Western Refining Inc. WNR recently closed the previously announced deal to drop down certain terminalling, storage and logistics assets from St. Paul Park Refining Co. LLC to its master limited partnership (MLP) unit, Western Refining Logistics, LP WNRL.
St. Paul Park Refining, which is a wholly owned subsidiary of Northern Tier Energy LLC and an indirect wholly owned subsidiary of Western Refining, will be paid $195 million in cash. Also, the transaction will comprise of $15 million worth of Western Refining Logistics units.
The assets under sale include refined product and crude oil storage tanks with a capacity of about four million barrels, a light products terminal, a heavy products loading rack and other related assets. The divestment also includes two crude oil pipeline segments and one pipeline segment which is idle at present. Each of these segments extends from St. Paul Park’s refinery to its tank farm in Cottage Grove, MN.
Apart from the closure of this deal, St. Paul Park and Western Refining Logistics have signed a 10-year terminalling, transportation and storage services agreement. Under the terms of the deal, a subsidiary of Western Refining Logistics will be providing product storage services, product throughput services, and product additive and blending services at St. Paul Park’s refinery in Minnesota. This agreement will also include certain minimum volume commitments by the latter.
WESTERN REFING Price
El Paso, TX-headquartered Western Refining is an independent refiner and marketer of refined petroleum products in the Southwestern and Mid-Atlantic regions of the U.S.
Western Refining Logistics is a fee-based MLP that owns logistics assets associated with terminalling, transportation and storage of crude oil and refined products. Western Refining owns general partner as well as 65% of the limited partnership interest in Western Refining Logistics.
Both Western Refining and Western Refining Logistics carry a Zacks Rank #3 (Hold), implying that they are expected to perform in line with the broader U.S. market in the next one to three months.
Some better-ranked players from the broader energy sector are NGL Energy Partners LP NGL and Matador Resources Company MTDR. Both these stocks sport a Zacks Rank #1 (Strong Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.
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