The master limited partnership of Williams Energy Partners LP (WEG), has signed an agreement to acquire a refined petroleum products pipeline system from Tesoro Petroleum Corp. for $110 million. The acquisition is expected to close during mid-October, pending approval from appropriate regulatory agencies.

The 430-mile pipeline system, which is expected to generate about $15 million a year in earnings before interest and taxes, extends from Tesoro’s refinery at Mandan, ND, to Minneapolis, and includes four terminals. The pipeline system is expected to be immediately accretive to per unit cash flows.

“This asset is an excellent strategic fit with our Williams Pipe Line system and provides the partnership with additional stable, fee-based revenues,” said CEO Don Wellendorf. “Its location is complementary to our current northern tier assets, allowing us to better serve our existing customers and Tesoro through improved service offerings.”

WEG, based in Tulsa, was formed to own, operate and acquire a diversified portfolio of energy assets. Williams Coes. has a 60% interest. The partnership primarily transports, stores and distributes refined petroleum products and ammonia. The general partner of WEG is a unit of Williams, which moves, manages and markets a variety of energy products, including natural gas, liquid hydrocarbons, petroleum and electricity. Like Williams, Tesoro, an independent oil refiner, is selling off some of its assets to pare back its debt load. It has plans to reduce its debt by raising about $200 million this year through asset sales, and hopes to cut its debt by a total of $500 million by the end of 2003.

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