Plains All American Pipeline (PAA) has agreed to acquire Occidental Petroleum’s 50% stake in BridgeTex Pipeline Company (BridgeTex) for $1.075bn.
BridgeTex owns the 300,000 barrel-per-day crude oil pipeline system that extends from Colorado City in West Texas to Texas City.
The BridgeTex pipeline is linked to PAA’s Basin Pipeline System and to the company’s Sunrise Pipeline at Colorado City.
The Sunrise pipeline, which is presently under construction, starts in Midland with an initial capacity of 250,000 barrels per day.
The pipeline is anticipated to start services in December 2014.
An affiliate of Occidental is the anchor shipper on the BridgeTex pipeline and about 80% of its capacity is committed to long term contracts.
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By GlobalDataMagellan Midstream Partners owns the remaining 50% stake in BridgeTex and the company is also acquiring the southern leg of the pipeline system running from Houston to Texas City for $75m.
PAA chairman and CEO Greg Armstrong said: "BridgeTex represents a very attractive and strategic addition to our existing West Texas pipelines.
"Given recent and projected increases in Permian Basin production, we believe that BridgeTex will play an important role in providing needed takeaway capacity out of the Permian Basin, will provide additional flexibility for our customers and will expand PAA’s market access to the Gulf Coast."
PAA owns and operates midstream energy infrastructure and offers logistics services for crude oil, natural gas liquids (NGL), natural gas and refined products.
The company owns a network of pipeline transportation, terminalling, storage and gathering assets in important crude oil and NGL producing basins and transportation corridors and at major market hubs in the US and Canada.
PAA, on average, handles more than 3.9 million barrels per day of crude oil and NGL on its pipelines.
