Sunoco Logistics Partners has entered into an agreement with Switzerland-based energy trading firm Vitol to acquire Permian Basin crude oil system for $760m plus working capital.
The acquisition includes access to an approximately two million barrel crude oil terminal in Midland, Texas, a crude oil gathering and mainline pipeline system in the Midland Basin.
The deal also includes purchase of 50% stake in SunVit pipeline, which connects the Midland terminal to the Sunoco’s Permian express 2 pipeline.
The pipeline is considered to be a key takeaway to bring Permian crude oil to multiple markets.
Sunoco president and chief executive officer said: “The addition of the Vitol system is an excellent synergistic fit to our growing crude platform in the Permian Basin. The Permian Basin is the most prolific of all of the US shale areas with strong growth expectations.
“The Vitol pipeline assets are located in what we believe are the three best counties in the Midland Basin. Adding a 2 million barrel terminal in Midland is very complimentary to our Permian strategy.”
The transaction is expected to be completed in the fourth quarter 2016, subject to certain closing conditions and regulatory approval.
Vitol Americas head Mike Loya said: “Sunoco Logistics has a strong strategic position in West Texas and we are confident that they will provide excellent service to customers of the Vitol system.”
Headquartered in Newtown Square, US, Sunoco owns and operates a logistics business, consisting of a geographically diverse portfolio of complementary pipeline, terminalling, and acquisition and marketing assets.
Vitol, an energy and commodities company, trades over 6mbpd of crude oil and products and has a fleet of 200 ships transporting its cargoes.
Earlier this month, A consortium comprising Burgh Group and Vitol agreed to purchase Optimum Coal Terminal (OCT) from the Tegeta Group for an undisclosed sum.