Sunoco Logistics to buy US East Coast terminals from Sunoco, Conoco
Sunoco Logistics announced today that it has reached an agreement with former parent company Sunoco to purchase the Eagle Point tank farm and related assets, located in Westville, N.J., for approximately $100 million in deferred distribution units.
Sunoco Logistics said it anticipates additional capital spending of approximately $90 million to provide for operational flexibility and to meet regulatory requirements.
In a separate transaction, Sunoco Logistics also announced that it signed a definitive agreement to purchase a refined products terminal located in East Boston, Massachusetts, from ConocoPhillips for $56 million plus the fair market value of inventory.
This transaction is expected to be financed with borrowings under Sunoco Logistics’ revolving credit facilities pending more permanent financing.
Both transactions are subject to customary closing conditions and are expected to be completed in the third quarter of 2011.
Eagle Point Tank Farm
“The sale of the Eagle Point storage assets to Sunoco Logistics unlocks value for Sunoco shareholders. At the same time, it demonstrates Sunoco’s commitment as general partner to supporting the growth of Sunoco Logistics,” said CEO Lynn L. Elsenhans.
“As the market for transportation fuels continues to evolve, Sunoco Logistics’ ability to aggregate various types of fuel components, provide advanced blending services at the terminal level, and get products to market becomes even more valuable.”
The Eagle Point tank farm consists of approximately 5 million bbl of active storage for clean products and dark oils, with the potential to expand storage capacity in the future.
“Together with our existing pipeline connectivity, dock space, and refined products rack at Eagle Point, the tank farm establishes this location as a major terminal operation on the East Coast with import/export capabilities and room to grow,” said chief operating officer Michael J. Hennigan.
The sale of the Eagle Point tank farm and related assets excludes the idled refinery processing units and still-operational 225 megawatt cogeneration facility. Sunoco is pursuing the sale of both the processing units and co-generation facility, it said.
East Boston Terminal
The East Boston terminal, with storage capacity of approximately 1.2 million bbl, is the sole service provider of Logan International Airport under a long-term contract. The terminal’s truck rack services local markets.
“This terminal acquisition enables us to expand our geographic and customer base as we enter the New England terminal market,” said Elsenhans. “This acquisition will continue to grow our ratable cash flow.”
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