McGuireWoods advised Tesoro Logistics LP in completing its $2.5 billion acquisition of QEP Resources Inc.’s natural gas pipeline and processing business. The deal, which was announced in October, is the latest in a series of major asset acquisitions McGuireWoods has negotiated for the Fortune 100 energy company.
Tesoro Logistics is an affiliate Tesoro Corp., which operates six petroleum refineries in the western United States with a combined capacity of more than 850,000 barrels per day. Consistent with the terms of the transaction, the partnership has acquired 2,000 miles of natural gas and crude oil gathering and transmission pipelines within the Rocky Mountain Region and North Dakota.
McGuireWoods lawyers in the firm’s Houston and Chicago offices have negotiated multiple asset acquisitions for San Antonio-based Tesoro Logistics since its formation and initial public offering as a master limited partnership (MLP) in 2011. Those acquisitions include two transactions that stemmed from Tesoro Corp.’s $2.5 billion purchase of BP’s Carson refinery and logistics assets in Southern California in 2013. McGuireWoods represented Tesoro Logistics in the transfer of BP’s former pipeline and logistics assets from Tesoro Corp.
“Our multidisciplinary team is proud to have assisted Tesoro Logistics in closing this significant deal,” said McGuireWoods Houston-based partner David Ronn, who is co-head of the firm’s oil and gas industry team and led the firm’s negotiating team.
The McGuireWoods team also included Chicago-based mergers and acquisitions partner Craig Culbertson, who leads McGuireWoods’ Tesoro team, and debt finance partners Donald Ensing and Yuan-Ying Hsu who advised on financing matters. Additionally, corporate partner Rachel Mantz, also based in Chicago, and Houston associate Ryan Giggs worked closely with Ronn.
Master limited partnerships offer the liquidity of a publicly traded company, but are exempt from corporate income taxes. They have enjoyed explosive growth in the energy sector as a vehicle for accessing capital markets, but face complex governance, securities, accounting and regulatory issues. McGuireWoods has a cross-disciplinary team of corporate, energy and tax lawyers who provide industry-leading advice to clients in all aspects of MLP transactions.