Magellan Midstream Partners to acquire pipeline and oil storage assets from BP

BP sells pipeline, storage assets for $289M

NEW YORK — Embattled oil giant BP plans to sell some of its pipeline and oil storage assets for $289 million.

Magellan Midstream Partners LP said Tuesday it will acquire storage facilities for 7.8 million barrels of crude and more than 100 miles of active petroleum pipelines from BP’s pipeline division in North America.

BP has been working to shed some of its assets to help pay for the massive spill in the Gulf of Mexico. The company has spent more than $3 billion on cleanup and damages so far, and it has agreed to set aside another $20 billion for future damage claims.

BP spokeswoman Sheila Williams said the pipeline sale is not part of a previously announced plan to sell $10 billion in assets over the next 12 months. The companies were negotiating the pipeline sale for several months, well before the April 20 rig explosion responsible for the oil spill, she said.

“This is a deal that’s been in the pipeline for quite some time,” Williams said.

Williams added that she didn’t know whether the money from the Magellan sale would go toward helping to pay for the oil spill.

The oil storage facilities are located in Cushing, Okla., where benchmark West Texas Intermediate oil is delivered every month. Oil supplies in Cushing greatly influence the price of oil on the New York Mercantile Exchange, and Magellan said its acquisition of BP’s storage facilities makes it one of the largest owners of oil storage in the area.

The acquisition also includes pipelines for crude oil and refined fuels that can be connected to every major refinery between Houston and Texas City, Texas. Magellan said the deal should close within 60 days and is subject to approval by regulators.

BP shares added 41 cents at $37.17 in morning trading.