Valero Energy Corp. (VLO) said Monday that it has agreed to sell to Genesis Energy LP (GEL) for $330 million a 50% stake in a pipeline that brings deepwater crude oil from the Gulf of Mexico to the U.S.
Valero Energy Corp. (VLO) said Monday that it has agreed to sell to
Genesis Energy LP (GEL) for $330 million a 50% stake in a pipeline that brings
deepwater crude oil from the Gulf of Mexico to the U.S.
"This sale is part of our ongoing strategy of divesting noncore
assets" and unlocking shareholder value, Valero Chairman and Chief
Executive Bill Klesse said in a statement. The sale is expected to close in the
fourth quarter, subject to regulatory approvals.
The
San Antonio
company sold both of its East Coast refineries in the
U.S.
this
year while it has been expanding its pipeline assets in the Texas Panhandle. Since
early 2009, the company also purchased 10
Midwest
ethanol plants. Valero has been trying to streamline its operations and cut
costs aggressively since the recession hit, helping the company post a profit
in the second quarter after reporting a year's worth of losses.
Valero has owned its interest in
Cameron
Highway
since the 380-mile underwater pipeline system was
constructed in 2004 to deliver up to 500,000 barrels a day of crude oil from
major Gulf deepwater production fields to the
Texas
coast. The pipeline is co-owned and operated by Enterprise Products Partners LP
(EPD). Valero received $27 million to $33 million in annualized distributions
from the venture, but Genesis said in a statement that it could see
"significantly higher" distributions as new fields are developed.
The pipeline's operations were not affected by the moratorium on new
deepwater-drilling activity this year in the wake of the BP PLC (BP, BP.LN) oil
spill in late April, company spokesman Bill Day said.
Genesis CEO Grant Sims called the transaction a "strategic
investment" that bolsters the midstream services it provides to
Gulf
Coast
producers and refineries as offshore production grows.
Cameron Highway
has
"cash flows tied to large, dedicated anchor fields, the majority of which
are not yet fully developed, and it has capacity and is geographically
positioned to benefit from future midstream service opportunities," Sims
said.
The
Houston
company plans to finance the cash payment to Valero through debt and equity.
Valero shares were recently up 12 cents at $17.77, boosting year-to-date gains
to 6%. Genesis shares were recently down 10 cents at $25.95. Its stock has
gained 37% this year.
Διαβάστε ακόμα
Τρι, 24 Σεπτεμβρίου 2024 - 19:58
Τρι, 24 Σεπτεμβρίου 2024 - 19:54
Τετ, 18 Σεπτεμβρίου 2024 - 18:32
Τετ, 18 Σεπτεμβρίου 2024 - 18:27
Τρι, 17 Σεπτεμβρίου 2024 - 20:01