Sunoco Logistics, ExxonMobil Combine on Crude Oil Logistics Venture
Sunoco Logistics Partners and ExxonMobil will join forces on a joint venture, forming Permian Express Partners to combine certain of their key crude oil logistics assets. Sunoco Logistics will contribute its Permian Express 1, Permian Express 2 and Permian Longview and Louisiana Access pipelines. ExxonMobil will contribute its Longview to Louisiana and Pegasus pipelines, Hawkins gathering system, an idle pipeline in southern Oklahoma and a Patoka, IL terminal.
This move establishes a stronger crude oil logistics network to meet market demand, provides additional take-away opportunities for shippers and expands ExxonMobil’s options to supply its network of refineries. Concurrent with the transaction, ExxonMobil and its affiliates will enter into a preferred provider agreement with the joint venture. Sunoco Logistics will be the majority owner and operator of the joint-venture’s assets.
“This combination of certain strategic crude oil assets, together with our existing and recently acquired Midland Basin assets, greatly enhances our service capabilities for the Permian Basin, one of the most prolific shale areas with incredible growth opportunities. We expect to achieve significantly greater long-term accretion as domestic crude oil production grows over time,” said Michael J. Hennigan, President and Chief Executive Officer of Sunoco Logistics.
Upon closing, Sunoco will own about 85% the Permian Express Partners, while ExxonMobil will about 15%.
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