PBF in Plains Philly deal

04.02.16. PBF Logistics LP is buying four refined product terminals in the Philadelphia region from an affiliate of Plains All American Pipeline for U$100 million.
The acquisition is expected to be financed through a combination of cash, borrowings from a revolving credit facility and equity, which may include common units sold to its sponsor, PBF Energy. Closing is expected in the second quarter.
PBFX CEO Thomas Nimbley said the East Coast terminals represented PBFX’s first third party acquisition and was an attractive deal.
“The addition of the East Coast terminals increases the partnership’s total capacity by over 100 percent to approximately 8.1 million shell barrels and diversifies its customer and asset base. We expect the acquisition to be accretive to distributable cash flow on closing,” he commented.
Located in the Philadelphia market, the terminals are situated in the sixth largest metropolitan area in the USA with significant local demand for refined products. They also provide a critical link for the approximately 1.3 million bpd of refining capacity located within 100 miles of the terminals and associated downstream demand.
In conjunction with the transaction, the partnership expects to invest approximately $5 million to improve infrastructure in order to increase throughput capability. Based on a total transaction cost of $105 million, including the $5 million investment and “synergy opportunities”, the partnership expects the terminals to generate $15 million of EBITDA, of which approximately two-thirds is expected to be from third party customers.
The assets include 57 product tanks with a total capacity of 4.2 million barrels, pipeline connections to the Colonial, Buckeye, Sunoco Logistics and other pipeline systems, 26 truck loading lanes and marine facilities capable of handling barges and ships.