July 19, 2013 [OPIS] - TransMontaigne Partners, the company that operates a slew of terminals throughout the eastern half of the United States, today amended and extended terminaling service agreements with Morgan Stanley Capital Group.
Morgan Stanley indirectly controls the TransMontaigne general partner interests for the TransMontaigne Master Limited Partnership’s terminals.
There had been some speculation that Morgan Stanley might look to divest itself of the TransMontaigne equity and supply interests, so for now, this puts that speculation to rest.
Under the terms of the new accord, an agreement scheduled to expire Dec. 31, 2014 will be extended by six months to July 31, 2015 and will continue beyond that point unless Morgan Stanley gives 24 month’s prior notice to terminate the agreement.
The deal calls for the same throughput rates and same minimum throughput ommitments, which will result in payments to the partnership of approximately $36.1 million annually through December 2013. There will be stipulated annual increases in payments thereafter.
Similarly, an agreement for the partnership’s terminals in Florida (Fort Lauderdale, Port Ave. – Tampa, Eisenhower – Fort Lauderdale, Dock St. – Tampa, Cape Carnival, Jacksonville, Miami Beach, Clubbs – Pensacola, Barrancas – Pensacola) as well as in Mt. Vernon, Mo., and Rogers, Ark., (known as the Razorback terminals) has been amended and extended. The previous deal was set to expire May 31, 2014 but has been extended through Jan. 31, 2015.
The agreements will continue indefinitely unless Morgan Stanley provides the partnership at least 18 months’ prior notice of intent to terminate the agreement in its entirety, or with respect to one or more of the Florida properties.
Earlier this year, the company noted that it would not be renewing bunker fuel agreements on the Florida properties. The agreements expired on May 31, 2013.
The Florida and Razorback terminals will result in minimum throughput payments to the partnership of $37.3 million for the contract year that ended May 31, 2013 and $37.6 million for the next year, with stipulated annual increases each contract year thereafter.
Also extended was an omnibus agreement (slated to expire at year’s end) that pays TransMontaigne an administrative fee for provision of general and administrative services for the partnership’s benefit.
