TransMontaigne gains ownership interest in BOSTCO project
Jan 2, 2013 9:25 AM
TransMontaigne Partners LP announced in late December that it acquired a 42.5% ownership interest for approximately $79 million in Battleground Oil Specialty Terminal Company LLC (BOSTCO), which is developing a new black oil terminal facility on the Houston Ship Channel for handling residual fuel, feedstocks, distillates, and other black oils. In connection with its acquisition, TLP has committed to make its pro rata share of the future capital contributions required to complete the initial phase of the BOSTCO project.
The initial phase of the BOSTCO project involves construction of 50 storage tanks with approximately 6.1 million barrels of storage capacity at an estimated cost of approximately $425 million. The BOSTCO facility’s docks will benefit from one of the deepest vessel drafts and nearest access points in the Houston Ship Channel and will be well positioned to capitalize on increasing exports of petroleum related products.
“TransMontaigne is excited to be able to rejoin Kinder Morgan in the BOSTCO project,” said Charles Dunlap, chief executive officer of TransMontaigne’s general partner. “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. 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.”
The BOSTCO facility is scheduled to begin initial commercial operation in the fourth quarter of 2013. Completion of the full 6.1 million barrels of storage capacity and related infrastructure is scheduled for early 2014. A subsidiary of Kinder Morgan Energy Partners LP will manage the day-to-day operations of the BOSTCO project.
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