Houston, TX-based Buckeye Partners, L.P. (BPL) announced the completion of sale of all the outstanding limited liability interests in Lodi Gas Storage, L.L.C. to Brookfield Infrastructure.
The transaction was completed on Dec 31, 2014, and was priced at around $105 million. The deal was earlier announced by Buckeye Partners on Jul 29, 2014.
Following the announcement, unit prices of Buckeye Partners depicted an upward movement of 1.3% on the closing of the intraday session on Jan 02, 2015.
Lodi Gas Storage is a natural gas utility company, which owns and operates a natural gas storage facility in North California. Connected to PG&E Corporation’s (PCG) intrastate gas pipelines, the facility provides roughly 22 billion cubic feet (“bcf”) of working gas capacity. Covering an area of 1,500 acres, the facility has 15 wells and is 2,200 feet deep.
Buckeye Partners had acquired the interest in Lodi Gas in 2007 from an affiliate of ArcLight Capital Partners, LLC for a total consideration of $440 million.
With the withdrawal of its operations in Lodi, Buckeye Partners has further reduced its footprint in the western part of the country. The proceeds from the sale could be utilized by the partnership to reduce its outstanding debt burden or in other profitable acquisition or expansion programs.
In the third quarter release, the partnership announced the acquisition of an 80% stake in Buckeye Texas Partners. This deal is expected to provide Buckeye Partners a vertically integrated system of midstream assets in the lucrative U.S. Gulf Coast market.
Zacks Rank
Buckeye Partners currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the oil and gas space include Enbridge Energy Management LLC (EEQ) and PBF Logistics LP (PBFX). Both these stocks currently sport a Zacks Rank #1 (Strong Buy).
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