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Valero Energy Partners Makes First Asset Acquisition

|Includes:Valero Energy Corporation (VLO), VLP

Valero Energy Partners has approved the acquisition from Valero Energy Corporation of the McKee Crude System, Three Rivers Crude System, and Wynnewood Products System for $154 million. This is the first purchase for the MLP that was created by Valero Energy.

McKee Crude System overview

· Located in Sunray, Texas

· Throughput capacity of 72 Mbbl/d; supplies approximately 40% of the crude oil processed at Valero's McKee refinery

· Consists of more than 200 miles of pipelines, 20 crude oil truck unloading sites, and approximately 240 Mbbl of storage capacity

Three Rivers Crude System overview

· Located in the Eagle Ford region in South Texas

· Consists of 11 crude oil truck unloading sites

· Includes 12" pipeline with a capacity of 110 Mbbl/d that delivers crude oil to tanks at Valero's Three Rivers refinery

Wynnewood Products System overview

· Located in Ardmore, Oklahoma

· Consists of a 30-mile, 90 Mbbl/d refined petroleum products pipeline

· Connects Valero's Ardmore refinery to the Magellan refined products pipeline system

Upon closing, the Partnership plans to enter into ten-year term transportation and terminaling agreements with subsidiaries of Valero.

Valero Energy Partners was spun off in an IPO in Dec-2013.

In Sep-2013, Valero Energy announced plans to raise the light crude oil processing capacity at its US Gulf Coast refineries by increasing Atmospheric Distillation Unit capacity.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Stocks: VLO, VLP