Buckeye To Buy 80% Stake In Corpus Christi Terminal Complex For $860 Mln

(RTTNews) - Buckeye Partners L.P. (BPL) said Tuesday it agreed to acquire an 80 percent interest in a company that will be owned jointly with Trafigura AG for $860 million.

The company ("Buckeye Texas Partners") and its subsidiaries will own and operate a vertically integrated system of midstream assets including a deep-water, high volume marine terminal located on the Corpus Christi Ship Channel, a condensate splitter and LPG storage complex in Corpus Christi, and three crude oil and condensate gathering facilities in the Eagle Ford shale.

All of the assets are supported by 7- to 10-year minimum volume throughput, storage and tolling agreements with Trafigura.

Closing of the transaction is subject to pending regulatory approval.

Trafigura AG will maintain a 20 percent interest in Trafigura Terminals LLC and retain commercial rights to use all of the assets.

"This acquisition demonstrates our continued efforts to develop new midstream platforms in key areas with significant growth potential," said Buckeye's President, Global Marine Terminals, Khalid Muslih. "We are excited about the opportunity to partner with Trafigura AG and to position ourselves in the rapidly growing Corpus Christi and Eagle Ford markets."

Buckeye expects this investment to be highly accretive to its distributable cash flow per limited partner unit in 2016 and beyond.

The Corpus Christi facilities have five vessel berths including three deep-water docks, and upon completion of initial development phase, will offer approximately 5.6 million barrels of liquid petroleum products storage capacity along with rail and truck loading/unloading capability.

A 50,000 barrel per day condensate splitter is currently under construction and is anticipated to be completed by mid-2015, after which Buckeye Texas Partners will commence operations under a 7-year fixed-fee tolling agreement with Trafigura.

In addition, three field gathering facilities with associated storage and pipeline connectivity will allow Buckeye Texas Partners to move Eagle Ford crude and condensate production directly to the terminalling complex in Corpus Christi.

The company expects Buckeye Texas Partners to invest about $240 million to $270 million through the first quarter of 2016 relating to these growth capital initiatives that we anticipate will be operational over the next 9 to 18 months.

Citigroup served as exclusive financial advisor to Trafigura in connection with the transaction.