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.
Recommended Reading
Crescent Energy Bolts On $905MM Central Eagle Ford Acreage
2024-12-03 - Crescent Energy will purchase Eagle Ford assets from Carnelian Energy Capital Management-backed Ridgemar Energy for $905 million, plus WTI-based contingency payments of up to $170 million.
STEP Energy Services Drops Go-Private Deal as Shareholders Balk
2024-12-20 - STEP Energy Services has terminated its agreement with ARC Energy Fund 8 to go private in an all-cash transaction for CA$5 per share.
Crescent Upsizes Stock Offering, Offers Debt for Ridgemar Acquisition
2024-12-04 - Crescent Energy is offering 21.5 million shares of its stock and borrowing additional funds to pay for the cash portion of a $905 million acquisition of Ridgemar Energy.
Vitesse Energy to Buy Bakken Pureplay Lucero in $220MM Deal
2024-12-16 - Vitesse Energy will acquire Lucero Energy’s Bakken/Three Forks assets, including 25 net remaining locations, 1.9 net DUCs and 20 wells that are candidates for recompletions.
Despite Low Prices, Thrifty, Efficient E&Ps Keep Distributions Flowing
2024-10-08 - Even with lower commodity prices, producers have maintained healthy shareholder returns through dividends and buybacks thanks to M&A, drilling efficiencies and capital discipline.