By SAABIRA CHAUDHURI
Magellan Midstream has agreed to buy Plains All
American Pipeline's noncore refined-product pipelines and
related assets in the Rocky Mountain and New Mexico areas for
about $190 million, as the petroleum pipeline-and-storage
company looks to extend its existing refined-products
distribution system and capture new markets.
The assets to be sold include a pipeline system that
delivers refined products throughout Wyoming, South Dakota and
Colorado and associated tankage, as well as a pipeline system
that delivers refined products from El Paso, Texas, to
Albuquerque, N.M., and Juarez, Mexico.
Magellan said it expects the acquisition to immediately add
to distributable cash flow per unit, with the potential for
additional growth in cash flow from the assets over time. It
will pay for the deal with cash on hand and borrowings under
its revolving credit facility, if necessary.
The transaction is expected to close during the second
Magellan primarily transports, stores and distributes
petroleum products. It owns the longest refined
petroleum-products pipeline system in the country, with access
to more than 40% of the nation's refining capacity.
Meanwhile, Houston-based Plains transports, stores and markets
crude oil and refined products, as well as natural-gas
Earlier this month, Magellan reported its fourth-quarter
earnings rose 40% as it benefited from improved volume and
Plains said its fourth-quarter earnings jumped 15% as the
pipeline company reported strong results in its
supply-and-logistics segment, while profits at its PAA natural
gas storage (PNG) business improved 1.6% as it reduced
Dow Jones Newswires