Tesoro Logistics LP (TLLP) and Tesoro Corp. agreed on terms for TLLP's acquisition of crude oil and refined product storage and pipeline assets in Los Angeles, TLLP said Nov. 10.
These Los Angeles refinery storage and handling assets, owned by Tesoro subsidiaries, include 97 crude oil, feedstock and refined product storage tanks and a 50% interest in the Line 88 Pipeline, which transports jet fuel from Tesoro's Los Angeles refinery to the Los Angeles International Airport.
The purchase price was $500 million. The assets have average throughput of 25,000 barrels per day, and an expected annual EBITDA of $60 million, TLLP added.
The purchase price includes about $250 million in cash and the issuance of common and general partner units to Tesoro, valued at about $250 million. The transaction is expected to close later this week. In connection with the closing, Tesoro and TLLP anticipate entering into a 10-year storage capacity commitment agreement requiring Tesoro to pay a monthly fee to reserve the existing shell capacity of the dedicated storage tanks.
"The acquisition of these storage and pipeline assets should expand our network of integrated crude oil and refined product infrastructure in Southern California and demonstrates our commitment to growing a full-service logistics business with a focus on stable, fee-based revenues," said Greg Goff, chairman and CEO of TLLP's general partner. "We expect this transaction to be immediately accretive to unitholder distributions."
Tesoro Logistics LP is based in San Antonio.
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