Global Partners LP GLP today announced that it has signed an agreement
to acquire 100 percent of the membership interests in a West Coast crude oil
and ethanol facility near Portland, Oregon from Cascade Kelly Holdings LLC.
The total purchase price is expected to be approximately $95 million. The
transaction includes a rail transloading facility serviced by the BNSF
Railway, 200,000 barrels of storage capacity, a deepwater marine terminal, a
1,200-foot dock and the largest ethanol plant on the West Coast. Situated
along the Columbia River in Clatskanie, Oregon, the site is located on land
leased under a long-term agreement from the Port of St. Helens. In November
2012, the facility began transloading unit trains of crude oil.
“This transaction capitalizes on our advantaged logistics and enables Global
to supply cost-competitive crude and ethanol to refiners and customers on the
West Coast,” said Eric Slifka, Global's president and chief executive officer.
“From our origination hub in the Bakken region of North Dakota, we will now
have destination assets on both coasts. The Oregon site is linked via BNSF to
the Basin Transload facility in Beulah, North Dakota while our Albany, NY
terminal is connected via single line haul on Canadian Pacific to the Basin
Transload location in Columbus, North Dakota. This facility also creates a
link between the Western Canadian Sedimentary Basin and Pacific refiners. With
the pending closing of our Basin Transload acquisition this quarter, these new
assets increase our capability to transport crude from the U.S. and Canadian
mid-continent and extend our virtual pipeline to the West.”
“Because certain regions of the West Coast energy market have limited pipeline
access, the dynamics of sourcing and logistics for PADD V refiners and
customers are comparable to those we see in the Northeast,” Slifka said. “As
we have demonstrated to those customers, we believe that we can apply our rail
and marine expertise to meet the demand for crude and ethanol on the West
Coast. Given the 3.3 million barrels a day of crude refining capacity in PADD
V, this facility represents an opportunity for Global to drive additional
product volumes and enhance margins.”
Global's purchase of Cascade Kelly Holdings, which has been approved by the
Board of Directors of the Partnership's general partner, Global GP LLC, is
subject to customary regulatory approvals and various other customary
commercial closing conditions. The purchase is expected to be completed by the
end of the current quarter and is expected to be accretive to unit holders in
its first full year of operation.
In addition to this transaction, this quarter Global expects to close its
pending acquisition of a 60% interest in Basin Transload, LLC for
approximately $80 million. To finance these transactions, Global has arranged
a $115 million increase in its bank credit facility and has secured a senior
unsecured five-year note of up to $70 million from funds managed by GSO
Capital Partners LP, the credit arm of The Blackstone Group.
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