Texas oil refinery giant swoops on Rocky Mountains pipeline

Michael Bow
Follow Michael
TESORO Logistics made a push into the Rocky Mountains yesterday by clinching a deal to buy QEP Resource’s natural gas pipeline and processing unit in a $2.5bn (£1.5bn) all-cash takeover agreement.

The business, which is a subsidiary of listed refinery operator Tesoro, will buy the pipelines and processing unit from QEP’s subsidiary QEP Field Services.

Around $230m of the $2.5bn paid by Tesoro will go towards a refinancing of debts owed by the QEP division. Shares in Tesoro rose nearly seven per cent in early trading on the New York Stock Exchange while QEP Resources also rose more than six per cent.

The pipelines involved in the deal cover more than than 2,000 miles in the mountains and around North Dakota. QEP Resources leader Chuck Stanley said: “This transaction allows us to maximise shareholder value by deploying proceeds from the sale through multiple avenues.”

“This acquisition will make (Tesoro) a leading full-service, integrated logistics company with significant growth opportunities,” Tesoro’s Phil Anderson said.

Bank of America acted as financial adviser to Tesoro while QEP used Deutsche Bank and Goldman Sachs as financial advisers on the deal.