TransMontaigne, BP to exchange terminals
Feb 1, 2006 12:00 PM
TransMontaigne Inc signed a terminal exchange agreement Jan 10, 2006, with BP Plc. The companies have agreed to end a decades-long joint terminal supply and operating arrangement involving 17 terminals in the southeastern United States. TMG and BP intend to separate both the supply and terminaling operations functions whereby BP will own and operate six terminals, and TMG will own and operate nine terminals. The remaining two terminals will be supplied separately, but will continue to be operated by TMG for both companies.
The transaction is expected to have been completed by Feb 1, 2006. Under the terms of the agreement, both companies will enter into three- to five-year throughput obligations at the facilities to be owned and operated by the other party. BP will be obligated to throughput about 24,500 barrels per day through TMG's owned facilities, while TMG will be obligated to throughput some 18,000 barrels per day through BP's owned facilities.
The 15 terminals to be exchanged pursuant to the agreement have approximately 3.7 million barrels of storage capacity. After the exchange, TMG will increase its ownership in the storage capacity by about 0.3 million barrels to a total of approximately 1.8 million barrels, with BP retaining roughly 1.9 million barrels of storage capacity. In return for the additional storage capacity, current and future capital requirements, and other items, TMG will pay BP approximately $5.6 million.
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