September 28, 2016 [OPIS] - Sunoco Logistics Partners (the partnership) has acquired the Vitol Group's Permian Basin crude oil system in West Texas for $760 million plus working capital, both companies said.
The acquisition provides Sunoco Logistics with an approximately 2-million-bbl crude oil terminal in Midland, Texas, a crude oil gathering and mainline pipeline system in the Midland Basin, including a significant acreage dedication from an investment grade Permian producer, and crude oil inventories related to Vitol’s crude oil purchasing and marketing business in West Texas.
The acquisition includes the purchase of a 50% interest in SunVit Pipeline which results in the partnership owning all of the membership interests in SunVit.
SunVit connects the Midland terminal to the partnership’s Permian Express 2 pipeline, a key takeaway to bring Permian crude oil to multiple markets.
The acquisition is expected to close in the fourth quarter 2016, subject to certain closing conditions and regulatory approval.
In connection with the acquisition of Vitol’s integrated crude oil business in West Texas, Energy Transfer Partners and Energy Transfer Equity, as the owners of Sunoco Partners LLC, the partnership’s general partner, have agreed to reduce the incentive distributions the general partner receives from the partnership by a total of $60 million over a two-year period.
The reduction will be recognized evenly over eight quarters beginning with the quarterly cash distribution paid for the third quarter 2016.
