(By Balachander) Plains All American Pipeline L.P. (NYSE: PAA) has agreed to acquire crude oil rail terminals from U.S. Development Group (USD) for roughly $500 million.
Under the terms of the agreement, the master limited partnership will purchase four operating crude oil rail terminals, one terminal under development and various contractual arrangements from USD.
Three crude oil rail loading terminals are located in the Eagle Ford, Bakken and Niobrara producing regions with an aggregate daily loading capacity of around 85,000 barrels per day. The assets to be acquired also include a rail unloading terminal at St. James, Louisiana with capacity of roughly 140,000 barrels per day.
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"These assets represent a very attractive addition to our existing North American rail activities, substantially improving our scale, scope, and flexibility," commented CEO Greg Armstrong.
PAA is engaged in the transportation, storage, terminalling and marketing of crude oil and refined products, as well as in the processing, transportation, fractionation, storage and marketing of natural gas liquids. It owns a network of roughly 18,000 miles of liquids pipelines, 120 million barrels of liquids storage capacity and handles more than 3 million barrels of physical product on a daily basis.
The transaction is expected to be completed before the end of 2012.
The stock, which has been trading in the 52-week range of $33.24 to $47.14, closed at $45.52 on Tuesday.