Buckeye Partners L.P. (BPL), yesterday, said that its $225 million deal to buy 33 refined petroleum products terminals and 1000 miles of refined petroleum products pipelines from BP Products North America Inc., a wholly owned subsidiary of BP Plc (BP), has been modified to exclude BP’s stake in Inland Corporation.
This modification was the result of some shareholders of Inland exercising their rights of first refusal so that Buckeye has none of Inland's shares available for purchase. As a result, Buckeye said it will now buy 33 refined petroleum products terminals with a storage capacity of over 10 million barrels and nearly 650 miles of refined petroleum products pipelines from BP for a total purchase price of $165 million.
BP Products North America Inc. owns a 50% interest in Inland Corporation, which represented a value of $60 million in the Buckeye purchase deal. Inland owns about 350 miles of refined products pipeline running through Ohio.
Buckeye expects to close the acquisition in the second quarter of 2011, pending regulatory approvals and customary closing conditions.
Buckeye said the acquisition of BP’s assets is a part of the partnership’s continued expansion and geographic diversification efforts. Located in Midwestern, Southeastern, and Western United States, these assets further extend Buckeye's operations in new and key geographic markets. The partnership expects the acquisition to immediately perk up its distributable cash flow.
Separately, Buckeye said it recently closed upon the agreement to sell off its 20% non-operating interest in West Texas LPG Pipeline Limited Partnership (WTLPG) to Atlas Pipeline Partners L.P. for $85 million in cash.
West Texas Pipeline L.P. is the owner of a 2,295-mile common-carrier pipeline system that transports NGLs from New Mexico and Texas to Mont Belvieu for fractionation. The remaining 80% interest in WTLPG is held by Chevron Pipeline Company, a unit of Chevron Corporation (CVX), which operates the pipeline.
Buckeye expects to divert the proceeds from the sale to its core operating assets and fund a portion of its internal growth capital projects planned for 2011.
Based in Houston, Texas, Buckeye Partners L.P. primarily operates pipeline systems for refined petroleum products in the United States. Buckeye Partners currently retains a Zacks #3 Rank (short-term Hold rating). We maintain our long-tern Neutral rating on the stock.
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