Marathon Petroleum Corp. drops down terminal, pipeline and storage assets to MPLX for $2 billion
FINDLAY, Ohio, March 1, 2017 - Marathon Petroleum Corp. (NYSE: MPC) and MPLX LP (NYSE: MPLX) today closed a transaction in which MPC contributed certain
terminal, pipeline and storage assets to MPLX for total consideration of $2.015 billion.
The assets include 62 light-product terminals with approximately 24 million barrels of storage capacity; 11 pipeline systems consisting of 604 miles of pipeline; 73 tanks with approximately 7.8
million barrels of storage capacity; a crude oil truck unloading facility at MPC's refinery in Canton, Ohio; and eight natural gas liquids storage caverns in Woodhaven, Michigan, with approximately
1.8 million barrels of capacity.
"This drop-down of additional high-quality logistics assets to MPLX represents the first of several drops expected to occur in 2017, and is an important part of our plan to unlock the value of our
midstream business for investors," said MPC Chairman, President and CEO Gary R. Heminger. "The stable, fee-based earnings from these assets will add scale and diversification to MPLX's portfolio of
high-quality midstream assets."
MPC is contributing these assets in exchange for the issuance of $504 million in MPLX equity and $1.511 billion in cash. The equity to be issued in the transaction consists of MPLX common
units and general partner units to maintain MPC's 2 percent general partner interest in MPLX. The units will be valued based on the 10-day volume weighted average price of MPLX common units prior
to the closing.
The total consideration equates to an 8 times multiple of the $250 million of earnings before interest, taxes, depreciation and amortization these businesses are expected to generate in the next 12
months. The transaction is expected to be immediately accretive to MPLX's 2017 distributable cash flow.
The terms of the acquisition were approved by the MPLX Board of Directors following the approval of the transaction by its independent conflicts committee. The conflicts committee was advised by
Jefferies LLC as to financial matters and Akin Gump Strauss Hauer & Feld LLP as to legal matters.
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About Marathon Petroleum Corporation
MPC is the nation's third-largest refiner, with a crude oil refining capacity of approximately 1.8 million barrels per
calendar day in its seven-refinery system. Marathon brand gasoline is sold through approximately 5,500 independently owned retail outlets across 19 states. In addition, Speedway LLC, an MPC
subsidiary, owns and operates the nation's second-largest convenience store chain, with approximately 2,730 convenience stores in 21 states. MPC owns, leases or has ownership interests in
approximately 8,400 miles of crude and light product pipelines and more than 5,600 miles of gas gathering and natural gas liquids (NGL) pipelines. MPC also has ownership interests in 54 gas
processing plants, 14 NGL fractionation facilities and two condensate stabilization facilities. Through subsidiaries, MPC owns the general partner of MPLX LP, a midstream master limited
partnership. MPC's fully integrated system provides operational flexibility to move crude oil, NGLs, feedstocks and petroleum-related products efficiently through the company's distribution network
and midstream service businesses in the Midwest, Northeast, East Coast, Southeast and Gulf Coast regions.