Plains All American Pipeline and Magellan Midstream Partners will sell a 50% interest in BridgeTex Pipeline Company for $1.438 billion.
OMERS, the defined pension plan for municipal employees in Ontario, Canada will acquire a 30% interest from Plains and a 20% interest from Magellan, with both companies each receiving a proportionate share of the total purchase price.
Once the transaction is closed, OMERS will own a 50% interest, Plains will retain a 20% interest and Magellan will continue to operate the pipeline and own a 30% interest.
The transaction is expected to close in the fourth quarter of 2018.
BridgeTex owns the pipeline, a 400,000 barrel per day crude oil pipeline system that extends from Colorado City in West Texas to Houston.
It delivers volumes into Magellan's East Houston terminal and Magellan's Houston crude oil distribution system with connection to refineries in Houston and Texas City as well as to marine export capabilities via Magellan's Seabrook Logistics joint venture terminal. BridgeTex pipeline capacity is being expanded to 440,000 barrels per day by early 2019.
Michael Ryder, senior managing director, Americas, for OMERS Infrastructure, says: 'The addition of BridgeTex marks our re-entry into the US midstream sector and is a welcome addition to our high-quality infrastructure portfolio.'
Michael Mears, Magellan's CEO and Willie Chiang, Plain's COO, say: 'OMERS investment adds another long-term oriented owner to our joint venture. This transaction provides both Plains and Magellan proceeds to fund additional growth projects while allowing us to maintain a meaningful position in BridgeTex, which is strongly aligned with investments owned by both Plains and Magellan along the crude oil value chain.'
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