Two other bidders — Oiltanking Houston and Nustar Energy — withdrew their bids prior to Tuesday’s selection process.
The new oil terminal at Port Everglades, which is the gateway to Miami and Fort Lauderdale on the Atlantic coast, is expected to store various grades of gasoline, diesel, bunker fuel and ethanol. The latest tender for that oil terminal closed in March.
The Broward County Commission issued a retender in January after failing to agree on a winner for the previous drawn-out tender due to economic and political factors.
The debate over the economic benefits and bidding process of the previous tender took more than a year, ending with a deadlocked vote at the commission last December.
Magellan plans to demolish the existing terminal, which was built during World War II, and rebuild an entirely new 1.68-million bbl storage terminal.
Magellan’s project would cost about $80 million.
Magellan has begun preliminary discussions with potential customers for the use of the new terminal.
Construction of the new oil terminal is expected to take 36-42 months, but the completion date could be earlier than projected, depending on approvals for local, county, state and federal permits.
The county will begin negotiations with Magellan immediately, and the county’s full commission will have 90 days to vote on the final approval of the lease agreement. If everything goes according to plan, construction could begin in August.
The project requirements include a land lease of 20 years, with an extension option for another 10 years.
Companies must agree to pay a minimum rent of $1.0-1.2 million a year, depending of size of the land leased.
According to the tender requirements, Magellan must maintain an inventory of 420,000 gal each of gasoline and diesel at the new terminal, which must be available for sale to Broward County in an event of a hurricane or supply disruption.
Magellan must also commit a minimum of $40 million in capital investment for the project versus $25 million in the previous tender.
Meanwhile, Port Everglades, which is seeing a jump in new storage capacity, was singled out as a market that could be oversupplied, terminal industry sources told OPIS last year.
TransMontaigne had constructed some new tanks at Port Everglades, totaling 438,000 bbl, for storing cutterstock and fuel oil.
Chevron is building six new tanks at Port Everglades, with the completion slated for mid-2010.