Calumet Specialty Products has acquired seven crude oil
loading facilities and related assets in
North Dakota and Montana from Murphy Oil, the companies
announced on Monday.
The transaction closed on August 9, with specific financial
terms not disclosed.
With the acquisition of the loading facilities, all of which are
connected at junction points along Enbridge's North Dakota
pipeline system, Calumet says it will be positioned to source
increased volumes of crude oil directly from local producers in
North Dakota and Montana while continuing to supplement its feedstock procurement through
third-party marketing relationships.
By purchasing increased volumes of feedstock directly from producers,
Calumet expects to enjoy more favorable economics on select
portions of the crude oil it purchases, over the longer
As part of this acquisition, Calumet also assumes line space
on the Enbridge system previously held by Murphy. Calumet
will have the ability to transport crude oil directly from the
point of lease, into Calumet's newly acquired crude loading facilities and then into the
Enbridge system where it can be routed to Calumet's refineries
and/or third party customers.
As part of this transaction, Calumet and Murphy jointly
consented to terminate an existing crude oil supply agreement
wherein Murphy supplies Calumet's refinery in Superior, Wisconsin,
with up to 10,000 bpd of crude oil.
"This acquisition expands our growing portfolio of crude oil
logistics assets, while positioning us to purchase increased
volumes of price-advantaged feedstock directly from producers
that operate in some of the major shale plays encompassing our
refineries," said Jennifer Straumins, chief operating
officer of Calumet.
"We believe the execution of a vertical integration strategy -- one
that puts us closer to our crude oil suppliers and
customers -- represents a long-term competitive advantage
for the partnership," she added.