Tesoro Logistics LP announced it has agreed to acquire crude oil, natural gas and produced water gathering systems and two natural gas processing facilities for total consideration of $700 million.
Additionally, the Company has acquired terminalling and storage assets located in Martinez, California from a subsidiary of Tesoro Corporation for total consideration of $400 million. These acquisitions strengthen TLLP's position as a leading integrated midstream service provider and are expected to support distribution growth.
"These two acquisitions strengthen TLLP's portfolio of logistics assets that provide full-service capabilities to both upstream and downstream customers," said Greg Goff, Chairman and Chief Executive Officer of TLLP's general partner. "TLLP is on target to achieve its 2017 goal of $635 million of net earnings and $1 billion of annual EBITDA. Further, these assets provide optimization and organic investment opportunities that support future growth."
Acquisition of North Dakota Gathering and Processing Assets
TLLP has agreed to acquire crude oil, natural gas and produced water gathering systems and two natural gas processing facilities from Whiting Oil and Gas Corporation, GBK Investments, LLC and WBI Energy Midstream, LLC for total consideration of approximately $700 million. The North Dakota Gathering and Processing Assets include over 650 miles of crude oil, natural gas, and produced water gathering pipelines, 170 MMcf per day of natural gas processing capacity and 18,700 barrels per day of fractionation capacity in the Sanish and Pronghorn fields of the Williston Basin in North Dakota.
The revenue from the assets is approximately 90% fee-based and backed by acreage dedications from ten producers. The assets are well utilized based on current production levels and provide organic expansion opportunities that support continued drilling in existing well locations with attractive production economics.
The acquisition, which is subject to customary closing conditions including regulatory approval, is anticipated to close early in the first quarter of 2017. The North Dakota Gathering and Processing Assets are expected to contribute $79 to $89 million of annual net earnings and $100 to $110 million of annual EBITDA. TLLP expects the acquisition to be immediately accretive to unitholders.