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HOUSTON — BP plc and Kinder Morgan Inc. will create a new jointly owned company to operate fuel storage terminals throughout the United States.
Under the agreement, BP will sell 15 U.S. terminals to Kinder Morgan, which will operate 14 of them via a new limited liability company. Kinder Morgan will solely own the remaining terminal. In turn, BP will receive a 25-percent ownership stake in the newly formed company.
The transaction, subject to regulatory approvals, is expected to be finalized by early 2016.
“We believe this deal is a win for both companies,” said Doug Sparkman, BP’s chief operating officer of Fuels, North America. “It enables BP to maintain strategic access to terminals nationwide, while reducing operating costs and complexity. It also brings in a world-class company to manage the terminals, ensuring that our customers continue receiving excellent service.”
Earlier this year, BP’s U.S. Pipelines and Logistics business decided to centralize operations and sell select fuel storage terminals in the U.S. After an extensive internal review, the business concluded that forming a limited liability company with Kinder Morgan was an attractive way to pursue strategic growth, while also streamlining the business.
The new limited liability company will oversee fuel terminals in the Midwest, Northeast, Southeast and on the West Coast.
Following the transaction, BP will still continue to operate fuels terminals in Whiting, Ind.; Dubuque, Iowa; Portland, Ore.; Seattle, Wash.; and Port Newark, N.J.
London-based BP plc is one of the largest producers of oil and gas.
Houston-based Kinder Morgan Energy Inc. is North America’s biggest energy infrastructure firm.