Plains All American Pipeline LP (NYSE: PAA), Magellan Midstream Partners LP (NYSE: MMP), and OMERS have entered into a definitive agreement whereby Plains and Magellan will collectively sell a 50% interest in BridgeTex Pipeline Co. LLC for $1.438 billion.

UPDATE - BridgeTex Transaction Says Good Deal About Investors

OMERS will acquire a 30% interest from Plains and a 20% interest from Magellan, with Plains and Magellan each receiving a proportionate share of the total purchase price. Following closing, OMERS will own a 50% interest, Plains will retain a 20% interest, and Magellan will continue to operate the BridgeTex pipeline and own a 30% interest. The transaction is expected to close in the fourth-quarter of 2018.

BridgeTex owns the BridgeTex pipeline, a 400,000 barrel per day (bbl/d) crude oil pipeline system that extends from Colorado City in West Texas to Houston, with further connectivity for BridgeTex shippers to the Texas City area. At Colorado City, BridgeTex pipeline sources crude oil from Plains’ Basin and Sunrise pipeline systems. BridgeTex delivers volumes into Magellan’s East Houston terminal and Magellan’s Houston crude oil distribution system with connection to refineries in Houston and Texas City as well as to marine export capabilities via Magellan’s Seabrook Logistics joint venture terminal. BridgeTex pipeline capacity is being expanded to 440,000 bbl/d by early 2019.

“We’re excited to enter into this joint venture with Plains All American and Magellan, consistent with our strategy to build long-term investment partnerships with leading corporations,” Michael Ryder, senior managing director, Americas for OMERS Infrastructure, said. “The addition of BridgeTex marks our re-entry into the U.S. midstream sector and is a welcome addition to our high-quality infrastructure portfolio,” he added.

Barclays served as financial advisor for Plains, and Jefferies advised OMERS. Legal advisors included Vinson & Elkins LLP for Plains, GableGotwals for Magellan and Sidley Austin LLP for OMERS.