BP forms new company with Kinder Morgan in order to manage U.S. fuel terminals.
A new jointly-owned company is being formed between BP and Kinder Morgan. This new company is being created to operate fuel storage terminals across the country.
Under the agreement, BP will sell 15 of its U.S. terminals to Kinder Morgan, which will operate 14 of them through a new limited liability company. Kinder Morgan will solely own the remaining terminal. BP, meanwhile, will obtain a 25% ownership stake in the newly formed company, continuing to use the terminals as key distribution hubs for BP gasoline and its other refined products. The agreement is expected to be finalized by early next year, pending regulatory approvals.
“We believe this deal is a win for both companies,” said Doug Sparkman, BP’s chief operating officer of Fuels, North America. “It enables BP to maintain strategic access to terminals nationwide, while reducing operating costs and complexity. It also brings in a world-class company to manage the terminals, ensuring that our customers continue receiving excellent service.”
Earlier this year, BP’s U.S. Pipelines and Logistics business decided to centralize operations and sell select fuel storage terminals in the U.S. After an extensive internal review, the business concluded that forming a limited liability company with Kinder Morgan was an attractive way to pursue strategic growth, while also streamlining the business.
The new limited liability company will oversee fuel terminals in the Midwest, Northeast, Southeast and on the West Coast.
The transactions with Kinder Morgan do not include all of BP’s U.S. fuel storage terminals. BP still has terminals in Whiting, Ind.; Dubuque, Iowa; Portland, Ore.; Seattle; and Port Newark, N.J.