By the OGJ Online Staff
HOUSTON, Oct. 1 -- Plains All American Pipeline LP said Monday it is buying the Dollarhide pipeline system and Midland, Tex., tank farm facilities from Unocal Pipeline Co. for $2.6 million.
Harry Pefanis, president and CEO of Plains All American, said the acquisition would augment his company's gathering, marketing, and pipeline assets in the West Texas market.
He said, "We expect this transaction to be accretive to earnings per unit and cash flow per unit, generating a 15-20%/year return on capital."
Dollarhide moves 4,500 b/d of oil to the Midland market. The acquisition also includes 215,000 bbl of crude storage capacity along the system and in Midland.
Plains All American said in conjunction with the transaction, it has agreed to enter into a connection agreement with a large independent producer that provides for the dedication of additional volumes to the system for 5 years. Both transactions are expected to close in the next several weeks.