Tulsa’s Magellan Midstream Partners, L.P. and Plains All American Pipeline, L.P. of Houston have sold their 50% interest in BridgeTex Pipeline company in a $1.4 billion joint venture with the Canadian pension plan OMERS.
Once the $1.438 billion deal is finalized, OMERS will end up with a 30% interest from Plains and a 20% interest from Magellan. In other words, OMERS, the benefit pension plan for municipal employees in Ontario, Canada will own a 50% interest. Plains will keep 20% interest and Magellan will own 30% and continue operations of the BridgeTex pipeline.
The deal is expected to be closed in the fourth quarter of the year.
BridgeTex owns the BridgeTex pipeline, a 400,000 barrel-per-day crude oil pipeline system that extends from Colorado City in West Texas to Houston, with further connectivity for BridgeTex shippers to the Texas City area. At Colorado City, BridgeTex pipeline sources crude oil from Plains’ Basin and Sunrise pipeline systems. BridgeTex delivers volumes into Magellan’s East Houston terminal and Magellan’s Houston crude oil distribution system with connection to refineries in Houston and Texas City as well as to marine export capabilities via Magellan’s Seabrook Logistics joint venture terminal. BridgeTex pipeline capacity is being expanded to 440,000 barrels per day by early 2019.
“We’re excited to enter into this joint venture with Plains All American and Magellan, consistent with our strategy to build long-term investment partnerships with leading corporations,” said Michael Ryder, Senior Managing Director, Americas for OMERS Infrastructure.
“OMERS investment adds another long-term oriented owner to our joint venture,” said Willie Chiang, Plains’ chief operating officer and Michael Mears, Magellan’s chief executive officer. “Furthermore, this transaction provides both Plains and Magellan proceeds to fund additional growth projects while allowing us to maintain a meaningful position in BridgeTex, which is strongly aligned with investments owned by both Plains and Magellan along the crude oil value chain.”