Buckeye Partners LP announced that it has completed a comprehensive “best practices” review of its business and is implementing organizational changes that are expected to result in annualized savings of $18 million to $22 million, which should be fully realized beginning in 2010.
The organizational changes will result in a workforce reduction of approximately 260 employees, or nearly 25% of Buckeye’s workforce.
Separately, Buckeye announced that it has completed a strategic review of certain of its operating assets and has determined that its pipeline system that transports natural gas liquids from Colorado to Kansas is non-core to its ongoing operations. Buckeye continues to evaluate various strategic alternatives, including actively marketing this asset. As a result of this analysis, Buckeye will record a non-cash charge of $65 million to $75 million in the second quarter of 2009 to write the asset down to its fair value.
Buckeye is a publicly traded partnership that owns and operates one of the largest independent refined petroleum products pipeline systems in the United States in terms of volumes delivered, with approximately 5,400 miles of pipeline. It owns 64 refined petroleum products terminals, operates and maintains about 2,400 miles of pipeline under agreements with major oil and chemical companies, owns a major natural gas storage facility in Northern California, and markets refined petroleum products in certain geographic areas served by its pipeline and terminal operations. The general partner of Buckeye Partners LP is owned by Buckeye GP Holdings LP.