Texas oil refiner and gas station operation Sunoco LP on Thursday (Nov. 15) announced a multimillion dollar deal to purchase key U.S. refined products terminals, including a 550 million barrel per day crude oil storage facility just off the Arkansas River in North Little Rock.
The definitive agreement allows Dallas-based Sunoco to purchase the refined products terminal businesses of its smaller Texas rival American Midstream Partners LP for $125 million, plus working capital. The deal includes AMP’s crude oil terminal in North Little Rock and another similar facility in Caddo Mills, Texas, which together include 21 storage tanks, nearly 1.3 million barrels of storage capacity and combined throughout capacity of 77,500 barrels per day.
Sunoco, a master limited partnership that distributes more than 10 fuel brands to nearly 10,000 convenience stores, independent dealers, commercial customers and distributors in more than 30 states, said the acquisition builds on the company’s strategy of adding fee-based refined product terminals into its overall U.S. portfolio.
The deal is subject to customary closing conditions, including a Hart-Scott-Rodino antitrust review by the Federal Trade Commission and the U.S. Justice Department. Sunoco said it hopes to close the deal in the fourth quarter of 2018, adding that it would be accretive to the company’s distributable cash flow in the first year.
Last week, Sunoco reported third quarter profits of $112 million on revenue of $4.8 billion. The company shipped and sold more than 2 billion gallons of gas in the third quarter, marketed under top U.S. brands such as Exxon-Mobil, Shell, Valero, Chevron, Phillips 66, Texaco and Diamond Shamrock. On the completion of the deal, Sunoco will have terminal facilities near key urban markets in Central Arkansas and East Texas.
Before its deal with Sunoco, American Midstream Partners owned 1,100 miles of onshore and offshore natural gas, crude oil and natural gas pipelines, 17 gathering systems and seven natural gas processing plants. The company will keep its remaining terminal in Cushing, Okla., the world’s largest crude oil storage complex.