Valero Energy Partners Acquires Refined Petroleum Terminals - Analyst Blog

Valero Energy Partners LP VLP announced the acquisition of refined petroleum terminals in Houston and Louisiana – subsidiaries of Valero Energy Corp. VLO. In the transaction, the partnership received the outstanding membership interests in Valero Partners Houston LLC and Valero Partners Louisiana LLC for a total consideration of about $671 million.  

Valero Partners Houston LLC operates a crude oil, intermediates and refined petroleum products terminal located on the Houston ship channel that supports Valero Energy Partners' Houston refinery. The asset consists of storage tanks with 3.6 million barrels of storage capacity.

Valero Partners Louisiana LLC operates a crude oil, intermediates and refined petroleum products terminal located on the Mississippi River in Norco, Louisiana, that supports the partnership’s St. Charles, LA refinery. The asset consists of storage tanks with 10 million barrels of storage capacity.

The partnership financed the acquisition with $211 million in cash, $200 million in borrowings under its revolving credit facility, $160 million in borrowings under a five-year subordinated loan agreement with Valero, and the issuance of 1,908,100 common units, representing limited partner interests and 38,941 general partner units to a subsidiary of Valero valued, collectively, at $100 million. The newly issued VLP units were allocated between common units and general partner units in a proportion allowing the general partner to maintain its 2% general partner interest.

Valero Energy Partners is a fee-based, growth-oriented, traditional master limited partnership formed by Valero Energy Corporation to own, operate, develop, and acquire crude oil and refined petroleum products pipelines, terminals, and other transportation and logistics assets. With headquarters in San Antonio, the partnership's assets include crude oil and refined petroleum products’ pipeline and terminal systems in the Gulf Coast and Mid-Continent regions of the United States that are integral to the operations of several of Valero's refineries.

Valero Energy Partners currently holds a Zacks Rank #1 (Strong Buy). Other stocks with the same Zacks Rank in this industry include Sunoco LP SUN and Hallador Energy Co. HNRG.

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