Plains All American Pipeline, LP (PAA) has entered into a definitive purchase and sale agreement with Occidental Petroleum Corp. for the purchase by PAA of Occidental’s 50% interest in BridgeTex Pipeline Co. for approximately $1.1 billion.
The BridgeTex pipeline is a new 300,000 barrel-per-day crude oil pipeline system that extends from Colorado City in West Texas to Texas City. At Colorado City, the BridgeTex pipeline is connected to PAA’s Basin Pipeline System as well as PAA’s Sunrise Pipeline. The Sunrise Pipeline originates in Midland.
Approximately 80% of the BridgeTex pipeline’s capacity is committed to long term contracts with a volume weighted average tenor of 9.5 years. The remaining 50% interest in BridgeTex is owned by Magellan Midstream Partners, LP, the operator of the pipeline.
BridgeTex also has agreed to sell the southern segment of the pipeline system, which runs from Houston to Texas City to Magellan.