2. Background

Lodi Gas Storage, L.L.C. (LGS), a limited liability company with its principal place of business in Houston, Texas, is an independent natural gas storage provider in northern California. Buckeye Gas Storage, LLC (Buckeye Storage) a limited liability company with its principal place of business in Houston Texas, was formed for the purpose of holding all of the outstanding limited liability company interests of LGS. Buckeye Partners, L.P. (Buckeye Partners) a publicly traded partnership with its principal place of business in Houston, Texas, owns and operates an independent refined petroleum products pipeline system. Buckeye Partners' limited partners currently are the predominant owners of Joint Applicants, with control of Buckeye Partners vested in its general partner, Buckeye GP LLC (Buckeye GP), which in turn is wholly owned by Buckeye GP Holdings L.P. (Holdings). Holdings is owned by a combination of public limited partners and units owned by BGH GP Holdings, LLC (BGH Holdings). Holdings is controlled by its general partner, MainLine Management LLC (Holdings GP), which is wholly owned by BGH Holdings. The limited partner interests of Buckeye Partners and Holdings are traded on the New York Stock Exchange as limited partnership units. Holdings GP currently controls Buckeye Partners and indirectly LGS through its power to appoint all eight members of Buckeye GP's Board.

Under the Amended and Restated Agreement and Plan of Merger (Merger Agreement), entered into on August 18, 2010, Buckeye Partners will acquire Holdings through a merger of Grand Ohio, LLC (MergerCo) with and into Holdings, with Holdings surviving the merger. As a result of the merger, Holdings will become a subsidiary of Buckeye Partners, with Buckeye Partners as Holdings' sole limited partner. Following approval of this application or granting of the Motion to Dismiss, all public owners of Buckeye Partners limited partnership units (including those who were unitholders before the merger and those who received units as a result of the merger, but excluding any affiliates of BGH Holdings) will be granted the right to vote for seven of the nine members on Buckeye GP's Board. Until approvals are received, Holdings GP will continue to appoint members of the Board. After approvals are received, Holdings GP will no longer control Buckeye Partners. Holdings GP will continue to appoint two members of the Board, unless BGH Holdings and its affiliates reduce their ownership of Buckeye Partners limited partnership units.

There will be no change in the legal ownership of LGS. No party protested the application or opposed the motion to dismiss.