November 10, 2015 [Bluff Country Newspaper Group] - The BP terminal east of Spring Valley will change ownership early next year as the result of a recent joint venture agreement between two national companies.
Kinder Morgan, Inc., has finalized agreements with BP Products North America, Inc., to acquire 15 refined products terminals, including the one in Spring Valley, and associated infrastructure in the United States in a transaction valued at approximately $350 million, according to Melissa Ruiz, manager of corporate communications for Kinder Morgan.
Kinder Morgan and BP will form a joint venture limited liability company terminal business to own 14 of the acquired assets, which Kinder Morgan will operate and market on the joint venture’s behalf. One terminal will be owned solely by KMI.
The terminals, with approximately 9.5 million barrels of storage, are connected by pipeline to key refining and processing centers across the United States and offer extensive truck, vessel, and barge access and terminal service capabilities, said Ruiz.
In connection with the transaction, BP will enter into commercial agreements securing long-term storage and throughput capacity from the joint venture, which plans to market additional capacity to third-party customers.
The transaction is expected to close in the first quarter of 2016. BP doesn’t plan to change any of the existing Spring Valley operations, which requires three full-time employees, until the sale goes through. It is unknown what changes will take place after the transfer takes place, but Kinder Morgan officials indicated that the acquisitions will lead to opportunities for growth.
“We are excited to be partnering with BP on this joint venture,” said John Schlosser, president of Kinder Morgan Terminals. “By combining BP’s expertise in product trading and marketing with Kinder Morgan’s strength in operations and terminal development, the joint venture is well suited for growth opportunities in high-demand refined petroleum products markets. We believe this arrangement benefits BP, Kinder Morgan and third-party customers.”
The 15 above-ground storage tanks with 250,000 barrels of storage capacity at the local terminal is located on 21 acres of property along Minnesota 16 east of Spring Valley. The Spring Valley terminal is on a pipeline that enters Minnesota south of Fillmore County and continues to the NuStar terminal in Roseville. The pipeline brings in petroleum products to Minnesota from BP’s Whiting, Ind., refinery. On an average year, BP moves 1 million barrels through the local terminal. For reference, 42 gallons of crude oil are in one barrel.
Kinder Morgan will own a 75 percent interest in the joint venture, with BP owning the balance. In addition to Spring Valley, the new jointly owned limited liability company will own and operate these terminals: Atlanta; Brooklyn, N.Y.; Carteret, N.J.; Chicago; Cincinnati; Curtis Bay, Md.; Dayton, Ohio; Doraville, Ga.; Indianapolis; Port Everglades, Fla.; Richmond, Calif.; Rochelle, Ill.; and Wood River, Ill.
Kinder Morgan, Inc., is the largest energy infrastructure company in North America. It owns an interest in or operates approximately 84,000 miles of pipelines and 165 terminals. The company’s pipelines transport natural gas, gasoline, crude oil, CO2 and other products, and its terminals store petroleum products and chemicals, and handle bulk materials such as coal and petroleum coke. Kinder Morgan is the largest midstream and third largest energy company in North America with an enterprise value of approximately $115 billion.
