Omaha, Neb.-based ethanol producer and marketer Green Plains Inc. recently announced the public filing of an S-1 registration statement with the U.S. Securities and Exchange Commission (SEC) for an IPO seeking $200 million to form a midstream MLP spinoff of its downstream ethanol transportation and storage assets throughout the Midwest and Southeast.

The newly formed MLP company, Green Plains Partners LP, intends “to own, operate and expand the downstream logistics assets required to support its [parent company Green Plains’] approximately 1.2 billion gallons per year ethanol marketing and distribution business because our assets are the principal method of storing and delivering the ethanol our parent produces for its customers,” according to the SEC filing.

“Our parent believes that this vertical integration will enable it to further expand its downstream logistics activities and better capture the economic value of these operations within the ethanol value chain.

“We generate a substantial portion of our revenues by charging fixed fees to Green Plains Trade for receiving, storing, transferring and transporting ethanol and other fuels. We do not take ownership of, or receive any payments based on the value of, the ethanol or fuel we handle; as a result, we will not have any direct exposure to fluctuations in commodity prices,” the filing noted.

The filing didn’t disclose how many units it plans to offer or an anticipated price range for the units, according to the prospectus filed with the SEC. The units are expected to trade on NASDAQ under the symbol “GPP.” The deal is underwritten by Bank of America Merrill Lynch and Barclays.

In March, Green Plains filed a confidential draft S-1 registration statement with the SEC for the IPO raise for its midstream MLP. (See DownstreamBusiness.com article here.)

Currently, Green Plains Partners owns 27 ethanol storage facilities located at or near Green Plains’ 12 ethanol production plants in Indiana, Iowa, Michigan, Minnesota, Nebraska and Tennessee, for a combined annual production capacity of 1 billion gallons.

“Our ethanol storage assets currently have a combined storage capacity of approximately 26.6 million gallons and have the ability to efficiently and effectively store and load railcars and tanker trucks with all of the ethanol produced at our parent’s ethanol production plants,” according to the SEC filing.

Green Plains Partners also provides terminal services and logistics solutions through its fuel-terminal facilities that it owns and operates through its wholly owned subsidiary BlendStar LLC.

“These fuel-terminal facilities, at eight locations in seven south-central U.S. states, have fuel holding tanks and access to major rail lines for transporting ethanol or other fuels. Our fuel-terminal facilities have a current combined total storage capacity of approximately 7.4 million gallons and, for the year ended Dec. 31, 2014 and the three months ended March 31, 2015, had an aggregate throughput of approximately 324.8 million gallons and 80.4 million gallons, respectively,” according to the SEC filing.

Green Plains Partners doesn’t operate any ethanol pipelines; instead, it leases a fleet of about 2,200 tank cars to transport ethanol to market. The company also leases around 900 hopper cars to transport dried distiller’s grains with solubles, a byproduct of ethanol production used for livestock feed. Green Plains Partners also uses some of its rail car fleet to transport crude oil for third parties.

“We intend to seek opportunities to grow our business by pursuing organic projects and acquisitions of complementary assets from third parties in cooperation with our parent and on our own,” Green Plains Partners explained in the SEC filing.

“For example, our parent has announced that it is expanding production at its ethanol production plants by approximately 100 million gallons per year and will explore certain other expansion projects at its ethanol production plants in the future. These expansion projects, when implemented, will enable us to utilize the strategic location and capacity of our assets and will increase annual throughput at our ethanol storage facilities with minimal capital.

“A substantial portion of our revenues and cash flows will initially be derived from commercial agreements with Green Plains Trade. At the closing of this offering, we will (1) enter into (i) a 10-year fee-based storage and throughput agreement, (ii) a six-year fee-based rail transportation services agreement, and (iii) a one-year fee-based trucking transportation services agreement and (2) assume (i) an approximately 2.5-year fee-based terminaling agreement for our Birmingham facility, which we refer to as our Birmingham terminaling agreement, and (ii) various other terminaling agreements for our other fuel terminal facilities, each with Green Plains Trade.

“Our storage and throughput agreement and certain of our terminaling agreements, including the Birmingham terminaling agreement, will be supported by minimum volume commitments, and our rail transportation services agreement will be supported by minimum rail car take-or-pay usage commitments. We believe that the nature of these agreements will provide stable and predictable cash flows over time,” according to the SEC filing.