Hess Corp. in deal to sell Wilmington terminal
October 11, 2013By Jenny Callison
It looks as though the Hess terminal on Wilmington’s riverfront will have a new owner by January.
New York-based Hess announced late Wednesday that it plans to sell its East Coast terminal network to Houston-based Buckeye Partners L.P. for $850 million in cash. If approved by regulators, the sale is expected to close by the end of 2013, according to the company’s news release.
Hess owns 19 terminals along the U.S. Atlantic coast, including its substantial tank farm on South Front Street where the firm stores and distributes gas, distillate and ethanol products.
The sale also includes one terminal on the Caribbean island of St. Lucia, which has approximately 10 million barrels of crude oil, refined petroleum products storage capacity and deep-water access, according to the release.
All 20 terminals have a combined total storage capacity of approximately 39 million barrels of liquid petroleum products, the news release said.
Buckeye Partners is a publicly traded master limited partnership that owns and operates one of the largest independent liquid petroleum products pipeline systems in the U.S. in terms of volumes delivered, with approximately 6,000 miles of pipeline, a release from Buckeye stated. According to that release, Buckeye also owns more than 100 liquid petroleum products terminals with aggregate storage capacity of over 70 million barrels.
The planned sale is Hess Corp.’s most recent step in divesting itself of assets in the distribution and sale of petroleum products in order to focus its resources and activity in the areas of exploration and production. According to the company’s news release, the sale of the terminal network would bring its year-to-date divestitures to $5.4 billion – funds that will be used to pay down debt and free up capital to allocate to its newly defined core business.
The company announced in January it intended to sell the terminals and was looking for a buyer.
Even though Hess continues to pursue its goal of becoming a “pure play” exploration and production company, it is still in the process of acquiring the remainder of WilcoHess LLC.
In June, Hess announced that it would purchase a 56 percent interest in the Winston-Salem-based convenience store and travel plaza operator WilcoHess.
A company spokesman said Friday that the WilcoHess transaction is, like the Buckeye Partners transaction, expected to close in the fourth quarter of 2013. The spokesman added that once Hess Corp. is the sole owner, it will consider several options for WilcoHess, including the possible sale or a spinoff of the retailer.