Fuels

QuikTrip Bulks Up Midstream

Retailer, Magellan buying bankrupt SemGroup assets
TULSA, Okla. -- QuikTrip Corp. and Magellan Midstream Partners LP have purchased much of bankrupt SemGroup LP's SemFuel refined petroleum unit for a combined $37 million, reported The Tulsa World. Fee-based gasoline storer and transporter Magellan, through subsidiary Magellan Pipeline Co., would pay $23 million to buy SemFuel's terminal operations in El Dorado, Kansas, and Des Moines, and storage sites in Glenpool and west Tulsa, Okla., court records cited by the newspaper show. Convenience store retailer QuikTrip would spend $14 million for assets in Fort Worth.

"[image-nocss] It fits our long-term plans in the Dallas area," QuikTrip spokesperson Mike Thornbrugh told the paper.

The acquisitions are still subject to an auction and court approval, but QuikTrip, Magellan and U.S. Oil Co. emerged as stalking horse bidders for three of SemFuel's five assets groups. The auction deadline for other interested bidders is July 27, but a judge will hear arguments on these proposed transactions by July 14, according to court records.

If approved, SemFuels will be the second major piece of the former SemGroup sold to help pay off creditors, said the report.

SemGroup LP filed for Chapter 11 bankruptcy protection last July after its traders lost at least $2.4 billion in margins on oil futures positions. The company also owes at least another $2.5 billion to banks and other creditors, according to the report.

It filed a reorganization plan last month, but revised its proposal after many oil and gas producers filed objections against the company's disclosure statement. The amended reorganization still calls for SemGroup to emerge as a publicly traded entity by September, if approved by creditors and the court.

Earlier this year, SemGroup CEO Terry Ronan told employees that the eventual plan would focus on the company's SemCrude oil operations.

SemGroup is a midstream service company providing the energy industry means to move products from the wellhead to the wholesale marketplace. It provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids, refined products and asphalt. Services include purchasing, selling, processing, transporting, terminalling and storing energy. SemGroup serves customers in the United States, Canada, Mexico and Wales. The company owns and operates proprietary and common carrier pipelines, terminals, storage tanks, processing plants, underground storage and a transportation fleet.

Magellan is a publicly traded partnership formed to own, operate and acquire a diversified portfolio of energy assets. The partnership primarily transports, stores and distributes refined petroleum products.

QuikTripoperates more than 500 retail outlets in nine states, as well as QT Kitchen facilities in Tulsa, Kansas City, Phoenix and Atlanta.

All three companies are headquartered in Tulsa.

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