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Tesoro Corporation
("Tesoro") has agreed to acquire Great Northern Midstream LLC ("Great
Northern Midstream"), a crude oil logistics provider which owns and
operates high-quality, recently constructed crude oil pipeline,
gathering system, transportation, storage and rail loading facilities in
the Williston Basin of North Dakota.
The transaction includes the 97-mile BakkenLink crude oil pipeline,
which connects to several third-party gathering systems, as well as a
proprietary 28-mile gathering system in the core of the Bakken,
supported by acreage dedication. In addition, the transaction includes a
154,000 barrel per day rail loading and a 657,000 barrel storage
facility in Fryburg, North Dakota which can provide outbound deliveries
to the West, East and Gulf Coasts.
This acquisition, which is in close proximity to the Tesoro High Plains
Pipeline system, builds upon Tesoro and Tesoro Logistics' existing
capabilities to provide efficient, flexible and cost-effective
integrated logistics services to customers in the Bakken region. Once
integrated with the Tesoro High Plans Pipeline system, it is expected to
provide Tesoro's West Coast facilities with cost-effective access to
advantaged crude oil and provide producers additional market access.
"Our acquisition of Great Northern Midstream is aligned with our
strategy to grow our logistics business, supply advantaged crude oil to
our refineries, and make these assets available to third-party customers,
" said Greg Goff, Chairman, President and Chief Executive Officer of
Tesoro Corporation. "Combining the Great Northern Midstream assets with
our Tesoro High Plains Pipeline will create a leading crude oil pipeline
system in the most prolific region of the Bakken."
The acquisition price represents 5-6 times Tesoro-estimated future
EBITDA for the Great Northern Midstream business and is expected to be
immediately accretive. The transaction is subject to customary closing
conditions, including regulatory approval, and is expected to close in
the first quarter of 2016.
"We expect the enhanced system to serve as an additional platform for
growth and we intend to offer the business for sale to Tesoro Logistics
in 2016," said Goff.
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