- Partnership Secures 160,000 Barrels per Day of Rail Loading
Capacity in North Dakota
- Provides Global with Unique Combination of Origin and Destination
Assets
- Transaction Expected to Close by the End of 2012
WALTHAM, Mass.--(BUSINESS WIRE)--Oct. 5, 2012--
Expanding its presence in the energy-rich Bakken region, Global Partners
LP (NYSE: GLP) today announced that it has signed a purchase agreement
to acquire a 60% membership interest in Basin Transload LLC (“Basin
Transload”), which operates two transloading facilities in North Dakota
with a combined rail loading capacity of 160,000 barrels per day. The
total purchase price is expected to be approximately $80 million.
The transloading facilities are approximately 195 miles apart in
Columbus and Beulah, North Dakota. The Columbus facility is located
along the Canadian Pacific Railway and provides single line haul service
to Global’s recently expanded terminal in Albany, NY. Basin Transload’s
Beulah site, which supports crude oil production efforts in the
Williston Basin, is located along the Burlington Northern Santa Fe
Railroad with direct long-haul service to the West Coast and Gulf Coast
markets. The Partnership owns and operates a 100,000 barrel storage tank
and truck offloading rack at the Columbus facility.
Under the purchase agreement, Global will acquire a 60% membership
interest in Basin Transload, with the remaining 40% split evenly between
current owners TGC, L.P. and MBI Holdings, LLC. Global intends to
arrange an optimal financing structure for the transaction, and is
currently considering several debt financing options.
The transaction is expected to be accretive in the first full year of
operation, based on current operating and anticipated future performance
of the Basin Transload assets and economic and market conditions.
“The acquisition of a majority stake in Basin Transload significantly
broadens and strengthens our energy infrastructure in the Bakken
region,” said Eric Slifka, Global’s president and chief executive
officer. “The strategic locations of the Basin Transload facilities, as
well as their proximity and ease of access to key suppliers, create
flexibility and logistical advantages for Global. These assets enhance
our footprint in one of the fastest growing oil producing regions in
North America, creating new opportunities to drive product volumes and
increase cash flow through a wide range of value-added services to
producers and refiners.”
“The dramatic growth in Bakken crude oil production and related rail
transport is another key component in Global’s diversification
strategy,” Slifka said. “Our recently completed Albany rail expansion,
for example, serves as a ‘virtual pipeline’ to transport crude and other
products from the mid-continent region to Albany, directly addressing
the lack of pipeline infrastructure on the East Coast. Our rail
shipments to the East Coast average just four or five days, with some
completed in as little as two-and-a-half days. From Albany, it’s then
just a day to day-and-a-half trip by barge to the East Coast refineries.”
“We believe that Global and Basin Transload form a unique combination of
Bakken crude origin and destination assets,” Slifka said. “This
transaction creates strategic value for customers through the
transportation not only of crude, but also the movement of other energy
supplies and products to market.”
The transaction, which has been approved by the Board of Directors of
the Partnership’s general partner, Global GP LLC, is subject to
customary regulatory approvals, due diligence and various other
customary commercial closing conditions. The purchase is expected to be
completed by the end of this year.
About Global Partners LP
Global Partners LP, a publicly traded master limited partnership based
in Waltham, Massachusetts, owns, controls or has access to one of the
largest terminal networks of refined petroleum products and renewable
fuels in the Northeast. Global is a leader in the logistics of
transporting crude and other products from the mid-continent region to
the East Coast. The Partnership is one of the largest wholesale
distributors of gasoline (including blendstocks such as ethanol and
naphtha), distillates (such as home heating oil, diesel and kerosene),
residual oil and renewable fuels to wholesalers, retailers and
commercial customers in the New England states and New York. In
addition, the Partnership has a portfolio of approximately 1,000 gas
stations in nine Northeastern states. The Partnership also is a
distributor of natural gas. A FORTUNE 500® company, Global Partners
trades on the New York Stock Exchange under the ticker symbol "GLP." For
additional information, please visit www.globalp.com.
Forward-looking Statements
Some of the information contained in this news release may contain
forward-looking statements. Forward-looking statements include, without
limitation, any statement that may project, indicate or imply future
results, events, performance or achievements, and may contain the words
“may,” “believe,” “should,” “could,” “expect,” “anticipate,” “plan,”
“intend,” “estimate,” “continue,” “will likely result,” or other similar
expressions. In addition, any statement made by Global Partners LP’s
management concerning future financial performance (including future
revenues, earnings or growth rates), ongoing business strategies or
prospects and possible actions by Global Partners LP or its subsidiaries
are also forward-looking statements.
Although Global Partners LP believes these forward-looking statements
are reasonable as and when made, there may be events in the future that
Global Partners LP is not able to predict accurately or control, and
there can be no assurance that future developments affecting Global
Partners LP’s business will be those that it anticipates.
For additional information about risks and uncertainties that could
cause actual results to differ materially from the expectations Global
Partners LP describes in its forward-looking statements, please refer to
Global Partners LP’s Annual Report on Form 10-K for the year ended
December 31, 2011 and subsequent filings the Partnership makes with the
Securities and Exchange Commission.
Readers are cautioned not to place undue reliance on the forward-looking
statements, which speak only as of the date on which they are made.
Global Partners LP expressly disclaims any obligation or undertaking to
update forward-looking statements to reflect any change in its
expectations or beliefs or any change in events, conditions or
circumstances on which any forward-looking statement is based.
Source: Global Partners LP
Global Partners LP
Thomas J. Hollister, 781-894-8800
Chief
Operating Officer and
Chief Financial Officer
or
Global
Partners LP
Edward Faneuil, 781-894-8800
Executive Vice
President,
General Counsel and Secretary