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Global Partners (GLP) To Buy West Coast Crude Oil And Ethanol Facility Near Portland, Oregon

 January 28, 2013 10:37 AM

(By Balaseshan) Global Partners LP (NYSE: GLP), which engages in distribution of refined petroleum products and renewable fuels, has agreed to buy 100% of the membership interests in a West Coast crude oil and ethanol facility near Portland, Oregon from Cascade Kelly Holdings LLC for about $95 million.

The company said the purchase will be accretive to unit holders in its first full year of operation.

The deal includes a rail transloading facility serviced by the BNSF Railway, 200,000 barrels of storage capacity, a deepwater marine terminal, a 1,200-foot dock and the largest ethanol plant on the West Coast.

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The site, which is situated along the Columbia River in Clatskanie, Oregon, is located on land leased under a long-term agreement from the Port of St. Helens. In November 2012, the facility began transloading unit trains of crude oil.

In addition to this transaction, which is expected to be completed by the end of the current quarter, Global expects to close its pending acquisition of a 60% interest in Basin Transload LLC for about $80 million during the period.

To finance these transactions, Global has arranged a $115 million increase in its bank credit facility and has secured a senior unsecured five-year note of up to $70 million from funds managed by GSO Capital Partners LP, the credit arm of The Blackstone Group.

On January 22, the company said the board of directors of its general partner, Global GP LLC, has declared a quarterly cash distribution of $0.57 per unit. The distribution, which represents a 7% increase over last quarter's $0.5325 per unit, will be paid February 14 to unitholders of record as of the close of business February 5.

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On January 8, Global Partners has signed a five-year contract with Phillips 66 under which Global will use its rail transloading, logistics and transportation system to deliver crude oil from the Bakken region of North Dakota to Phillips 66's Bayway, NJ refinery.

The terms of the contract include a take-or-pay commitment from Phillips 66 to receive about 91 million barrels of crude oil over the contract term, which equates to about 50,000 barrels per day. The Bakken crude oil is expected to be transloaded at Basin Transload LLC's North Dakota rail facilities. Global has agreed to buy a 60% interest in Basin Transload.

GLP is trading up 2.95% at $31.72 on Monday. The stock has been trading between $20.01 and $32.18 for the past 52 weeks.



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