Occidental Petroleum Corporation announced the entrance into an agreement with Plains All American Pipeline, L.P. (PAA) and Plains GP Holdings, L.P. (PAGP) to sell its 50 percent interest in BridgeTex Pipeline Company, LLC (BridgeTex) to PAA for $1.075 billion.
BridgeTex, a company jointly owned by Occidental and Magellan Midstream Partners, L.P., owns the BridgeTex Pipeline, a 300,000 barrel-per-day crude oil pipeline extending from the Permian Basin to the Houston Gulf Coast area. The BridgeTex Pipeline began service in September 2014.
The sale of Occidental’s interest in BridgeTex includes two transactions: PAA will purchase for $1.075 billion Occidental’s interest in the approximately 400-mile northern leg of the BridgeTex pipeline which runs from the Permian Basin to East Houston; and Magellan will acquire Occidental’s interest in the approximately 40-mile, 24-inch southern leg of the BridgeTex pipeline from Houston to Texas City for $75 million.
"This sale allows us to monetize this important pipeline while retaining long-term cost-advantaged shipping commitments on BridgeTex to ensure access to the key Houston refining markets," said Stephen I. Chazen, President and Chief Executive Officer. “This is in line with our previously announced strategic review to streamline our business, reinvest in areas where we have depth and scale, and maximize total return to shareholders.”
The BridgeTex transaction is contingent on the sale of a portion of Occidental’s Class A shares in PAGP.
