El Paso Sells Off $156M in Petroleum Assets
In line with its plans to exit the refinery business and concentrate on North American natural gas pipelines and production, El Paso Corp. announced progress Wednesday on three petroleum asset sales totaling approximately $156 million. The news came on the heels of a deal that fell through to sell some properties in the Uinta Basin to Vintage Petroleum Co. (see related story).
El Paso said it closed the sale of its Coastal Unilube assets to an affiliate of Warren Oil Co. Inc. for approximately $34 million, consisting of both cash and a note payable. The transaction, which closed Tuesday, includes the lubricant blending and packaging facility located in West Memphis, AK, and related inventory. The facility has an estimated annual production capacity of 117 million gallons of lubricants and automotive performance products. El Paso will also receive approximately $45 million from related working capital reductions.
The company also sold its 50% interest in a Philippine petroleum sales and marketing joint venture, as well as its rights in the Subic terminal and Clark pipeline asset leases it held with the Philippine government. The total value of the transaction is $77 million, which includes $35 million in proceeds for the 50% interest in the joint venture, the rights to the terminal and pipeline leases, and the release of a $42 million guarantee.
The Philippine business comprised of marketing, trading, storage, and distribution of petroleum products within the Philippines. The sales and marketing transaction closed on Tuesday, and the asset transaction is expected to close Jan. 15.
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