Magellan Midstream Partners, L.P. announced Friday that it has agreed to acquire approximately 800 miles of refined petroleum products pipeline from Plains All American Pipeline, L.P. 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.