Sunoco Logistics Partners L.P. and the Vitol Group have announced the acquisition of Vitol’s Permian Basin crude oil system in West Texas for approximately US$760 million plus working capital.
The acquisition provides Sunoco Logistics with an approximately two million barrel 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 per cent interest in SunVit Pipeline LLC which results in the Sunoco owning all of the membership interests in SunVit. SunVit connects the Midland terminal to the Sunoco’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.
Sunoco Logistics Partners L.P. is formed by Energy Transfer Partners, L.P. and Energy Transfer Equity.
Michael J. Hennigan, President and Chief Executive Officer for Sunoco Logistics Partners L.P said:
"We are pleased to announce this strategic crude oil acquisition. The addition of the Vitol system is an excellent synergistic fit to our growing crude platform in the Permian Basin. The Permian Basin is the most prolific of all of the US shale areas with strong growth expectations. The Vitol pipeline assets are located in what we believe are the three best counties in the Midland Basin. Adding a 2 million barrel terminal in Midland is very complimentary to our Permian strategy.”
Mike Loya, Head of the Americas for Vitol added:
“We have had a good working relationship with Sunoco Logistics, including our SunVit JV. Sunoco Logistics has a strong strategic position in West Texas and we are confident that they will provide excellent service to customers of the Vitol system. We wish Sunoco Logistics well in the further development of the business.”