Energy infrastructure company MPLX LP (NYSE:MPLX) revealed on Monday that its MPLX Pipe Line Holdings LLC subsidiary will acquire the Enbridge Ozark Pipeline. Enbridge Inc (TSE:ENB, Mkt cap 53.15B, P/E 27.76, Div/yield 0.58/4.13, EPS 2.03, Shares 943.19M)
An affiliate of MPLH will purchase the pipeline for approximately $220m under an asset purchase agreement with Enbridge Pipelines (Ozark) LLC.
The Ozark pipeline is a 433-mile, 22-inch crude oil pipeline which extends from Cushing, Oklahoma, to Wood River, Illinois. It has the capacity to transport approximately 230,000 barrels per day (bpd).
A planned expansion of the pipeline will increase its capacity to approximately 345,000 bpd by increasing horsepower at pump stations along the pipeline and adding drag-reducing agents to the crude oil.
An open season recently conducted by Enbridge Pipelines (Ozark) LLC received sufficient long-term volume commitments to plan the expansion, which is expected to be in commercial service by the second quarter of 2018.
Commenting on the acquisition, Don Templin, president of MPLX, said: "We believe MPLX is extremely well-positioned to grow through a combination of organic projects, dropdowns from our sponsor Marathon Petroleum Corporation, and third-party acquisitions. Ozark Pipeline will expand the footprint of our logistics and storage segment by connecting Cushing-sourced volumes to our extensive Midwest pipeline network."
The purchase transaction remains subject to customary closing conditions, including regulatory approvals. It is expected to close in the first quarter of 2017.
MPLX is a master limited partnership which was formed in 2012 by Marathon Petroleum Corporation to own, operate, develop and acquire midstream energy infrastructure assets.
Enbridge Inc (TSE:ENB) is a Calgary-based energy transportation and distribution company. The Company operates in five segments: Liquids Pipelines; Gas Distribution; Gas Pipelines, Processing and Energy Services; Sponsored Investments, and Corporate. Liquids Pipelines segment owns and operates crude oil and other liquid hydrocarbons pipelines and terminals. Gas Distribution consists of the Company's natural gas utility operations. Gas Pipelines, Processing and Energy Services segment consists of investments in natural gas pipelines, gathering and processing facilities and the Company's energy services businesses, along with renewable energy and transmission facilities. Sponsored Investments includes the Company's 33.7% economic interest in Enbridge Energy Partners, L.P. (EEP), and Enbridge's interests in both the Eastern Access and Lakehead System Mainline expansion projects held through Enbridge Energy, Limited Partnership (EELP). The Corporate segment includes an investment in Noverco Inc. More from Reuters »
How Did Your Advisor Choose the Mutual Funds You Own? Read here>>
Download Our Free Special Report – How to Hunt For Value Stocks. Michael Sprung will share with you 5 stocks set for long-term gains here>>
We believe that investment management is about managing risk, not chasing speculative returns. Like to learn more? Please contact us here>>
The opinions expressed here are ours alone. They are provided for information purposes only and are not tailored to the needs of any particular individual or company, are not an endorsement, recommendation, or sponsorship of any entity or security, and do not constitute investment advice. We strongly recommend that you seek advice from a qualified investment advisor before making any investment decision.