NGL Energy Partners LP (NYSE: NGL) and Magnum Liquids LLC have formed a joint venture (JV) to focus on the storage of NGL and refined products by combining NGL’s Sawtooth storage facility with Magnum’s refined products rights and adjacent leasehold, the companies said on March 1.

Sawtooth is a NGL storage facility with 6.1 million barrels (MMbbl) of capacity in five existing salt caverns, including rail and truck access to Western U.S. markets located southwest of Salt Lake City, Utah.

NGL will sell an interest in Sawtooth to Magnum for $45 million in cash due at closing. Magnum will contribute its right, title and interest in certain leasehold and other assets located at the site, which will be utilized to expand Sawtooth’ s existing operations and allow for the addition of refined products storage at the facility.

NGL will own approximately 67.6% of the JV and Magnum will own the remaining 32.4% at closing. Magnum will have an option to acquire an additional 21.6% interest from NGL under similar terms with an additional option to acquire NGL’s remaining 46% interest within three years of closing.

The initial transaction, which is subject to certain closing conditions, is expected to close by March 31, 2018.

UBS Investment Bank served as the financial advisor to NGL and McGrath North Mullin & Kratz PC LLO served as NGL’s legal counsel in connection with this transaction.

King & Spalding served as Magnum and Haddington’s legal counsel in connection with this transaction.