PROPERTY, PLANT AND EQUIPMENT

12 Months Ended

Dec. 31, 2011

7. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consist of the following at the dates indicated (in thousands):


	Estimated Useful			December 31,
	Lives (Years)			2011			2010
Land		N/A		$	226,750		$	64,905
Rights-of-way		(1	)		109,325			97,529
Pad gas		N/A			29,346			29,346
Buildings and leasehold improvements		13-50			147,454			109,585
Jetties and subsea pipelines		20-50			336,431			—
Gas storage facility		25-50			206,237			196,077
Pipelines and terminals		7-50			2,947,643			1,982,049
Vehicles, equipment and office furnishings		3-20			83,765			72,901
Construction in progress		N/A			178,756			66,642

Total property, plant and equipment					4,265,707			2,619,034
Less: Accumulated depreciation					(418,134	)		(313,150	)

Total property, plant and equipment, net				$	3,847,573		$	2,305,884

(1)	Rights-of-way assets are depreciated over the term of the agreement.

Depreciation expense was $105.5 million, $54.7 million and $50.9 million for the years ended December 31, 2011, 2010 and 2009, respectively.

Impairment of Long-Lived Assets

We previously owned and operated the Buckeye NGL Pipeline that runs from Wattenberg, Colorado to Bushton, Kansas. During the second quarter of 2009, we received notification that several of our shippers, which were then using the Buckeye NGL Pipeline, intended to migrate their business to a competing pipeline that had recently gone into service. In connection with this notification, there was a significant decline in shipment volumes as compared to historical averages. This significant loss in the customer base utilizing Buckeye’s NGL pipeline, in conjunction with the authorization of the Board of Directors of Buckeye GP to pursue the sale of Buckeye NGL Pipe Lines LLC (“Buckeye NGL”), the entity which owned the Buckeye NGL Pipeline, triggered an evaluation of a potential asset impairment that resulted in a non-cash charge to earnings in the second quarter of 2009 of $72.5 million in the Pipelines & Terminals segment.

We ceased depreciation of the assets as of July 1, 2009 and reclassified the assets of Buckeye NGL to “Assets held for sale”. Effective January 1, 2010, we sold our ownership interest in Buckeye NGL for $22.0 million. The sales proceeds exceeded the previously impaired carrying value of the Buckeye NGL Pipeline by $12.8 million, resulting in the reversal of $12.8 million of the previously recorded asset impairment expense in the fourth quarter of 2009, yielding a net impairment of $59.7 million for the year ended December 31, 2009. This impairment and the reversal are reflected within the category “Asset Impairment Expense” on our consolidated statements of operations.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

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