Americas News
TransMontaigne Acquires BOSTCO Interest
TransMontaigne Partners L.P. [NYSE:TLP] (TransMontaigne) has said that effective December 20, 2012 it acquired a 42.5% ownership interest for approximately $79 million in the Battleground Oil Specialty Terminal Company LLC (BOSTCO) terminal project on the Houston Ship Channel.
TransMontaigne said the investment was funded with cash on hand and borrowings under its amended and restated senior secured credit facility, which was also amended to increase the maximum revolving credit amount from $250 million to $350 million.
"TransMontaigne is excited to be able to rejoin Kinder Morgan in the BOSTCO project. This project will significantly increase our asset base and is expected to be accretive to the distributable cash flow of the Partnership once terminal operations commence," said Charles Dunlap, Chief Executive Officer of TransMontaigne's general partner.
"This state-of-the-art oil products storage terminal with deep water access will give us an important foothold in the Houston Ship Channel with the opportunity to add capacity in later phases at attractive rates of return."
TransMontaigne, who started the BOSTCO project in November 2010 before selling 50 percent of its interest in the project to a subsidiary of Kinder Morgan Energy Partners L.P. [NYSE:KMP], said earlier in the month it had received approval from Morgan Stanley, which controls TransMontaigne's general partner, to acquire 48.75 percent ownership in the project.
The initial $415 million phase of the project includes the construction of 50 storage tanks with a capacity of 6.1 million barrels for residual fuels, feedstocks, distillates, and other black oils.
The BOSTCO facility is scheduled to begin initial commercial operation in the fourth quarter of 2013 with completion of the full 6.1 million barrels of storage capacity and related infrastructure scheduled for early 2014.
