Energy Transfer Partners and Sunoco Logistics Partners agreed to sell 36.75% of the Bakken Pipeline Project, which includes the Dakota Access pipeline and the Energy Transfer Crude Oil pipeline, to MarEn Bakken, jointly owned by Enbridge Energy Partners and Marathon Petroleum, for $2 billion in cash. The sale is expected to close in the third quarter of 2016.
Upon closing, a subsidiary of MPC has committed to participate in a forthcoming Dakota Access/Energy Transfer Crude Oil (ETCO) Pipeline open season, and 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.
The project will consist of 1,172 miles of new 30-inch crude oil pipeline from North Dakota to Patoka, IL and more than 700 miles of pipeline converted to crude service from Patoka to Nederland, TX. Bakken Holdings is selling 49% of its 75% interest (36.75%) in Dakota Access and ETCO. The remaining 25% of each of Dakota Access and ETCO is owned by wholly owned subsidiaries of Phillips 66.
The Dakota Access pipeline is expected to deliver in excess of 470,000 bpd 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.
As previously announced, the Bakken Pipeline entities have arranged a $2.5 billion project financing facility expected to provide “substantially all” of the remaining capital necessary to complete the project. As a result, Energy Transfer and Sunoco Logistics plan to use the proceeds from the sale to pay down debt and to help fund current growth projects.
Bakken Holdings Company, a joint venture of Energy Transfer Partners and Sunoco Logistics, owns a 75% membership interest in the Dakota Access and Energy Transfer Crude Oil Company, the entities responsible for developing, owning and operating the Bakken Pipeline Project.