Plains All American To Buy Occidental's 50% Interest In BridgeTex For $1.08 Bln

(RTTNews) - Plains All American Pipeline, L.P. (PAA) said it has entered into a definitive purchase and sale agreement with Occidental Petroleum Corp. (OXY) for the purchase by PAA of Occidental's 50 percent interest in BridgeTex Pipeline Company LLC for $1.075 billion.

BridgeTex owns the BridgeTex pipeline, which is a new 300,000 barrel-per-day crude oil pipeline system that extends from Colorado City in West Texas to Texas City and is complementary to PAA's existing West Texas assets.

At Colorado City, the BridgeTex pipeline is connected to PAA's Basin Pipeline System as well as PAA's Sunrise Pipeline.

An affiliate of Occidental is the anchor shipper on the BridgeTex pipeline. Approximately 80 percent of the pipeline's capacity is committed to long term contracts with a volume weighted average tenor of 9.5 years.

The remaining 50 percent interest in BridgeTex is owned by Magellan Midstream Partners, L.P., which is also the operator of the BridgeTex pipeline.

Contemporaneous with the purchase by PAA, BridgeTex has agreed to sell the southern leg of the pipeline system which runs from Houston to Texas City to MMP, and MMP has agreed to enter into a long term capacity lease with BridgeTex following which BridgeTex shippers will have access to capacity on the Texas City Leg.

PAA's acquisition of Occidental's interest in BridgeTex is subject to completion by Plains GP Holdings, L.P. (PAGP) of an underwritten secondary offering pursuant to which Occidental would sell a portion of its equity interest in PAGP.

The transaction is expected to be around 1.5 percent accretive to PAA's targeted 2015 distribution per unit and 5 percent accretive to PAGP's corresponding distribution per share for 2015.