Magellan Midstream Partners, L.P. has placed the initial bid to acquire the assets of Longhorn Partners Pipeline L.P. Completion of the acquisition is subject to an auction process, bankruptcy court approval and customary regulatory approval.
The 700-mile common carrier pipeline system transports refined petroleum products from Houston to El Paso, TX. A terminal in El Paso, comprised of a 5-bay truck loading rack and over 900,000 bbls of storage, is included in the purchase. This terminal serves local petroleum products demand and distributes product to connecting third-party pipelines for ultimate delivery to markets in Arizona, New Mexico and in the future to Northern Mexico.
Magellan currently serves as the operator of the pipeline system.
The purchase price for the pipeline system is $250 million plus the fair market value of line fill, which is currently estimated at approximately $90 million. Management intends to finance the acquisition with debt.