Buckeye to buy Corpus Christi terminal interest in $860 million deal

Sept. 2, 2014
Buckeye Partners LP has agreed to acquire 80% interest in a company that it will jointly own with Trafigura AG for $860 million. The transaction is expected to close later this month.

Buckeye Partners LP has agreed to acquire 80% interest in a company that it will jointly own with Trafigura AG for $860 million. The transaction is expected to close later this month.

The company, to be named Buckeye Texas Partners, will own and operate a vertically integrated system of midstream assets including a deepwater, high-volume marine terminal on the Corpus Christi Ship Channel; a condensate splitter and LPG storage complex in Corpus Christi; and three crude oil and condensate gathering facilities in the Eagle Ford shale.

The Corpus Christi facilities have five vessel berths, including three deepwater docks, and on completion of initial development phase, will offer 5.6 million bbl of liquid petroleum products storage capacity along with rail and truck loading-unloading capability.

The 50,000-b/d condensate splitter is under construction and anticipated to be completed by mid-2015. All assets are supported by 7- to 10-year minimum volume throughput, storage, and tolling agreements with Trafigura.

Buckeye says completion of the initial development phase will bring forth an integrated system connecting production in the field to the marine terminal infrastructure in Corpus Christi.

“We expect this unique integrated system of assets will allow us to capitalize on the rapidly growing production in the Eagle Ford shale,” said Clark C. Smith, Buckeye chairman and chief executive officer. “This acquisition complements our portfolio of marine terminal assets in strategic energy hubs and further enhances the logistical solutions we can provide across these key energy markets.”

Buckeye Texas Partners is expected to invest $240-270 million relating to the initiatives through first-quarter 2016, with operations coming over the next 9-18 months.