Blackwater Midstream Corp. (OTCBB: BWMS) announces that Blackwater New Orleans, LLC, its wholly owned subsidiary, has reached a five year commercial agreement with a new customer for the lease of three 50,000 barrel storage tanks currently under construction at its Westwego, Louisiana facility. The new contract is scheduled to commence on December 1, 2009 and is expected to add approximately $8 million in gross earnings over the five year period. In connection with the 150,000 barrel tank expansion, Blackwater has also begun construction of a ship dock at the terminal that will expand access to the site for cargo tankers, requiring a deepwater draft of approximately 40 feet.
Blackwater New Orleans, LLC completed the acquisition of NuStar Energy`s storage terminal in Westwego, Louisiana on December 23, 2008. Michael Suder, Blackwater Midstream Corp.`s Chief Executive Officer, stated, “This new long-term commercial agreement is a significant step for Blackwater New Orleans and the continued success of our business. Expanding the facility within our fence line with the construction of additional tank assets and a ship dock has been an integral part of our business plan from day one. We expect participation by our existing senior debt lender for this expansion. Upon the commencement of this new commercial agreement in December 2009, we will have grown our annual revenues by approximately 250% from the time of the acquisition of the terminal.” The Westwego facility currently consists of 752,000 barrels of storage capacity that is increasing to 902,000 barrels during the announced expansion. The tank systems are capable of storing a variety of chemical and petroleum products. The site offers modal access for product distribution via marine, rail, and truck.
