MPLX LP (NYSE:MPLX) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01
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Entry into a Material Definitive Agreement.
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On March 1, 2017, MPLX LP (the Partnership) entered into a
Membership Interests Contributions Agreement (the Contributions
Agreement) with MPLX GP LLC (the General Partner), MPLX Logistics
Holdings LLC (MPLX Logistics), MPLX Holdings Inc. (MPLX Holdings)
and MPC Investment LLC (MPC Investment). to the Contributions
Agreement, MPC Investment agreed to contribute the outstanding
membership interests in Hardin Street Transportation LLC (Hardin
Street Transportation), Woodhaven Cavern LLC (Woodhaven Cavern)
and MPLX Terminals LLC (MPLX Terminals) through a series of
intercompany contributions to the Partnership for approximately
$1.511 billion in cash and equity consideration valued at
approximately $504 million (the Transaction).
Membership Interests Contributions Agreement (the Contributions
Agreement) with MPLX GP LLC (the General Partner), MPLX Logistics
Holdings LLC (MPLX Logistics), MPLX Holdings Inc. (MPLX Holdings)
and MPC Investment LLC (MPC Investment). to the Contributions
Agreement, MPC Investment agreed to contribute the outstanding
membership interests in Hardin Street Transportation LLC (Hardin
Street Transportation), Woodhaven Cavern LLC (Woodhaven Cavern)
and MPLX Terminals LLC (MPLX Terminals) through a series of
intercompany contributions to the Partnership for approximately
$1.511 billion in cash and equity consideration valued at
approximately $504 million (the Transaction).
MPLX Terminals owns and operates light products terminals. Hardin
Street Transportation owns various crude oil and refined product
pipeline systems and associated storage tanks. Woodhaven Cavern
owns butane and propane storage caverns.
Street Transportation owns various crude oil and refined product
pipeline systems and associated storage tanks. Woodhaven Cavern
owns butane and propane storage caverns.
In connection with the closing of the Transaction on March 1,
2017, the Partnership issued (i) 9,197,900 common units
representing limited partner interests in the Partnership (Common
Units) to the General Partner, (ii) 2,630,427 Common Units to
MPLX Logistics, and (iii) 1,132,049 Common Units to MPLX
Holdings. The Partnership also issued 264,497 general partner
units to the General Partner in order to maintain its two percent
general partner interest in the Partnership.
2017, the Partnership issued (i) 9,197,900 common units
representing limited partner interests in the Partnership (Common
Units) to the General Partner, (ii) 2,630,427 Common Units to
MPLX Logistics, and (iii) 1,132,049 Common Units to MPLX
Holdings. The Partnership also issued 264,497 general partner
units to the General Partner in order to maintain its two percent
general partner interest in the Partnership.
The Contributions Agreement contains customary representations
and warranties as well as customary indemnification obligations
among the parties. The foregoing description of the Contributions
Agreement is not complete and is qualified in its entirety by
reference to the full text of the Contributions Agreement, which
is filed as Exhibit 2.1 to this Current Report on Form 8-K and
incorporated herein by reference.
and warranties as well as customary indemnification obligations
among the parties. The foregoing description of the Contributions
Agreement is not complete and is qualified in its entirety by
reference to the full text of the Contributions Agreement, which
is filed as Exhibit 2.1 to this Current Report on Form 8-K and
incorporated herein by reference.
The conflicts committee and the board of directors of the General
Partner approved the terms of the Contributions Agreement on
behalf of the Partnership. The conflicts committee, which is
comprised of independent members of the board of directors of the
General Partner, retained independent legal and financial
advisors to assist it in evaluating and negotiating the
Transaction.
Partner approved the terms of the Contributions Agreement on
behalf of the Partnership. The conflicts committee, which is
comprised of independent members of the board of directors of the
General Partner, retained independent legal and financial
advisors to assist it in evaluating and negotiating the
Transaction.
Second Amended and Restated Employee Services Agreement
In connection with the closing of the Transaction, Marathon
Petroleum Logistics Services LLC (MPLS), the General Partner and
Marathon Pipe Line LLC (MPL) entered into a Second Amended and
Restated Employee Services Agreement, dated March 1, 2017 (the
Second Amended and Restated Employee Services Agreement), under
which MPL has agreed to reimburse MPLS for the provision of
certain operational and management services in support of the
assets owned or operated by MPL. MPL pays monthly fees to MPLS
for such services. The Second Amended and Restated Employee
Services Agreement has an initial term ending on September 30,
2017, and automatically renews on a year to year basis
thereafter, provided that either party may generally terminate
upon 180 days written notice to the other.
Petroleum Logistics Services LLC (MPLS), the General Partner and
Marathon Pipe Line LLC (MPL) entered into a Second Amended and
Restated Employee Services Agreement, dated March 1, 2017 (the
Second Amended and Restated Employee Services Agreement), under
which MPL has agreed to reimburse MPLS for the provision of
certain operational and management services in support of the
assets owned or operated by MPL. MPL pays monthly fees to MPLS
for such services. The Second Amended and Restated Employee
Services Agreement has an initial term ending on September 30,
2017, and automatically renews on a year to year basis
thereafter, provided that either party may generally terminate
upon 180 days written notice to the other.
The foregoing description of the Second Amended and Restated
Employee Services Agreement is not complete and is qualified in
its entirety by reference to the full text of the Second Amended
and Restated Employee Services Agreement, which is filed as
Exhibit 10.1 to this Current Report on Form 8-K and incorporated
herein by reference.
Employee Services Agreement is not complete and is qualified in
its entirety by reference to the full text of the Second Amended
and Restated Employee Services Agreement, which is filed as
Exhibit 10.1 to this Current Report on Form 8-K and incorporated
herein by reference.
With the closing of the Transaction, the following agreements
were entered into or assumed by the Partnership through its
ownership of Hardin Street Transportation and MPLX Terminals.
were entered into or assumed by the Partnership through its
ownership of Hardin Street Transportation and MPLX Terminals.
Transportation Services Agreement
Hardin Street Transportation is a party to a Transportation
Services Agreement with Marathon Petroleum Company LP (MPC LP),
dated January 1, 2015 (the Transportation Services Agreement).
Under the Transportation Services Agreement, Hardin Street
Transportation provides pipeline transportation of crude oil and
refined products, as well as related services, for MPC LP. MPC LP
pays Hardin Street Transportation monthly for such services based
on contractual rates relating to MPC LP crude oil and refined
product deliveries as well as any viscosity surcharges, loading,
handling, transfers or other related charges.
Services Agreement with Marathon Petroleum Company LP (MPC LP),
dated January 1, 2015 (the Transportation Services Agreement).
Under the Transportation Services Agreement, Hardin Street
Transportation provides pipeline transportation of crude oil and
refined products, as well as related services, for MPC LP. MPC LP
pays Hardin Street Transportation monthly for such services based
on contractual rates relating to MPC LP crude oil and refined
product deliveries as well as any viscosity surcharges, loading,
handling, transfers or other related charges.
Under the Transportation Services Agreement, if MPC LP fails to
transport its quarterly minimum throughput volumes, MPC LP will
pay a deficiency payment equal to the volume of the deficiency
multiplied by the rate then in effect. If the minimum capacity of
the pipeline falls below the level of MPC LPs commitment at any
time, depending on the cause of the reduction in capacity, MPC
LPs commitment may be reduced or MPC LP will receive a credit for
its minimum volume commitment for that period.
transport its quarterly minimum throughput volumes, MPC LP will
pay a deficiency payment equal to the volume of the deficiency
multiplied by the rate then in effect. If the minimum capacity of
the pipeline falls below the level of MPC LPs commitment at any
time, depending on the cause of the reduction in capacity, MPC
LPs commitment may be reduced or MPC LP will receive a credit for
its minimum volume commitment for that period.
On December 1, 2016, the parties entered into a First Amendment
to the Transportation Services Agreement (the First Amendment) to
remove certain pipeline systems from the agreement. On January 1,
2017, the parties entered into a Second
to the Transportation Services Agreement (the First Amendment) to
remove certain pipeline systems from the agreement. On January 1,
2017, the parties entered into a Second
Amendment to the Transportation Services Agreement (the Second
Amendment) to revise the initial term in the agreement as well as
the renewal terms. The parties entered into a Third Amendment to
the Transportation Services Agreement, dated January 1, 2017 (the
Third Amendment), to permit Hardin Street Transportation to
adjust certain contractual rates provided for in the
Transportation Services Agreement.
Amendment) to revise the initial term in the agreement as well as
the renewal terms. The parties entered into a Third Amendment to
the Transportation Services Agreement, dated January 1, 2017 (the
Third Amendment), to permit Hardin Street Transportation to
adjust certain contractual rates provided for in the
Transportation Services Agreement.
The Transportation Services Agreement, as amended, has an initial
term ending on December 31, 2026, and automatically renews for
two additional renewal terms of four years each unless either
party provides the other party with written notice of its intent
to terminate at least six months prior to the end of the
then-current term.
term ending on December 31, 2026, and automatically renews for
two additional renewal terms of four years each unless either
party provides the other party with written notice of its intent
to terminate at least six months prior to the end of the
then-current term.
The foregoing description of the Transportation Services
Agreement, First Amendment, Second Amendment and Third Amendment
are not complete and are qualified in their entirety by reference
to the full text of the Transportation Services Agreement, First
Amendment, Second Amendment and Third Amendment, which are filed
as Exhibit 10.2, Exhibit 10.3, Exhibit 10.4 and Exhibit 10.5,
respectively, to this Current Report on Form 8-K and incorporated
herein by reference.
Agreement, First Amendment, Second Amendment and Third Amendment
are not complete and are qualified in their entirety by reference
to the full text of the Transportation Services Agreement, First
Amendment, Second Amendment and Third Amendment, which are filed
as Exhibit 10.2, Exhibit 10.3, Exhibit 10.4 and Exhibit 10.5,
respectively, to this Current Report on Form 8-K and incorporated
herein by reference.
Third Amended and Restated Terminal Services Agreement
MPLX Terminals is a party to a Third Amended and Restated
Terminal Services Agreement with MPC LP, entered into on March 1,
2017 (the Terminal Services Agreement), whereby MPLX Terminals
provides terminal storage for refined petroleum products, as well
as related services, for MPC LP. MPC LP pays MPLX Terminals
monthly for such services based on contractual fees relating to
MPC LP product deliveries as well as any viscosity surcharges,
loading, handling, transfers or other related charges.
Terminal Services Agreement with MPC LP, entered into on March 1,
2017 (the Terminal Services Agreement), whereby MPLX Terminals
provides terminal storage for refined petroleum products, as well
as related services, for MPC LP. MPC LP pays MPLX Terminals
monthly for such services based on contractual fees relating to
MPC LP product deliveries as well as any viscosity surcharges,
loading, handling, transfers or other related charges.
Under the Terminal Services Agreement, if MPC LP fails to meet
its quarterly minimum volume throughput commitments, MPC LP will
pay a deficiency payment equal to the volume of the deficiency
multiplied by the rate then in effect. If the average daily
capacity of a terminal falls below the level of MPC LPs
commitment during a quarter, depending on the cause of the
reduction in capacity, MPC LPs throughput commitment will be
reduced to equal the average daily capacity available during such
quarter.
its quarterly minimum volume throughput commitments, MPC LP will
pay a deficiency payment equal to the volume of the deficiency
multiplied by the rate then in effect. If the average daily
capacity of a terminal falls below the level of MPC LPs
commitment during a quarter, depending on the cause of the
reduction in capacity, MPC LPs throughput commitment will be
reduced to equal the average daily capacity available during such
quarter.
The Terminal Services Agreement has an initial term ending on
March 31, 2026, and automatically renews for two additional
renewal terms of five years each unless either party provides the
other party with written notice of its intent to terminate at
least 12 months prior to the end of the then-current term.
March 31, 2026, and automatically renews for two additional
renewal terms of five years each unless either party provides the
other party with written notice of its intent to terminate at
least 12 months prior to the end of the then-current term.
The foregoing description of the Terminal Services Agreement is
not complete and is qualified in its entirety by reference to the
full text of the Terminal Services Agreement, which is filed as
Exhibit 10.6 to this Current Report on Form 8-K and incorporated
herein by reference.
not complete and is qualified in its entirety by reference to the
full text of the Terminal Services Agreement, which is filed as
Exhibit 10.6 to this Current Report on Form 8-K and incorporated
herein by reference.
Third Amended and Restated Employee Services Agreement
MPLX Terminals is a party to a Third Amended and Restated
Employee Services Agreement with MPLS with an effective date of
December 21, 2015 (the Third Amended and Restated Employee
Services Agreement). Under the Third Amended and Restated
Employee Services Agreement, MPLX Terminals reimburses MPLS for
employee benefit expenses along with certain operational and
management services provided in support of the operations of MPLX
Terminals.
Employee Services Agreement with MPLS with an effective date of
December 21, 2015 (the Third Amended and Restated Employee
Services Agreement). Under the Third Amended and Restated
Employee Services Agreement, MPLX Terminals reimburses MPLS for
employee benefit expenses along with certain operational and
management services provided in support of the operations of MPLX
Terminals.
The Third Amended and Restated Employee Services Agreement has an
initial term ending on December 31, 2020, and automatically
renews for two additional renewal terms of five years each unless
either party provides the other party with written notice of its
intent to terminate at least 12 months prior to the end of the
then-current term.
initial term ending on December 31, 2020, and automatically
renews for two additional renewal terms of five years each unless
either party provides the other party with written notice of its
intent to terminate at least 12 months prior to the end of the
then-current term.
The foregoing description of the Third Amended and Restated
Employee Services Agreement is not complete and is qualified in
its entirety by reference to the full text of the Third Amended
and Restated Employee Services Agreement, which is filed as
Exhibit 10.7 to this Current Report on Form 8-K and incorporated
herein by reference.
Employee Services Agreement is not complete and is qualified in
its entirety by reference to the full text of the Third Amended
and Restated Employee Services Agreement, which is filed as
Exhibit 10.7 to this Current Report on Form 8-K and incorporated
herein by reference.
Relationships
The General Partner manages the Partnerships operations and
activities through the General Partners officers and directors.
Each of MPLX Logistics, MPLX Holdings, MPC Investment, the
General Partner, MPC LP and MPLS are wholly-owned subsidiaries of
Marathon Petroleum Corporation (MPC). As a result, certain
individuals serve as officers and/or directors of one or more of
such entities. After giving effect to the Transaction, MPC holds,
indirectly through its subsidiaries, 99,579,689 Common Units,
representing approximately 26.9 percent of the Common Units
issued and outstanding as of March 1, 2017. Through its ownership
of the General Partner, MPC also indirectly owns all of the
Partnerships incentive distribution rights as well as 7,636,916
general partner units, representing a two percent general partner
interest in the Partnership.
activities through the General Partners officers and directors.
Each of MPLX Logistics, MPLX Holdings, MPC Investment, the
General Partner, MPC LP and MPLS are wholly-owned subsidiaries of
Marathon Petroleum Corporation (MPC). As a result, certain
individuals serve as officers and/or directors of one or more of
such entities. After giving effect to the Transaction, MPC holds,
indirectly through its subsidiaries, 99,579,689 Common Units,
representing approximately 26.9 percent of the Common Units
issued and outstanding as of March 1, 2017. Through its ownership
of the General Partner, MPC also indirectly owns all of the
Partnerships incentive distribution rights as well as 7,636,916
general partner units, representing a two percent general partner
interest in the Partnership.
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Item 2.01
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Completion of Acquisition or Disposition of Assets.
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The Transaction closed on March 1, 2017. The description of the
Transaction contained in Item 1.01 of this Current Report on Form
8-K is incorporated herein by reference.
Transaction contained in Item 1.01 of this Current Report on Form
8-K is incorporated herein by reference.
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Item 3.02
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Unregistered Sales of Equity Securities.
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The description in Item 1.01 above of the Partnerships issuance
of Common Units and general partner units in connection with the
Transaction is incorporated into this Item 3.02 by reference,
insofar as such information relates to the sale of unregistered
equity securities. The sale and issuance of the Common Units and
general partner units in connection with the Transaction is
exempt from registration under Section 4(a)(2) of the Securities
Act of 1933.
of Common Units and general partner units in connection with the
Transaction is incorporated into this Item 3.02 by reference,
insofar as such information relates to the sale of unregistered
equity securities. The sale and issuance of the Common Units and
general partner units in connection with the Transaction is
exempt from registration under Section 4(a)(2) of the Securities
Act of 1933.
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Item 9.01
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Financial Statements and Exhibits.
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(a)
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Financial Statements of businesses acquired
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The audited combined financial statements of Hardin Street
Transportation LLC and Woodhaven Cavern LLC as of and for the
years ended December 31, 2016 and 2015 are incorporated herein by
reference to Exhibit 99.1 of this Current Report on Form 8-K.
Transportation LLC and Woodhaven Cavern LLC as of and for the
years ended December 31, 2016 and 2015 are incorporated herein by
reference to Exhibit 99.1 of this Current Report on Form 8-K.
The audited consolidated financial statements of MPLX Terminals
LLC as of December 31, 2016 and for the nine months ended
December 31, 2016 are incorporated herein by reference to Exhibit
99.2 of this Current Report on Form 8-K.
LLC as of December 31, 2016 and for the nine months ended
December 31, 2016 are incorporated herein by reference to Exhibit
99.2 of this Current Report on Form 8-K.
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(b)
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Pro forma financial information
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The MPLX LP unaudited pro forma consolidated financial statements
of income for each of the years in the two-year period ended
December 31, 2016 and the unaudited pro forma balance sheet as of
December 31, 2016 are incorporated herein by reference to Exhibit
99.3 of this Current Report on Form 8-K.
of income for each of the years in the two-year period ended
December 31, 2016 and the unaudited pro forma balance sheet as of
December 31, 2016 are incorporated herein by reference to Exhibit
99.3 of this Current Report on Form 8-K.
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(d)
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>Exhibits.
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Exhibit Number
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Description
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2.1*
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Membership Interests Contributions Agreement, dated
March 1, 2017, between MPLX LP, MPLX Logistics Holdings LLC, MPLX Holdings Inc., MPLX GP LLC and MPC Investment LLC |
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10.1
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Second Amended and Restated Employee Services
Agreement, dated March 1, 2017, between Marathon Petroleum Logistics Services LLC, Marathon Pipe Line LLC and MPLX GP LLC |
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10.2
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Transportation Services Agreement, dated January 1,
2015, between Hardin Street Transportation LLC and Marathon Petroleum Company LP |
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10.3
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First Amendment to Transportation Services Agreement,
dated December 1, 2016, between Hardin Street Transportation LLC and Marathon Petroleum Company LP |
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10.4
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Second Amendment to Transportation Services Agreement,
dated January 1, 2017, between Hardin Street Transportation LLC and Marathon Petroleum Company LP |
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10.5
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Third Amendment to Transportation Services Agreement,
dated January 1, 2017, between Hardin Street Transportation LLC and Marathon Petroleum Company LP |
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10.6
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Third Amended and Restated Terminal Services Agreement,
dated March 1, 2017, between MPLX Terminals LLC and Marathon Petroleum Company LP |
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10.7
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Third Amended and Restated Employee Services Agreement,
effective December 21, 2015, between MPLX Terminals LLC and Marathon Petroleum Logistics Services LLC |
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23.1
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Consent of PricewaterhouseCoopers LLP, independent
accountants |
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23.2
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Consent of PricewaterhouseCoopers LLP, independent
accountants |
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99.1
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Audited combined financial statements of Hardin Street
Transportation LLC and Woodhaven Cavern LLC as of and for the years ended December 31, 2016 and 2015 |
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99.2
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Audited consolidated financial statements of MPLX
Terminals LLC as of December 31, 2016 and for the nine months ended December 31, 2016 |
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99.3
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MPLX LP unaudited pro forma consolidated financial
statements of income for each of the years in the two-year period ended December 31, 2016 and the unaudited pro forma balance sheet as of December 31, 2016 |
*The exhibits and schedules have been omitted to Item 601(b)(2)
of Regulation S-K and will be provided to the Securities and
Exchange Commission upon request.
of Regulation S-K and will be provided to the Securities and
Exchange Commission upon request.
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
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MPLX LP
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By:
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MPLX GP LLC, its General Partner
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Date: March 2, 2017
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By:
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/s/ Pamela K.M. Beall
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Name: Pamela K.M. Beall
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Title: Executive Vice President and Chief Financial
Officer |
Index to Exhibits
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Exhibit Number
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Description
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2.1*
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Membership Interests Contributions Agreement, dated
March 1, 2017, between MPLX LP, MPLX Logistics Holdings LLC, MPLX Holdings Inc., MPLX GP LLC and MPC Investment LLC |
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10.1
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Second Amended and Restated Employee Services
Agreement, dated March 1, 2017, between Marathon Petroleum Logistics Services LLC, Marathon Pipe Line LLC and MPLX GP LLC |
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10.2
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Transportation Services Agreement, dated January 1,
2015, between Hardin Street Transportation LLC and Marathon Petroleum Company LP |
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10.3
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First Amendment to Transportation Services Agreement,
dated December 1, 2016, between Hardin Street Transportation LLC and Marathon Petroleum Company LP |
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10.4
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Second Amendment to Transportation Services Agreement,
dated January 1, 2017, between Hardin Street Transportation LLC and Marathon Petroleum Company LP |
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10.5
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Third Amendment to Transportation Services Agreement,
dated January 1, 2017, between Hardin Street Transportation LLC and Marathon Petroleum Company LP |
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10.6
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Third Amended and Restated Terminal Services Agreement,
dated March 1, 2017, between MPLX Terminals LLC and Marathon Petroleum Company LP |
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10.7
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Third Amended and Restated Employee Services Agreement,
effective December 21, 2015, between MPLX Terminals LLC and Marathon Petroleum Logistics Services LLC |
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23.1
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Consent of PricewaterhouseCoopers LLP, independent
accountants |
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23.2
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Consent of PricewaterhouseCoopers LLP, independent
accountants |
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99.1
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Audited combined financial statements of Hardin Street
Transportation LLC and Woodhaven Cavern LLC as of and for the years ended December 31, 2016 and 2015 |
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99.2
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Audited consolidated financial statements of MPLX
Terminals LLC as of December 31, 2016 and for the nine months ended December 31, 2016 |
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99.3
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MPLX LP unaudited pro forma consolidated financial
statements of income for each of the years in the two-year period ended December 31, 2016 and the unaudited pro forma balance sheet as of December 31, 2016 |
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*The exhibits and schedules have been omitted
About MPLX LP (NYSE:MPLX)
MPLX LP is a United States-based diversified master limited partnership (MLP) company, which owns, operates, develops and acquires midstream energy infrastructure assets. The Company is engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of natural gas liquids (NGLs); and the gathering, transportation and storage of crude oil and refined petroleum products. The Company’s segments are Logistics and Storage (L&S) and Gathering and Processing (G&P). Its assets include infrastructure to support Marathon Petroleum Corporation (MPC), including approximately 2,900 miles of crude oil and refined product pipelines across over nine states. The Company owns a barge dock facility with approximately 80 thousand barrels per day (mbpd) of crude oil and product throughput capacity, as well as crude oil and product storage facilities with approximately 4,530 thousand barrels (mbbls) of available storage capacity. MPLX LP (NYSE:MPLX) Recent Trading Information
MPLX LP (NYSE:MPLX) closed its last trading session up +0.25 at 38.27 with 1,630,380 shares trading hands.