Tesoro Corporation to Sell Alaska Storage and Terminalling Assets to Tesoro Logistics
July 01 2016 - 8:20AM
SAN ANTONIO -
July 1, 2016 - Tesoro Corporation (NYSE:TSO, Tesoro) and Tesoro
Logistics LP (NYSE:TLLP) today announced that subsidiaries of
Tesoro have executed an agreement for the sale of storage and
terminalling assets in Alaska to TLLP for a total consideration of
$444 million.
The Alaska Storage and
Terminalling Assets include:
-
Storage: Crude oil, feedstock and refined
product storage tanks with combined capacity of approximately 3.5
million barrels in Kenai, Alaska, with connectivity with TLLP's
Tesoro Alaska Pipeline and Nikiski Products Terminal and Tesoro's
Kenai Refinery
-
Terminals: Refined product terminals in
Anchorage and Fairbanks with combined storage capacity of over
600,000 barrels, expected throughput of 10,400 barrels per day and
rail loading of 7,000 barrels per day
The transaction is expected to
close in two stages. The storage portion of the acquisition closed
today. The acquisition of the Anchorage and Fairbanks terminals is
expected to close later in the third quarter once the Consent
Decree with the State of Alaska becomes effective. This agreement
is related to Tesoro's acquisition of the Flint Hills Resources
assets, which closed on June 20, 2016.
The acquisition price of $444
million includes cash proceeds to Tesoro of $400 million and the
issuance of common and general partner units to Tesoro, valued at
approximately $44 million.
In consideration for the first
closing (storage assets), Tesoro received $239 million of cash and
$27 million of common and general partner units of TLLP. The cash
consideration was borrowed on TLLP's revolving credit facility. The
equity consideration was based on the average daily closing price
of TLLP's common units for the 10 trading days prior to closing, or
$48.06 per unit, with 390,282 units in the form of common units and
162,375 units in the form of general partner units.
In consideration for the second
closing (terminal assets), Tesoro will receive $160 million of cash
and $18 million of common and general partner units of TLLP. The
cash consideration is expected to be borrowed on TLLP's revolving
credit facility and the equity consideration will be based on the
average daily closing price of TLLP's common units for the 10
trading days prior to closing.
Tesoro Corporation, a Fortune 100 company, is an independent
refiner and marketer of petroleum products. Tesoro, through its
subsidiaries, operates seven refineries in the western United
States with a combined capacity of over 895,000 barrels per day and
ownership in a logistics business, which includes a 36% interest in
Tesoro Logistics LP (NYSE: TLLP) and ownership of its general
partner. Tesoro's retail-marketing system includes over 2,400
retail stations under the ARCO®, Shell®, Exxon®, Mobil®, USA
Gasoline(TM), Rebel(TM) and Tesoro® brands.
This press
release contains certain statements that are "forward-looking"
statements within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934.
These statements relate to, among other things: expected
throughputs and rail loadings and our expectations regarding the
closing date for the second stage of the transaction. For more
information concerning factors that could affect these statements,
see the respective annual reports on Form 10-K, quarterly reports
on Form 10-Q and current reports on Form 8-K for Tesoro Corporation
and Tesoro Logistics LP, filed with the Securities and Exchange
Commission. We undertake no obligation to publicly release the
result of any revisions to any such forward-looking statements that
may be made to reflect events or circumstances that occur, or which
we become aware of, after the date hereof.
Contact:
Investors:
Sam Ramraj, Vice President, Investor Relations, (210) 626-4757
Media:
Tesoro Media Relations, media@tsocorp.com, (210) 626-7702
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Tesoro Corporation via Globenewswire
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