Ultramar, Koch Combine Midstream Assets

Seeking greater efficiency in operations, Ultramar Diamond Shamrock Corp. (UDS) and a division and two subsidiaries of Koch Industries finalized a joint venture to combine the companies' gas liquids and petrochemicals operations in Mont Belvieu, TX.

The new business, to be called Diamond-Koch and headquartered in Houston, will offer customers a more efficient source for transportation, storage, processing and distribution for both gas and refinery liquids and petrochemical feedstocks. Diamond-Koch's assets include UDS' majority interest in Mont Belvieu propylene splitters and related distribution pipelines and terminals, UDS' Mont Belvieu hydrocarbon storage operation, Koch Hydrocarbon's majority interest in the Mont Belvieu I gas liquids fractionator, and certain UDS and Koch Pipeline supply systems. The Koch division and subsidiaries involved in the transaction are Koch Pipeline Co., Koch Hydrocarbon Co., and Koch Chemical Co.

A management committee will have responsibility for the overall governance of Diamond-Koch's operations. "We see these assets as a perfect fit. The Mont Belvieu market is quickly becoming the global hub for natural gas liquids and it is the area where the NGL supply sources integrate with the major chemical, refining and fuel demand sources. Therefore, this partnership with UDS is a natural complement to Koch's existing capabilities," said Shelby Odell, senior vice president Koch Industries. "This combination of assets positions us to offer superior value to our customers by providing more integrated and efficient services including transportation, storage, processing, and the distribution of both natural gas and refinery liquids and petrochemical feedstocks."

Joe Fisher,

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