By Houston Business Journal

Magellan Midstream Partners LP has agreed to buy more than 100 miles of active petroleum pipelines and 7.8 million barrels of crude oil storage from a BP Plc subsidiary for $289 million.

Tulsa, Okla.-based Magellan (NYSE: MMP) said the deal, expected to close within 60 days, will expand its crude oil logistics infrastructure and energy footprint in the Cushing, Okla., and Houston markets.

⿿These assets will facilitate our strategy to develop our existing East Houston terminal into a key distribution point for crude oil to Gulf Coast refineries by improving Magellan⿿s connectivity within the Houston market and extending our reach to the Texas City refining region,⿝ said Magellan Chief Executive Don Wellendorf in a statement.

As part of the transaction, Magellan will acquire two 35-mile common carrier pipelines that transport refined petroleum products from the Texas City refining region to the Houston area, including connections to third-party pipelines for delivery to other end-use markets. An 18-inch pipeline transports gasoline and a 12-inch pipeline transports distillates, such as diesel fuel.

BP (NYSE: BP) has spent more than $3 billion cleaning up the massive oil spill in the Gulf of Mexico since the April 20 Deepwater Horizon explosion. The London oil giant has been dogged by takeover rumors as of late but was also said to possibly be selling off assets.

The Houston Business Journal is providing continous coverage of the Gulf oil spill.

Copyright 2010 American City Business Journals
Copyright 2010