SemGroup Corporation to sell U.K. petroleum storage business
SemGroup Corporation has agreed to sell its SemLogistics business unit, a petroleum storage facility in the United Kingdom, to Valero Logistics UK Ltd, a subsidiary of Valero Energy Corporation. In addition to the sale price, the agreement provides for potential earn-out payments to be made to SemGroup if certain revenue targets are met in the four years following the close of the transaction. SemGroup intends to use the sales proceeds from the sale toward its capital raise plan and to pre-fund capital growth projects.
Based in Tulsa, Okla., U.S.A., SemGroup Corporation is a publicly traded midstream service company providing the energy industry the means to move products from the wellhead to the wholesale marketplace. SemGroup provides diversified services for end-users and consumers of crude oil, natural gas, natural gas liquids, refined products, residual fuel oil and asphalt. Services include purchasing, selling, processing, transporting, terminalling and storing energy.
“We are pleased to execute this transaction and to reach another milestone in our plan to divest non-core legacy assets and move forward with a more focused North American midstream strategy,” said SemGroup President and Chief Executive Officer Carlin Conner.
The SemLogistics sale is expected to close by the end of the third quarter of 2018, subject to the receipt of certain governmental approvals and the satisfaction of other customary closing conditions.
“This facility complements our Pembroke refinery and fuel terminal in the UK and Ireland making it a natural fit for the company,” said Joe Gorder, Valero chairman, president and chief executive officer. “This purchase demonstrates Valero’s commitment to Wales and the UK, and it aligns with our strategy to grow the logistics business and reduce secondary costs.”