Enbridge and Marathon Petroleum Acquire Stake in Bakken Pipeline Project

Published: August 4, 2016 |

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Energy Transfer Partners, L.P. and Sunoco Logistics Partners L.P. have signed an agreement to sell 36.75 percent of the Bakken Pipeline Project, which includes the Dakota Access pipeline and the Energy Transfer Crude Oil pipeline, to MarEn Bakken Company LLC, an entity jointly owned by Enbridge Energy Partners, L.P. and Marathon Petroleum Corporation (MPC), for $2 billion in cash.

The sale is expected to close in the third quarter of 2016, subject to certain closing conditions. Energy Transfer Partners and Sunoco Logistics will receive $1.2 billion and $800 million in cash at closing, respectively. The Bakken Pipeline entities have arranged a $2.5 billion project financing facility that is expected to provide substantially all of the remaining capital necessary to complete the project. As a result, Energy Transfer Partners and Sunoco Logistics plan to use the proceeds from the sale of the equity interest in the project to MarEn to pay down debt and to help fund their current growth projects. In addition, following the closing of the transaction, all owners of the Bakken Pipeline will participate on a pro rata basis for any incremental capital needs to complete the project.

Upon closing, a subsidiary of MPC has committed to participate in a forthcoming Dakota Access/Energy Transfer Crude Oil Pipeline open season, and subject to the terms and conditions of the open season, make a long-term volume commitment on the Bakken Pipeline Project. A new open season is expected to be launched in the third quarter of 2016.

Bakken Holdings Company, LLC, a joint venture between Energy Transfer Partners and Sunoco Logistics, owns a 75-percent membership interest in each of Dakota Access, LLC and Energy Transfer Crude Oil Company, LLC (ETCO), the entities responsible for developing, owning and operating the Bakken Pipeline Project. The project will consist of approximately 1,172 miles of new 30-inch diameter crude oil pipeline from North Dakota to Patoka, Illinois, and more than 700 miles of pipeline converted to crude service from Patoka to Nederland, Texas. Bakken Holdings is selling 49-percent of its 75-percent interest (36.75 percent) in Dakota Access and ETCO. The remaining 25-percent of each of Dakota Access and ETCO is owned by wholly-owned subsidiaries of Phillips 66.

Upon closing, ownership in the Bakken Pipeline Project will be as follows: Energy Transfer Partners and Sunoco Logistics – 38.25 percent, MarEn 36.75 percent and PSX – 25 percent. Energy Transfer Partners continues to oversee construction of the pipeline, which is expected to be ready for service at the end of this year. Once in operation, Sunoco Logisitics will be the operator.

The Dakota Access pipeline is currently expected to deliver in excess of 470,000 barrels per day of crude oil from the Bakken/Three Forks production area in North Dakota to market centers in the Midwest. The Dakota Access pipeline will provide shippers with access to Midwestern refineries, potential unit-train rail loading facilities to facilitate deliveries to East Coast refineries, and the Gulf Coast market. The Energy Transfer Crude Oil pipeline, through an interconnection in Patoka, Illinois with Dakota Access, will provide crude oil transportation service from the Midwest to the Sunoco Logistics Partners and Phillips 66 storage terminals located in Nederland, Texas.

About Energy Transfer Partners
Energy Transfer Partners, L.P. is a master limited partnership that owns and operates one of the largest and most diversified portfolios of energy assets in the United States. ETP’s subsidiaries include Panhandle Eastern Pipe Line Company, LP (the successor of Southern Union Company) and Lone Star NGL LLC, which owns and operates natural gas liquids storage, fractionation and transportation assets. In total, ETP currently owns and operates more than 62,500 miles of natural gas and natural gas liquids pipelines. ETP also owns the general partner, 100 percent of the incentive distribution rights, and approximately 67.1 million common units in Sunoco Logistics Partners L.P., which operates a geographically diverse portfolio of crude oil and refined products pipelines, terminalling and crude oil acquisition and marketing assets. ETP’s general partner is owned by Energy Transfer Equity, L.P.

To stop by Energy Transfer Partners’ website, CLICK HERE

About Sunoco Logistics
Sunoco Logistics Partners L.P. is a master limited partnership that owns and operates a logistics business consisting of a geographically diverse portfolio of complementary crude oil, refined products, and natural gas liquids pipeline, terminalling and acquisition and marketing assets which are used to facilitate the purchase and sale of crude oil, refined products, and natural gas liquids. Sunoco Logistics’ general partner is a consolidated subsidiary of Energy Transfer Partners, L.P.

To stop by Sunoco Logistics’ website, CLICK HERE

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