As part of its $15-20 billion divestiture program set for the years 2010-2012, ConocoPhillips (NYSE: COP) has entered into agreements to sell its interests in two US pipeline companies for a total of $2 billion.
ConocoPhillips has entered into definitive agreements with a subsidiary of Caisse de dépôt et placement du Québec (CDPQ) to sell its 16.55% interest in Colonial Pipeline Company and Colonial Ventures LLC (Colonial). The transaction is anticipated to close in the first quarter of 2012 following the completion of contractual Rights of First Refusal review by the existing shareholders in Colonial.
In addition, ConocoPhillips has entered into definitive agreements with Enbridge Holdings (Seaway) LLC, a subsidiary of Enbridge (US) Inc., to sell its ownership interest in the Seaway Crude Pipeline Company (SCPC).
Enbridge will acquire ConocoPhillips' 50% interest in the Seaway Crude Pipeline System for US$1.15 billion. On closing, Enbridge will become joint owner of the pipeline with Enterprise Products Partners LP (NYSE: EPD). Enterprise will continue to operate the pipeline system and storage facilities.
The 670-mile Seaway Crude Pipeline System (SCPS) includes the 500-mile, 30-inch diameter Freeport, Texas to Cushing, Oklahoma long-haul system, as well as the Texas City Terminal and Distribution System which serves refineries in the Houston and Texas City areas. SCPS also includes 6.8 million barrels of crude oil tankage on the Texas Gulf Coast and four import docks at two locations.
The transaction is anticipated to close in December, subject to satisfaction of customary conditions precedent and completion of certain arrangements regarding other logistics services currently provided by SCPC to ConocoPhillips.
"Through September 2011, the 2010-2012 divestiture program has yielded proceeds from asset dispositions of $8 billion. Once closed, these two transactions, along with other sales already closed in the fourth quarter, would increase that total to approximately $10.5 billion, and strongly position us to accomplish our target by the end of 2012," said Al Hirshberg, senior vice president, Planning and Strategy, ConocoPhillips.
