Sunoco closes Mobil Pipe Line acquisition
Sep 1, 2005 12:00 PM
Sunoco Logistics Partners LP has completed the previously announced acquisition of a crude oil pipeline system and storage facilities, located in Texas, from Mobil Pipe Line Co. The purchase was financed with cash and amounts drawn under the partnership's credit facility. The partnership expects to issue more equity in the future to repay a substantial portion of the additional indebtedness, incurred under the credit facility, consistent with conservative capital structure.
The system consists primarily of a 187-mile, 16-inch pipeline, with an operating capacity of 125 mbpd, originating at the Corsicana TX terminal and terminating at Wichita Falls TX. The Corsicana terminal consists of 2.9 million shell barrels of crude oil storage, while the Ringgold TX terminal consists of 0.5 million shell barrels of crude oil capacity.
As a result of the closing of this acquisition, the board of directors of the general partner of the partnership decided to advance the date for action on the quarterly distribution for the third quarter ending Sept 30, 2005, and declared a distribution of $0.65 payable Nov 14, 2005, to unitholders of record Nov 7, 2005. This is a $0.0125 increase in the quarterly distribution ($0.05 annualized). The increased cash distribution will equal an annual rate of $2.60 per common unit, and represents a 2.0% increase over the annual cash distribution of $2.55 declared for the quarter ended June 30, 2005.
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