February 2, 2016 [OPIS] - PBF Logistics LP said on Tuesday it will buy four Philadelphia-area refined product terminals from Plains All American Pipeline LP for $100 million, allowing PBF to foray into third-party storage and terminaling businesses.
The company said that it is buying the following assets: 57 product tanks with a total shell capacity of about 4.2 million shell barrels, pipeline connections to the Colonial, Buckeye, Sunoco Logistics and other proprietary pipeline systems, 26 truck loading lanes and marine facilities capable of handling barges and ships.
The terminals provide a critical link for the about 1.3 million b/d of refining capacity located within 100 miles of the terminals and associated downstream demand, it said.
The company said the acquisition should close in the second quarter of 2016.
PBF Logistics LP is a fee-based, growth-oriented master limited partnership (MLP) formed by its parent company PBF Energy Inc. to own or lease crude oil and refined petroleum products terminals, pipelines, storage facilities and similar logistics assets.
New Jersey-based PBF energy has been in a buying spree since last year. It is currently in the process of acquiring the Torrance, Calif., refinery from ExxonMobil, and it completed its acquisition of Chalmette Refinery in New Orleans, La., in November last year.
PBF Logistics said the addition of the four terminals will more than double its total capacity to about 8.1 million shell barrels.
It said the terminals will allow it to leverage opportunities with its sponsor PBF Energy due to the close proximity of the PBF Energy’s refineries on the East Coast.
In addition to the Chalmette and Torrance plants, PBF Energy also operates three
other refineries in Toledo, Ohio; Delaware City, Del.; and Paulsboro, N.J.
As part of the deal, PBF Logistics said it will invest about $5 million in cash to improve infrastructure to increase throughput capability at the four terminals.
In addition, the deal is expected to be accretive to distributable cash flow upon closing.
Based on a total transaction cost of $105 million, the company expects the terminals to generate about $15 million of pro-forma EBITDA, of which about two-thirds is expected to be from third-party customers.
The company said the deal will be financed through a combination of cash on hand, borrowings from its senior secured revolving credit facility and equity, which may include common units sold to its sponsor, PBF Energy.
