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."
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