Valero Buys Corpus Christi Terminal Services Business For $465 Mln

(RTTNews) - Valero Energy Partners LP (VLP) on Wednesday said the board of its general partner has approved the Partnership's acquisition of the Corpus Christi Terminal Services Business from a subsidiary of Valero Energy Corp (VLO) for $465 million. The transaction is expected to close effective October 1.

The business to be acquired includes two terminals that support Valero Energy Corp's Corpus Christi East and West refineries. The assets consist of 134 tanks with 10.1 million barrels of storage capacity for crude oil, intermediates, and refined petroleum products.

Valero Energy Partners expects to finance the acquisition with $395 million in borrowings under a subordinated loan agreement with Valero Energy Corp, as well as the issuance of additional common units and general partner units to Valero subsidiaries, valued collectively at about $70 million. The newly issued units will be allocated in a proportion allowing the general partner to maintain its 2 percent general partner interest.

Upon closing, Valero Energy Partners plans to enter into a 10-year terminaling agreement with a subsidiary of Valero Energy Corp. The business to be acquired is expected to contribute about $50 million of EBITDA in its first full year of operation.