Buckeye Partners L.P. (BPL) said it has successfully closed its $165 million deal with BP North America Inc. and its affiliates, a wholly owned subsidiary of BP Plc (BP). Under the deal, which was amended on May 17, 2011, Buckeye gained control of BP’s 33 refined petroleum products terminals and 650 miles of refined petroleum products pipeline.
The acquisition of these terminal and pipeline assets further expand Buckeye's operations in new and key geographic markets. Most of the acquired assets are located in the Midwestern, Southeastern, and Western United States. The terminal assets with more than 10 million barrels of storage capacity, also enhance Buckeye's total liquid petroleum storage capacity by nearly 19% to over 63 million barrels.
Buckeye said BP will continue to be a key customer at these facilities under multi-year throughput commitments.
Moreover, Buckeye pointed out that the acquisition of BP’s assets is a part of the partnership’s continued expansion and geographic diversification efforts, through its best practices initiative started in July 2009. The acquisition also depicts the partnership’s commitment to create long-term unitholder value through strategic acquisitions that leverage its core strengths as an organization. The partnership expects the acquisition to be immediately accretive to its distributable cash flow per unit.
Buckeye’s best practices initiative has intensified its commercial focus and allowed it to drive incremental volumes through legacy assets. Going forward, the partnership remains committed to apply these practices to further enhance the commercial utilization of its newly acquired facilities.
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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