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Alon USA to sell Amdel and White Oil pipelines.

Alon USA Energy, Inc. has entered agreed to sell its Amdel and White Oil pipelines to an affiliate of Sunoco Logistics Partners L.P. for a total consideration of $68 million. Alon and Sunoco Logistics will enter into a 10-year pipeline throughput and deficiency agreement which will allow Alon to maintain its physically integrated system by retaining crude oil transportation rights on the pipelines from the Gulf Coast for an initial term of 10 years. Alon will commit to ship a minimum of 15,000 bpd on the pipelines. Alon also has the option to extend the agreement by four additional 30-month periods.

The startup of the Amdel pipeline is scheduled for June 1. Alon will be able to originate crude oil from either Sunoco Logistics' Nederland, TX terminal or other terminals in Midland. The current Amdel pipeline capacity is 27,000 bpd from Nederland to Alon's Big Spring refinery and 40,000 bpd from Midland to the refinery. Sunoco Logistics is expected to expand the capacity of the entire system to 40,000 bpd by year end. The startup of the Amdel pipeline should provide the Big Spring refinery with more flexibility regarding crude slate optimization. Alon's excess sulfur capacity and advanced asphalt capabilities should allow Alon to refine additional heavy and sour grades of crude.

The Amdel pipeline is a bi-directional common carrier pipeline capable of delivering crude oil from Nederland to Midland, a distance of approximately 500 miles. The White Oil pipeline runs approximately 25 miles and is capable of delivering crude oil from the Amdel pipeline to the Big Spring refinery.
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Title Annotation:Alon USA Energy, Inc.
Comment:Alon USA to sell Amdel and White Oil pipelines.(Alon USA Energy, Inc.)
Publication:Pipeline & Gas Journal
Article Type:Brief article
Geographic Code:1USA
Date:Mar 1, 2006
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