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Reuters: Buckeye to buy Shell US Midwest assets for $530 million

 

Thu Jul 1, 2004 09:26 AM ET

 

NEW YORK, July 1 (Reuters) - Buckeye Partners L.P. a refined oil-products pipeline company, on Thursday said it agreed to buy a package of pipelines and terminals in the U.S. midcontinent from Royal Dutch/Shell Group for $530 million in cash.

 

Buckeye, which is based in Emmaus, Pennsylvania, said it will gain five major pipelines that distribute gasoline and other oil products from a St. Louis-area hub, where Shell once owned a refinery.

 

Anglo-Dutch Shell, the world's third-largest oil company, is selling its 309-mile North Line System, the 355-mile East Line System, a 191-mile Two Rivers Pipeline and two shorter lines, the St Louis 6-Inch Pipeline and the ATF Pipeline.

 

Shell, which previously announced plans to divest some U.S. downstream assets, also is selling 25 product terminals in Illinois, Indiana, Ohio, Michigan and Missouri with a combined storage capacity of 10.5 million barrels.

 

Buckeye expects the purchase to boost cash available for annual distributions by 15 cents per unit. And because the assets are located near its existing facilities, Buckeye says it expects to realize significant savings.

 

The transaction will be funded by credit facilities and bank loans, Buckeye said, and is expected to be completed within 90 days.

 

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=5565350


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