Western Refining Files For MLP IPO

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Western Refining Files For MLP IPO


EL PASO, Texas -- Western Refining Inc. filed a registration statement to spin off Western Refining Logistics LP as a master limited partnership (MLP). If the Form S-1 is approved by the U.S. Securities and Exchange Commission, the new company would be responsible for owning, operating, developing and acquiring terminals, storage tanks, pipelines and other logistics assets.

Units of El Paso, Texas-based Western Refining Logistics would be sold to the general public via an initial public offering and then traded on the New York Stock Exchange under the symbol WNRL.

Parent company Western Refining Inc.'s 222 convenience stores and gas stations operating under the GIANT, Mustang, Sundial and Howdy's banners would be undisturbed by the transaction.

As CSNews Online reported both in February and May, Western Refining Inc. has long been considering an MLP spinoff of its midstream assets. In fact, CEO Jeff Stevens hinted at the possibility during the company's last two earnings conference calls.

"The board [of directors] authorized us to look into a traditional MLP of our logistics assets," Stevens said on May 2. "We continue to do so."

To qualify for MLP status, a partnership must generate at least 90 percent of its income from what the Internal Revenue Service deems "qualifying" sources. Those qualifying sources include activities related to the production, processing or transportation of oil, natural gas and coal.

Western Refining Inc. is certainly not alone in its plans to spinoff off assets into an MLP. Phillips 66, Marathon Petroleum Corp., Susser Holdings Corp., Alon USA, Lehigh Gas Partners and Delek U.S. Holdings are among the companies with convenience store ties to announce or complete logistics IPOs. In addition, Sunoco Inc. is owned by an MLP: Energy Transfer Partners LP.

Stevens is expected to discuss the matter further during the company's next earnings call on Aug. 1.