San Antonio, TX-based Tesoro Logistics LP agreed to buy Denver, CO-based QEP Resources Inc.'s natural gas pipeline and processing business, QEP Field Services, for 2.5-billion in late October of 2014. The deal also includes a 58% ownership in QEP Midstream Partners.
The acquired assets operate over 2,000 miles of natural gas and crude oil gathering and transmission pipeline, with locations in North Dakota's Bakken Shale and the Rocky Mountain region. The assets have have a combined 2.9 billion cf/d of natural gas and 54,000 b/d of crude oil throughput capacity.
The deal expands Tesoro's presence in North Dakota significantly, and company officials say the acquisition will allow Tesoro to offer more integrated crude oil and natural gas services to producers in the Bakken.
In June, QEP stated that it would be focusing more on exploration and production, rather than processing and transportation. QEP, which has significant interests in the Bakken and West Texas' Permian Basin, expects to increase production in these areas.
“The sale of our midstream business is a significant milestone in the strategic repositioning of our company, as we believe QEP will be better positioned to deliver continued growth in production and Adjusted EBITDA in 2015 and beyond.”
The acquisition, which is subject to regulatory approval, is anticipated to close in the fourth quarter.