Gibson Energy GEI-T said on Wednesday it will buy South Texas Gateway oil terminal from Buckeye Partners and its partners for $1.1-billion as the Canadian energy infrastructure firm looks to expand into U.S. crude oil export markets.
U.S. oil exports have boomed in recent years, touching a record of about 4.5 million barrels per day in March, on rising shale output, while Russia’s invasion of Ukraine boosted demand for U.S. oil.
South Texas Gateway, located in Ingleside, Texas, at the mouth of the Corpus Christi ship channel, is the second largest oil exports facility in the United States with total capacity of 8.6 million barrels across 20 tanks.
“As U.S. crude oil exports grow, driven by production growth from the low-cost, resource-rich Permian basin, Gibson anticipates the potential for future expansions at the terminal,” the Calgary, Alberta, company said in a statement.
Buckeye did not reply to a request for comment.
In March, the terminal exported a record 670,000 barrels per day, and year to date has handled 12 per cent of U.S. crude exports, Gibson said.
The facility is 50 per cent owned and operated by privately held Buckeye Partners. Phillips 66 and Marathon Petroleum Corp each have 25 per cent stakes.
The company will finance the deal through a C$350-million ($262.72-million) equity offering and other debt offerings.
J.P. Morgan Securities Canada is acting as exclusive financial advisor to the deal, which is set to close in the third quarter of 2023. Latham and Watkins LLP and Bennett Jones were legal advisors on the transaction.