BP to sell oil storage, pipelines to Magellan Midstream Partners for $289 million

BP's North American unit BP Pipelines, today said that it would sell its crude oil storage and active petroleum pipelines in North America to petroleum pipeline and storage company Magellan Midstream Partners for $289 million.

Tulsa, Oklahoma-based Magellan transports, stores and distributes refined petroleum products and liquefied petroleum gases in 13 states from Texas through the Midwest to Colorado, North Dakota, Minnesota, Wisconsin and Illinois.

Since going public in 2001, Magellan has acquired $2 billion in strategic assets and its current asset portfolio includes over 80 petroleum products terminals, a 9,500-mile petroleum products pipeline system and a 1,100-mile ammonia pipeline system.

Magellan will acquire 7.8 million barrels of crude oil storage in Cushing, Oklahoma from BP, nearly 40 miles of crude oil pipelines running between Houston and Texas City, Texas that is or can be connected to every major refinery within Houston and Texas City and two 35-mile common carrier pipelines that transport refined petroleum products from the Texas City refining region to the Houston area, including connections to third-party pipelines for delivery to other end-use markets.

It will also acquire an 18-inch pipeline transports gasoline and a 12-inch pipeline transports distillates, such as diesel fuel.

Magellan said that the acquisition is expected to close within 60 days subject to regulatory approval. Upon closing of the transaction, it also will acquire certain crude oil tank working inventory fro BP at fair market value, which is currently estimated to be approximately $50 million.

The sale is art of the British oil giant's plan to sell assets worth $10 billion in order BP to fund the Gulf of Mexico oil spill.

BP is reportedly in talks with Apache Corporation of the US to sell assets worth up to $12 billion including its stake in Alaska's Prudhoe Bay, the largest oil field in North America. (See: BP in talks to sell assets worth $12 billion to Apache Corp)