Genesis Energy, L.P. (GEL) announced that it has reached a definitive agreement to acquire a 50% indirect ownership interest in Cameron Highway Oil Pipeline Company (Cameron Highway) for $330 million from Valero Energy Corporation (VLO). GEL expects to close the acquisition by yearend. Cameron Highway consists of a 380-mile 24-inch and 30-inch diameter pipeline that transports oil from developments in the Gulf of Mexico to the Texas Gulf Coast. Enterprise Products Partners, L.P. (EPD) owns the other 50% interest and operates the pipeline. Given the distributions received by owners of Cameron Highway during the 12 months ended June 30, 2010, GEL acquired these assets at 10.1x cash flow. The partnership expects distributions could be significantly higher going forward as fields dedicated to Cameron Highway resume development. Based on our preliminary assumptions and estimates, this acquisition could be 5% accretive to current unitholders on an annual basis.
I expect a unit offering in teh very near term. If it comes thru and the units get hit like I suspect they would be ill be a buyer