US-based Calumet Specialty Products Partners is to acquire seven crude oil loading facilities and related assets from Murphy Oil USA in North Dakota and Montana.
The facilities, which are connected at junction points along Enbridge’s North Dakota pipeline system, will allow the company to source increased volumes of crude oil from local producers.
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Calumet Specialty Products will also assume line space on the Enbridge system, which was previously announced by Murphy.
The acquisition allows the company to transport crude oil directly from the point of lease into the firm’s newly acquired crude loading facilities and then into the Enbridge system, where it will be supplied to company’s refineries and third party customers.
Both companies have agreed to terminate an existing crude oil supply agreement, in which Murphy supplies Calumet’s Wisconsin refinery with about 10,000 barrels a day of crude oil.
Calumet Specialty Products Partners president and COO Jennifer Straumins said that the latest deal allows the company to purchase increased volumes of price-advantaged feedstock directly from producers which operate in major shale plays close to the firm’s refineries.
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By GlobalData"We believe the execution of a vertical integration strategy; one that puts us closer to our crude oil suppliers and customers; represents a long-term competitive advantage for the Partnership," Straumins added.
Calumet processes crude oil into customised lubricating oils and also produces fuel products such as gasoline, diesel and jet fuel.
The company has eleven facilities, located in northwest Louisiana, northwest Wisconsin, northern Montana, western Pennsylvania, Texas and eastern Missouri.
