SemGroup to acquire assets from subsidiary
Feb 1, 2008 12:00 PM
SemGroup Energy Partners L.P. (SGLP) has agreed to acquire 46 United States liquid asphalt cement and residual fuel oil terminaling and storage facilities from SemMaterials L.P. for $378.8 million. SemMaterials is a subsidiary of privately owned SemGroup L.P. The terminaling and storage facilities, located in 23 states, have aggregate storage capacity of approximately 6.6 million barrels and represent substantially all domestic liquid asphalt cement and residual fuel oil terminaling and storage facilities owned by SemMaterials.
In connection with the acquisition of the facilities, SGLP will enter into a terminaling and storage agreement with SemMaterials. The terminaling and storage agreement has a seven-year term expiring Dec. 31, 2014, with additional automatic one-year renewals unless either party terminates the agreement upon one year's notice. Under the agreement, SemMaterials will commit to use terminaling and storage services provided by SGLP at a level that will provide SGLP with minimum fee-based annual revenues of approximately $60 million (exclusive of reimbursement for energy costs). SGLP will not take title to any asphalt in storage or engage in any asphalt marketing activities. Margins are expected to be equal to or exceed those of our current crude oil terminalling and storage business.
SemMaterials will continue to own assets involved in the further processing of liquid asphalt cement and will continue to market asphalt cement and residual fuel oil as well as blend, process, and market its line of specialty road-paving products.
The 2007 Operations Seminar and Trade Show (OPSEM) included crisis response discussions such as the tabletop exercise being conducted with participating attendees. The conference, sponsored by the National Association of Chemical Distributors in September in Nashville TN, drew 409 attendees with almost 70 exhibitors. Sessions included topics such as security plans, Department of Transportation rule updates, and legal issues. Next year, OPSEM is scheduled for September 10-12 at the Caribe Royale Hotel, Orlando FL.
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