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BP Sold Some U.S. Fuel Storage and Pipeline Assets to Buckeye


BP Products North America today announced that it has agreed to sell a package of 33 refined products terminals and 992 miles of pipelines across 13 states to Buckeye Partners L.P. Buckeye has also agreed to buy BP’s 50 per cent share in Inland Corporation, the pipeline joint venture in Ohio.
Under the terms of the agreement Buckeye has agreed to pay BP $225 million in cash, subject to closing adjustments. Subject to regulatory approvals and pre-emption rights of co-owners, the transaction is expected to complete during the second quarter of 2011.
The planned divestment was originally announced in October 2009 as a move to simplify BP’s downstream portfolio, increasing efficiency and decreasing capital employed while maintaining BP’s marketing footprint in the US. BP expects to continue to market its fuel through the terminals and will continue with the customer relationships currently in place.
Notes to editors: Inland Corporation, currently operated by BP Pipelines (North America) Inc., owns one of the largest product pipeline systems in the state of Ohio and consists of approximately 350 miles of active pipeline and 259 miles of out of service pipeline. The pipeline system connects three refineries in the Ohio area, BP/Husky in Toledo, Husky in Lima, and SUN in Toledo to 15 terminals.
Further information:
Office: BP Press Office
Location: London
Phone : +44 20 7496 4076
Email: bppress@bp.com
Office: Houston
Location: BP Press Office
Phone : +1 281 366 4463 begin_of_the_skype_highlighting +1 281 366 4463
---------------------------------------------------------------------------------------------------------------------
 
May 19, 2011
 
Dear Axxis Subscriber,
 
Given that the biodiesel industry, as a whole, has not come to a consensus on how to handle the biodiesel tax credit, there are pricing challenges for all segments of Axxis customers from the refiners down to the marketers, and end users. The biggest challenge centers on fair and equitable price discovery for our broad base of clients. We have heard from many of our customers requesting that we normalize posted biodiesel rack prices to put all suppliers on equal footing in terms of wholesale postings and rack price discovery. You may recall that we did this same type of normalization with the ethanol tax credit in 2005.
 
Effective on June 1, 2011 Axxis will offer the option of “normalized” biodiesel data.
 
What does this mean?
As many of you know, the $1.00 per gallon biodiesel tax that entitles suppliers to a $1.00 tax credit for every gallon of biodiesel blended was reinstated on January 1, 2011. Since then, Axxis has observed that some suppliers include this credit in their posted rack price, while others reflect it as a line item on their invoice. As a result, suppliers who pass the credit on in their posted rack price may seem to have a competitive advantage, when in fact their competitor’s price, less the invoice credit, could be the better price.
 
To illustrate how normalization works, the three sample reports below show a current non-adjusted report, a report that is normalized with the tax credit and a report that is normalized without the tax credit.
We assume:
bulletSupplier A and Supplier B intend to pass the credit on as part of their posted price
bulletSupplier C and Supplier D show a 5 cent credit as a line item on their invoices.
 
I. Sample: Axxis Non-Adjusted Report
ANY AXXIS RACK, US 2011-04-08 11:01:46 EST
**AXXIS GROSS WHOLESALE B5 SME BIODIESEL PRICES**
 ULS Move
Terms No.2 Date
SUPPLIER A u N-10 282.90 01/19
SUPPLIER B u N-12 283.90 01/19
SUPPLIER C b 1-10 287.83 01/19
SUPPLIER C u 1-10 288.08 01/19
SUPPLIER D b N-10 290.85 01/19
LOW RACK 282.90
HIGH RACK 290.85
RACK AVG 286.71
 
II. Sample: Axxis Normalized With the Tax Credit Report
ANY AXXIS RACK, US 2011-04-08 11:01:46 EST
**AXXIS GROSS WHOLESALE B5 SME BIODIESEL PRICES WITH TAX CREDIT**
 ULS Move
Terms No.2 Date
SUPPLIER A u N-10 282.90 01/19
SUPPLIER B u N-12 283.90 01/19
SUPPLIER C b 1-10 282.83 01/19
SUPPLIER C u 1-10 283.08 01/19
SUPPLIER D b N-10 285.85 01/19
LOW RACK 282.90
HIGH RACK 285.85
RACK AVG 283.71
 
III. Sample: Axxis Normalized Without Tax Credit Report
ANY AXXIS RACK, US 2011-04-08 11:01:46 EST
**AXXIS GROSS WHOLESALE B5 SME BIODIESEL PRICES WITHOUT TAX CREDIT **
ULS Move
 Terms No.2 Date
SUPPLIER A u N-10 287.90 01/19
SUPPLIER B u N-12 288.90 01/19
SUPPLIER C b 1-10 287.83 01/19
SUPPLIER C u 1-10 288.08 01/19
SUPPLIER D b N-10 290.85 01/19
LOW RACK 287.83
HIGH RACK 290.85
RACK AVG 288.71
 
How will this affect my Axxis Reports?
· Axxis Standard Biodiesel Rack Reports will default to Non-Adjusted Pricing, and all customers receiving these reports will be offered the opportunity to switch to a Normalized with Tax Credit or a Normalized Without Tax Credit file. If you do not request it, your report will not be normalized.
· We CANNOT normalize B0-5 product listings, due to the fact that the actual amount of biodiesel used in the product is unknown.
Axxis will post a list of how each supplier is passing along their tax credit through OPIS’ website at http://www.opisnet.com/biodiesel_tax_credit_supplier_list.pdf
 
We also want to remind you that if you have contracts tied to an Axxis benchmark your contract partner may have opted to see biodiesel normalization differently than your company has. We suggest that you come to a consensus with any contract signatories prior to contacting Axxis with you normalization preferences.
 
If you have any questions, please do not hesitate to call myself or our customer service team at 1-800-833-8870.
 
Sincerely,
Chris Yotter
Axxis Petroleum
651-644-8280 X123
 

 

 

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