Plains All American, Magellan Midstream and OMERS Infrastructure Announce Joint Ownership of BridgeTex Pipeline Company, LLC
August 21 2018 - 8:00AM
Business Wire
Announcement Highlights:
- OMERS to acquire 50% interest in
BridgeTex for $1.438 billion
- Plains All American to sell a 30%
interest (will retain a 20% interest)
- Magellan Midstream to sell a 20%
interest (will retain a 30% interest)
- Transaction expected to close in the
fourth quarter of 2018
Plains All American Pipeline, L.P. (NYSE: PAA) (“Plains”),
Magellan Midstream Partners, L.P. (NYSE: MMP) (“Magellan”), and
OMERS, the defined benefit pension plan for municipal employees in
Ontario, Canada (“OMERS”), along with OMERS Infrastructure
Management Inc. (“OMERS Infrastructure”), the infrastructure
investment manager of OMERS, today announced that certain of their
subsidiaries have entered into a definitive agreement whereby
Plains and Magellan will collectively sell a 50% interest in
BridgeTex Pipeline Company, LLC (“BridgeTex”) for $1.438 billion.
OMERS will acquire a 30% interest from Plains and a 20% interest
from Magellan, with Plains and Magellan each receiving a
proportionate share of the total purchase price. Following closing,
OMERS will own a 50% interest, Plains will retain a 20% interest,
and Magellan will continue to operate the BridgeTex pipeline and
own a 30% interest. The transaction is expected to close in the
fourth quarter of 2018, subject to the satisfaction of customary
closing conditions.
BridgeTex owns the BridgeTex pipeline, a 400,000 barrel-per-day
crude oil pipeline system that extends from Colorado City in West
Texas to Houston, with further connectivity for BridgeTex shippers
to the Texas City area. At Colorado City, BridgeTex pipeline
sources crude oil from Plains’ Basin and Sunrise pipeline systems.
BridgeTex delivers volumes into Magellan’s East Houston terminal
and Magellan’s Houston crude oil distribution system with
connection to refineries in Houston and Texas City as well as to
marine export capabilities via Magellan’s Seabrook Logistics joint
venture terminal. BridgeTex pipeline capacity is being expanded to
440,000 barrels per day by early 2019.
“We’re excited to enter into this joint venture with Plains All
American and Magellan, consistent with our strategy to build
long-term investment partnerships with leading corporations,” said
Michael Ryder, Senior Managing Director, Americas for OMERS
Infrastructure. “The addition of BridgeTex marks our re-entry into
the U.S. midstream sector and is a welcome addition to our
high-quality infrastructure portfolio,” he added.
“OMERS investment adds another long-term oriented owner to our
joint venture,” said Willie Chiang, Plains’ chief operating officer
and Michael Mears, Magellan’s chief executive officer.
“Furthermore, this transaction provides both Plains and Magellan
proceeds to fund additional growth projects while allowing us to
maintain a meaningful position in BridgeTex, which is strongly
aligned with investments owned by both Plains and Magellan along
the crude oil value chain.”
Barclays served as financial advisor for Plains, and Jefferies
advised OMERS. Legal advisors included: Vinson & Elkins LLP for
Plains, GableGotwals for Magellan and Sidley Austin LLP for
OMERS.
About Magellan Midstream Partners, L.P.
Magellan Midstream Partners, L.P. is a publicly traded
partnership that primarily transports, stores and distributes
refined petroleum products and crude oil. The partnership owns the
longest refined petroleum products pipeline system in the country,
with access to nearly 50% of the nation’s refining capacity, and
can store more than 100 million barrels of petroleum products such
as gasoline, diesel fuel and crude oil. More information is
available at www.magellanlp.com.
About Plains All American Pipeline, L.P.
Plains All American Pipeline, L.P. is a publicly traded master
limited partnership that owns and operates midstream energy
infrastructure and provides logistics services for crude oil, NGLs
and natural gas. Plains owns an extensive network of pipeline
transportation, terminalling, storage and gathering assets in key
crude oil and NGL producing basins and transportation corridors and
at major market hubs in the United States and Canada. On average,
Plains handles more than 5 million barrels per day of crude oil and
NGL in its Transportation segment. Plains is headquartered in
Houston, Texas. More information is available at
www.plainsallamerican.com.
About OMERS and OMERS Infrastructure
OMERS Infrastructure invests globally in infrastructure assets
on behalf of OMERS, the defined benefit pension plan for Ontario’s
municipal employees. Investments are aimed at steady returns to
help deliver strong and sustainable pensions to OMERS members.
OMERS Infrastructure’s diversified portfolio of large-scale
infrastructure assets exhibits stability and strong cash flows, in
sectors including energy, transportation and government-regulated
services.
OMERS has employees in Toronto and other major cities across
North America, the U.K., Europe, Asia and Australia. OMERS is one
of Canada's largest defined benefit pension funds, with net assets
of more than C$95 billion. Visit www.omersprivatemarkets.com for
more information.
Forward Looking
Statements:
This press release includes certain statements concerning
expectations for the future that are forward-looking statements as
defined by federal law. Such forward-looking statements are subject
to a variety of known and unknown risks, uncertainties, and other
factors that could cause actual results or outcomes to differ
materially from results or outcomes anticipated in the
forward-looking statements. Important risks, uncertainties and
other factors that could affect future results or outcomes are
discussed in Plains’ and Magellan’s filings with the Securities and
Exchange Commission. Plains and Magellan undertake no obligation to
update or revise any forward-looking statement to reflect new
information or events occurring after today’s date.
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version on businesswire.com: https://www.businesswire.com/news/home/20180821005214/en/
Plains All American Pipeline, L.P. and Plains GP HoldingsBrett
Magill, 866-809-1291Investor RelationsorBrad Leone,
866-809-1290CommunicationsorMagellanPaula Farrell,
918-574-7650Investor Relationspaula.farrell@magellanlp.comorBruce
Heine, 918-574-7010Media
Relationsbruce.heine@magellanlp.comorOMERSNeil Hrab,
416-369-2418Communications and Media Relationsnhrab@omers.com
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