June 12, 2014 [OPIS] - Oiltanking Partners LP said on Wednesday that the board of directors of its general partner has approved an expansion project to construct new crude storage, pipelines and dock infrastructure at its terminal in Beaumont, Texas.
The multi-phase crude expansion will have a total capacity of up to 6.2 million bbl of storage at a total cost of approximately $340 million when all currently planned phases have been completed.
The initial phase of the project is fully supported by customer commitments.
In addition, the partnership has received strong commercial interest in storage commitments with other potential customers that exceed the remaining project capacity.
The expansion project is designed to meet the growing needs of Oiltanking’s customers in the Beaumont/Port Arthur market.
This market currently has refining capacity of 1.5 million b/d.
In addition, several new long-haul pipelines, including the TransCanada Gulf Coast Project, Shell’s Houston-to-Houma or “HoHo” Pipeline and the Port Arthur Extension of the Seaway Pipeline, have recently been completed or are under development.
As much as 3 million b/d of crude could flow to the Beaumont/Port Arthur market once these and other pipeline projects are in service, driving strong demand for additional storage, pipeline connectivity and deep water access.
Based on current contracts, the partnership expects to begin delivering initial tanks to customers during the third quarter of 2015, with the balance of the tanks coming online as they are completed through the first half of 2016.
Upon completion of the announced crude storage expansions, the Beaumont terminal is expected to have 11.7 million bbl of total capacity, bringing the partnership’s combined capacity to nearly 35 million bbl of storage.
The first phase cost includes required pipeline connections and manifold infrastructure, as well as the cost of constructing a new finger pier with two new deepwater docks.
The new docks will be configured to load and unload crude and feedstocks at high rates to accommodate both the announced crude expansions and other growth opportunities. The Beaumont crude expansions are expected to be accretive to distributable cash flow once operational.
In addition, it is expected that future potential expansions would utilize the newly constructed dock and pipeline infrastructure that will support this project.
Oiltanking Partners LP is a master limited partnership engaged in independent storage and transportation of crude oil, refined petroleum products and liquefied petroleum gas.
