12 November 2002
Sunoco unit to buy 43.8% of Texas pipe line firm
Philadelphia – Sunoco Logistics Partners L.P. said Tuesday it would purchase a 43.8% interest in the West Texas Gulf Pipe Line Co. for $10.6 million.
Assets being bought consist of a 17.3% interest previously held by an affiliate of Sunoco Inc. plus a 26.5% interest to be acquired by Sunoco from an affiliate of Union Oil Company of California in a separate transaction. Sunoco Logistics said closing is expected before year-end, subject to customary conditions.
"We are pleased to announce this latest acquisition, given our current operations in Texas," said Deborah M. Fretz, CEO. "This investment is expected to add $1.3 million of annual incremental cash flow before financing costs, consisting of our share of the dividends. We intend to initially fund this acquisition using our revolving credit facility, and expect to keep our investment grade debt rating by maintaining a conservative capital structure over the medium and long term."
West Texas Gulf consists of approximately 580 miles of 26 and 20-inch crude oil pipeline and related facilities, running from Colorado City and Nederland, Texas, to Longview, Texas. West Texas Gulf shipped approximately 171 thousand barrels per day (bpd) in the first nine months of 2002. It is operated by ChevronTexaco Pipeline Co.
Sunoco Logistics Partners L.P., headquartered in Philadelphia, was formed to acquire, own and operate Sunoco Inc.'s refined product and crude oil pipelines and terminal facilities. The Eastern Pipeline system consists of approximately 2,000 miles of primarily refined product pipelines. The Terminal Facilities consist of 7.8 million barrels of refined product terminal capacity and 14.2 million barrels of crude oil terminal capacity, including 11.2 million at the Texas Gulf Coast Nederland Terminal. The Western Pipeline System consists of approximately 2,750 miles of crude oil pipelines, located principally in Oklahoma and Texas.
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