April 24, 2014 [OPIS] - A subsidiary of Northeast marketer Sprague Resources will lease a 1-million-bbl facility in Providence, R.I., from Capital Properties for five years at an annual rent of $3.5 million subject to adjustments, the realty company announced this morning.
The deal will go through Capital Properties’ wholly owned subsidiary Dunellen LLC, and that company could get an extra 15cts/bbl for any throughput over 3.5 million bbl.
Sprague will have the option to extend the lease for two additional terms of five years provided they give twelve months’ notice.
The agreement could be terminated by either party if twelve months’ notice is given, beginning in April 2016, and in a twist related to regulatory uncertainty, Sprague could opt out on six months’ notice if Rhode Island decides to put further restrictions on heating oil specifications.
Rhode Island is considering a move to lower-sulfur heating oil, but Sprague has requested that storage facilities with over 100,000 bbl be exempt from such a move.
The Providence terminal includes an eight-bay, 19-position truck loading rack, and is connected to a deepwater berth for barges and terminals.
