Tesoro Corporation (NYSE:TSO) and Tesoro Logistics LP (NYSE:TLLP) (the "Partnership" or "TLLP") today announced that TLLP has reached an agreement with Tesoro Corporation ("Tesoro") to acquire certain terminalling and pipeline assets ("West Coast Logistics Assets") owned by Tesoro's subsidiaries. Under the terms of the agreement, TLLP will acquire the three marketing terminals, a storage facility and a refined products pipeline for total consideration of $270 million.
"We expect to use the proceeds to continue our investment in growth opportunities and return cash to shareholders through our share repurchase program," said Greg Goff, President and CEO. "We are committed to capturing the full value of our logistics assets and growing the Partnership's distributions."
The West Coast Logistics Assets include:
- Three refined products terminals that are adjacent to Tesoro's refineries at Martinez, California; Anacortes, Washington; and Kenai, Alaska, with expected total throughput of 35,000 to 45,000 barrels per day. The Partnership plans to develop a new truck rack at the site of the acquired Anacortes terminal which is expected to add an additional 6,000 to 7,000 barrels per day of throughput.
- A marine crude oil and heavy products storage facility with a capacity of 1.5 million barrels located adjacent to Tesoro's Anacortes refinery.
- An approximately 70 mile long refined products pipeline system connecting Tesoro's Kenai refinery to Anchorage, Alaska with expected average throughput of approximately 35,000 barrels per day.
The purchase price of $270 million will include cash proceeds of $243 million and Partnership equity valued at approximately $27 million. The terminalling and storage assets have an expected closing date early in the third quarter of 2014. The portion of the acquisition pursuant to which TLLP will acquire the Tesoro entity with ownership of the refined products pipeline is expected to close and fund late in the third quarter or early in the fourth quarter of 2014.
Tesoro Corporation, a Fortune 100 company, is an independent refiner and marketer of petroleum products. Tesoro, through its subsidiaries, operates six refineries in the western United States with a combined capacity of over 850,000 barrels per day and ownership in a logistics business which include a 34% interest in Tesoro Logistics LP (NYSE: TLLP) and ownership of its general partner. Tesoro's retail-marketing system includes over 2,200 retail stations under the ARCO®, Shell®, Exxon®, Mobil®, USA Gasoline(TM) and Tesoro® brands.