Seeking greater efficiency in operations, Ultramar DiamondShamrock Corp. (UDS) and a division and two subsidiaries of KochIndustries finalized a joint venture to combine the companies’ gasliquids and petrochemicals operations in Mont Belvieu, TX.

The new business, to be called Diamond-Koch and headquartered inHouston, will offer customers a more efficient source fortransportation, storage, processing and distribution for both gasand refinery liquids and petrochemical feedstocks. Diamond-Koch’sassets include UDS’ majority interest in Mont Belvieu propylenesplitters and related distribution pipelines and terminals, UDS’Mont Belvieu hydrocarbon storage operation, Koch Hydrocarbon’smajority interest in the Mont Belvieu I gas liquids fractionator,and certain UDS and Koch Pipeline supply systems. The Koch divisionand subsidiaries involved in the transaction are Koch Pipeline Co.,Koch Hydrocarbon Co., and Koch Chemical Co.

A management committee will have responsibility for the overallgovernance of Diamond-Koch’s operations. “We see these assets as aperfect fit. The Mont Belvieu market is quickly becoming the globalhub for natural gas liquids and it is the area where the NGL supplysources integrate with the major chemical, refining and fuel demandsources. Therefore, this partnership with UDS is a naturalcomplement to Koch’s existing capabilities,” said Shelby Odell,senior vice president Koch Industries. “This combination of assetspositions us to offer superior value to our customers by providingmore integrated and efficient services including transportation,storage, processing, and the distribution of both natural gas andrefinery liquids and petrochemical feedstocks.”

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