Tesoro Logistics LP has agreed to buy QEP Resources Inc.’s natural-gas pipeline and processing business for US2 .5 billion in cash to expand in the Rocky Mountain region and North Dakota.
The deal will add more than 2000 miles of natural gas and crude oil pipelines with capacity to carry more than 2.9 billion ft3/d of gas and more than 54 000 barrels of oil, the San Antonio, Texas-based company said in a statement last week. Tesoro is focusing on stable fee-based businesses and seeking to expand through acquisitions, it said.
Takeovers involving companies that help move and process oil and gas have surged this year, as buyers seek scale amid a rise in US energy production. Williams Cos. and a subsidiary agreed in June to pay US$ 6 billion for control of pipeline operator Access Midstream Partners LP.
QEP said in June it would spin off its midstream business while evaluating alternative transactions after activist investor Jana Partners LLC urged it to break up. Jana has since sold its position in the company.
The Tesoro transaction includes about US$ 230 million to refinance debt at QEP Midstream Partners LP and is expected to close before the end of the year, according to the statement. QEP will keep the Haynesville gathering system, Denver-based QEP said in a separate statement.
QEP will be more competitive and in a better position to boost production after the deal as it focuses on the Williston and Permian oil basins, the company said.
Williams was said to be among the bidders for the QEP assets, people familiar with the matter said last week.
Edited from various sources by Elizabeth Corner
Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/20102014/tesoro-to-buy-qeps-pipeline-business-for-us-25-billion/