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Deal includes Associated Eagle Ford assets in South Texas
Buckeye Partners, L.P. (NYSE:BPL) announced today that it has completed its $860 million purchase of an 80 percent interest in Buckeye Texas Partners LLC.
Buckeye Texas and its subsidiaries, which are owned jointly with Trafigura AG, will own and operate a vertically integrated system of midstream assets including a deep-water, high volume marine terminal located on the Corpus Christi Ship Channel, a condensate splitter and LPG storage complex in Corpus Christi and three crude oil and condensate gathering facilities in the Eagle Ford shale.
Trafigura will be a key customer of these assets under 7- to 10-year minimum volume throughput, storage and tolling agreements.
“We are excited to incorporate this unique integrated system of assets into the Buckeye portfolio,” said Clark C. Smith, Chairman and Chief Executive Officer. “This acquisition expands our geographic and product diversity with a premier position on the U.S. Gulf Coast and in the prolific Eagle Ford shale. We are excited about our partnership with Trafigura, a global leader in international commodities trading and logistics. Once the initial phase of expansion is complete, these assets will form an integrated system with connectivity from the production in the field to the marine terminal infrastructure in Corpus Christi, creating a logistics platform with significant flexibility and optionality.
“In addition, 100% of the cash flows associated with these assets are supported by fee-based take-or-pay revenue commitments under 7- to 10-year commercial agreements with Trafigura. We expect this acquisition to be highly accretive to our distributable cash flow per limited partner unit beginning in 2016 and to position Buckeye for acceleration of distribution growth.”
Buckeye is a publicly traded master limited partnership and owns and operates a diversified network of integrated assets providing midstream logistic solutions, primarily consisting of the transportation, storage, and marketing of liquid petroleum products. Buckeye is one of the largest independent liquid petroleum products pipeline operators in the United States in terms of volumes delivered with approximately 6,000 miles of pipeline and more than 120 liquid petroleum products terminals with aggregate storage capacity of over 110 million barrels across our portfolio of pipelines, inland terminals, and an integrated network of marine terminals located primarily on the U.S. East Coast and in the Caribbean.
Buckeye’s flagship marine terminal in The Bahamas, BORCO, is one of the largest marine crude oil and petroleum products storage facilities in the world and provides an array of logistics and blending services for the global flow of petroleum products. Buckeye’s network of marine terminals enables it to facilitate global flows of crude oil, refined petroleum products, and other commodities, and to offer its customers connectivity to some of the world’s most important bulk storage and blending hubs. Buckeye is also a wholesale distributor of refined petroleum products in areas served by its pipelines and terminals.
