- Industry Links
- HCB Shop
Buckeye on a spree
Originally published:  01/01/2011
Buckeye Partners LP has over the past three months put in place two major deals that will make it a major player in the Caribbean oil storage market. Last month it agreed to take an 80 per cent stake in Bahamas Oil Refining Co International (Borco) from affiliates of First Reserve Corp for $1.36bn. It has also made an offer to Vopak to buy the other 20 per cent, although it is understood that Vopak is keen to hang on to its strategic investment in the facility.
Borco is the fourth largest oil and petroleum products storage terminal in the world and the largest petroleum products facility in the Caribbean with current storage capacity of 21.6m bbl (3.4m m3). “This acquisition is a natural fit for Buckeye’s core business and significantly expands our market reach by adding a global logistics hub to our portfolio of assets,” says Forrest E Wylie, chairman and CEO of Buckeye. “Borco is a premier marine storage facility with a world-class customer base that complements our fast-growing terminalling and storage business.”
To finance the purchase, Buckeye announced the issue of $650m in senior unsecured notes, to mature in February 2021, which closed earlier this month.
The Bahamas deal came hard on the heels of another significant acquisition, involving the purchase of Shell’s petroleum products terminal at Yabucoa, Puerto Rico. The 44-tank facility offers a total of 4.6m bbl (730,000 m3) of storage capacity for gasoline, jet fuel, diesel, fuel oil and crude oil. “As Buckeye’s first acquisition outside the continental US, this transaction represents an important step in Buckeye’s growth objectives,” says Wylie. “It provides geographic diversity with strong local demand and potential regional growth opportunities.”
Buckeye Partners owns and operates one of the largest independent refined petroleum products pipeline systems in the US as well as 69 refined products terminals.