Enbridge Energy Partners acquiring Shell crude oil pipeline and storage systems

By OGJ editors
HOUSTON, Dec. 29 -- Enbridge Energy Partners LP, Houston, plans to acquire crude oil pipeline and storage systems from Shell Pipeline Company LP and Shell Oil Products US for $131 million.

Concurrently, the Calgary-based Enbridge Inc. plans to acquire Shell's Patoka West Tank Farm and its 60% interest in the Woodpat Pipeline for $9.5 million. These assets complement Enbridge's initiative to access new markets for Canadian crude oil. The initiative will benefit the partnership by facilitating throughput on its Lakehead system.

Enbridge Energy Partners anticipates closing on its $131 million package during the first quarter, subject to regulatory approvals and a right of first refusal by another owner on the Osage pipeline.

The assets being acquired serve refineries in the Mid-Continent from the Cushing, Okla., hub and consist of 615 miles of active crude oil pipelines and 9.5 million bbl of storage capacity.

Assets being acquired include:
--the 433-mile Ozark pipeline that transports 170,000 b/d of crude oil from Cushing to Wood River, Ill.
--a 58.8% interest in the 135-mile Osage pipeline and associated 1.2 million bbl storage terminal. The pipeline delivers 110,000 b/d and is connected to two refineries in Kansas.
--the 47-mile West Tulsa pipeline that transports 55,000 b/d to two refineries in Oklahoma.
--the Shell storage terminal at Cushing with 8.3 million bbl of storage capacity.

"These systems provide stable cash flows from toll or fee-based revenues derived from a combination of regulated assets and contracted unregulated assets. We anticipate that these assets will contribute immediately to distributable cash flow per unit," said Dan C. Tutcher, president of the partnership's general partner and management company.

Enbridge Energy Management LLC owns 18% of Enbridge Energy Partners. Enbridge Energy Co. Inc., an indirect wholly owned subsidiary of Enbridge Inc. of Calgary, is the general partner of Enbridge Energy Partners, in which it holds a 12% interest.

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