Marathon Petroleum sells assets to MPLX for $2bn

US-based Marathon Petroleum has completed the sale of certain terminal, pipeline and storage assets to MPLX for a total consideration of $2.015bn.

MPLX is a master limited partnership formed in 2012 by Marathon Petroleum (MPC), to own, operate, develop and acquire midstream energy infrastructure assets.

In this transaction, Ohio-based MPC has sold 62 light-product terminals with approximately 24 million barrels of storage capacity, 11 pipeline systems comprising 604 miles, and 73 tanks that can hold approximately 7.8 million barrels.

The assets also include a crude oil truck unloading facility at MPC’s refinery in Canton, Ohio, and eight natural gas liquids storage caverns located in Woodhaven, Michigan with the combined strength of nearly 1.8 million barrels of capacity.

Marathon Petroleum president and CEO Gary R. Heminger said: “This drop-down of additional high-quality logistics assets to MPLX represents the first of several drops expected to occur in 2017, and is an important part of our plan to unlock the value of our midstream business for investors.

“The stable, fee-based earnings from these assets will add scale and diversification to MPLX’s portfolio of high-quality midstream assets.”

As consideration, MPC will receive $504m in MPLX equity and $1.511bn in cash.

The equity to be issued comprises MPLX common units and general partner units to maintain MPC’s 2% general partner interest in the company.

The transaction has been approved by MPLX’s board of directors after the approval by its independent conflicts committee.

MPC is one of the largest refiners in the US, with crude oil refining capacity of nearly 1.8 million barrels per day in its seven-refinery system.