December 11, 2014 [OPIS] - Sprague Resources LP said on Tuesday that it has acquired all of the equity interests in Kildair Service Ltd. through the acquisition of the equity interests of Kildair's parent Sprague Canadian Properties LLC for total consideration of $175 million, which included $10 million in privately placed common units of Sprague Resources LP.
Total consideration also included the retirement of third-party and related-party debt.
Kildair owns a major terminal in Sorel-Tracy, Quebec, on the St. Lawrence River where it maintains 3.2 million bbl of residual fuel, asphalt and crude oil storage.
The company’s primary businesses include marketing of residual fuel both locally and for export, marketing of asphalt including polymer modified grades, and crude-by-rail handling services.
Kildair’s terminal has extensive blending infrastructure allowing the ability to process a wide range of varying quality blend components.
The facility also includes an asphalt and residual fuel oil testing laboratory, 25 truck and railcar loading and offloading racks, 120 railcars of offloading capacity, including 60 in the new crude oil rail offloading section, and a dock with the capability to receive ships with up to 450,000 bbl of capacity.
Kildair recently completed a $30 million expansion capital project in which it constructed a new 60-car rail offloading station and converted 1.1 million bbl of storage to crude oil service to receive, store and transload crude oil to waterborne vessels.
The project was anchored by a long-term take-or-pay handling contract with Suncor and the first crude oil vessel was loaded in September. Kildair also has additional storage capacity available for potential materials handling or other applications.
“We are all excited to have Kildair back where it belongs, as an important part of Sprague’s master limited partnership,” said David Glendon, President and CEO of Sprague.
Sprague’s purchase of Kildair now increases its total petroleum storage capacity to over 14 million bbl across 19 terminals.
On Monday, Sprague completed the acquisition of Castle Oil, strengthening its heating oil and residual fuel distribution network in New York City.
Sprague Resources LP is engaged in the purchase, storage, distribution and sale of refined petroleum products and natural gas. The company also provides storage and handling services for a broad range of materials, including crude oil.
