By OGJ editors
HOUSTON, Apr. 5 -- Link Energy LLC, Houston, closed the sale of all of its North American crude oil and pipeline operations to Plains All American Pipeline LP, also of Houston, in a deal valued at $330 million.
As a result, Link Energy—formerly EOTT Energy, one of the largest US independent gatherers and marketers of crude oil—has no further operations and will wind down its business affairs, officials said.
A unit of Enron Inc. previously held a 25% stake in EOTT Energy and acted as general partner. Facing Enron-related financial difficulties, EOTT Energy filed for Chapter 11 bankruptcy protection in 2002, from which it emerged in 2003 as Link Energy.
In addition to a cash payment of $273 million, Plains All American agreed to assume $49 million of liabilities and net working capital items and expects to incur $8 million of third-party and other costs.
Link's oil business included some 7,000 miles of active crude oil pipeline and gathering systems, more than 10 million barrels of crude oil storage capacity, a fleet of 200 trucks, and 2 million bbl of crude oil line fill and working inventory.
"The Link assets are complementary to our assets in West Texas and along the Gulf Coast. Additionally, this acquisition meaningfully expands our footprint in the Rocky Mountain and Oklahoma-Kansas regions," said Greg L. Armstrong, chairman and CEO of Plains All American. "Due to the significant overlap of administrative and back office expenses, we believe that we can capture annual cost savings and commercial synergies in the range of $20-30 million within the first 18 months after the acquisition is completed."