them or at a price that is less than the price you would
like to receive. You may also incur a tax liability upon a sale of your units.

   You may not have limited liability if a court finds that unitholder actions
constitute control of our business.

   Under Delaware law, you could be held liable for our obligations to the same
extent as a general partner if a court determined that the right of unitholders
to remove our general partner or to take other action under the partnership
agreement constituted participation in the "control" of our business.

   The general partner generally has unlimited liability for the obligations of
the partnership, such as its debts and environmental liabilities, except for
those contractual obligations of the partnership that are expressly made
without recourse to the general partner.

   In addition, Section 17-607 of the Delaware Revised Uniform Limited
Partnership Act provides that under some circumstances, a unitholder may be
liable to us for the amount of a distribution for a period of three years from
the date of the distribution.

   Conflicts of interest could arise among the general partner, Plains
Resources Inc. and the partnership. These conflicts may include the following
situations:

  . we do not have any employees and we rely solely on employees of the
    general partner and its affiliates, including Plains Resources Inc.;

  . under the partnership agreement, we reimburse the general partner for the
    costs of managing and operating the partnership;

  . the amount of cash expenditures, borrowings and reserves in any quarter
    may affect available cash to pay quarterly distributions to unitholders;

  . the general partner tries to avoid being personally liable for
    partnership obligations. The general partner is permitted to protect its
    assets in this manner by the partnership agreement. Under the

                                       6

    partnership agreement the general partner does not breach its fiduciary
    duty even if the partnership could have obtained more favorable terms
    without limitations on the general partner's liability;

  . under the partnership agreement, the general partner may pay its
    affiliates for any services rendered on terms fair and reasonable to the
    partnership. The general partner may also enter into additional contracts
    with any of its affiliates on behalf of the partnership. Agreements or
    contracts between the partnership and the general partner (and its
    affiliates) are not the result of arms length negotiations;

  . the general partner does not breach the partnership agreement by
    exercising its call rights to purchase limited partnership interests or
    by assigning its call rights to one of its affiliates or to the
    partnership; and

  . the general partner's affiliates may compete with us. The omnibus
    agreement prohibits the general partner's affiliates from engaging in or
    acquiring any business engaged in crude oil storage, terminalling,
    gathering activities, marketing activities and transportation by pipeline
    in the lower 48 states for any party other than Plains All American
    Pipeline or our affiliates described in the Omnibus Agreement. This
    restriction, however, does not apply if the restricted business was
    engaged in by us or these affiliates as of the date of our formation, is
    conducted pursuant to and in accordance with the terms of the marketing
    agreement, or if the value of the assets acquired in a transaction that
    comprises a restricted business does not exceed $10 million, or if the
    value of the assets acquired exceeds $10 million and the general partner
    has elected not to pursue such an opportunity. The omnibus agreement may
    be terminated by Plains Resources upon a change of control.

Tax Risks to Common Unitholders

   You should read "Tax Considerations" for a more complete discussion of the
following expected material federal income tax consequences of owning and
disposing of common units.

   The IRS could treat us as a corporation for tax purposes, which would
substantially reduce the cash available for distribution to you.

   The anticipated after-tax benefit of an investment in the common units
depends largely on our being treated as a partnership for federal income tax
purposes. We have not requested, and do not plan to request, a ruling from the
IRS on this or any other matter affecting us.

   If we were classified as a corporation for federal income tax purposes, we
would pay federal income tax on our income at the corporate tax rate, which is
currently a maximum of 35%. Distributions to you would generally be taxed again
to you as corporate distributions, and no income, gains, losses, deductions or
credits would flow through to you. Because a tax would be imposed upon us as a
corporation, the cash available for distribution to you would be substantially
reduced. Treatment of us as a corporation would result in a material reduction
in the after-tax return to the unitholders, likely causing a substantial
reduction in the value of the common units.

   Current law may change so as to cause us to be taxed as a corporation for
federal income tax purposes or otherwise subject us to entity-level taxation.
The partnership agreement provides that, if a law is enacted or existing law is
modified or interpreted in a manner that subjects us to taxation as a
corporation or otherwise subjects us to entity-level taxation for federal,
state or local income tax purposes, then the minimum quarterly distribution and
the target distribution levels will be decreased to reflect that impact on us.

   A successful IRS contest of the federal income tax positions we take may
adversely impact the market for common units.

   We have not requested a ruling from the IRS with respect to any matter
affecting us. The IRS may adopt positions that differ from the conclusions of
our counsel expressed in this prospectus or from the positions we take. It may
be necessary to resort to administrative or court proceedings to sustain our
counsel's conclusions

                                       7

or the positions we take. A court may not concur with our counsel's conclusions
or the positions we take. Any contest with the IRS may materially and adversely
impact the market for common units and the price at which they trade. In
addition, the costs of any contest with the IRS, principally legal, accounting
and related fees, will be borne by us and directly or indirectly by the
unitholders and the general partner.

   You may be required to pay taxes even if you do not receive any cash
distributions.

   You will be required to pay federal income taxes and, in some cases, state
and local income taxes on your share of our taxable income even if you do not
receive any cash distributions from us. You may not receive cash distributions
from us equal to your share of our taxable income or even equal to the actual
tax liability that results from your share of our taxable income.

   Tax gain or loss on disposition of common units could be different than
expected.

   If you sell your common units, you will recognize gain or loss equal to the
difference between the amount realized and your tax basis in those common
units. Prior distributions in excess of the total net taxable income you were
allocated for a common unit, which decreased your tax basis in that common
unit, will, in effect, become taxable income to you if the common unit is sold
at a price greater than your tax basis in that common unit, even if the price
you receive is less than your original cost. A substantial portion of the
amount realized, whether or not representing gain, may be ordinary income to
you. Should the IRS successfully contest some positions we take, you could
recognize more gain on the sale of units than would be the case under those
positions, without the benefit of decreased income in prior years. Also, if you
sell your units, you may incur a tax liability in excess of the amount of cash
you receive from the sale.

   If you are not an individual residing in the United States, you may have
adverse tax consequences from owning common units.

   Investment in common units by tax-exempt entities, regulated investment
companies or mutual funds and foreign persons raises issues unique to them. For
example, virtually all of our income allocated to organizations exempt from
federal income tax, including individual retirement accounts and other
retirement plans, will be unrelated business taxable income and will be taxable
to them. Very little of our income will be qualifying income to a regulated
investment company or mutual fund. Distributions to foreign persons will be
reduced by withholding taxes, currently at the rate of 39.6%, and foreign
persons will be required to file federal income tax returns and pay tax on
their share of our taxable income.

   We are registered as a tax shelter. This may increase the risk of an IRS
audit of us or a unitholder.

   We are registered with the IRS as a "tax shelter." Our tax shelter
registration number is 99061000009. The IRS requires that some types of
entities, including some partnerships, register as "tax shelters" in response
to the perception that they claim tax benefits that the IRS may believe to be
unwarranted. As a result, we may be audited by the IRS and tax adjustments
could be made. Any unitholder owning less than a 1% profits interest in us has
very limited rights to participate in the income tax audit process. Further,
any adjustments in our tax returns will lead to adjustments in the unitholders'
tax returns and may lead to audits of unitholders' tax returns and adjustments
of items unrelated to us. You will bear the cost of any expense incurred in
connection with an examination of your personal tax return.

   We treat a purchaser of units as having the same tax benefits without regard
to the units purchased. The IRS may challenge this treatment, which could
adversely affect the value of the units.

   Because we cannot match transferors and transferees of common units, we have
adopted depreciation and amortization positions that do not conform with all
aspects of the Treasury regulations. A successful IRS challenge to those
positions could adversely affect the amount of tax benefits available to you.
It also could affect the timing of these tax benefits or the amount of gain
from your sale of common units and could have a negative impact on the value of
the common units or result in audit adjustments to your tax returns. Please
read

                                       8

"Tax Considerations--Uniformity of Units" for further discussion of the effect
of the depreciation and amortization positions we adopt.

   You will likely be subject to state and local taxes in states where you do
not live as a result of an investment in units.

   In addition to federal income taxes, you will likely be subject to other
taxes, including state and local taxes, foreign taxes, unincorporated business
taxes and estate, inheritance or intangible taxes that are imposed by the
various jurisdictions in which we do business or own property and in which you
do not reside. You may be required to file foreign, state and local income tax
returns and pay foreign, state and local income taxes in many or all of the
jurisdictions in which we do business or own property. Further, you may be
subject to penalties for failure to comply with those requirements. We own
assets and do business in Alabama, Arizona, Arkansas, California, Colorado,
Florida, Illinois, Indiana, Kansas, Kentucky, Louisiana, Minnesota,
Mississippi, Missouri, Montana, Nebraska, New Mexico, North Dakota, Oklahoma,
South Dakota, Texas, Utah and Wyoming. Of these states, Florida, South Dakota,
Texas and Wyoming do not currently impose a personal income tax. In addition,
we expect to own assets and do business in Canada. It is your responsibility to
file all federal, state, local and foreign tax returns. Our counsel has not
rendered an opinion on the foreign, state or local tax consequences of an
investment in the common units.

                                       9

                                USE OF PROCEEDS

   Unless otherwise indicated to the contrary in an accompanying prospectus
supplement, we will use the net proceeds from the sale of securities covered by
this registration for general partnership purposes, which may include repayment
of indebtedness, the acquisition of businesses and other capital expenditures
and additions to working capital.

                        DESCRIPTION OF OUR COMMON UNITS

   Generally, our common units represent limited partner interests that entitle
the holders to participate in our cash distributions and to exercise the rights
or privileges available to limited partners under our partnership agreement.
For a description of the relative rights and preferences of holders of common
units, holders of subordinated units and our general partner in and to cash
distributions, together with a description of the circumstances under which
subordinated units convert into common units, see "Cash Distribution Policy."

   Our outstanding common units are listed on the NYSE under the symbol "PAA."
Any additional common units we issue will also be listed on the NYSE.

   The transfer agent and registrar for our common units is American Stock
Transfer & Trust Company.

Meetings/Voting

   Each holder of common units is entitled to one vote for each common unit on
all matters submitted to a vote of the unitholders.

Status as Limited Partner or Assignee

   Except as described below under "--Limited Liability," the common units will
be fully paid, and unitholders will not be required to make additional capital
contributions to us.

   Each purchaser of common units offered by this prospectus must execute a
transfer application whereby the purchaser requests admission as a substituted
limited partner and makes representations and agrees to provisions stated in
the transfer application. If this action is not taken, a purchaser will not be
registered as a record holder of common units on the books of our transfer
agent or issued a common unit certificate. Purchasers may hold common units in
nominee accounts.

   An assignee, pending its admission as a substituted limited partner, is
entitled to an interest in us equivalent to that of a limited partner with
respect to the right to share in allocations and distributions, including
liquidating distributions. Our general partner will vote and exercise other
powers attributable to common units owned by an assignee who has not become a
substituted limited partner at the written direction of the assignee.
Transferees who do not execute and deliver transfer applications will be
treated neither as assignees nor as record holders of common units and will not
receive cash distributions, federal income tax allocations or reports furnished
to record holders of common units. The only right the transferees will have is
the right to admission as a substituted limited partner in respect of the
transferred common units upon execution of a transfer application in respect of
the common units. A nominee or broker who has executed a transfer application
with respect to common units held in street name or nominee accounts will
receive distributions and reports pertaining to its common units.

Limited Liability

   Assuming that a limited partner does not participate in the control of our
business within the meaning of the Delaware Revised Uniform Limited Partnership
Act (the "Delaware Act") and that he otherwise acts in conformity with the
provisions of our partnership agreement, his liability under the Delaware Act
will be

                                       10

limited, subject to some possible exceptions, generally to the amount of
capital he is obligated to contribute to us in respect of his units plus his
share of any undistributed profits and assets.

   Under the Delaware Act, a limited partnership may not make a distribution to
a partner to the extent that at the time of the distribution, after giving
effect to the distribution, all liabilities of the partnership, other than
liabilities to partners on account of their partnership interests and
liabilities for which the recourse of creditors is limited to specific property
of the partnership, exceed the fair value of the assets of the limited
partnership. For the purposes of determining the fair value of the assets of a
limited partnership, the Delaware Act provides that the fair value of the
property subject to liability of which recourse of creditors is limited shall
be included in the assets of the limited partnership only to the extent that
the fair value of that property exceeds the nonrecourse liability. The Delaware
Act provides that a limited partner who receives a distribution and knew at the
time of the distribution that the distribution was in violation of the Delaware
Act is liable to the limited partnership for the amount of the distribution,
for three years from the date of the distribution.

Reports and Records

   As soon as practicable, but in no event later than 120 days after the close
of each fiscal year, our general partner will furnish or make available to each
unitholder of record (as of a record date selected by our general partner) an
annual report containing our audited financial statements for the past fiscal
year. These financial statements will be prepared in accordance with generally
accepted accounting principles. In addition, no later than 45 days after the
close of each quarter, (except the fourth quarter) our general partner will
furnish or make available to each unitholder of record (as of a record date
selected by our general partner) a report containing our unaudited financial
statements and any other information required by law.

   Our general partner will use all reasonable efforts to furnish each
unitholder of record information reasonably required for tax reporting purposes
within 90 days after the close of each fiscal year. Our general partner's
ability to furnish this summary tax information will depend on the cooperation
of unitholders in supplying information to our general partner. Each unitholder
will receive information to assist him in determining his U.S. federal and
state and Canadian federal and provincial tax liability and filing his U.S.
federal and state and Canadian federal and provincial income tax returns.

   A limited partner can, for a purpose reasonably related to the limited
partner's interest as a limited partner, upon reasonable demand and at his own
expense, have furnished to him:

  . a current list of the name and last known address of each partner;

  . a copy of our tax returns;

  . information as to the amount of cash and a description and statement of
    the agreed value of any other property or services, contributed or to be
    contributed by each partner and the date on which each became a partner;

  . copies of our partnership agreement, our certificate of limited
    partnership, amendments to either of them and powers of attorney which
    have been executed under our partnership agreement;

  . information regarding the status of our business and financial condition;
    and

  . any other information regarding our affairs as is just and reasonable.

   Our general partner may, and intends to, keep confidential from the limited
partners trade secrets or other information the disclosure of which our general
partner believes in good faith is not in our best interest or which we are
required by law or by agreements with third parties to keep confidential.

                                       11

                            CASH DISTRIBUTION POLICY

   One of our principal objectives is to generate cash from our operations and
to distribute cash to our partners each quarter. We are required to distribute
to our partners 100% of our available cash each quarter. Our available cash is
defined in our partnership agreement and is generally the sum of the cash we
receive in a quarter less cash disbursements, adjusted for net changes in
reserves.

   During the subordination period the holders of our common units are entitled
to receive each quarter a minimum quarterly distribution of $0.450 per unit
($1.80 annualized) prior to any distribution of available cash to holders of
our subordinated units. The subordination period is defined generally as the
period that will end on the first day of any quarter beginning after December
31, 2003 if we have distributed at least the minimum quarterly distribution on
all outstanding units each quarter for three consecutive four-quarter periods
and our adjusted operating surplus, as defined in our partnership agreement,
for such periods equals or exceeds the amount that would have been sufficient
to enable us to distribute the minimum quarterly distribution on all
outstanding units on a fully diluted basis and the related distribution on the
2% general partner interest during those periods. In addition, one-quarter of
the subordinated units may convert to common units on a one-for-one basis after
December 31, 2002 if we meet the tests set forth in our partnership agreement.

   During the subordination period, our cash is distributed first 98% to the
holders of common units and 2% to our general partner until there has been
distributed to the holders of common units an amount equal to the minimum
quarterly distribution and any arrearages. Any additional cash is distributed
98% to the holders of subordinated units and 2% to our general partner until
there has been distributed to the holders of subordinated units an amount equal
to the minimum quarterly distribution. If the subordination period ends, the
rights of the holders of subordinated units will no longer be subordinated to
the rights of the holders of common units and the subordinated units may be
converted into common units.

   Our general partner is entitled to incentive distributions if the amount we
distribute with respect to any quarter exceeds levels specified in our
partnership agreement. Under the quarterly incentive distribution provisions,
generally our general partner is entitled to 15% of amounts we distribute in
excess of $0.450 per common unit, 25% of amounts we distribute in excess of
$0.495 per common unit and 50% of amounts we distribute in excess of $0.675 per
common unit.

                    DESCRIPTION OF OUR PARTNERSHIP AGREEMENT

   The following is a summary of the material provisions of our partnership
agreement. Our partnership agreement and all amendments thereto have been filed
as exhibits to our Form 10-K, which is incorporated by reference in this
prospectus. The following provisions of our partnership agreement are
summarized elsewhere in this prospectus.

  . distributions of our available cash are described under "Quarterly
    Distributions";

  . allocations of taxable income and other tax matters are described under
    "Tax Considerations"; and

  . rights of holders of common units, are described under "Description of
    Our Common Units."

Purpose

   Our purpose under our partnership agreement is to serve as a partner of our
operating partnerships and engage in any business activities that may be
engaged in by our operating partnership or that is approved by our general
partner. The partnership agreements of our operating partnerships provide that
they may engage in any activity that was engaged in by our predecessors at the
time of our initial public offering or reasonably related thereto and any other
activity approved by our general partner.

                                       12

Power of Attorney

   Each limited partner, and each person who acquires a unit from a unitholder
and executes and delivers a transfer application, grants to our general partner
and, if appointed, a liquidator, a power of attorney to, among other things,
execute and file documents required for our qualification, continuance or
dissolution. The power of attorney also grants the authority for the amendment
of, and to make consents and waivers under, our partnership agreement.

Reimbursements of Our General Partner

   Our general partner does not receive any compensation for its services as
our general partner. It is, however, entitled to be reimbursed for all of its
costs incurred in managing and operating our business. Our partnership
agreement provides that our general partner will determine the expenses that
are allocable to us in any reasonable manner determined by our general partner
in its sole discretion.

Issuance of Additional Securities

   Our partnership agreement authorizes us to issue an unlimited number of
additional limited partner interests and other equity securities that are equal
in rank with or junior to our common units on terms and conditions established
by our general partner in its sole discretion without the approval of any
limited partners. During the subordination period, however, except as set forth
in the following paragraph, we may not issue an aggregate of more than
approximately 10 million additional common units or an equivalent number of
units that are equal in rank with our common units, in each case, without the
approval of the holders of at least a majority of our outstanding common units.

   During the subordination period, we may issue an unlimited number of common
units to finance an acquisition or a capital improvement that would have
resulted, on a pro forma basis, in an increase in per unit adjusted available
cash constituting cash from operations, as provided in our partnership
agreement.

   In no event may we issue partnership interests that are senior to our common
units without the approval of the holders of a majority of our outstanding
common units.

   It is possible that we will fund acquisitions through the issuance of
additional common units or other equity securities. Holders of any additional
common units we issue will be entitled to share equally with the then-existing
holders of common units in our cash distributions. In addition, the issuance of
additional partnership interests may dilute the value of the interests of the
then-existing holders of common units in our net assets.

   In accordance with Delaware law and the provisions of our partnership
agreement, we may also issue additional partnership interests that, in the sole
discretion of our general partner, may have special voting rights to which
common units are not entitled.

   Our general partner has the right, which it may from time to time assign in
whole or in part to any of its affiliates, to purchase common units,
subordinated units or other equity securities whenever, and on the same terms
that, we issue those securities to persons other than our general partner and
its affiliates, to the extent necessary to maintain their percentage interests
in us that existed immediately prior to the issuance. The holders of common
units will not have preemptive rights to acquire additional common units or
other partnership interests in us.

Amendments to Our Partnership Agreement

   Amendments to our partnership agreement may be proposed only by our general
partner. In general, proposed amendments must be approved by holders of at
least a majority of our outstanding units. However, in some circumstances, more
particularly described in our partnership agreement, our general partner may
make amendments to our partnership agreement without the approval of our
limited partners or assignees.

                                       13

   Any amendment that materially and adversely affects the rights or
preferences of any type or class of limited partner interests in relation to
other types of classes of limited partner interest or our general partner
interest will require the approval of at least a majority of the type or class
of limited partner interest so affected (excluding any limited partner
interests held by our general partner or its affiliates).

Withdrawal or Removal of Our General Partner; Transfer of Ownership of the
General Partner

   Our general partner has agreed not to withdraw voluntarily as our general
partner prior to December 31, 2008 without obtaining the approval of the
holders of a majority of our outstanding units, excluding those held by our
general partner and its affiliates, and furnishing an opinion of counsel
regarding limited liability and tax matters. On or after December 31, 2008, our
general partner may withdraw as general partner without first obtaining
approval of any unitholder by giving 90 days' written notice, and that
withdrawal will not constitute a violation of our partnership agreement. In
addition, our general partner may withdraw without unitholder approval upon 90
days' notice to our limited partners if at least 50% of our outstanding common
units are held or controlled by one person and its affiliates other than our
general partner and its affiliates.

   Upon the voluntary withdrawal of our general partner, the holders of a
majority of our outstanding units may elect a successor to that withdrawing
general partner. If a successor is not elected, or is elected but an opinion of
counsel regarding limited liability and tax matters cannot be obtained, we will
be dissolved, wound up and liquidated, unless within 180 days after that
withdrawal, the holders of a majority of our outstanding units agree to
continue our business and to appoint a successor general partner.

   Our general partner may not be removed unless that removal is approved by
the vote of the holders of not less than two-thirds of our outstanding units,
including units held by our general partner and its affiliates, and we receive
an opinion of counsel regarding limited liability and tax matters. Any removal
of this kind is also subject to the approval of a successor general partner by
the vote of the holders of a majority of our outstanding units, including those
held by our general partner and its affiliates.

   While our partnership agreement limits the ability of our general partner to
withdraw, it allows the general partner interest to be transferred to an
affiliate or to a third party in conjunction with a merger or sale of all or
substantially all of the assets of our general partner. In addition, the
partnership agreement expressly permits the sale, in whole or in part, of the
ownership of our general partner. Our general partner may also transfer, in
whole or in part, the common units and subordinated units owned by its
subsidiary as well as, with minor limitations, the incentive distribution
rights.

Liquidation and Distribution of Proceeds

   Upon our dissolution, unless we are reconstituted and continued as a new
limited partnership, the person authorized to wind up our affairs (the
liquidator) will, acting with all the powers of our general partner that the
liquidator deems necessary or desirable in its good faith judgment, liquidate
our assets. The proceeds of the liquidation will be applied as follows; (i)
first, towards the payment of all of our creditors and the creation of a
reserve for contingent liabilities and (ii) then, to all partners in accordance
with the positive balance in the respective capital accounts. Under some
circumstances and subject to some limitations, the liquidator may defer
liquidation or distribution of our assets for a reasonable period of time. If
the liquidator determines that a sale would be impractical or would cause loss
to the partners, our general partner may distribute assets to partners in kind.

Change of Management Provisions

   Our partnership agreement contains specific provisions that are intended to
discourage a person or group from attempting to remove our general partner or
otherwise change management.

                                       14

Limited Call Right

   If at any time our general partner and its affiliates own 80% or more of the
issued and outstanding limited partner interests of any class, our general
partner will have the right to purchase all, but not less than all, of the
outstanding limited partner interests of that class that are held by non-
affiliated persons. The record date for determining ownership of the limited
partner interests would be selected by our general partner on at least 10 but
not more than 60 days' notice. The purchase price in the event of a purchase
under these provisions would be the greater of (i) the current market price (as
defined in our partnership agreement) of the limited partner interests of the
class as of the date three days prior to the partnership agreement) of the
limited partner interests of the class as of the date five days prior to the
mailing of written notice of its election to purchase the units and (ii) the
highest cash price paid by our general partner or any of its affiliates for any
limited partner interest of the class purchased within the 90 days preceding
the date our general partner mails notice of its election to purchase the
units.

Indemnification

   Under our partnership agreement, in most circumstances, we will indemnify
our general partner, its affiliates and their officers and directors to the
fullest extent permitted by law, from and against all losses, claims or damages
any of them may suffer by reason of their status as general partner, officer or
director, as long as the person seeking indemnity acted in good faith and in a
manner believed to be in or not opposed to our best interest. Any
indemnification under these provisions will only be out of our assets. Our
general partner shall not be personally liable for, or have any obligation to
contribute or loan funds or assets to us to enable us to effectuate, such
indemnification. We are authorized to purchase insurance against liabilities
asserted against and expenses incurred by persons for our activities,
regardless of whether we would have the power to indemnify the person against
liabilities under our partnership agreement.

Registration Rights

   Under our partnership agreement, we have agreed to register for resale under
the Securities Act and applicable state securities laws any common units,
subordinated units or other partnership securities proposed to be sold by our
general partner or any of its affiliates or their assignees if an exemption
from the registration requirements is not otherwise available. We are obligated
to pay all expenses incidental to the registration, excluding underwriting
discounts and commissions.

                                       15

                               TAX CONSIDERATIONS

   This section is a summary of all the material tax considerations that may be
relevant to prospective unitholders who are individual citizens or residents of
the United States and, unless otherwise noted in the following discussion,
expresses the opinion of Vinson & Elkins L.L.P., special counsel to the general
partner and us, insofar as it relates to matters of United States federal
income tax law and legal conclusions with respect to those matters. This
section is based upon current provisions of the Internal Revenue Code, existing
and proposed regulations and current administrative rulings and court
decisions, all of which are subject to change. Later changes in these
authorities may cause the tax consequences to vary substantially from the
consequences described below. Unless the context otherwise requires, references
in this section to "us" or "we" are references to Plains All American Pipeline
and the operating partnerships.

   No attempt has been made in the following discussion to comment on all
federal income tax matters affecting us or the unitholders. Moreover, the
discussion focuses on unitholders who are individual citizens or residents of
the United States and has only limited application to corporations, estates,
trusts, nonresident aliens or other unitholders subject to specialized tax
treatment, such as tax-exempt institutions, foreign persons, individual
retirement accounts (IRAs), real estate investment trusts (REITs) or mutual
funds. Accordingly, we recommend that each prospective unitholder consult, and
depend on, his own tax advisor in analyzing the federal, state, local and
foreign tax consequences particular to him of the ownership or disposition of
common units.

   All statements as to matters of law and legal conclusions, but not as to
factual matters, contained in this section, unless otherwise noted, are the
opinion of counsel and are based on the accuracy of representations made by us.

   No ruling has been or will be requested from the IRS regarding any matter
affecting us or prospective unitholders. An opinion of counsel represents only
that counsel's best legal judgment and does not bind the IRS or the courts.
Accordingly, the opinions and statements made here may not be sustained by a
court if contested by the IRS. Any contest of this sort with the IRS may
materially and adversely impact the market for the common units and the prices
at which common units trade. In addition, the costs of any contest with the IRS
will be borne directly or indirectly by the unitholders and the general
partner. Furthermore, the treatment of us, or an investment in us, may be
significantly modified by future legislative or administrative changes or court
decisions. Any modifications may or may not be retroactively applied.

   For the reasons described below, counsel has not rendered an opinion with
respect to the following specific federal income tax issues:

      (1) the treatment of a unitholder whose common units are loaned to a
  short seller to cover a short sale of common units (please read "--Tax
  Consequences of Unit Ownership--Treatment of Short Sales");

     (2) whether our monthly convention for allocating taxable income and
  losses is permitted by existing Treasury Regulations (please read "--
  Disposition of Common Units--Allocations Between Transferors and
  Transferees"); and

     (3) whether our method for depreciating Section 743 adjustments is
  sustainable (please read "--Tax Consequences of Unit Ownership--Section 754
  Election").

Partnership Status

   A partnership is not a taxable entity and incurs no federal income tax
liability. Instead, each partner of a partnership is required to take into
account his share of items of income, gain, loss and deduction of the
partnership in computing his federal income tax liability, regardless of
whether cash distributions are made to him by the partnership. Distributions by
a partnership to a partner are generally not taxable unless the amount of cash
distributed is in excess of the partner's adjusted basis in his partnership
interest.

   No ruling has been or will be sought from the IRS and the IRS has made no
determination as to our status or the status of the operating partnerships as
partnerships for federal income tax purposes or whether our

                                       16

operations generate "qualifying income" under Section 7704 of the Code.
Instead, we will rely on the opinion of counsel that, based upon the Internal
Revenue Code, its regulations, published revenue rulings and court decisions
and the representations described below, we and the operating partnerships will
be classified as a partnership for federal income tax purposes.

   In rendering its opinion, counsel has relied on factual representations made
by us and the general partner. The representations made by us and our general
partner upon which counsel has relied are:

     (a) Neither we nor the operating partnerships will elect to be treated
  as a corporation;

     (b) For each taxable year, more than 90% of our gross income will be
  income from sources that our counsel has opined or will opine is
  "qualifying income" within the meaning of Section 7704(d) of the Internal
  Revenue Code.

   Section 7704 of the Internal Revenue Code provides that publicly-traded
partnerships will, as a general rule, be taxed as corporations. However, an
exception, referred to as the "Qualifying Income Exception," exists with
respect to publicly-traded partnerships of which 90% or more of the gross
income for every taxable year consists of "qualifying income." Qualifying
income includes income and gains derived from the transportation and marketing
of crude oil, natural gas and products thereof. Other types of qualifying
income include interest (other than from a financial business), dividends,
gains from the sale of real property and gains from the sale or other
disposition of assets held for the production of income that otherwise
constitutes qualifying income. We estimate that less than 5% of our current
income is not qualifying income; however, this estimate could change from time
to time. Based upon and subject to this estimate, the factual representations
made by us and the general partner and a review of the applicable legal
authorities, counsel is of the opinion that at least 90% of our current gross
income constitutes qualifying income.

   If we fail to meet the Qualifying Income Exception, other than a failure
which is determined by the IRS to be inadvertent and which is cured within a
reasonable time after discovery, we will be treated as if we had transferred
all of our assets, subject to liabilities, to a newly formed corporation, on
the first day of the year in which we fail to meet the Qualifying Income
Exception, in return for stock in that corporation, and then distributed that
stock to the unitholders in liquidation of their interests in us. This
contribution and liquidation should be tax-free to unitholders and us so long
as we, at that time, do not have liabilities in excess of the tax basis of our
assets. Thereafter, we would be treated as a corporation for federal income tax
purposes.

   If we were taxable as a corporation in any taxable year, either as a result
of a failure to meet the Qualifying Income Exception or otherwise, our items of
income, gain, loss and deduction would be reflected only on our tax return
rather than being passed through to the unitholders, and our net income would
be taxed to us at corporate rates. In addition, any distribution made to a
unitholder would be treated as either taxable dividend income, to the extent of
our current or accumulated earnings and profits, or, in the absence of earnings
and profits, a nontaxable return of capital, to the extent of the unitholder's
tax basis in his common units, or taxable capital gain, after the unitholder's
tax basis in his common units is reduced to zero. Accordingly, taxation as a
corporation would result in a material reduction in a unitholder's cash flow
and after-tax return and thus would likely result in a substantial reduction of
the value of the units.

   The discussion below is based on the conclusion that we will be classified
as a partnership for federal income tax purposes.

Limited Partner Status

   Unitholders who have become limited partners of Plains All American Pipeline
will be treated as partners of Plains All American Pipeline for federal income
tax purposes. Also:

     (a) assignees who have executed and delivered transfer applications, and
  are awaiting admission as limited partners, and

     (b) unitholders whose common units are held in street name or by a
  nominee and who have the right to direct the nominee in the exercise of all
  substantive rights attendant to the ownership of their common units,

                                       17

will be treated as partners of Plains All American Pipeline for federal income
tax purposes. As there is no direct authority addressing assignees of common
units who are entitled to execute and deliver transfer applications and become
entitled to direct the exercise of attendant rights, but who fail to execute
and deliver transfer applications, counsel's opinion does not extend to these
persons. Furthermore, a purchaser or other transferee of common units who does
not execute and deliver a transfer application may not receive some federal
income tax information or reports furnished to record holders of common units
unless the common units are held in a nominee or street name account and the
nominee or broker has executed and delivered a transfer application for those
common units.

   A beneficial owner of common units whose units have been transferred to a
short seller to complete a short sale would appear to lose his status as a
partner with respect to those units for federal income tax purposes. Please
read "--Tax Consequences of Unit Ownership--Treatment of Short Sales."

   Income, gain, deductions or losses would not appear to be reportable by a
unitholder who is not a partner for federal income tax purposes, and any cash
distributions received by a unitholder who is not a partner for federal income
tax purposes would therefore be fully taxable as ordinary income. These holders
should consult their own tax advisors with respect to their status as partners
in Plains All American Pipeline for federal income tax purposes.

Tax Consequences of Unit Ownership

   Flow-through of Taxable Income. We will not pay any federal income tax.
Instead, each unitholder will be required to report on his income tax return
his share of our income, gains, losses and deductions without regard to whether
corresponding cash distributions are received by that unitholder. Consequently,
we may allocate income to a unitholder even if he has not received a cash
distribution. Each unitholder will be required to include in income his share
of our income, gains, losses and deductions for our taxable year ending with or
within his taxable year.

   Treatment of Distributions. Distributions by us to a unitholder generally
will not be taxable to the unitholder for federal income tax purposes to the
extent of his tax basis in his common units immediately before the
distribution. Our cash distributions in excess of a unitholder's tax basis
generally will be considered to be gain from the sale or exchange of the common
units, taxable in accordance with the rules described under "--Disposition of
Common Units" below. Any reduction in a unitholder's share of our liabilities
for which no partner, including the general partner, bears the economic risk of
loss, known as "nonrecourse liabilities," will be treated as a distribution of
cash to that unitholder. To the extent our distributions cause a unitholder's
"at risk" amount to be less than zero at the end of any taxable year, he must
recapture any losses deducted in previous years. Please read "--Limitations on
Deductibility of Losses."

   A decrease in a unitholder's percentage interest in us because of our
issuance of additional common units will decrease his share of our nonrecourse
liabilities, and thus will result in a corresponding deemed distribution of
cash. A non-pro rata distribution of money or property may result in ordinary
income to a unitholder, regardless of his tax basis in his common units, if the
distribution reduces the unitholder's share of our "unrealized receivables,"
including depreciation recapture, and/or substantially appreciated "inventory
items," both as defined in Section 751 of the Internal Revenue Code, and
collectively, "Section 751 Assets." To that extent, he will be treated as
having been distributed his proportionate share of the Section 751 Assets and
having exchanged those assets with us in return for the non-pro rata portion of
the actual distribution made to him. This latter deemed exchange will generally
result in the unitholder's realization of ordinary income. That income will
equal the excess of (1) the non-pro rata portion of that distribution over (2)
the unitholder's tax basis for the share of Section 751 Assets deemed
relinquished in the exchange.

   Basis of Common Units. A unitholder's initial tax basis for his common units
will be the amount he paid for the common units plus his share of our
nonrecourse liabilities. That basis will be increased by his share of our
income and by any increases in his share of our nonrecourse liabilities. That
basis will be decreased, but not below zero, by distributions from us, by the
unitholder's share of our losses, by any decreases in his share

                                       18

of our nonrecourse liabilities and by his share of our expenditures that are
not deductible in computing taxable income and are not required to be
capitalized. A limited partner will have no share of our debt which is recourse
to the general partner, but will have a share, generally based on his share of
profits, of our nonrecourse liabilities. Please read "--Disposition of Common
Units--Recognition of Gain or Loss."

   Limitations on Deductibility of Losses. The deduction by a unitholder of his
share of our losses will be limited to the tax basis in his units and, in the
case of an individual unitholder or a corporate unitholder, if more than 50% of
the value of its stock is owned directly or indirectly by five or fewer
individuals or some tax-exempt organizations, to the amount for which the
unitholder is considered to be "at risk" with respect to our activities, if
that is less than his tax basis. A unitholder must recapture losses deducted in
previous years to the extent that distributions cause his at risk amount to be
less than zero at the end of any taxable year. Losses disallowed to a
unitholder or recaptured as a result of these limitations will carry forward
and will be allowable to the extent that his tax basis or at risk amount,
whichever is the limiting factor, is subsequently increased. Upon the taxable
disposition of a unit, any gain recognized by a unitholder can be offset by
losses that were previously suspended by the at risk limitation but may not be
offset by losses suspended by the basis limitation. Any excess loss above that
gain previously suspended by the at risk or basis limitations is no longer
utilizable.

   In general, a unitholder will be at risk to the extent of the tax basis of
his units, excluding any portion of that basis attributable to his share of our
nonrecourse liabilities, reduced by any amount of money he borrows to acquire
or hold his units, if the lender of those borrowed funds owns an interest in
us, is related to the unitholder or can look only to the units for repayment. A
unitholder's at risk amount will increase or decrease as the tax basis of the
unitholder's units increases or decreases, other than tax basis increases or
decreases attributable to increases or decreases in his share of our
nonrecourse liabilities.

   The passive loss limitations generally provide that individuals, estates,
trusts and some closely-held corporations and personal service corporations can
deduct losses from passive activities, which are generally activities in which
the taxpayer does not materially participate, only to the extent of the
taxpayer's income from those passive activities. The passive loss limitations
are applied separately with respect to each publicly-traded partnership.
Consequently, any passive losses we generate will only be available to offset
our passive income generated in the future and will not be available to offset
income from other passive activities or investments, including our investments
or investments in other publicly-traded partnerships, or salary or active
business income. Passive losses that are not deductible because they exceed a
unitholder's share of income we generate may be deducted in full when he
disposes of his entire investment in us in a fully taxable transaction with an
unrelated party. The passive activity loss rules are applied after other
applicable limitations on deductions, including the at risk rules and the basis
limitation.

   A unitholder's share of our net income may be offset by any suspended
passive losses, but it may not be offset by any other current or carryover
losses from other passive activities, including those attributable to other
publicly-traded partnerships.

   Limitations on Interest Deductions. The deductibility of a non-corporate
taxpayer's "investment interest expense" is generally limited to the amount of
that taxpayer's "net investment income." The IRS has announced that Treasury
Regulations will be issued that characterize net passive income from a
publicly-traded partnership as investment income for purposes of the
limitations on the deductibility of investment interest. In addition, the
unitholder's share of our portfolio income will be treated as investment
income. Investment interest expense includes:

  . interest on indebtedness properly allocable to property held for
    investment;

  . our interest expense attributed to portfolio income; and

  . the portion of interest expense incurred to purchase or carry an interest
    in a passive activity to the extent attributable to portfolio income.

   The computation of a unitholder's investment interest expense will take into
account interest on any margin account borrowing or other loan incurred to
purchase or carry a unit. Net investment income includes

                                       19

gross income from property held for investment and amounts treated as portfolio
income under the passive loss rules, less deductible expenses, other than
interest, directly connected with the production of investment income, but
generally does not include gains attributable to the disposition of property
held for investment.

   Entity-Level Collections. If we are required or elect under applicable law
to pay any federal, state or local income tax on behalf of any unitholder or
the general partner or any former unitholder, we are authorized to pay those
taxes from our funds. That payment, if made, will be treated as a distribution
of cash to the partner on whose behalf the payment was made. If the payment is
made on behalf of a person whose identity cannot be determined, we are
authorized to treat the payment as a distribution to all current unitholders.
We are authorized to amend the partnership agreement in the manner necessary to
maintain uniformity of intrinsic tax characteristics of units and to adjust
later distributions, so that after giving effect to these distributions, the
priority and characterization of distributions otherwise applicable under the
partnership agreement is maintained as nearly as is practicable. Payments by us
as described above could give rise to an overpayment of tax on behalf of an
individual partner in which event the partner would be required to file a claim
in order to obtain a credit or refund.

   Allocation of Income, Gain, Loss and Deduction. In general, if we have a net
profit, our items of income, gain, loss and deduction will be allocated among
the general partner and the unitholders in accordance with their percentage
interests in us. At any time that distributions are made to the common units in
excess of distributions to the subordinated units, or incentive distributions
are made to the general partner, gross income will be allocated to the
recipients to the extent of these distributions. If we have a net loss for the
entire year, that loss will be allocated first to the general partner and the
unitholders in accordance with their percentage interests in us to the extent
of their positive capital accounts and, second, to the general partner.

   Specified items of our income, gain, loss and deduction will be allocated to
account for the difference between the tax basis and fair market value of
property contributed to us by the general partner, referred to in this
discussion as "Contributed Property," and to account for the difference between
the fair market value of our assets and their carrying value on our books at
the time of the offering. The effect of these allocations to a unitholder
purchasing common units in this offering will be essentially the same as if the
tax basis of our assets were equal to their fair market value at the time of
this offering. In addition, items of recapture income will be allocated to the
extent possible to the partner who was allocated the deduction giving rise to
the treatment of that gain as recapture income in order to minimize the
recognition of ordinary income by some unitholders. Finally, although we do not
expect that our operations will result in the creation of negative capital
accounts, if negative capital accounts nevertheless result, items of our income
and gain will be allocated in an amount and manner to eliminate the negative
balance as quickly as possible.

   An allocation of items of our income, gain, loss or deduction, other than an
allocation required by the Internal Revenue Code to eliminate the difference
between a partner's "book" capital account, credited with the fair market value
of Contributed Property, and "tax" capital account, credited with the tax basis
of Contributed Property referred to in this discussion as the "Book-Tax
Disparity", will generally be given effect for federal income tax purposes in
determining a partner's share of an item of income, gain, loss or deduction
only if the allocation has substantial economic effect. In any other case, a
partner's share of an item will be determined on the basis of the partner's
interest in us, which will be determined by taking into account all the facts
and circumstances, including the partner's relative contributions to us, the
interests of all the partners in profits and losses, the interest of all the
partners in cash flow and other nonliquidating distributions and rights of the
partners to distributions of capital upon liquidation.

   Counsel is of the opinion that, with the exception of the issues described
in "--Tax Consequences of Unit Ownership--Section 754 Election" and "--
Disposition of Common Units--Allocations Between Transferors and Transferees,"
allocations under our partnership agreement will be given effect for federal
income tax purposes in determining a partner's share of an item of income,
gain, loss or deduction.

   Treatment of Short Sales. A unitholder whose units are loaned to a "short
seller" to cover a short sale of units may be considered as having disposed of
those units. If so, he would no longer be a partner for those

                                       20

units during the period of the loan and may recognize gain or loss from the
disposition. As a result, during this period:

  . any of our income, gain, loss or deduction with respect to those units
    would not be reportable by the unitholder;

  . any cash distributions received by the unitholder for those units would
    be fully taxable; and

  . all of these distributions would appear to be ordinary income.

   Counsel has not rendered an opinion regarding the treatment of a unitholder
where common units are loaned to a short seller to cover a short sale of common
units; therefore, unitholders desiring to assure their status as partners and
avoid the risk of gain recognition from a loan to a short seller should modify
any applicable brokerage account agreements to prohibit their brokers from
borrowing their units. The IRS has announced that it is actively studying
issues relating to the tax treatment of short sales of partnership interests.
Please read "--Disposition of Common Units--Recognition of Gain or Loss."

   Alternative Minimum Tax. Although it is not expected that we will generate
significant tax preference items or adjustments, each unitholder will be
required to take into account his distributive share of any items of our
income, gain, loss or deduction for purposes of the alternative minimum tax.
The current minimum tax rate for noncorporate taxpayers is 26% on the first
$175,000 of alternative minimum taxable income in excess of the exemption
amount and 28% on any additional alternative minimum taxable income.
Prospective unitholders should consult with their tax advisors as to the impact
of an investment in units on their liability for the alternative minimum tax.

   Tax Rates. In general the highest effective United States federal income tax
rate for individuals for 2001 is 39.6% and the maximum United States federal
income tax rate for net capital gains of an individual for 2001 is 20% if the
asset disposed of was held for more than 12 months at the time of disposition.

   Section 754 Election. We have made the election permitted by Section 754 of
the Internal Revenue Code. That election is irrevocable without the consent of
the IRS. The election will generally permit us to adjust a common unit
purchaser's tax basis in our assets ("inside basis") under Section 743(b) of
the Internal Revenue Code to reflect his purchase price. This election does not
apply to a person who purchases common units directly from us. The Section
743(b) adjustment belongs to the purchaser and not to other partners. For
purposes of this discussion, a partner's inside basis in our assets will be
considered to have two components: (1) his share of our tax basis in our assets
("common basis") and (2) his Section 743(b) adjustment to that basis.

   Treasury regulations under Section 743 of the Internal Revenue Code require,
if the remedial allocation method is adopted (which we have adopted), a portion
of the Section 743(b) adjustment attributable to recovery property to be
depreciated over the remaining cost recovery period for the Section 704(c)
built-in gain. Under Treasury Regulation Section 1.167(c)-l(a)(6), a Section
743(b) adjustment attributable to property subject to depreciation under
Section 167 of the Internal Revenue Code rather than cost recovery deductions
under Section 168 is generally required to be depreciated using either the
straight-line method or the 150% declining balance method. Under our
partnership agreement, the general partner is authorized to take a position to
preserve the uniformity of units even if that position is not consistent with
these Treasury Regulations. Please read "--Tax Treatment of Operations--
Uniformity of Units."

   Although counsel is unable to opine as to the validity of this approach
because there is no clear authority on this issue, we intend to depreciate the
portion of a Section 743(b) adjustment attributable to unrealized appreciation
in the value of Contributed Property, to the extent of any unamortized Book-Tax
Disparity, using a rate of depreciation or amortization derived from the
depreciation or amortization method and useful life applied to the common basis
of the property, or treat that portion as non-amortizable to the extent
attributable to property the common basis of which is not amortizable. This
method is consistent with the regulations under Section 743 but is arguably
inconsistent with Treasury Regulation Section 1.167(c)-1(a)(6), which is not
expected to directly apply to a material portion of our assets. To the extent
this Section 743(b) adjustment is attributable to appreciation in value in
excess of the unamortized Book-Tax Disparity, we will apply the rules

                                       21

described in the Treasury Regulations and legislative history. If we determine
that this position cannot reasonably be taken, we may take a depreciation or
amortization position under which all purchasers acquiring units in the same
month would receive depreciation or amortization, whether attributable to
common basis or a Section 743(b) adjustment, based upon the same applicable
rate as if they had purchased a direct interest in our assets. This kind of
aggregate approach may result in lower annual depreciation or amortization
deductions than would otherwise be allowable to some unitholders. Please read
"--Uniformity of Units."

   A Section 754 election is advantageous if the transferee's tax basis in his
units is higher than the units' share of the aggregate tax basis of our assets
immediately prior to the transfer. In that case, as a result of the election,
the transferee would have, among other items, a greater amount of depreciation
and depletion deductions and a smaller share of any gain or loss on a sale of
our assets. Conversely, a Section 754 election is disadvantageous if the
transferee's tax basis in his units is lower than those units' share of the
aggregate tax basis of our assets immediately prior to the transfer. Thus, the
fair market value of the units may be affected either favorably or unfavorably
by the election.

   The calculations involved in the Section 754 election are complex and will
be made on the basis of assumptions as to the value of our assets and other
matters. The determinations we make may be successfully challenged by the IRS
and the deductions resulting from them may be reduced or disallowed altogether.
For example, the allocation of the Section 743(b) adjustment among our assets
must be made in accordance with the Internal Revenue Code. The IRS could seek
to reallocate some or all of any Section 743(b) adjustment allocated by us to
our tangible assets to goodwill instead. Goodwill, as an intangible asset, is
generally amortizable over a longer period of time or under a less accelerated
method than our tangible assets. Should the IRS require a different basis
adjustment to be made, and should, in our opinion, the expense of compliance
exceed the benefit of the election, we may seek permission from the IRS to
revoke our Section 754 election. If permission is granted, a subsequent
purchaser of units may be allocated more income than he would have been
allocated had the election not been revoked.

Tax Treatment of Operations

   Accounting Method and Taxable Year. We use the year ending December 31 as
our taxable year and the accrual method of accounting for federal income tax
purposes. Each unitholder will be required to include in income his share of
our income, gain, loss and deduction for our taxable year ending within or with
his taxable year. In addition, a unitholder who has a taxable year ending on a
date other than December 31 and who disposes of all of his units following the
close of our taxable year but before the close of his taxable year must include
his share of our income, gain, loss and deduction in income for his taxable
year, with the result that he will be required to include in income for his
taxable year his share of more than one year of our income, gain, loss and
deduction. Please read "--Disposition of Common Units--Allocations Between
Transferors and Transferees."

   Initial Tax Basis, Depreciation and Amortization. The tax basis of our
assets will be used for purposes of computing depreciation and cost recovery
deductions and, ultimately, gain or loss on the disposition of these assets.
The federal income tax burden associated with the difference between the fair
market value of our assets and their tax basis immediately prior to this
offering will be borne by partners holding interests in us prior to this
offering. Please read "--Tax Consequences of Unit Ownership--Allocation of
Income, Gain, Loss and Deduction."

   To the extent allowable, we may elect to use the depreciation and cost
recovery methods that will result in the largest deductions being taken in the
early years after assets are placed in service. We are not entitled to any
amortization deductions with respect to any goodwill conveyed to us on
formation. Property we subsequently acquire or construct may be depreciated
using accelerated methods permitted by the Internal Revenue Code.

   If we dispose of depreciable property by sale, foreclosure, or otherwise,
all or a portion of any gain, determined by reference to the amount of
depreciation previously deducted and the nature of the property, may be subject
to the recapture rules and taxed as ordinary income rather than capital gain.
Similarly, a partner who has taken cost recovery or depreciation deductions
with respect to property we own will likely be required to

                                       22

recapture some or all of those deductions as ordinary income upon a sale of his
interest in us. Please read "--Tax Consequences of Unit Ownership--Allocation
of Income, Gain, Loss and Deduction" and "--Disposition of Common Units--
Recognition of Gain or Loss."

   The costs incurred in selling our units (called "syndication expenses") must
be capitalized and cannot be deducted currently, ratably or upon our
termination. There are uncertainties regarding the classification of costs as
organization expenses, which may be amortized by us, and as syndication
expenses, which may not be amortized by us. The underwriting discounts and
commissions we incur will be treated as syndication expenses.

   Valuation and Tax Basis of Our Properties. The federal income tax
consequences of the ownership and disposition of units will depend in part on
our estimates of the relative fair market values, and the initial tax bases, of
our assets. Although we may from time to time consult with professional
appraisers regarding valuation matters, we will make many of the relative fair
market value estimates ourselves. These estimates of basis are subject to
challenge and will not be binding on the IRS or the courts. If the estimates of
fair market value or basis are later found to be incorrect, the character and
amount of items of income, gain, loss or deductions previously reported by
unitholders might change, and unitholders might be required to adjust their tax
liability for prior years and may incur interest and penalties with respect to
those adjustments.

Disposition of Common Units

   Recognition of Gain or Loss. Gain or loss will be recognized on a sale of
units equal to the difference between the amount realized and the unitholder's
tax basis for the units sold. A unitholder's amount realized will be measured
by the sum of the cash or the fair market value of other property received plus
his share of our nonrecourse liabilities. Because the amount realized includes
a unitholder's share of our nonrecourse liabilities, the gain recognized on the
sale of units could result in a tax liability in excess of any cash received
from the sale.

   Prior distributions from us in excess of cumulative net taxable income for a
common unit that decreased a unitholder's tax basis in that common unit will,
in effect, become taxable income if the common unit is sold at a price greater
than the unitholder's tax basis in that common unit, even if the price is less
than his original cost.

   Except as noted below, gain or loss recognized by a unitholder, other than a
"dealer" in units, on the sale or exchange of a unit held for more than one
year will generally be taxable as capital gain or loss. Capital gain recognized
by an individual on the sale of units held more than 12 months will generally
be taxed a maximum rate of 20%. A portion of this gain or loss, which will
likely be substantial, however, will be separately computed and taxed as
ordinary income or loss under Section 751 of the Internal Revenue Code to the
extent attributable to assets giving rise to depreciation recapture or other
"unrealized receivables" or to "inventory items" we own. The term "unrealized
receivables" includes potential recapture items, including depreciation
recapture. Ordinary income attributable to unrealized receivables, inventory
items and depreciation recapture may exceed net taxable gain realized upon the
sale of a unit and may be recognized even if there is a net taxable loss
realized on the sale of a unit. Thus, a unitholder may recognize both ordinary
income and a capital loss upon a sale of units. In the case of individuals,
capital losses may offset capital gains, and may offset ordinary income of no
more than $3,000. In the case of corporations, capital losses may only be used
to offset capital gains.

   The IRS has ruled that a partner who acquires interests in a partnership in
separate transactions must combine those interests and maintain a single
adjusted tax basis for all those interests. Upon a sale or other disposition of
less than all of those interests, a portion of that tax basis must be allocated
to the interests sold using an "equitable apportionment" method. Although the
ruling is unclear as to how the holding period of these interests is determined
once they are combined, Treasury regulations allow a selling unitholder who can
identify common units transferred with an ascertainable holding period to elect
to use the actual holding period of the common units transferred. Thus,
according to the ruling, a common unitholder will be unable to select high or
low basis common units to sell as would be the case with corporate stock, but,
according to the

                                       23

regulations, may designate specific common units sold for purposes of
determining the holding period of units transferred. A unitholder electing to
use the actual holding period of common units transferred must consistently use
that identification method for all subsequent sales or exchanges of common
units. A unitholder considering the purchase of additional units or a sale of
common units purchased in separate transactions should consult his tax advisor
as to the possible consequences of this ruling and application of the
regulations.

   Specific provisions of the Internal Revenue Code affect the taxation of some
financial products and securities, including partnership interests, by treating
a taxpayer as having sold an "appreciated" partnership interest, one in which
gain would be recognized if it were sold, assigned or terminated at its fair
market value, if the taxpayer or related persons enter(s) into:

  . a short sale;

  . an offsetting notional principal contract; or

  . a futures or forward contract with respect to the partnership interest or
    substantially identical property.

   Moreover, if a taxpayer has previously entered into a short sale, an
offsetting notional principal contract or a futures or forward contract with
respect to the partnership interest, the taxpayer will be treated as having
sold that position if the taxpayer or a related person then acquires the
partnership interest or substantially identical property. The Secretary of
Treasury is also authorized to issue regulations that treat a taxpayer that
enters into transactions or positions that have substantially the same effect
as the preceding transactions as having constructively sold the financial
position.

   Allocations Between Transferors and Transferees. In general, our taxable
income and losses will be determined annually, will be prorated on a monthly
basis and will be subsequently apportioned among the unitholders in proportion
to the number of units owned by each of them as of the opening of the NYSE on
the first business day of the month (the "Allocation Date"). However, gain or
loss realized on a sale or other disposition of our assets other than in the
ordinary course of business will be allocated among the unitholders on the
Allocation Date in the month in which that gain or loss is recognized. As a
result, a unitholder transferring units may be allocated income, gain, loss and
deduction realized after the date of transfer.

   The use of this method may not be permitted under existing Treasury
Regulations. Accordingly, counsel is unable to opine on the validity of this
method of allocating income and deductions between unitholders. If this method
is not allowed under the Treasury Regulations, or only applies to transfers of
less than all of the unitholder's interest, our taxable income or losses might
be reallocated among the unitholders. We are authorized to revise our method of
allocation between unitholders to conform to a method permitted under future
Treasury Regulations.

   A unitholder who owns units at any time during a quarter and who disposes of
them prior to the record date set for a cash distribution for that quarter will
be allocated items of our income, gain, loss and deductions attributable to
that quarter but will not be entitled to receive that cash distribution.

   Notification Requirements. A unitholder who sells or exchanges units is
required to notify us in writing of that sale or exchange within 30 days after
the sale or exchange. We are required to notify the IRS of that transaction and
to furnish specified information to the transferor and transferee. However,
these reporting requirements do not apply to a sale by an individual who is a
citizen of the United States and who effects the sale or exchange through a
broker. Additionally, a transferor and a transferee of a unit will be required
to furnish statements to the IRS, filed with their income tax returns for the
taxable year in which the sale or exchange occurred, that describe the amount
of the consideration received for the unit that is allocated to our goodwill or
going concern value. Failure to satisfy these reporting obligations may lead to
the imposition of substantial penalties.

   Constructive Termination. We will be considered to have been terminated for
tax purposes if there is a sale or exchange of 50% or more of the total
interests in our capital and profits within a 12-month period. A constructive
termination results in the closing of our taxable year for all unitholders. In
the case of a unitholder reporting on a taxable year other than a fiscal year
ending December 31, the closing of our taxable year may

                                       24

result in more than 12 months of our taxable income or loss being includable in
his taxable income for the year of termination. We would be required to make
new tax elections after a termination, including a new election under Section
754 of the Internal Revenue Code, and a termination would result in a deferral
of our deductions for depreciation. A termination could also result in
penalties if we were unable to determine that the termination had occurred.
Moreover, a termination might either accelerate the application of, or subject
us to, any tax legislation enacted before the termination.

Uniformity of Units

   Because we cannot match transferors and transferees of units, we must
maintain uniformity of the economic and tax characteristics of the units to a
purchaser of these units. In the absence of uniformity, we may be unable to
completely comply with a number of federal income tax requirements, both
statutory and regulatory. A lack of uniformity can result from a literal
application of Treasury Regulation Section 1.167(c)-1(a)(6). Any non-uniformity
could have a negative impact on the value of the units. Please read "--Tax
Consequences of Unit Ownership--Section 754 Election."

   We intend to depreciate the portion of a Section 743(b) adjustment
attributable to unrealized appreciation in the value of Contributed Property,
to the extent of any unamortized Book-Tax Disparity, using a rate of
depreciation or amortization derived from the depreciation or amortization
method and useful life applied to the common basis of that property, or treat
that portion as nonamortizable, to the extent attributable to property the
common basis of which is not amortizable, consistent with the regulations under
Section 743 even though that portion may be inconsistent with Treasury
Regulation Section 1.167(c)-1(a)(6), which is not expected to directly apply to
a material portion of our assets. Please read "--Tax Consequences of Unit
Ownership--Section 754 Election." To the extent that the Section 743 (b)
adjustment is attributable to appreciation in value in excess of the
unamortized Book-Tax Disparity, we will apply the rules described in the
Treasury Regulations and legislative history. If we determine that this
position cannot reasonably be taken, we may adopt a depreciation and
amortization position under which all purchasers acquiring units in the same
month would receive depreciation and amortization deductions, whether
attributable to a common basis or Section 743(b) adjustment, based upon the
same applicable rate as if they had purchased a direct interest in our
property. If this position is adopted, it may result in lower annual
depreciation and amortization deductions than would otherwise be allowable to
some unitholders and risk the loss of depreciation and amortization deductions
not taken in the year that these deductions are otherwise allowable. This
position will not be adopted if we determine that the loss of depreciation and
amortization deductions will have a material adverse effect on the unitholders.
If we choose not to utilize this aggregate method, we may use any other
reasonable depreciation and amortization method to preserve the uniformity of
the intrinsic tax characteristics of any units that would not have a material
adverse effect on the unitholders. The IRS may challenge any method of
depreciating the Section 743(b) adjustment described in this paragraph. If this
challenge were sustained, the uniformity of units might be affected, and the
gain from the sale of units might be increased without the benefit of
additional deductions. Please read "--Disposition of Common Units--Recognition
of Gain or Loss."

Tax-Exempt Organizations and Other Investors

   Ownership of units by employee benefit plans, other tax-exempt
organizations, non-resident aliens, foreign corporations, other foreign persons
and regulated investment companies raises issues unique to those investors and,
as described below, may have substantially adverse tax consequences to them.
Employee benefit plans and most other organizations exempt from federal income
tax, including individual retirement accounts and other retirement plans, are
subject to federal income tax on unrelated business taxable income. Virtually
all of our income allocated to a unitholder which is a tax-exempt organization
will be unrelated business taxable income and will be taxable to the
unitholder.

   A regulated investment company or "mutual fund" is required to derive 90% or
more of its gross income from interest, dividends and gains from the sale of
stocks or securities or foreign currency or specified related sources. It is
not anticipated that any significant amount of our gross income will include
that type of income.

                                       25

   Non-resident aliens and foreign corporations, trusts or estates that own
units will be considered to be engaged in business in the United States because
of the ownership of units. As a consequence they will be required to file
federal tax returns to report their share of our income, gain, loss or
deduction and pay federal income tax at regular rates on their share of our
income or gain. And, under rules applicable to publicly traded partnerships, we
will withhold (currently at the rate of 39.6%) on cash distributions made
quarterly to foreign unitholders. Each foreign unitholder must obtain a
taxpayer identification number from the IRS and submit that number to our
transfer agent on a Form W-8 or applicable substitute form in order to obtain
credit for these withholding taxes

   In addition, because a foreign corporation that owns units will be treated
as engaged in a United States trade or business, that corporation may be
subject to United States branch profits tax at a rate of 30%, in addition to
regular federal income tax, on its share of our income and gain, as adjusted
for changes in the foreign corporation's "U.S. net equity," which is
effectively connected with the conduct of a United States trade or business.
That tax may be reduced or eliminated by an income tax treaty between the
United States and the country in which the foreign corporate unitholder is a
"qualified resident." In addition, this type of unitholder is subject to
special information reporting requirements under Section 6038C of the Internal
Revenue Code.

   Under a ruling of the IRS, a foreign unitholder who sells or otherwise
disposes of a unit will be subject to federal income tax on gain realized on
the disposition of that unit to the extent that this gain is effectively
connected with a United States trade or business of the foreign unitholder.
Apart from the ruling, a foreign unitholder will not be taxed or subject to
withholding upon the disposition of a unit if he has owned less than 5% in
value of the units during the five-year period ending on the date of the
disposition and if the units are regularly traded on an established securities
market at the time of the disposition.

Administrative Matters

   Information Returns and Audit Procedures. We intend to furnish to each
unitholder, within 90 days after the close of each calendar year, specific tax
information, including a Schedule K-1, which describes his share of our income,
gain, loss and deduction for our preceding taxable year. In preparing this
information, which will not be reviewed by counsel, we will take various
accounting and reporting positions, some of which have been mentioned earlier,
to determine the unitholder's share of income, gain, loss and deduction. We
cannot assure you that those positions will yield a result that conforms to the
requirements of the Internal Revenue Code, regulations or administrative
interpretations of the IRS. Neither we nor counsel can assure prospective
unitholders that the IRS will not successfully contend in court that those
positions are impermissible. Any challenge by the IRS could negatively affect
the value of the units.

   The IRS may audit our federal income tax information returns. Adjustments
resulting from an IRS audit may require each unitholder to adjust a prior
year's tax liability, and possibly may result in an audit of that unitholder's
own return. Any audit of a unitholder's return could result in adjustments not
related to our returns as well as those related to our returns.

   Partnerships generally are treated as separate entities for purposes of
federal tax audits, judicial review of administrative adjustments by the IRS
and tax settlement proceedings. The tax treatment of partnership items of
income, gain, loss and deduction are determined in a partnership proceeding
rather than in separate proceedings with the partners. The Internal Revenue
Code requires that one partner be designated as the "Tax Matters Partner" for
these purposes. The partnership agreement appoints the general partner as our
Tax Matters Partner.

   The Tax Matters Partner has made and will make some elections on our behalf
and on behalf of unitholders. In addition, the Tax Matters Partner can extend
the statute of limitations for assessment of tax deficiencies against
unitholders for items in our returns. The Tax Matters Partner may bind a
unitholder with less than a 1% profits interest in us to a settlement with the
IRS unless that unitholder elects, by filing a statement with the IRS, not to
give that authority to the Tax Matters Partner. The Tax Matters Partner may
seek judicial review, by which all the unitholders are bound, of a final
partnership administrative adjustment and, if the Tax Matters Partner fails to
seek judicial review, judicial review may be sought by any unitholder having at

                                       26

least a 1% interest in profits or by any group of unitholders having in the
aggregate at least a 5% interest in profits. However, only one action for
judicial review will go forward, and each unitholder with an interest in the
outcome may participate. However, if we elect to be treated as a large
partnership, a unitholder will not have the right to participate in settlement
conferences with the IRS or to seek a refund.

   A unitholder must file a statement with the IRS identifying the treatment
of any item on his federal income tax return that is not consistent with the
treatment of the item on our return. Intentional or negligent disregard of the
consistency requirement may subject a unitholder to substantial penalties.
However, if we elect to be treated as a large partnership, the unitholders
would be required to treat all partnership items in a manner consistent with
our return.

   Nominee Reporting. Persons who hold an interest in us as a nominee for
another person are required to furnish to us:

      (a) the name, address and taxpayer identification number of the
  beneficial owner and the nominee;

      (b) whether the beneficial owner is

        (1) a person that is not a United States person,

        (2) a foreign government, an international organization or any
    wholly owned agency or instrumentality of either of the foregoing, or

        (3) a tax-exempt entity;

      (c) the amount and description of units held, acquired or transferred
  for the beneficial owner; and

      (d) specific information including the dates of acquisitions and
  transfers, means of acquisitions and transfers, and acquisition cost for
  purchases, as well as the amount of net proceeds from sales.

   Brokers and financial institutions are required to furnish additional
information, including whether they are United States persons and specific
information on units they acquire, hold or transfer for their own account. A
penalty of $50 per failure, up to a maximum of $100,000 per calendar year, is
imposed by the Internal Revenue Code for failure to report that information to
us. The nominee is required to supply the beneficial owner of the units with
the information furnished to us.

   Registration as a Tax Shelter. The Internal Revenue Code requires that "tax
shelters" be registered with the Secretary of the Treasury. The temporary
Treasury Regulations interpreting the tax shelter registration provisions of
the Internal Revenue Code are extremely broad. It is arguable that we are not
subject to the registration requirement on the basis that we will not
constitute a tax shelter. However, we have registered as a tax shelter with
the Secretary of Treasury in the absence of assurance that we will not be
subject to tax shelter registration and in light of the substantial penalties
which might be imposed if registration is required and not undertaken.

   Issuance of this registration number does not indicate that investment in
us or the claimed tax benefits have been reviewed, examined or approved by the
IRS.

   Our tax shelter registration number is 99061000009. A unitholder who sells
or otherwise transfers a unit in a later transaction must furnish the
registration number to the transferee. The penalty for failure of the
transferor of a unit to furnish the registration number to the transferee is
$100 for each failure. The unitholders must disclose our tax shelter
registration number on Form 8271 to be attached to the tax return on which any
deduction, loss or other benefit we generate is claimed or on which any of our
income is included. A unitholder who fails to disclose the tax shelter
registration number on his return, without reasonable cause for that failure,
will be subject to a $250 penalty for each failure. Any penalties discussed
are not deductible for federal income tax purposes.

   Accuracy-related Penalties. An additional tax equal to 20% of the amount of
any portion of an underpayment of tax that is attributable to one or more
specified causes, including negligence or disregard of rules or regulations,
substantial understatements of income tax and substantial valuation
misstatements, is imposed by the Internal Revenue Code. No penalty will be
imposed, however, for any portion of an

                                      27

underpayment if it is shown that there was a reasonable cause for that portion
and that the taxpayer acted in good faith regarding that portion.

   A substantial understatement of income tax in any taxable year exists if the
amount of the understatement exceeds the greater of 10% of the tax required to
be shown on the return for the taxable year or $5,000 ($10,000 for most
corporations). The amount of any understatement subject to penalty generally is
reduced if any portion is attributable to a position adopted on the return:

     (1) for which there is, or was, "substantial authority," or

     (2) as to which there is a reasonable basis and the pertinent facts of
  that position are disclosed on the return.

   More stringent rules apply to "tax shelters," a term that in this context
does not appear to include us. If any item of income, gain, loss or deduction
included in the distributive shares of unitholders might result in that kind of
an "understatement" of income for which no "substantial authority" exists, we
must disclose the pertinent facts on our return. In addition, we will make a
reasonable effort to furnish sufficient information for unitholders to make
adequate disclosure on their returns to avoid liability for this penalty.

   A substantial valuation misstatement exists if the value of any property, or
the adjusted basis of any property, claimed on a tax return is 200% or more of
the amount determined to be the correct amount of the valuation or adjusted
basis. No penalty is imposed unless the portion of the underpayment
attributable to a substantial valuation misstatement exceeds $5,000 ($10,000
for most corporations). If the valuation claimed on a return is 400% or more
than the correct valuation, the penalty imposed increases to 40%.

State, Local and Other Tax Considerations

   In addition to federal income taxes, you will be subject to other taxes,
including state and local income taxes, unincorporated business taxes, and
estate, inheritance or intangible taxes that may be imposed by the various
jurisdictions in which we do business or own property. Although an analysis of
those various taxes is not presented here, each prospective unitholder should
consider their potential impact on his investment in us. We own property or do
business in Alabama, Arizona, Arkansas, California, Colorado, Florida,
Illinois, Indiana, Kansas, Kentucky, Louisiana, Minnesota, Mississippi,
Missouri, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota,
Texas, Utah and Wyoming. Of these states, Florida, South Dakota, Texas, and
Wyoming do not currently impose a personal income tax. In addition, we expect
to own assets and do business in Canada, in which case you will likely be
required to file a Canadian income tax return. We may also own property or do
business in other states in the future. A unitholder will be required to file
state income tax returns and to pay state income taxes in some or all of these
states in which we do business or own property and may be subject to penalties
for failure to comply with those requirements. In some states, tax losses may
not produce a tax benefit in the year incurred and also may not be available to
offset income in subsequent taxable years. Some of the states may require us,
or we may elect, to withhold a percentage of income from amounts to be
distributed to a unitholder who is not a resident of the state. Withholding,
the amount of which may be greater or less than a particular unitholder's
income tax liability to the state, generally does not relieve a nonresident
unitholder from the obligation to file an income tax return. Amounts withheld
may be treated as if distributed to unitholders for purposes of determining the
amounts distributed by us. Please read "--Tax Consequences of Unit Ownership--
Entity-Level Collections." Based on current law and our estimate of our future
operations, the general partner anticipates that any amounts required to be
withheld will not be material.

   It is the responsibility of each unitholder to investigate the legal and tax
consequences, under the laws of pertinent states and localities, of his
investment in us. Accordingly, each prospective unitholder should consult, and
must depend upon, his own tax counsel or other advisor with regard to those
matters. Further, it is the responsibility of each unitholder to file all state
and local, as well as United States federal tax returns that may be required of
him. Counsel has not rendered an opinion on the state or local tax consequences
of an investment in us.

                                       28

                              PLAN OF DISTRIBUTION

   Under this prospectus, we intend to offer our common units to the public:

  . through one or more broker-dealers;

  . through underwriters; or

  . directly to investors.

   We will fix a price or prices, and we may change the price of the securities
offered from time to time:

  . at market prices prevailing at the time of any sale under this
    registration statement;

  . prices related to market prices; or

  . negotiated prices.

   We will pay or allow distributors' or sellers' commissions that will not
exceed those customary in the types of transactions involved. Broker-dealers
may act as agent or may purchase securities as principal and thereafter resell
the securities from time to time:

  . in or through one or more transitions (which may involve crosses and
    block transactions) or distributions;

  . on the New York Stock Exchange;

  . in the over-the-counter market; or

  . in private transactions.

Broker-dealers or underwriters may receive compensation in the form of
underwriting discounts or commissions and may receive commissions from
purchasers of the securities for whom they may act as agents. If any broker-
dealer purchases the securities as principal, it may effect resales of the
securities from time to time to or through other broker-dealers, and other
broker-dealers may receive compensation in the form of concessions or
commissions from the purchasers of securities for whom they may act as agents.

   To the extent required, the names of the specific managing underwriter or
underwriters, if any, as well as other important information, will be set forth
in prospectus supplements. In that event, the discounts and commissions we will
allow or pay to the underwriters, if any, and the discounts and commissions the
underwriters may allow or pay to dealers or agents, if any, will be set forth
in, or may be calculated from, the prospectus supplements. Any underwriters,
brokers, dealers and agents who participate in any sale of the securities may
also engage in transactions with, or perform services for, us or our affiliates
in the ordinary course of their businesses.

   In connection with offerings under this shelf registration and in compliance
with applicable law, underwriters, brokers or dealers may engage in
transactions which stabilize or maintain the market price of the securities at
levels above those which might otherwise prevail in the open market.
Specifically, underwriters, brokers or dealers may over-allot in connection
with offerings, creating a short position in the securities for their own
accounts. For the purpose of covering a syndicate short position or stabilizing
the price of the securities, the underwriters, brokers or dealers may place
bids for the securities or effect purchases of the securities in the open
market. Finally, the underwriters may impose a penalty whereby selling
concessions allowed to syndicate members or other brokers or dealers for
distribution the securities in offerings may be reclaimed by the syndicate if
the syndicate repurchases previously distributed securities in transactions to
cover short positions, in stabilization transactions or otherwise. These
activities may stabilize, maintain or otherwise affect the market price of the
securities, which may be higher than the price that might otherwise prevail in
the open market, and, if commenced, may be discontinued at any time.

                                       29

                      WHERE YOU CAN FIND MORE INFORMATION

   We file annual, quarterly and special reports and other information with the
Securities Exchange Commission under the Securities Exchange Act of 1934. You
can inspect and/or copy these reports and other information at offices
maintained by the SEC, including:

  . the principal offices of the SEC located at Judiciary Plaza, 450 Fifth
    Street, N.W., Room 1024, Washington, D.C. 20549;

  . the Regional Offices of the SEC located at Northwestern Atrium Center,
    500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511;

  . the Regional Offices of the SEC located at 7 World Trade Center, New
    York, New York 10048; and

  . the SEC's website at http://www.sec.gov.

   Further, our common units are listed on the New York Stock Exchange, and you
can inspect similar information at the offices of the New York Stock Exchange,
located at 20 Broad Street, New York, New York 10005.

   The SEC allows us to incorporate by reference information we file with it
into this prospectus. This procedure means that we can disclose important
information to you by referring you to documents on file or to be filed with
the SEC. The information we incorporate by reference is part of this prospectus
and later information that we file with the SEC will automatically update and
supersede this information. Therefore, before you decide to invest in a
particular offering under this shelf registration, you should always check for
SEC reports we may have filed after the date of this prospectus. We incorporate
by reference the documents listed below and any future filings made with the
SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934 until all offerings under this shelf registration are completed:

  . Annual Report on Form 10-K for the year ended December 31, 2000,

  . Current Report on Form 8-K filed with the SEC on April 19, 2001; and

  . the description of our common units contained in our Form 8-A/A dated
    November 3, 1998.

   You may request a copy of these filings at no cost by making written or
telephone requests for copies to:

   Plains All American Pipeline, L.P.
   500 Dallas Street
   Houston, Texas 77002
   Attention: Tim Moore
   Telephone: (713) 654-1414

   You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not
authorized anyone else to provide you with any information. You should not
assume that the information in this prospectus or any prospectus supplement is
accurate as of any date other than the date on the front of each document.

                                       30

                           FORWARD-LOOKING STATEMENTS

   This prospectus, any accompanying prospectus supplement and the documents we
have incorporated by reference contain forward-looking statements. The words
"believe," "expect," "estimate" and "anticipate" and similar expressions
identify forward-looking statements. Forward-looking statements include those
that address activities, events or developments that we expect or anticipate
will or may occur in the future. These include the following:

  . the amount and nature of future capital expenditures;

  . business strategy and measures to carry out strategy;

  . competitive strengths;

  . goals and plans;

  . expansion and growth of our business and operations;

  . references to intentions as to future matters; and

  . other similar matters.

   A forward-looking statement may include a statement of the assumptions or
bases underlying the forward-looking statement. We believe we have chosen these
assumptions or bases in good faith and that they are reasonable. However, we
caution you that assumed facts or bases almost always vary from actual results,
and the differences between assumed facts or bases and actual results can be
material, depending on the circumstances. When considering forward-looking
statements, you should keep in mind the risk factors and other cautionary
statements in this prospectus, any prospectus supplement and the documents we
have incorporated by reference. We will not update these statements unless the
securities laws require us to do so.

                                 LEGAL MATTERS

   The validity of the securities will be passed upon for Plains All American
Pipeline, L.P. by Vinson & Elkins L.L.P. The underwriters' own legal counsel
will advise them about other issues relating to any offering.

                                    EXPERTS

   The financial statements incorporated in this Prospectus by reference to the
Annual Report on Form 10-K of Plains All-American Pipeline, LP for the year
ended December 31, 2000 and the audited consolidated balance sheet of Plains
All American Inc. included as Exhibit 99.1 to Plains All American Pipeline LP's
Form 8-K dated April 19, 2001 have been so incorporated in reliance on the
reports of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.

                                       31

                                    PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

   We will incur the following expenses in connection with the issuance and
distribution of the securities registered. With the exception of the Securities
and Exchange Commission registration fee, the amounts set forth below are
estimates:

                                                                    
      Securities and Exchange Commission registration fee............. $ 31,250
      Legal fees and expenses.........................................  150,000
      Accounting fees and expenses....................................  100,000
      Printing and engraving expenses.................................  100,000
      Miscellaneous...................................................   18,750
                                                                       --------
        TOTAL......................................................... $400,000
                                                                       ========

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS

   The partnership agreement of Plains All American Pipeline provides that
Plains All American Pipeline will indemnify the general partner, any former
general partner, any person who is or was an affiliate of the general partner
or any former general partner, and any person who is or was an officer,
director, partner or trustee of the general partner or any former general
partner or any affiliate of the general partner or any former general partner,
or any person who is or was serving at the request of the general partner or
any former general partner or any affiliate of the general partner or any
former general partner as an officer, director, employee, partner, agent or
trustee of another person (each, an "Indemnitee"), to the fullest extent
permitted by law, from and against any and all losses, claims, damages,
liabilities (joint and several), expenses (including, without limitation, legal
fees and expenses), judgments, fines, penalties, interest, settlements and
other amounts arising from any and all claims, demands, actions, suits or
proceedings, whether civil, criminal, administrative or investigative, in which
any Indemnitee may be involved, or is threatened to be involved, as a party or
otherwise, by reason of its status as any of the foregoing; provided that in
each case the Indemnitee acted in good faith and in a manner that such
Indemnitee reasonably believed to be in or not opposed to the best interests of
Plains All American Pipeline and, with respect to any criminal proceeding, had
no reasonable cause to believe its conduct was unlawful. Any indemnification
under these provisions will be only out of the assets of Plains All American
Pipeline, and the general partner shall not be personally liable for, or have
any obligation to contribute or loan funds or assets to Plains All American
Pipeline to enable it to effectuate, such indemnification. Plains All American
Pipeline is authorized to purchase (or to reimburse the general partner or its
affiliates for the cost of) insurance against liabilities asserted against and
expenses incurred by such persons in connection with Plains All American
Pipeline's activities, regardless of whether Plains All American Pipeline would
have the power to indemnify such person against such liabilities under the
provisions described above.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

   
 1.1* --Form of Underwriting Agreement

 3.1  --Second Amended and Restated Agreement of Limited Partnership of Plains
       All American Pipeline, L.P. (incorporated by reference to Exhibit 3.1 to
       the registrant's Annual Report on Form 10-K filed on March 31, 1999)

 3.2  --Amended and Restated Agreement of Limited Partnership of Plains
       Marketing, L.P. (incorporated by reference to Exhibit 3.2 to the
       registrant's Annual Report on Form 10-K filed on March 31, 1999)

 3.3  --Amended and Restated Agreement of Limited Partnership of All American
       Pipeline, L.P. (incorporated by reference to Exhibit 3.3 to the
       registrant's Annual Report on Form 10-K filed on March 31, 1999)

                                      II-1

     
  3.4   --Certificate of Limited Partnership of Plains All American Pipeline,
         L.P. (incorporated by reference to Exhibit 3.4 to Registration
         Statement on Form S-1, file no. 333-64107)

  3.5   --Certificate of Limited Partnership of Plains Marketing, L.P.
         (incorporated by reference to Exhibit 3.5 to the registrant's Annual
         Report on Form 10-K filed on March 31, 1999)

  3.6   --Articles of Conversion of All American Pipeline, L.P. (incorporated
         by reference to Exhibit 3.6 to the registrant's Annual Report on Form
         10-K filed on March 31, 1999)

  3.7   --Amendment No. 1 to the Second Amended and Restated Agreement of
         Limited Partnership of Plains All American Pipeline, L.P.
         (incorporated by reference to Exhibit 3.8 to the registrant's
         Quarterly Report on Form 10-Q filed on May 14, 1999)

  3.8   --Amendment No. 2 to the Second Amended and Restated Agreement of
         Limited Partnership of Plains All American Pipeline, L.P.
         (incorporated by reference to Exhibit 3.1 to the registrants Quarterly
         Report on Form 10-Q filed on November 14, 2000)

  5.1** --Opinion of Vinson & Elkins L.L.P. as to the legality of the
         securities being registered

  8.1** --Opinion of Vinson & Elkins L.L.P. relating to tax matters

 21.1** --List of Subsidiaries of the Registrant

 23.1** --Consent of PricewaterhouseCoopers LLP

 23.2** --Consent of Vinson & Elkins L.L.P. (contained in Exhibits 5.1 and 8.1)

 24.1** --Powers of Attorney (included on the signature page)

- --------
 * To be filed as an exhibit to a Current Report on Form 8-K or in a post
   effective amendment to this registration statement.
** Filed herewith.

ITEM 17. UNDERTAKINGS

   The undersigned registrant hereby undertakes:

     (1) To file, during any period in which offers or sales are being made,
  a post-effective amendment to this registration statement:

       (i) To include any prospectus required by section 10(a)(3) of the
    Securities Act;

       (ii) To reflect in the prospectus any facts or events arising after
    the effective date of the registration statement (or the most recent
    post-effective amendment thereof) which, individually or in the
    aggregate, represents a fundamental change in the information set forth
    in the registration statement. Notwithstanding the foregoing, any
    increase or decrease in volume of securities offered (if the total
    dollar value of securities offered would not exceed that which was
    registered) and any deviation from the low or high end of the estimated
    maximum offering range may be reflected in the form of prospectus filed
    with the Commission pursuant to Rule 424(b) if, in the aggregate, the
    changes in volume and price represent no more than a 20% change in the
    maximum aggregate offering price set forth in the "Calculation of
    Registration Fee" table in the effective registration statement;

       (iii) To include any material information with respect to the plan
    of distribution not previously disclosed in the registration statement
    or any material change to such information in the registration
    statement;

    Provided, however, that paragraphs 1(i) and 1(ii) do not apply if the
    information required to be included in a post-effective amendment by
    those paragraphs is contained in periodic reports filed by the
    registrant pursuant to section 13 or section 15(d) of the Securities
    Exchange Act of 1934, as amended (the "Exchange Act"), that are
    incorporated by reference in the registration statement.

                                      II-2

     (2) That, for the purpose of determining any liability under the
  Securities Act, each such post-effective amendment shall be deemed to be a
  new registration statement relating to the securities offered therein, and
  the offering of such securities at that time shall be deemed to be the
  initial bona fide offering thereof.

     (3) To remove from registration by means of a post-effective amendment
  any of the securities being registered which remain unsold at the
  termination of the offering.

   The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Exchange Act that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

   Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 15 above or
otherwise, the registrant has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the Act and is,
therefore, enforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.

   For purposes of determining any liability under the Securities Act of 1933,
the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.

   For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

                                      II-3

                                   SIGNATURES

   Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on April 19, 2001.

                                          PLAINS ALL AMERICAN PIPELINE, L.P.

                                          By:Plains All American Inc.,
                                             its general partner

                                                  /s/ Greg L. Armstrong
                                          By: _________________________________
                                             Name:Greg L. Armstrong
                                             Title: Chairman of the Board and
                                                    Chief Executive Officer

                               POWER OF ATTORNEY

   Each person whose signature appears below appoints Phillip D. Kramer and Tim
Moore, and each of them, any of whom may act without the joinder of the other,
as his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-
effective amendments) to this Registration Statement and any Registration
Statement (including any amendment thereto) for this offering that is to be
effective upon filing pursuant to Rule 462 (b) under the Securities Act of
1933, as amended, and to file the same, with all exhibits thereto, and all
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he might or would
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents or any of them of their or his substitute and substitutes, may
lawfully do or cause to be done by virtue hereof.

   Pursuant to the requirements of the securities act of 1933, as amended, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated below.

PLAINS ALL AMERICAN, INC., as the general partner on behalf of
PLAINS ALL AMERICAN PIPELINE, L.P.

              Signature                          Title                   Date
              ---------                          -----                   ----

      /s/ Greg L. Armstrong            Chairman of the Board,       April 19, 2001
______________________________________  Chief Executive Officer
          Greg L. Armstrong             and Director (Principal
                                        Executive Officer)

       /s/ Harry N. Pefanis            President, Chief Operating   April 19, 2001
______________________________________  Officer and Director
           Harry N. Pefanis

      /s/ Phillip D. Kramer            Executive Vice President     April 19, 2001
______________________________________  Chief Financial Officer
          Phillip D. Kramer             (Principal Financial
                                        Officer)

                                      II-4

              Signature                          Title                   Date
              ---------                          -----                   ----

      /s/ Cynthia A. Feeback           Vice President--Accounting   April 19, 2001
______________________________________  (Principal Accounting
          Cynthia A. Feeback            Officer)

       /s/ Everardo Goyanes            Director                     April 19, 2001
______________________________________
           Everardo Goyanes

       /s/ Arthur L. Smith             Director                     April 19, 2001
______________________________________
           Arthur L. Smith

      /s/ Robert V. Sinnott            Director                     April 19, 2001
______________________________________
          Robert V. Sinnott

                                      II-5

                                                                     EXHIBIT 5.1

                                VINSON & ELKINS
                               ATTORNEYS AT LAW

                            VINSON & ELKINS L.L.P.
                             2300 FIRST CITY TOWER
                              1001 FANNIN STREET
                          HOUSTON, TEXAS  77002-6760
                           TELEPHONE (713) 758-2222
                              FAX (713) 758-2346

                                April 19, 2001

Plains All American Pipeline, L.P.
500 Dallas Street
Houston, TX 77002

Ladies and Gentlemen:

     We have acted as counsel for Plains All American Pipeline, L.P., a Delaware
limited partnership (the "Partnership") and Plains All American Inc., a Delaware
Corporation and the general partner of the Partnership (the "General Partner"),
with respect to certain legal matters in connection with the registration by the
Partnership, under the Securities Act of 1933, as amended (the "Securities
Act"), of the offer and sale by the Partnership from time to time, pursuant to
Rule 415 under the Securities Act, of common units of the Partnership (the
"Common Units").  The aggregate initial offering prices of the Common Units to
be offered and sold by the Partnership pursuant to the Partnership's
Registration Statement on Form S-3 (the "Registration Statement"), to which this
opinion is an exhibit, will not exceed $125,000,000.  The Common Units will be
offered in amounts, at prices and on terms to be determined in light of market
conditions at the time of sale and to be set forth in supplements to the
Prospectus (each, a "Prospectus Supplement") contained in the Registration
Statement.

     We have examined originals or copies, certified or otherwise identified to
our satisfaction, of (i) the Agreement of Limited Partnership of the
Partnership, as amended to the date hereof (the "Partnership Agreement"), (ii)
the Registration Statement, and (iii) such other certificates, statutes and
other instruments and documents as we considered appropriate for purposes of the
opinions hereafter expressed.  In addition, we reviewed such questions of law as
we considered appropriate.

     In connection with this opinion, we have assumed that (i) the Registration
Statement, and any amendments thereto (including post-effective amendments),
will have become effective; (ii) a Prospectus Supplement will have been prepared
and filed with the Commission describing the Common Units offered thereby; (iii)
all Common Units will be issued and sold in compliance with applicable federal
and state securities laws and in the manner stated in the Registration Statement
and the applicable Prospectus Supplement; (iv) at the time of any offering or
sale of any Common Units, that the Partnership shall have such number of Common
Units, as set forth in such offering or sale, authorized or created and
available for issuance; (v) a definitive purchase, underwriting or similar
agreement with respect to any Common Units offered will

Plains All American Pipeline, L.P.
Page 2
April 19, 2001

have been duly authorized and validly executed and delivered by the Partnership
and the other parties thereto and (vi) each document submitted to us for review
is accurate and complete, each such document that is an original is authentic,
each such document that is a copy conforms to an authentic original and all
signatures on each such document are genuine.

     Based on the foregoing, and subject to the assumptions, qualifications,
limitations, and exceptions set forth herein, we are of the opinion that:

     1. The Partnership has been duly formed and is validly existing as a
limited partnership under the Delaware Revised Uniform Limited Partnership Act;
and

     2. All of the Common Units offered by means of the Registration Statement
have been duly authorized by the Partnership Agreement and when (a) the
Registration Statement has become effective under the Securities Act, and (b)
the Common Units have been issued and sold as contemplated in the Registration
Statement, the Common Units will be legally issued and fully paid and non-
assessable, except as such non-assessability may be affected by the matters
below:

       (a)  If a court were to determine that the right or exercise of the right
       under the Second Amended and Restated Agreement of Limited Partnership of
       the Partnership (the "Partnership Agreement") by the holders of Common
       Units and subordinated units (the "Limited Partners") of the Partnership
       as a group

            (i)  to remove or replace the General Partner;

            (ii)  to approve certain amendments to the Partnership Agreement; or

            (iii)  to take certain other actions under the Partnership Agreement

          constitutes "participation in the control" of the Partnership's
          business for the purposes of the Delaware Act, then the Limited
          Partners could be held personally liable for the Partnership's
          obligations under the laws of Delaware, to the same extent as the
          General Partner with respect to persons who transact business with the
          Partnership reasonably believing, based on the conduct of any of the
          Limited Partners, that such Limited Partner is a general partner.

       (b)  Section 17-607 of the Delaware Act provides that a limited partner
       who receives a distribution and knew at the time of the distribution that
       it was made in violation of the Delaware Act shall be liable to the
       limited partnership for three years for the amount of the distribution.

The foregoing opinions are limited to the federal laws of the United States of
America and the Delaware Revised Uniform Limited Partnership Act.

     We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name in the Prospectus forming a
part of the Registration Statement under

Plains All American Pipeline, L.P.
Page 3
April 19, 2001

the caption "Legal Matters." In giving this consent, we do not admit that we are
within the category of persons whose consent is required under Section 7 of the
Securities Act and the rules and regulations thereunder.

                                      Very truly yours,

                                      /s/ VINSON & ELKINS L.L.P.

                                                                     EXHIBIT 8.1

                            Vinson & Elkins L.L.P.
                            1001 Fannin, Suite 2300
                           Houston, Texas 77002-6760

Plains All American Pipeline, L.P.
500 Dallas Street, Suite 700
Houston, TX 77002

     RE:  PLAINS ALL AMERICAN PIPELINE, L.P.; REGISTRATION STATEMENT ON FORM S-3

Ladies and Gentlemen:

     We have acted as counsel to Plains All American Pipeline, L.P. (the
"Company") in connection with the offer and sale of up to $125,000,000 of common
units representing limited partner interests in the Company pursuant to a
Registration Statement on Form S-3 (the "Registration Statement") originally
filed with the Securities and Exchange Commission under the Securities Act of
1933 on April 19, 2001. In connection therewith, we prepared the discussion set
forth under the caption "Tax Considerations" in the Registration Statement (the
"Discussion"). Capitalized terms not defined herein shall have the meanings
ascribed to them in the Registration Statement.

     All statements of legal conclusions contained in the Discussion, unless
otherwise noted, reflect our opinion with respect to the matters set forth
therein as of the effective date of the Registration Statement.  In addition, we
are of the opinion that the federal income tax discussion in the Registration
Statement with respect to those matters as to which no legal conclusions are
provided is an accurate discussion of such federal income tax matters (except
for the representations and statements of fact of the Company and its General
Partner, included in such discussion, as to which we express no opinion).

     We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name in the Registration Statement.
This consent does not constitute an admission that we are "experts" within the
meaning of such term as used in the Securities Act of 1933, as amended.

                          Very truly yours,

                          /s/ VINSON & ELKINS L.L.P.

                          VINSON & ELKINS L.L.P.

                                                                    Exhibit 21.1

               Subsidiaries of Plains All American Pipeline, L.P.

Name                                         Jurisdiction
- ----                                         ------------
PAA Finance Corp.                            Delaware
Plains Marketing, L.P.                       Delaware
All American Pipeline, L.P.                  Texas
Plains Marketing Canada LLC                  Delaware
Plains Marketing Canada, L.P.                Canada
PMC (Nova Scotia) Company                    Canada

                                                                    EXHIBIT 23.1

                       CONSENT OF INDEPENDENT ACCOUNTANTS
                       ----------------------------------

We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our reports dated March 22, 2001 relating to the
consolidated financial statements and the combined financial statements, which
appear in the Plains All American Pipeline LP's Annual Report on Form 10-K for
the year ended December 31, 2000. We also consent to the incorporation by
reference of our report dated April 12, 2001 relating to the balance sheet of
Plains All American Inc., which appears in Plains All American Pipeline LP's
Current Report on Form 8-K dated April 19, 2001. We also consent to the
reference to us under the heading "Experts" in such Registration Statement.

/s/ PricewaterhouseCoopers LLP

Houston, Texas
April 19, 2001