Tesoro Logistics to acquire portion of Los Angeles Logistics Assets
Tesoro Corporation and Tesero Logistics LP has announces that Tesoro Logistics LP (TLLP) has entered into a definitive agreement with Tesoro Corporation (Tesoro) to acquire the majority of the remaining Los Angeles Logistics Assets owned by Tesoro’s subsidiary, Tesoro Refining & Marketing Company LLC.
Under the terms of the agreement, TLLP will acquire the Los Angeles Logistics Assets for total consideration of US$ 650 million with an expected closing date scheduled for later in the fourth quarter of 2013.
“With the acquisition, we intend to strengthen our position as a West Coast logistics provider and significantly increase our access to long-term, contractually committed, fee-based revenues,’ said Greg Goff, TLLP’s Chairman and Chief Executive Officer. “Our expectation is that the acquisition of these strategically important assets will be immediately accretive to unit holder cast distribution and will provide opportunities for future optimization and organic growth.”
The Los Angeles logistics assets include:
- Two marine terminals with expected throughput of 285 000 bpd, which includes a marine terminal capable of handling a 2 million barrel capacity crude carrier.
- Over 100 miles of active crude oil and refined products pipeline system connecting Tesoros Los Angeles refining complex with the marine terminal facilities to be acquired and TLLP’s Los Angeles area refined products terminal and storage facilities; with initial expected throughput of 550 000 bpd.
- Dedicated crude oil and refined products storage terminals with a capacity of 2 million barrels.
- A petroleum coke handling and storage facility with an expected throughput of 2600 metric tpd, a refined products terminal and a shipping container storage lot.
The Partnership expects that the Los Angeles logistics assets will contribute estimated EBITDA of US$ 60 million to US$ 65 million in its first full year of operation and annual EBTDA of US$ 65 million to US$ 75 million thereafter as a result of expected synergies to be gained from the integration of Tesoro’s Los Angeles refining complex. Annual maintenance capital expenditures are initially expected to be US$ 4 million to US$ 7 million, net of reimbursements from Tesoro.
In connection with the closing of the transaction, Tesoro and the Partnership expect to enter into long-term throughput and storage agreements.
Adapted from press release by Hannah Priestley-Eaton
Read the article online at: https://www.worldpipelines.com/business-news/27112013/tesoro-logistics-to-acquire-portion-of-los-angeles-logistics-assets/
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