Valero Energy Partners (VLP) has agreed to acquire the McKee Terminal Services Business from a subsidiary of Valero Energy for $240m.
The assets include a terminal business that supports Valero’s McKee refinery.
The fee-based master limited partnership, Valero Energy Partners expects the new business to contribute earnings before interest, taxes, depreciation, and amortization (EBITDA) of approximately $28m in its first full year of operation.
Upon completion of the deal, which is scheduled by 1 April 2016, Valero Energy plans to sign a 10-year terminaling agreement with a subsidiary of Valero.
Valero Energy Partners general partner CEO Joe Gorder said: "We’re pleased to announce this next step in our growth strategy, which is complementary to the existing VLP McKee Logistics System.
"We remain well-positioned to deliver our targeted year-over-year distribution growth of 25% for 2016 and 2017."
Under the terms of the deal, Valero will acquire assets including 75 tanks with 4.4 million barrels of storage capacity for crude oil, intermediates, and refined petroleum products.
In 2015, Valero Energy Partners’ board of directors of general partner had approved its plan to acquire Corpus Christi terminal services business from a unit of Valero Energy for $465m.
The acquisition is a part of Valero’s plan to advance capital investments to boost its North American crude oil processing capability.
The partnership owns crude oil and refined petroleum products pipeline and terminal systems which are integral to the operations of eight of Valero’s refineries in the Gulf Coast and Mid-Continent regions, US.
Image: Valero plan to boost its North American crude oil processing capability. Photo: courtesy of supakitmod/ FreeDigitalPhotos.net.