By OGJ editors
HOUSTON, Feb. 3 -- Findlay, Ohio-based Marathon Ashland Petroleum LLC (MAP) and Texas Eastern Products Pipeline Co. LP (TEPPCO) Monday reported signing a definitive agreement to pay $20 million each to increase to 50% each of their ownership percentages in Centennial Pipeline.
Currently, the 795 mile, 210,000 b/d Centennial refined product system was one-third owned by MAP; CMS Panhandle Eastern Pipe Line Co., a unit of CMS Energy Corp.; and TEPPCO; a unit of TEPPCO Partners LP. Now, MAP and TEPPCO will purchase equal parts of CMS Energy's stake. Marathon Ashland Pipe Line LLC, a wholly owned unit of MAP, will serve as operator of the pipeline system. MAP is owned 62% by Marathon Oil Co.—a part of Marathon Oil Corp.—and 38% by Ashland Inc.
In late 2002, CMS Energy announced plans to sell its pipeline unit and its ownership interest in Centennial, which transports petroleum products from the US Gulf Coast to the Midwest. Also in late 2002, CMS Energy announced the sale of CMS Panhandle Cos. to Southern Union Corp. as a part of its ongoing asset sales program (OGJ Online, Dec. 23, 2002). "The asset sales program is part of CMS Energy's continuing efforts to strengthen its balance sheet and liquidity, as well as to increase financial flexibility," the Dearborn, Mich.-based integrated company said.
"We view Centennial as a strategic investment in our downstream business, which has already provided additional capacity that enabled TEPPCO to transport record refined product volumes in 2002," said Barry R. Pearl, president and CEO of the general partner of TEPPCO.
The Centennial transaction is expected to close in mid-February.
