PAA Plains All American Pipeline

TULSA, Okla., Nov. 6, 2014 /PRNewswire/ -- Magellan Midstream Partners, L.P. (NYSE: MMP) announced today that it has entered into a definitive agreement to acquire a 40-mile crude oil pipeline system in the Houston Gulf Coast area from BridgeTex Pipeline Company, LLC, a company owned jointly by Magellan and Occidental Petroleum Corporation (NYSE: OXY).

"The acquisition of this crude oil pipeline will further solidify Magellan's position as the premiere system to deliver crude oil within the Houston Gulf Coast area," said Michael Mears, chief executive officer. "Magellan's comprehensive Houston distribution network will have the capability to access all domestic inbound crude production and deliver crude oil to all refineries in Houston and Texas City as well as to refineries throughout the Gulf Coast via third-party pipelines."

The acquisition will include an approximate 40-mile, 24-inch diameter crude oil pipeline from Magellan's East Houston terminal to Texas City, Texas and 1.4 million barrels of crude oil storage at Magellan's East Houston, Texas terminal. Magellan will purchase Occidental's 50% interest for $75 million and will own 100% of these assets following the acquisition. Further, Magellan will provide BridgeTex shippers access to this 40-mile crude oil distribution system through a long-term capacity lease with BridgeTex. The acquisition is expected to generate a 5 times EBITDA multiple on the purchase price.

In addition to customary closing conditions, Magellan's acquisition is contingent on the successful completion of the recently announced transaction by which Occidental plans to sell its 50% interest in BridgeTex to Plains All American Pipeline, L.P. (NYSE: PAA), which is further contingent upon Occidental's sale of a portion of its investment in Plains GP Holdings, L.P. (NYSE: PAGP).

BridgeTex Pipeline will continue to own and Magellan will continue to operate approximately 400 miles of crude oil pipeline from Colorado City, Texas to Magellan's East Houston terminal and 1.2 million barrels of crude oil storage at the pipeline's Colorado City origin. The newly-constructed BridgeTex Pipeline began commercial operations in late Sept. 2014 and is capable of transporting up to 300,000 barrels per day of Permian Basin crude oil from Colorado City to Magellan's East Houston terminal. Approximately 80% of the pipeline's capacity is currently committed under long-term, take-or-pay agreements.

About Magellan Midstream Partners, L.P.
Magellan Midstream Partners, L.P. (NYSE: MMP) is a publicly traded partnership that primarily transports, stores and distributes refined petroleum products and crude oil. The partnership owns the longest refined petroleum products pipeline system in the country, with access to nearly 50% of the nation's refining capacity, and can store more than 90 million barrels of petroleum products such as gasoline, diesel fuel and crude oil. More information is available at www.magellanlp.com.

Forward-Looking Statement Disclaimer
Portions of this document constitute forward-looking statements as defined by federal law. Although management believes any such statements are based on reasonable assumptions, there is no assurance that actual outcomes will not be materially different. Among the key risk factors associated with the acquisition that may have a direct impact on the partnership's results of operations and financial condition are: (1) its ability to obtain all required regulatory approvals; (2) price fluctuations and overall demand for crude oil in the United States; (3) changes in the partnership's tariff rates or other terms imposed by state or federal regulatory agencies; (4) shut-downs or cutbacks at major refineries or other businesses that use or supply the partnership's services; (5) the occurrence of an operational hazard or unforeseen interruption; (6) disruption in the debt and equity markets that negatively impacts the partnership's ability to finance its capital spending and (7) failure of customers to meet or continue contractual obligations to the partnership. Additional information about issues that could lead to material changes in performance is contained in the partnership's filings with the Securities and Exchange Commission, including the partnership's Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2013 and subsequent reports on Forms 8-K and 10-Q. The partnership undertakes no obligation to revise its forward-looking statements to reflect events or circumstances occurring after today's date.

SOURCE Magellan Midstream Partners, L.P.