Tesoro Logistics LP – TLLP – To Acquire Chevron Pipe Line Company’s Northwest Products System

Tesoro Logistics LP (NYSE:TLLP) announced that it has executed a definitive agreement to purchase Chevron Pipe Line Company’s Northwest Products System for $400 million.  The transaction is subject to regulatory approval and is expected to close during the first quarter of 2013.

The Northwest Products System consists of the Northwest Product Pipeline, a 760-mile Federal Energy Regulatory Commission (FERC)-regulated common carrier products pipeline which extends from Salt Lake City, Utah to Spokane, Washington, a separate five-mile jet fuel pipeline to the Salt Lake City International Airport and the Northwest Terminalling Company consisting of the Boise and Pocatello, Idaho and Pasco, Washington refined products terminals, which are not subject to FERC regulation.

“The purchase of the Northwest Products System is a unique opportunity to grow our portfolio of well positioned, fee-based logistics assets in the western US.  The system allows TLLP to capture operational synergies with our existing terminal assets in the region as well as significantly increase third-party revenue,” said Greg Goff, TLLP’s Chairman and Chief Executive Officer.  ”This transaction is expected to generate annual EBITDA of about $33 million in the first twelve months post closing and be immediately accretive to distributable cash flow per unit.”

The pipeline receives product from five refineries and one pipeline in the Salt Lake City area and is the primary transportation option from Salt Lake City to Pocatello, Boise, Pasco and Spokane.  Delivery volumes on the system averaged approximately 84,000 barrels per day in 2011.  The terminals have a total storage capacity of 1.3 million barrels and delivered approximately 51,000 barrels per day in 2011. Annual maintenance capital expenditures are expected to be about $4 million.

About Tesoro Logistics – TLLP

Tesoro Logistics LP (TLLP), headquartered in San Antonio, Texas, is a fee-based, growth-oriented Delaware limited partnership formed by Tesoro Corporation to own, operate, develop and acquire crude oil and refined products logistics assets.  Tesoro Logistics LP (TLLP) owns, operates, develops and acquires crude oil and refined products logistics assets. TLLP’s logistics assets are integral to the success of Tesoro Corporation’s (Tesoro’s) refining and marketing operations and are used to gather, transport and store crude oil and to distribute, transport and store refined products.

TTLP operates in two segments: Crude Oil Gathering and Terminalling, Transportation and Storage. Its assets consist of a crude oil gathering system in the Bakken Shale/Williston Basin area of North Dakota and Montana, eight refined products terminals in the midwestern and western United States, a crude oil and refined products storage facility and five related short-haul pipelines.It generates revenue by charging fees for gathering, transporting and storing crude oil and for terminalling, transporting and storing refined products. Tesoro Logistics GP, LLC is its general partner.

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.