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 term.
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.