Plains All American buys Murphy's Canadian oil transportation assets


By the OGJ Online Staff


HOUSTON, Mar. 1
�Plains All American Pipeline LP, Houston, has agreed to buy the crude oil pipeline, gathering, storage, and terminal assets of Murphy Oil Co. Ltd., a unit of Murphy Oil Corp., El Dorado, Ark., for $155 million plus an as-yet-undetermined payment for excess inventory in the system.

Murphy estimated the transaction at $163 million.

The deal is subject to regulatory approvals and other conditions, but is expected to close in 45-60 days.

The Canadian assets include 450 miles of crude and condensate transmission mainlines, associated gathering, and lateral lines, and 1.1 million bbl of crude oil storage and terminals, mostly in Kerrobert, Sask.. Included are an inactive 108-mile mainline system and 121 trailers used primarily for oil transportation. Among the assets are a 100% interest in the Manito Pipeline system, a 100% interest in the Milk River Pipeline, a 36% ownership in North Saskatchewan Pipeline, and interests varying from 13.125% to 76.25% in the Cactus Lake/Bodo Pipeline system.

Murphy has signed a long-term contract to continue to transport production from its fields via the system. The current volume is 11,000 b/d.

The pipeline systems transport 200,000 b/d of crude and condensate.

"These assets represent a strategic entry into Canada and are a perfect fit with Plains All American's existing operations and core competencies in pipelines, trucking, terminalling and marketing in the US," said Harry Pefanis, president and CEO of Plains All American. "Canada has a very large crude oil resource base with Canadian crude oil production projected to increase by over 25% during the next several years. These assets complement our current activities and enhance our ability to service the needs of refiners in the US Midwest."

Initial financing for the acquisition will be provided via an expansion of the partnership's existing $700 million revolving credit to $830 million.

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