American Midstream Partners LP announced the execution of a multi-year, fee-based agreement with a major refinery customer to lease 650,000 barrels of storage capacity at the Harvey LA terminal. The Partnership expects total storage capacity at Harvey to increase to approximately 1.1 million barrels in 2016.
The Partnership’s total storage capacity has increased by approximately 40%, or 500,000 barrels, since the acquisition of the terminals segment in 2013. The buildout of the Harvey terminal is ahead of expectations, increasing more than 100% in 2015 with the addition of 300,000 barrels of incremental storage capacity, all of which is leased under multi-year, firm storage contracts.
“We are excited to support our customer’s regional refining operations with incremental storage capacity additions at the Harvey terminal,” said Lynn Bourdon, chairman, president, and chief executive officer. “The Partnership’s strategic positioning in the Port of New Orleans combined with Blackwater’s exemplary safety record, outstanding customer service, and expertise in specialty chemical and petroleum product storage has contributed to a faster-than-expected buildout of the Harvey terminal.”
Harvey has 100,000 barrels of existing storage capacity that will be utilized for the new agreement, with construction of 550,000 barrels of incremental storage capacity currently underway. The Partnership expects 450,000 barrels of storage capacity to be in service by mid-2016 and the remaining 200,000 barrels of storage capacity to be in service by late 2016. The Partnership’s initial 2016 guidance announced in November 2015, including Adjusted EBITDA and capital expenditure guidance, includes the incremental storage capacity just announced.
The Harvey terminal is located on 56 acres on the west bank of the Mississippi River in the Port of New Orleans and equipped to handle a wide variety of petroleum and chemical products. Harvey is a full-service storage site, including 3,000 feet of rail track that can accommodate up to 50 cars, a two bay semi-automated truck loading facility, and a deepwater shipdock allowing for product transfers via ship, barge, railcar, and/or tank truck. When fully developed, Harvey has the potential to provide up to two million barrels of storage capacity.
American Midstream’s terminal operations consist of approximately 1.8 million barrels of storage capacity across three marine terminal sites located in Westwego LA, Brunswick GA, and Harvey. The facilities are equipped to store a range of petroleum, chemical, and agricultural products. Terminal operations are managed by Blackwater Midstream, a wholly-owned subsidiary of the Partnership.