Tuesday, January 10, 2012
Kinder Morgan Partners buys TransMontaigne Partners' interest in BOSTCO
HOUSTON, Texas - Kinder Morgan Energy Partners, L.P. (NYSE: KMP) on Jan. 4 announced the purchase of TransMontaigne Partners L.P.'s 50 percent interest in the previously announced Battleground Oil Specialty Terminal Co., LLC (BOSTCO) project.
KMP now owns 98 percent of BOSTCO and began construction on Dec. 14 of a new, approximately $430 million oil terminal located on the Houston Ship Channel.
The remaining two percent will be held by a customer at the BOSTCO facility.
The first phase of the project currently includes construction of 52 storage tanks that will have a capacity of 6.6 million barrels for handling residual fuel, feedstocks, distillates and other black oils. Terminal service agreements and/or letters of intent have been executed with customers for almost all of the capacity.
"The project will include one of the deepest vessel drafts in the Houston Ship Channel and position Kinder Morgan extremely well for the growing trend of exporting petroleum related products overseas," said Kinder Morgan Terminals President Jeff Armstrong.
BOSTCO is expected to be accretive to cash distributable to KMP unitholders when the first phase of the project comes online in the third quarter of 2013. The first phase of the project is expected to be completed by the first quarter of 2014.
TransMontaigne Partners L.P. (NYSE: TLP) received cash consideration equal to its investment plus a transferrable option to buy 50 percent of Kinder Morgan's interest at any time prior to Jan. 20, 2013.
The project will include one of the deepest vessel drafts in the Houston Ship Channel and be well positioned to participate in the growing trend of exporting petroleum-related products overseas.