US-based PBF Logistics (PBFX) has signed a letter of intent (LoI) to acquire a 50% stake in Torrance Valley Pipeline (TVP) from PBF Energy affiliate for approximately $175m.
The acquisition is planned to be financed through a combination of cash-on-hand, borrowings from PBFX’s senior secured revolving credit facility.
PBFX and PBF Energy CEO Thomas Nimbley said: "The potential acquisition of a 50% interest in the Torrance Valley Pipeline Company reflects PBFX's ongoing commitment to deliver sustained growth to our unit holders and diversify our earnings base with high-quality assets.
"PBF shareholders would also be expected to benefit from this transaction as PBF Energy would receive additional cash, representing approximately one-third of the PBF Energy's acquisition price for the Torrance refinery and its logistics assets, to strengthen its balance sheet in anticipation of future opportunities."
TVPC owns the 189-mile San Joaquin Valley Pipeline system, which consists of the M55, M1 and M70 primary crude gathering and transportation pipelines, and has a throughput capacity of about 110,000 barrels per day.
The pipelines supply PBF Energy's Torrance refinery.
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By GlobalDataTVP’s assets also include 11 pipeline stations with around one million barrels of combined storage capacity.
The acquisition is subject to customary closing conditions and is expected to close in the third quarter of this year.
Upon closing of the deal, PBFX will sign ten-year transportation services agreements with subsidiaries of PBF Energy containing minimum volume throughput commitments of approximately 50,000 barrels per day for the M1 and M55 pipelines.
