Denver-based on Monday said its QEP Field Services subsidiary will sell natural gas transmission pipelines and processing systems in Utah, Wyoming, Colorado and North Dakota to LP for $2.5 billion.
The all-cash deal, which includes a 58 percent stake in QEP Midstream Partners, is expected to close by the end of the year.
Acquiring the midstream systems will allow Tesoro expand its existing services, spokeswoman Destin Singleton said. “In addition to offering services to companies that need to transport crude oil, we will have the ability to transfer natural gas with this acquisition.”
The acquired assets including 2,000 miles of gathering pipelines with the capacity to carry more than 2.9 billion cubic feet per day of natural gas and over 54,000 barrels of oil, Singleton said.
Takeovers involving companies that help move and process oil and gas have surged this year, as buyers seek scale amid a rise in U.S. energy production. Williams Cos. and a subsidiary agreed in June to pay $6 billion for control of pipeline operator Access Midstream Partners, LP, according to Bloomberg News. Williams last week was reported to be among the bidders for the QEP assets.
San Antonio-based Tesoro operates six refineries in the western U.S., with a combined capacity of more than 850,000 barrels a day. Tesoro’s retail-marketing system includes more than 2,200 retail stations under the ARCO, Shell, Exxon, Mobil, USA Gasoline and Tesoro brands.
QEP Field Services employs about 250 people who will become Tesoro employees
QEP in a statement said the sale is part of the company’s ongoing review of strategic alternatives.
“This transaction allows us to maximize shareholder value by deploying proceeds from the sale through multiple avenues, including returning capital to shareholders,” CEO Chuck Stanley said in a statement.
The company, Stanley said, will emerge a more ”
competitive and financially strong independent (exploration and production) company with assets in two of North America’s most prolific crude oil provinces, the Williston and Permian Basins, and low-cost, high quality natural gas properties in the Rocky Mountains and in northwest Louisiana.”
Howard Pankratz: 303-954-1939, hpankratz@denverpost.com or twitter.com/howardpankratz
