Gibson Energy, a midstream company based in Canada, has announced its intention to acquire South Texas Gateway Terminal for $1.1bn, marking the company’s largest acquisition to date. The terminal, which is located on the Texas Gulf Coast, is one of just two in the area that can accommodate very large crude carriers and serves the Permian and Eagle Ford basins. Since its opening in 2020, the terminal has set records, with more than 670,000 barrels of oil per day being transported through it.

The acquisition is expected to be completed in the third quarter of 2023, subject to regulatory approval and customary closing adjustments. The deal is being financed through a $350m bought deal offering of subscription receipts. Gibson Energy plans to maintain its investment grade ratings and outlooks assigned to the company by S&P and DBRS.

Gibson Energy’s CEO, Steve Spaulding, said that the acquisition of the South Texas Gateway Terminal is an “important step” in the company’s growth strategy and further positions it as a “leading provider of midstream infrastructure and services in the United States.” He added that the terminal’s strategic location and “world-class marine and terminal assets” will enable Gibson Energy to better serve its customers and capture “meaningful incremental growth opportunities.”

The South Texas Gateway Terminal is a joint venture between Buckeye Partners and Phillips 66 Partners. Buckeye Partners will continue to own a 50 percent interest in the terminal, while Phillips 66 Partners will sell its 50 percent interest to Gibson Energy. Buckeye Partners will also enter into a long-term throughput agreement with Gibson Energy for the use of the terminal.

The acquisition of the South Texas Gateway Terminal is part of Gibson Energy’s broader strategy to expand its midstream services in the United States. The company has been actively investing in its infrastructure and services over the past few years, including the expansion of its Hardisty Terminal in Alberta, Canada, and the construction of a new crude oil storage terminal in the Delaware Basin.

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15th June 2023