Tesoro Corporation’s subsidiary Tesoro Refining and Marketing Company has sold its Long Beach marine terminal and Los Angeles short-haul pipelines to the partnership company Tesoro Logistics for a total consideration of $210 million (€160 million).
This terminal, which is located near Tesoro’s refinery in Wilmington, California, features six storage tanks with a total 235,000 barrel capacity, related pipelines with 70,000 barrels per day throughput and a two-vessel berth dock leased from the city of Long Beach.
Tesoro Logistics acquired the terminal and related infrastructure for $210 million; $189 million in cash and the partnership’s equity valued at approximately $21 million.
‘The transaction marks Tesoro’s second sale of assets to the partnership and represents the first significant addition of third party volumes into the TLLP system, one of the partnership’s primary business objectives,’ says Greg Goff, Tesoro Corporation’s president and CEO, and chairman and CEO of Tesoro Logistics. ‘We are committed to capturing the full value of our logistics assets and growing the partnership’s distributions.’
In connection with the closing of the transaction, Tesoro and the partnership entered into a throughput and use agreement for the marine terminal assets and a transportation services agreement for the short-haul pipeline assets.
Both of these agreements include minimum throughput commitments, annual price escalations and 10-year initial contract terms. Tesoro Logistics expects that this contribution will result in an estimated $22 million of additional annual EBITDA, approximately half of which is expected to be from third parties.