Delek Logistics Partners, LP (NYSE: DKL) ("Delek Logistics") announced
that Delek Logistics, through wholly owned subsidiaries, has entered
into two joint ventures that will construct logistics assets to serve
third parties and subsidiaries of Delek US Holdings, Inc. (NYSE: DK)
(“Delek US”). Delek Logistics’ total projected investment for the two
joint ventures is approximately $91.0 million and will be financed
through a combination of cash from operations and borrowings under its
revolving credit facility.
Uzi Yemin, Chairman and Chief Executive Officer of Delek Logistics'
general partner, remarked: “These joint ventures mark our first
development projects and should create additional growth for the
partnership. In addition, these crude oil pipelines will improve our
ability to serve Delek US, which will participate as a shipper in both
projects, as well as, increasing our ability to provide logistics
services to third parties. We look forward to working with our partners
toward successful completion and operation of these joint ventures.”
The following provides highlights of each joint venture.
Caddo Pipeline – This pipeline project will
be a 50/50 joint venture with a subsidiary of Plains All American
Pipeline, L.P. (NYSE: PAA) (“Plains”). It will be a 12-inch, 80-mile
crude oil pipeline originating in Longview, Texas with destinations in
the Shreveport, Louisiana area, and will have a capacity of
approximately 80,000 barrels per day of light sweet crude oil. Total
estimated construction cost of this project is approximately $100.0
million and completion is expected in mid-2016. Upon successful
completion of this project Delek US expects to be an anchor shipper on
this pipeline. This pipeline will be able to supply crude to refineries
in the Shreveport area and through additional connections to Delek US’
refinery in El Dorado, Arkansas. Plains will build and operate this
pipeline on behalf of the joint venture.
RIO Pipeline (Delaware Basin to Midland Pipeline
Project) – This project will be developed with Rangeland Energy,
and Delek Logistics will be a 33 percent participant. It has an
estimated construction cost of approximately $125.0 million, and
consists of a 12-inch, 107-mile pipeline originating in north Loving
County, Texas near the Texas-New Mexico border and terminating in
Midland, Texas. This pipeline will have a capacity of 55,000 barrels per
day, with the capability to expand to 85,000 barrels per day or more
with additional capital investments. Also included in this project are
terminals at each end of the pipeline, injection points and storage
tanks to support this pipeline. Upon successful completion of this
project Delek US expects to be an anchor shipper. Through connections in
Midland, Texas, this project will deliver crude to take-away pipelines
located in the Midland area. This project is expected to be completed in
the first half of 2016. Rangeland will build and operate these assets on
behalf of the joint venture.
About Delek Logistics Partners, LP
Delek Logistics Partners, LP, headquartered in Brentwood, Tennessee, is
a growth-oriented master limited partnership formed by Delek US
Holdings, Inc. (NYSE: DK) to own, operate, acquire and construct crude
oil and refined products logistics and marketing assets.
About Rangeland Energy
Headquartered in Sugar Land, Texas, Rangeland Energy was formed in 2009
to focus on developing, acquiring, owning and operating midstream
assets. The company’s primary focus has been in shale producing areas
experiencing rapid growth. The Rangeland team represents more than 150
years of combined midstream experience and is backed by an equity
commitment from EnCap Flatrock Midstream. www.rangelandenergy.com.
EnCap Flatrock Midstream provides value-added private equity capital to
proven management teams focused on midstream infrastructure
opportunities across North America. The firm was formed in 2008 by a
partnership between EnCap
Investments L.P. and Flatrock Energy Advisors.
Safe Harbor Provisions Regarding
Forward-Looking Statements
This press release contains “forward-looking” statements within the
meaning of the federal securities laws. These statements contain words
such as “possible,” “believe,” “should,” “could,” “would,” “predict,”
“plan,” “estimate,” “intend,” “may,” “anticipate,” “will,” “if,”
“expect” or similar expressions, as well as statements in the future
tense, and can be impacted by numerous factors, including the fact that
a substantial majority of Delek Logistics' contribution margin is
derived from commercial arrangements with Delek US, thereby subjecting
Delek Logistics to Delek US’s business risks, in addition to risks
relating to the securities markets generally, the impact of adverse
market conditions affecting the business of Delek Logistics, adverse
changes in laws including with respect to tax and regulatory matters and
other risks as disclosed in the annual reports on Form 10-K, quarterly
reports on Form 10-Q and other reports and filings with the United
States Securities and Exchange Commission for both Delek US and Delek
Logistics. There can be no assurance that actual results will not differ
from those expected by management or described in forward-looking
statements of Delek Logistics or Delek US. Neither Delek Logistics nor
Delek US undertake any obligation to update or revise such
forward-looking statements to reflect events or circumstances that
occur, or of which Delek Logistics or Delek US become aware, after the
date hereof.
Copyright Business Wire 2015