91 Million Barrels to be Transported from Bakken Region to New Jersey
Refinery Over Five-Year Period;
Company Provides 2013 EBITDA Guidance of $175 Million to $190 Million
WALTHAM, Mass.--(BUSINESS WIRE)--Jan. 8, 2013--
Global Partners LP (NYSE:GLP) today announced that it has signed a
five-year contract with Phillips 66 (NYSE:PSX) under which Global will
use its rail transloading, logistics and transportation system to
deliver crude oil from the Bakken region of North Dakota to Phillips
66’s Bayway, NJ refinery. The terms of the contract include a
take-or-pay commitment from Phillips 66 to receive approximately 91
million barrels of crude oil over the contract term, which equates to
approximately 50,000 barrels per day.
“We are proud to partner with one of the world’s leading independent
downstream energy companies,” said Eric Slifka, President and CEO of
Global Partners. “Phillips 66 and its predecessor has been a
long-standing strategic business partner with Global for more than 15
years in the refined products market. More recently, Phillips 66 has
been an important customer for Global as we have expanded our crude
supply and logistics services. Today’s announcement further enhances our
position as a leader in transporting crude by rail from the
mid-continent of the U.S. and Canada to the East Coast. This agreement
grows our mix of stable fee-based contract income.”
“Global has established a ‘virtual pipeline’ for the reliable
transportation of Bakken crude,” said Tim Taylor, Executive Vice
President, Commercial, Marketing, Transportation & Business Development
of Phillips 66. “Our five-year agreement with Global assures us
long-term access to advantaged crude for our Bayway refinery through
what we believe is a cost competitive origin-to-destination supply
system to the East Coast.”
The Bakken crude oil is expected to be transloaded at Basin Transload
LLC’s North Dakota rail facilities. Global has agreed to purchase a 60%
interest in Basin Transload. This transaction is expected to close in
the first quarter of 2013. As a continuation of the partnership between
Canadian Pacific (TSX:CP) (NYSE:CP) and Global, the crude oil will be
transported on CP’s rail network from the Bakken directly to Global’s
terminal in Albany, NY.
“CP is extremely pleased to be working with Global in providing rail
direct service from the North Dakota Bakken to the Northeast U.S., which
demonstrates the advantages of CP’s strategic rail network and
experience in moving energy products. CP is the only North American
railroad to serve the Bakken Formation, the Alberta Industrial Heartland
and other energy formations in the United States and Canada directly to
the Northeast U.S.,” said Canadian Pacific Executive Vice President and
Chief Marketing Officer, Jane O'Hagan.
“Today, Global’s capacity to move product by rail to our Albany terminal
is approximately 160,000 barrels a day. While the Phillips 66 agreement
provides Global with the stability and certainty of crude oil flows
through the Basin Transload facilities for the next five years, we
continue to maintain ample capacity to supply crude oil to other
refiners. In January 2013, we expect to move an average of more than
100,000 barrels a day by rail through our Albany facility,” Slifka said.
Financial Guidance and Outlook
Global Partners today announced that it is providing 2013 EBITDA
guidance in the range of $175 million to $190 million. The Partnership
previously provided 2012 EBITDA guidance in November 2012 of $115
million to $130 million. The Partnership’s guidance is based on its
current business outlook as well as assumptions regarding market
conditions, including demand for petroleum products and renewable fuels,
weather, credit markets and the forward product pricing curve, which
will influence financial results.
“We are entering 2013 with considerable momentum on a number of fronts,”
said Slifka. “Our expected growth in annual EBITDA for 2013 is the
result of a combination of organic growth projects, strategic
acquisitions and new contract business. Going forward, we will benefit
from the expansion of logistics assets in North Dakota and bringing
online our new Albany propane storage facility. We also will benefit
from a full year of contributions from Alliance Energy, which we
acquired in March 2012, and the addition of Basin Transload following
the expected completion of that transaction in the first quarter. In
terms of new contract business, our growth will be supported by our
recently announced long-term unitary lease with Getty Realty Corp., our
ongoing management services and supply agreement with Getty Realty, and
the Phillips 66 contract. We remain confident that the Partnership is
well-positioned to capitalize on the many opportunities in the dynamic
and rapidly evolving energy market.”
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 Partners is a leader in the logistics of
transporting crude and other products from the mid-continent region of
the U.S. and Canada 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
Edward J.
Faneuil, 781-894-8800
Executive Vice President, General Counsel and
Secretary