© 2015 The Texas Lawbook.
By Natalie Posgate
(Feb. 27) – Houston-based Plains All American Pipeline and Tulsa-based Magellan Midstream Partners have joined forces to construct a crude oil pipeline from the Denver-Julesburg Basin to Cushing, Oklahoma.
The venture will take place through the formation of the 50/50 limited liability company, Saddlehorn Pipeline Company. The estimated cost of the project is currently between $800 and $850 million.
PAA General Counsel Richard McGee hired Houston partner Doug Bland of Vinson & Elkins to lead the deal for his company. Bland received assistance from Houston associates Fiona Worrall and Kathleen Turner.
It is unknown at this time who provided legal assistance for Magellan in the deal.
V&E has a long-running track record of advising PAA on deals. In November, the firm represented PAA when it purchased Occidental Petroleum Corporation’s 50 percent interest in the BridgeTex Pipeline for $1 billion. In 2013, V&E and PAA worked together again when PAA acquired its natural gas business as a wholly-owned subsidiary for $2 billion. And the year before, V&E advised PAA when it acquired four operating crude oil rail terminals, one terminal under development and various contractual arrangements from U.S. Development Group for $500 million.
So far, the Saddlehorn pipeline has received shipping commitments from Noble Energy and a subsidiary of Anadarko Petroleum Corporation. Anadarko has the option to participate in equity ownership of up to 20 percent in Saddlehorn Pipeline Company. That offer will expire two weeks from today, when the current open season closed.
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