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Valero Energy Corporation (VLO) - $25 value - yours FREE >>
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Valero's Unit Gains Complete Ownership of Parkway Pipeline
An indirect wholly owned subsidiary of Valero Energy Corporation (VLO - Free Report) announced that it has acquired the remaining 50% membership interest in Parkway Pipeline LLC from a wholly owned subsidiary of Kinder Morgan Inc. (KMI - Free Report) .
The transaction has an effective date of Jun 30, 2016. With the deal, the unit – Valero Terminaling and Distribution Company – gained complete ownership of the pipeline. The acquisition was funded by Valero with cash.
A 141-mile, 16-inch Parkway Pipeline is a products pipeline with a capacity of 110,000 barrels per day. The capacity of the pipeline can be expanded to over 200,000 barrels per day. Currently, the pipeline transfers refined petroleum products from Valero’s St. Charles refinery to Collins, MS. The Norco, LA-based refinery has a capacity of 305,000 barrels per day. From Collins, the refined petroleum product is transported to the Plantation pipeline system. Kinder Morgan, the operator of Plantation pipeline system holds 51% in Plantation Pipe Line Co.
Moreover, a separate connection agreement was executed by Parkway Pipeline with Colonial Pipeline Co. According to this deal, Parkway Pipeline will now construct, own, and operate a new lateral segment to link the pipeline to the Colonial pipeline system near Collins, MS (“Colonial Connection”).
VALERO ENERGY Price
VALERO ENERGY Price | VALERO ENERGY Quote
Valero Energy Partners LP has a right of first offer to purchase Valero’s initial 50% interest in Parkway Pipeline.
The acquisition of Parkway Pipeline and execution of the Colonial Connection further boost Valero’s ability to develop and improve its product supply to the eastern United States. The company’s Chairman, President and CEO, Joe Gorder, mentioned “This demonstrates our disciplined approach to capital allocation where acquisitions are strategic to Valero’s core business and investments are consistent with our strategy to grow our logistics assets.”
Currently, Valero carries a Zacks Rank #5 (Strong Sell). Another player from the energy sector is Sasol Ltd (SSL - Free Report) , which sports a Zacks Rank #1 (Strong Buy).
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