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U.S. pipeline systems operator Buckeye Partners L.P. (BPL - Analyst Report) said it has agreed to sell its minority interest in West Texas LPG Pipeline Limited Partnership (WTLPG) for about $85 million. Per the agreement, the partnership’s 20% stake in WTLPG will now be owned by the affiliates of Atlas Pipeline Partners L.P. following the closing of the deal.

West Texas Pipeline L.P. is the owner of a 2,295-mile common-carrier pipeline system that transports NGLs from New Mexico and Texas to Mont Belvieu for fractionation. The remaining 80% interest in WTLPG is held by Chevron Pipeline Company, a part of Chevron Corporation (CVX - Analyst Report), which operates the pipeline.

Buckeye said the WTLPG interest was put up for sale following a thorough review of the partnership’s portfolio of assets, which identified the 20% interest in WTLPG as non-core. Buckeye Partners expects to close the transaction in the second quarter of 2011, pending routine closing conditions.

Buckeye expects to divert the proceeds from the sale to its core operating assets and also to fund a portion of its internal growth capital projects planned for 2011.

Last month, Buckeye entered into an agreement to buy 33 refined petroleum products terminals and nearly 1,000 miles of refined petroleum products pipelines from BP Products North America Inc., a wholly owned subsidiary of BP Plc (BP - Analyst Report) for about $225 million. Buckeye expects to close this acquisition also in the second quarter of 2011.

Buckeye Partners is scheduled to release its first quarter 2011 results on Friday, May 6, 2011. The Zacks Consensus earnings estimates for Buckeye’s first quarter, fiscal 2011 and fiscal 2012 are 80 cents, $3.53, $3.80 per share, respectively.

Based in Houston, Texas, Buckeye Partners, L.P. primarily operates pipeline systems for refined petroleum products in the United States. The partnership competes head-to-head with Ferrellgas Partners L.P. (FGP - Analyst Report).

Buckeye Partners currently retains a Zacks #2 Rank (short-term Buy rating). We maintain our long-tern Neutral rating on the stock.

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