March 31, 2011 [OPIS] - Two weeks ago, Chevron boasted that it had received top dollar for some of the refined products terminals that it has divested in the last 10 months.
A filing with the Securities and Exchange Commission (SEC) suggests that in the case of a Louisiana asset sale to Buckeye Partners, the major indeed received a price that turned heads in the logistics community.
In November, Buckeye bought a 135,000-bbl terminal in Opelousas, La., and the SEC 10K filing shows that it meted out $13 million in cash for the facility. The terminal, connected to the Colonial Pipeline, includes seven storage tanks and provides central Louisiana with gasoline, diesel and ethanol. Chevron negotiated a long-term throughput agreement with Buckeye as part of the acquisition.
The price appears steep relative to some other recent purchases that Buckeye made. In December, the master limited partnership bought a 4.6-million-bbl terminal in Yabucoa, Puerto Rico, from Shell. The price of that deal was $32.6million and it gave Buckeye 44 storage tanks for products as well as crude on the island, in addition to a long-term throughput agreement.
Meanwhile, Buckeye’s recent deal to purchase 33 terminals and 1,000 miles of oil products pipelines from BP has attracted attention for a different reason. The price of $225 million for 10 million bbl of terminal storage plus pipeline ownership is not regarded as excessive. However, there are thoughts that the Federal Trade Commission might take action in areas where Buckeye might have too high of a concentration of logistical assets.
Midwestern marketers suggest that Ohio might be one of the states where terminal and pipeline overlap might provoke particular FTC scrutiny.
