December 21, 2012 [OPIS] - TransMontaigne yesterday closed on the purchase of a 42.5% ownership interest in the Battleground Oil Specialty Terminal Company (BOSTCO) at a price of $79 million.
The BOSTCO project involves the construction of a new black oil terminal facility on the Houston Ship Channel. Last year, TransMontaigne sold 50% of its interest in the project to a subsidiary of Kinder Morgan.
The deal comes after a long delay. Last October, parent company Morgan Stanley notified TransMontaigne that it would not approve any “significant” acquisition or investments by the affiliate. Morgan Stanley owns the general partner interest in TransMontaigne.
TransMontaigne will now participate in the funding of the project. The initial phase of BOSTCO will see the construction of 50 storage tanks with approximately 6.1 million bbl of capacity at an estimated cost of $425 million. The facility’s docks and storage should enable it to capitalize on brisk exports of petroleum and related products.
“TransMontaigne is excited to be able to rejoin Kinder Morgan in the BOSTCO project,” noted TransMontaigne CEO Charles Dunlap. “This state-of-the-art oil products storage terminal with deep water access will give us an important foothold in the Houston Ship Channel with the opportunity to add capacity in later phases at attractive rates of return,” he added.
The facility is scheduled to begin initial commercial operation in the fourth quarter of 2013. Completion of the full 6.1 million bbl facility is scheduled for early 2014. A subsidiary of Kinder Morgan Energy Partners will manage the day-to-day operations of the BOSTCO project.
