TULSA, Okla. – Magellan
Midstream Partners, L.P. (NYSE: MMP) announced today that it has agreed to
acquire approximately 800 miles of refined petroleum products pipeline from Plains
All American Pipeline, L.P. (NYSE: PAA) for $190 million.
“This acquisition utilizes
Magellan’s expertise in transporting and storing petroleum products,” said Michael
Mears, chief executive officer. “These pipelines are a natural extension of our
existing refined products distribution system and provide new markets for
Magellan to serve.”
Rocky
Mountain pipeline system. The acquisition includes approximately
550 miles of common carrier pipeline that distributes refined petroleum products
in Colorado, South Dakota and Wyoming. The system includes 4 terminals with
nearly 1.7 million barrels of storage.
New
Mexico pipeline system. Magellan also will acquire about
250 miles of common carrier pipeline that transports refined petroleum products
north from El Paso, Texas, delivering products to Albuquerque, New Mexico, and transports
products south to the Texas-Mexico border for delivery via a third-party
pipeline within Mexico.
Management expects the
acquisition to be immediately accretive to the partnership’s distributable cash
flow per unit, with the potential for additional growth in cash flow from the
assets over time.
The acquisition is expected to close in
the second quarter of 2013 subject to regulatory approvals. Management expects
to fund the acquisition with cash on hand and borrowings under its revolving
credit facility, if necessary.
About
Magellan Midstream Partners, L.P.
Magellan
Midstream Partners, L.P. (NYSE: MMP) is a publicly traded partnership that primarily
transports, stores and distributes petroleum products. The partnership owns the
longest refined petroleum products pipeline system in the country, with access
to more than 40% of the nation’s refining capacity, and can store over 80
million barrels of petroleum products such as gasoline, diesel fuel and crude
oil. More information is available at www.magellanlp.com.
###
Forward-Looking Statement
Disclaimer
Portions of this document constitute
forward-looking statements as defined by federal law. Although management
believes any such statements are based on reasonable assumptions, there is no
assurance that actual outcomes will not be materially different. Among the key
risk factors associated with the acquisition that may have a direct impact on
the partnership’s results of operations and financial condition are: (1) its ability
to obtain all required regulatory approvals; (2) price fluctuations and overall
demand for refined petroleum products in the United States; (3) changes in the
partnership’s tariff rates or other terms imposed by state or federal regulatory
agencies; (4) shut-downs or cutbacks at major refineries or other businesses
that use or supply the partnership’s services; (5) the occurrence of an
operational hazard or unforeseen interruption for which the partnership is not
adequately insured; (6) disruption in the debt and equity markets that
negatively impacts the partnership’s ability to finance its capital spending
and (7) failure of customers to meet or continue contractual obligations to the
partnership. Additional information about issues that could lead to material
changes in performance is contained in the partnership's filings with the
Securities and Exchange Commission, including the partnership’s Annual Report
on Form 10-K for the fiscal year ended Dec. 31, 2011 and subsequent reports on Forms 8-K and 10-Q. The partnership undertakes no obligation
to revise its forward-looking statements to reflect events or circumstances
occurring after today's date.
Contacts: