Genesis Energy Acquires Interest In Gulf Pipelines

July 2015, Vol.242, No. 7

Genesis Energy, L.P. has entered into definitive agreements to acquire from Marathon Oil Company interests in several Gulf of Mexico crude oil pipeline systems, including its 28% interest in Poseidon Oil Pipeline Company, L.L.C., its 29% interest in Odyssey Pipeline L.L.C., and its 23% interest in the Eugene Island Pipeline System.

The purchase consideration for all of the assets, subject to usual and customary adjustments for debt, working capital, etc., is $205.76 million, which includes an estimated $29 million valuation of crude oil line fill at current market prices owned by the interests to be acquired.

The Poseidon system is comprised of a 367-mile network of crude oil pipelines varying in diameter from 16 to 24 inches, with capacity to deliver 400,000 bopd from developments in the central and western offshore Gulf of Mexico to other pipelines and terminals onshore and offshore Louisiana. Affiliates of Enterprise Products Partners L.P. and Shell Oil Company each own a 36% interest in Poseidon. An affiliate of Enterprise will continue in its role as operator of Poseidon.

The Odyssey system is comprised of a 120-mile network of crude oil pipelines, varying in diameter from 12 to 20 inches, with capacity to deliver up to 300,000 bopd from developments in the eastern Gulf of Mexico to other pipelines and terminals onshore Louisiana. An affiliate of Shell owns the remaining 71% interest in Odyssey. An affiliate of Shell will continue to serve as the operator.

The Eugene Island Pipeline System is comprised of a 183-mile network of crude oil pipelines, the main pipeline of which is 20 inches in diameter, with capacity to deliver 200,000 bopd from developments in the central Gulf of Mexico to other pipelines and terminals onshore Louisiana. Other owners in Eugene Island include affiliates of ExxonMobil, Chevron-Texaco, ConocoPhillips and Shell Oil Company. An affiliate of Shell will continue to serve as the operator.