In an early Thursday morning statement, Valero Energy Partners confirmed that it bought storage terminal assets at Valero’s Port Arthur Refinery and 100-percent of Parkway Pipeline LLC.

The deal is expected to close on Nov. 1. It gives Valero Energy Partners control of 47 storage tanks that can hold a combined 8.5 million barrels of crude oil, intermediates, and refined petroleum products.

The 141-mile Parkway Pipeline is a 16-inch refined petroleum products pipeline linking Valero’s refinery in St. Charles, Louisiana with the Plantation and Colonial pipeline systems in Collins, Mississippi.

The Parkway Pipeline currently has 110,000 barrels per day of capacity, with the ability to expand to more than 200,000 barrels per day.

Valero Energy Partners expects to finance the acquisitions primarily with borrowings under its revolving credit facility, cash on hand, and the issuance of additional common units and general partner units to Valero subsidiaries. The newly issued units will be allocated in a proportion allowing the general partner to maintain its 2 percent general partner interest.

“We are pleased to continue growing VLP’s footprint in the Gulf Coast region,” Valero CEO Joe Gorder said in a statement. “This transaction, combined with our organic growth projects, and strong distribution coverage, positions the Partnership well to deliver its targeted distribution growth without the need for additional acquisitions.”

Valero Energy Partners continues to target annual distribution growth of 25 percent for 2017 and at least 20 percent for 2018.

Upon closing, Valero Energy Partners plans to enter into separate 10-year terminaling and transportation agreements with its parent company. The agreements are each expected to include minimum volume commitments covering approximately 85 percent of expected throughput.

—————————-

TankTerminals.com – Research, Market and Expand Your Presence within the Tank Storage Industry Learn more.