Plains All American Pipeline LP, Houston, (NYSE: PAA) plans to buy entities that hold crude oil gathering and transportation assets that primarily service Bakken area producers Nexen Holdings U.S.A. Inc., a division of Nexen Inc., Calgary, (NYSE: NXY) for $210 million.
The deal includes approximately $170 million for the business and physical assets and approximately $40 million for approximately 400,000 barrels of inventory and other working capital adjustments.
The assets are primarily in northwestern North Dakota and northeastern Montana and include a lease-gathering business that currently handles approximately 55,000 barrels per day; the Robinson Lake pipeline, a FERC-regulated 20-mile, 8-inch pipeline that currently handles approximately 18,000 barrels per day; eight truck terminals and various other contractual rights.
Plains All American president and chief operating officer Harry Pefanis says, “This acquisition is consistent with our strategy to expand and strengthen our presence in long-lived, growing producing regions and is complementary to our existing Bakken area assets and activities, including our recently proposed Bakken North Pipeline project. We look forward to integrating this suite of well-positioned assets, servicing an expanded customer base and continuing to grow our Bakken business.”
The deal is expected to close by year-end 2010.
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