01-07-2016
Tesoro Corporation to sell Alaska storage and terminalling Assets to Tesoro Logistics
Tesoro Corporation and Tesoro Logistics LP today announced that subsidiaries of Tesoro have executed an agreement for the sale of storage and terminalling assets in Alaska to TLLP for a total consideration of $444M. The Alaska Storage and Terminalling Assets include:
* Storage: Crude oil, feedstock and refined product storage tanks with combined capacity of approximately 3.5 million barrels in Kenai, Alaska, with connectivity with TLLP's Tesoro Alaska Pipeline and Nikiski Products Terminal and Tesoro's Kenai Refinery
* Terminals: Refined product terminals in Anchorage and Fairbanks with combined storage capacity of over 600,000 barrels, expected throughput of 10,400 barrels per day and rail loading of 7,000 barrels per day
The transaction is expected to close in two stages. The storage portion of the acquisition closed today. The acquisition of the Anchorage and Fairbanks terminals is expected to close later in the third quarter once the Consent Decree with the State of Alaska becomes effective. This agreement is related to Tesoro's acquisition of the Flint Hills Resources assets, which closed on June 20, 2016.
The acquisition price of $444 million includes cash proceeds to Tesoro of $400 million and the issuance of common and general partner units to Tesoro, valued at approximately $44 million.
In consideration for the first closing (storage assets), Tesoro received $239 million of cash and $27 million of common and general partner units of TLLP. The cash consideration was borrowed on TLLP's revolving credit facility. The equity consideration was based on the average daily closing price of TLLP's common units for the 10 trading days prior to closing, or $48.06 per unit, with 390,282 units in the form of common units and 162,375 units in the form of general partner units.
In consideration for the second closing (terminal assets), Tesoro will receive $160 million of cash and $18 million of common and general partner units of TLLP. The cash consideration is expected to be borrowed on TLLP's revolving credit facility and the equity consideration will be based on the average daily closing price of TLLP's common units for the 10 trading days prior to closing.
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