US-based NuStar Energy has entered into an agreement to acquire a midstream company Navigator Energy Services for about $1.475bn.

Navigator owns and operates crude oil transportation, pipeline gathering and storage assets located in the Midland Basin of West Texas.

It owns nearly 500 miles of crude oil pipelines, which transport about 74,000 barrels per day.

Besides, its assets include a pipeline gathering system with over 200 connected producer tank batteries that have a pumping capacity of more than 400,000 barrels per day.   

Navigator also has nearly 1 million barrels of crude oil storage capacity, with third parties holding 440,000 barrels of it on lease.

NuStar president and CEO Bradley C. Barron said: “We are excited about starting 2017 with a strategic acquisition, and the addition of Navigator’s Permian assets marks NuStar’s entry into one of the most prolific basins in the United States.

“We expect that the purchase price, when coupled with modest future growth capex to build out the system, will result in a high single digit multiple as volumes ramp over time.”

Subject to the receipt of regulatory approvals, the acquisition is expected to be completed in mid- to late-May 2017.

While UBS Investment Bank acted as a financial advisor to NuStar in the transaction, Andrews Kurth Kenyon served as its legal advisor.

First Reserve Energy Infrastructure Fund managing director Mark Saxe said: “We are confident NuStar will have tremendous success integrating Navigator and transitioning it into the next phase of growth.”

Based in San Antonio, NuStar is one of the major liquids terminal and pipeline operators in the US. Currently, it has 8,700 miles of pipeline and 79 terminal and storage facilities that store and distribute crude oil, refined products and specialty liquids.

In October last year, it signed an agreement to purchase crude oil and refined product storage assets in the Port of Corpus Christi from Martin Midstream Partners.

Image: Navigator owns nearly 500 miles of crude oil pipelines. Photo: courtesy of supakitmod/