Jul. 30--Bankrupt Flying J has sold its struggling pipeline subsidiary, a step that produced cash to pay bills but also amputated a big piece of the $18 billion truck stop chain and petroleum producer.

Magellan Midstream Partners on Wednesday bought the assets of Longhorn Partners Pipeline for $250 million, plus the value of petroleum products in Longhorn's 700-mile Texas pipeline as the sale closed, roughly $100 million more.

Tulsa, Okla.-based Magellan was the sole bidder for Longhorn, which filed for bankruptcy alongside Flying J and another subsidiary, Big West, last December. The companies blamed a sudden, speedy drop in oil prices and frozen credit markets for their troubles.

"We own over 8,500 miles of pipeline, primarily in the Midwest," Magellan spokesman Bruce Heine said. "We have long-term growth plans in Texas, and the acquisition of the pipeline in Texas complements those plans."

Flying J Chairwoman Crystal Call Maggelet was unavailable for comment.

Ogden-based Flying J bought Longhorn just three years ago, in August 2006, adding the company to its subsidiaries, which include more than 270 travel centers in the U.S. and Canada, ownership interests in over 200 oil and gas wells, and refineries in California and North Salt Lake.

Although privately held Flying J has never revealed Longhorn's financial contribution to its empire, the corporation's annual revenue jumped 26 percent in the year after the acquisition, according

to Forbes magazine.

Now, because of the bankruptcy, Flying J seems to be unraveling. Its Bakersfield, Calif., refinery, purchased in 2005, was put up for sale early this year. Two weeks ago, Flying J and arch-rival Pilot Travel Centers announced a preliminary agreement to combine their travel centers in a deal that provides a framework for Flying J's core travel plaza business to emerge from bankruptcy protection.

The companies say Pilot will provide $100 million in financing to satisfy Flying J's creditors, subject to court approval. Although details are to be worked out, the combined company is expected to be headquartered at Pilot's offices in Knoxville, Tenn.

Flying J's travel centers will be operated under the Flying J brand if the merger is completed, the company has said. Pilot's 300 centers will continue under that name.

No deal to sell the California refinery has been struck, but Flying J has said efforts to find a buyer are "advancing."

Other business units, including Flying J Oil and Gas, Haycock Petroleum and Transportation Alliance Bank, face an uncertain future.

"Flying J is in the process of pursuing or evaluating alternatives for each of these other businesses," the company said in a statement on July 14.

pbeebe@sltrib.com

Flying J

Headquarters -- Ogden

Founded -- 1930

Business -- Privately held travel center operator, oil and natural gas producer, refiner, distributor. Flying J and two subsidiaries filed for bankruptcy protection in December.

Revenue -- $18 billion, estimated 2008

Employees -- 14,700, including 2,200 in Utah

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