Valero Energy Partners LP Announces Acquisition of Undivided Interest in the Red River Pipeline
January 18 2017 - 5:28PM
Valero Partners Wynnewood LLC, an indirect wholly owned subsidiary
of Valero Energy Partners LP (NYSE:VLP) (“the Partnership”) today
announced that it has acquired a 40 percent undivided interest in
the Hewitt segment of Plains All American Pipeline, L.P.’s
(“Plains”) Red River pipeline for approximately $70 million.
The Hewitt segment is a newly constructed 138-mile, 16-inch
crude oil pipeline with 150,000 barrels per day of capacity.
The purchase also includes a 40 percent undivided interest in two
150,000 shell barrel capacity tanks located at Hewitt Station.
The Hewitt segment originates at Plains Marketing L.P.’s
Cushing, Oklahoma terminal and ends at Hewitt Station in Hewitt,
Oklahoma. The pipeline began supplying crude oil to Valero’s
refinery in Ardmore, Oklahoma in January 2017.
The Partnership funded the acquisition with cash on hand.
Concurrent with the acquisition, the Partnership entered into a
10-year throughput agreement with a subsidiary of Valero Energy
Corporation (NYSE:VLO). Consistent with the Partnership’s
existing portfolio of assets, the agreement includes a minimum
volume commitment, a five-year renewal term, and no direct
commodity price exposure.
“This third-party transaction fits the Partnership’s growth
strategy, where we focus on acquisitions that are strategic to
Valero’s core business or that provide third-party revenue,” said
Joe Gorder, Chairman and Chief Executive Officer of VLP’s general
partner. “It also demonstrates our measured approach to
growing the Partnership while preserving our stable, fee-based cash
flow profile.”
The Partnership retains a right to participate in any future
expansions of the Hewitt segment of the Red River pipeline.
Plains will serve as the operator of the pipeline.
About Valero Energy Partners LP
Valero Energy Partners LP is a fee-based master limited
partnership formed by Valero Energy Corporation to own, operate,
develop and acquire crude oil and refined products pipelines,
terminals and other transportation and logistics assets. With
headquarters in San Antonio, the Partnership’s assets include crude
oil and refined petroleum products pipeline and terminal systems in
the Gulf Coast and Mid-Continent regions of the United States
(“U.S.”) that are integral to the operations of 10 of Valero’s
refineries. Please visit
www.valeroenergypartners.com for more information.
Contacts
Investors:John Locke, Vice President – Investor Relations,
210-345-3077Karen Ngo, Senior Manager – Investor Relations,
210-345-4574
Media:Lillian Riojas, Director – Media Relations and
Communications, 210-345-5002
Valero Energy (NYSE:VLO)
Historical Stock Chart
From Apr 2024 to May 2024
Valero Energy (NYSE:VLO)
Historical Stock Chart
From May 2023 to May 2024