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Chevron aims to sell US pipeline, storage networks

01.17.2014  | 

Chevron is working with Jefferies Group to find buyers for at least four natural gas and crude oil pipeline operations, said two of the sources, who asked not to be named because the process is private. The San Ramon, California-based company began sending out offering materials this week.

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By MATTHEW MONKS
Bloomberg

Chevron is seeking to sell pipeline and storage operations in Texas and Louisiana that together may fetch more than $1 billion, people familiar with the matter said.

Chevron is working with Jefferies Group to find buyers for at least four natural gas and crude oil pipeline operations, said two of the people, who asked not to be named because the process is private. The San Ramon, California-based company began sending out offering materials this week, the people said.

Diversified energy companies have been seeking to sell or spin off transportation and storage operations to cut costs and focus on exploration. Chevron sold a pipeline business in the Northwestern US last year to Tesoro Logistics, while Royal Dutch Shell and Chesapeake Energy made similar divestitures.

Chevron is looking to sell the West Texas LPG Pipeline, a natural gas pipeline 20% owned by Atlas Pipeline Partners, one of the people said. It’s also seeking buyers for a gas storage facility in West Texas, a crude oil terminal close to the Gulf of Mexico, and at least one of its pipelines in Louisiana, this person said.

Chevron spokesman Kent Robertson declined to comment on the sale, as did Jefferies spokesman Richard Khaleel. The company plans to sell some oil and gas assets to focus on exploration prospects in Iraq, Canada, and Australia, Chevron’s chief financial officer Pat Yarrington said in a conference call with analysts in November.

Chevron will report a fourth-quarter decline in profit amid a slump in oil and natural gas production, according to a statement on Jan. 9. The company, run by CEO John S. Watson, plans to spend close to $40 billion on new terminals and wells under a plan to boost output by 20% by the end of 2017.

The company’s shares have dropped about 4% this year, giving it a market value of over $230 billion.



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