Plains and Valero in Deal on Northern California Terminals

2017-03-09 11:06:29 EST
Plains and Valero in Deal on Northern California Terminals

Neither Plains nor Valero chose to mention a pending transaction in first-
quarter earnings announcements, but OPIS has confirmed that Valero's MLP
affiliate will indeed take title to two key California terminals, in Richmond
and Martinez.

OPIS first exclusively reported on the deal in late October, and indeed Plains
has acknowledged that it has received very substantial offers on the
properties. It is believed that a sale has yet to be announced while routine
regulatory clearances are rendered.

The Martinez terminal has a total capacity of just over 4.8 million bbl and
handles refined products and crude via marine and pipeline connections. Some 31
tanks with capacity between 10,000 to 500,000 bbl are on site and the complex
can accommodate 150,000 deadweight ton vessels with a draft as deep as 37 feet.

The Richmond facility has just over 600,000 bbl of storage for gasoline,
distillate, heavy fuel and ethanol, with 25 tanks ranging in size from 8,000
bbl to 56,000 bbl. It receives its product from the Kinder Morgan systems and
receives some ethanol by rail. Richmond can handle vessels of up to 65,000 DWT
with 37-foot draft.

Last summer, Plains Chief Operating Officer Willie Chiang noted that the
company was "very pleased with the values" that it received on the Bay Area
terminals. Other parties who bid on the facilities say they were "blown out of
the water" by the offers rendered by Valero and at least one other company.

The deal, and the eventual discovery of the high price paid, will underscore
the value of large terminals that can accommodate cargoes and barges in the
relatively illiquid West Coast market.

--Tom Kloza, tkloza@opisnet.com
--Lisa Street, lstreet@opisnet.com


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