Magellan Midstream to Acquire 800 Miles of Refined Petroleum Products Pipeline
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SOURCE Magellan Midstream Partners, L.P.
TULSA, Okla., Feb. 22, 2013 /PRNewswire/ -- 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, 2011and 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.
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