Source: Gibson Energy Inc.
  • Gibson Energy Inc. (TSX:GEI) says it will buy the South Texas Gateway oil terminal from Buckeye Partners for US$1.1 billion
  • The Canadian energy infrastructure company looks to expand into U.S. crude oil export markets
  • Gibson will acquire the South Texas Gateway terminal, which the company says is positioned as one of the most competitive liquids terminal and export facilities globally
  • Gibson Energy Inc. (GEI) opened trading at C$21.00 per share

Gibson Energy Inc. (TSX:GEI) says it will buy the South Texas Gateway oil terminal from Buckeye Partners for US$1.1 billion.

The Canadian energy infrastructure company looks to expand into U.S. crude oil export markets.

Through the transaction, Gibson will acquire the South Texas Gateway terminal, which the company says is positioned as one of the most competitive liquids terminal and export facilities globally. The terminal boasts direct pipeline connections to low-cost, long reserve-life resource supply, and very large crude carrier capabilities.

This transaction could strengthen the company’s cash flow with more than 95 per cent of revenue under “take-or-pay” contracts with investment grade or high-quality counterparties who are existing customers of Gibson. Gibson is out to grow its footprint with connectivity to the world-class Permian basin and provides platform for future infrastructure growth with existing and new customers.

The South Texas Gateway terminal is a newly built, high-quality crude oil export facility, operating a deep-water, open access marine terminal in Ingleside, Texas at the mouth of the Corpus Christi Bay. The terminal achieved record volumes of more than 670,000 bbl/d of oil in March 2023. The team anticipates the potential for future expansions at the terminal.

Gibson’s president and chief executive officer, Steve Spaulding said that since establishing Gibson as a leading liquids-focused infrastructure company, the team has been looking for an opportunity that is a strategic fit, while enhancing scale and diversity.

“After much patience and discipline, I am excited to add the world-class South Texas Gateway terminal to our infrastructure portfolio. This transaction amplifies our high-quality infrastructure revenues and bolsters the continued growth of our distributable cash flow per share,” Spaulding said. “To add 1 mmbbl/d of export capacity and nearly 9 million barrels of terminals storage in a highly strategic location furthers our momentum in growing Gibson’s infrastructure footprint and provides a platform for future growth with existing and new customers.”

Gibson Energy is a Canadian oil infrastructure company with its principal businesses consisting of the storage, optimization, processing, and gathering of crude oil and refined products. The company recently sanctioned the construction of two tanks, representing 870,000 barrels of new tankage, at its Edmonton terminal underpinned by a 15 year “take-or-pay” and stable fee-based contract agreement with Cenovus Energy Inc. (TSX:CVE), an investment grade, senior integrated oil sands customer. Click here to read more.

Gibson Energy Inc. (GEI) opened trading at C$21.00 per share. The company’s stock has fallen 15.2 per cent since this time last year.

The material provided in this article is for information only and should not be treated as investment advice. For full disclaimer information, please click here.

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