Valero Energy Partners Acquires Stake in the Red River Pipeline
Valero Partners Wynnewood LLC, an indirect wholly owned subsidiary of Valero Energy Partners LP, has acquired a 40 percent undivided interest in the Hewitt segment of Plains All American Pipeline, L.P.’s Red River pipeline for approximately $70 million.
The Hewitt segment is a newly constructed 138-mile, 16-inch crude oil pipeline with 150,000 barrels per day of capacity. The purchase also includes a 40 percent undivided interest in two 150,000 shell barrel capacity tanks located at Hewitt Station. The Hewitt segment originates at Plains Marketing L.P.’s Cushing, Oklahoma terminal and ends at Hewitt Station in Hewitt, Oklahoma. The pipeline began supplying crude oil to Valero’s refinery in Ardmore, Oklahoma in January 2017.
Concurrent with the acquisition, a 10-year throughput agreement with a subsidiary of Valero Energy Corporation was reached. The agreement includes a minimum volume commitment, a five-year renewal term, and no direct commodity price exposure.
As part of the agreement, Valero Partners Wynnewood LLC and Valero Energy Partners LP retain a right to participate in any future expansions of the Hewitt segment of the Red River pipeline. Plains will serve as the operator of the pipeline.
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