Tesoro Logistics acquires storage and pipeline assets of Tesoro Corp. in Los Angeles

Tesoro Logistics LP (TLLP) has acquired the crude oil and refined product storage and pipeline assets in Los Angeles, Calif., U.S.A., owned by subsidiaries of Tesoro Corp. for a total consideration of USD 500 million. The assets include 97 crude oil, feedstock and refined product storage tanks with a combined capacity of 6.6 million barrels and a 50% interest in Line 88, a 16-mile pipeline that transports jet fuel from Tesoro’s Los Angeles Refinery to the Los Angeles International Airport with an average throughput of 25,000 barrels a day. The Los Angeles Refinery Storage and Handling Assets have an expected annual EBITDA of USD 60 million.

The acquisition price of USD 500 million will include cash of approximately USD 250 million and the issuance of common and general partner units to Tesoro, valued at approximately USD 250 million. The equity consideration will be based on common TLLP units issued at the average daily closing price for the 10 trading days prior to the closing of the transaction. The transaction is expected to close later this week.

“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.

In connection with the closing of the transaction, 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.

TLLP is a leading full-service logistics company operating primarily in the western and mid-continent regions of the United States. TLLP owns and operates a network of more than 3,500 miles of crude oil, refined products and natural gas pipelines.

TLLP also owns and operates 28 crude oil and refined products truck and marine terminals and has more than nine million barrels of storage capacity. TLLP is a fee-based, growth-oriented Delaware limited partnership formed by Tesoro Corp. headquartered in San Antonio, Texas, U.S.A.

 

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