TULSA, Okla., June 19 /PRNewswire-FirstCall/ -- Magellan Midstream Partners, L.P. (NYSE: MMP) announced today that it has been selected as the "stalking horse" bidder for substantially all of the assets of Longhorn Partners Pipeline, L.P. Completion of the acquisition is subject to an auction process, bankruptcy court approval and customary regulatory approval.
The 700-mile common carrier pipeline system transports refined petroleum products from Houston to El Paso, Texas. A terminal in El Paso, comprised of a 5-bay truck loading rack and over 900,000 barrels of storage, is included in the purchase. This terminal serves local petroleum products demand and distributes product to connecting third-party pipelines for ultimate delivery to markets in Arizona, New Mexico and in the future to Northern Mexico.
Magellan currently serves as the operator of the pipeline system.
The purchase price for the pipeline system is $250 million plus the fair market value of line fill, which is currently estimated at approximately $90 million. Management intends to finance the acquisition with debt.
I believe that this acquisition is the deal that Wellendorf reffered to on the last conference call. It is, according to Don, not immediately accretive, but is something that they think will be accretive in a year or two. Personally, I think it is a good acquisition as it allows them to grow their footprint and may potentially have expansion opportunities.