Tesoro expands into natural gas with $2.5B deal with QEP

Tesoro Logistics LP said Sunday that it will acquire the natural gas gathering and processing business owned by QEP Resources Inc. in a $2.5 billion deal.

The deal will add natural gas to Tesoro Logistics' portfolio, in turn boosting its revenue and expected quarterly distributions to shareholders.

Tesoro said the deal includes natural gas assets in the Rockies, Uinta mountains and North Dakota. Under the agreement, Tesoro will take a 58 percent stake in QEP Midstream Partners LP and pay $230 million to refinance the company's debt.

The deal is expected to close in the fourth quarter and add to Tesoro's shareholder distributions in the first year.

Tesoro Logistics, based in San Antonio, is a limited partnership formed by Tesoro Corp.

Shares of Tesoro Corp. jumped 6 percent to $64.27 by midday; Tesoro Logistics fell 9 percent to $60.87. QEP Resources shares increased nearly 7 percent to $24.76.