Delek Logistics Partners LP and Green Plains Partners LP formed a 50/50 joint venture focused on the light products terminaling business and agreed to buy two light product terminals from an American Midstream Partners LP affiliate for $138.5 million.
The assets include the refined products terminals in Caddo Mills, Texas, and North Little Rock, Ark. The transaction is expected to close in the first half.
The joint venture, to be called DKGP Energy Terminals LLC, will also consist of assets from Delek Logistics valued at $24.0 million. These asset contributions include the company's North Little Rock terminal, which has throughput capacity of 17,100 barrels per day, and its Greenville tank farm in Caddo Mills, which has a shell capacity of about 330,000 barrels. Delek Logistics will also contribute $57.25 million in cash, and Green Plains will contribute about $81.25 million.
DKGP's board will oversee the joint venture with a Delek Logistics affiliate handling day-to-day operations for the four terminals. "In addition to serving third party customers, [the JV] should be well positioned to provide additional logistics support to Delek US' Tyler, Texas and El Dorado, Arkansas refineries," Delek Logistics Chairman and CEO Uzi Yemin said. "Our financial flexibility should give us the ability to finance this investment under our revolving credit facility, while we continue to look for opportunities for future growth."
Delek Logistics is a master limited partnership formed by Delek US Holdings Inc. to own, operate, acquire and construct crude oil and refined products logistics and marketing assets. Green Plains is a fee-based Delaware limited partnership formed by Green Plains Inc. to provide fuel storage and transportation services by owning, operating, developing and acquiring ethanol and fuel storage tanks, terminals, transportation assets and other related assets and businesses.
Separately, American Midstream said it expects to divest more of its terminal assets, including marine and specialty chemical storage facilities and other potential noncore assets.