(By Balaseshan) TransMontaigne Partners L.P. (NYSE: TLP), a terminaling and transportation company, said it has purchased a 42.5% ownership interest in the Battleground Oil Specialty Terminal Co. LLC (BOSTCO) Houston Ship Channel terminal project.
The company bought ownership interest for about $79 million in BOSTCO, which is developing a new black oil terminal facility on the Houston Ship Channel for handling residual fuel, feedstocks, distillates and other black oils.
The BOSTCO facility is scheduled to begin initial commercial operation in the fourth quarter of 2013. Completion of the full 6.1 million barrels of storage capacity and related infrastructure is scheduled for early 2014. A subsidiary of Kinder Morgan Energy Partners, L.P. (NYSE: KMP) will manage the day to day operations of the BOSTCO project.
In connection with its acquisition, TLP has committed to make its pro rata share of the future capital contributions required to complete the initial phase of the BOSTCO project.
The initial phase of the BOSTCO project, which is supported by long term contracts with customers, involves construction of 50 storage tanks with about 6.1 million barrels of storage capacity at an estimated cost of about $425 million.
The BOSTCO facility's docks will benefit from one of the deepest vessel drafts and nearest access points in the Houston Ship Channel and will be well positioned to capitalize on increasing exports of petroleum related products.
The company's investment in BOSTCO was funded with cash on hand and borrowings under its amended and restated senior secured credit facility provided by a syndicate of banks. In connection with investment in BOSTCO, TLP's credit facility was amended to increase the maximum revolving credit amount from $250 million to $350 million.
TLP is trading up 2.08% at $36.75 on Thursday. The stock has been trading between $29.89 and $38.74 for the past 52 weeks.