Newly Formed Joint Venture to Provide World Scale Marine Terminal Solution for Growing U.S. Crude Oil Production
HOUSTON, April 24, 2018 (GLOBE NEWSWIRE) — Buckeye Partners, L.P. (“Buckeye”) (NYSE:BPL), today announced the formation of a joint venture with Phillips 66 Partners LP (“Phillips 66 Partners”) (NYSE:PSXP) and Andeavor (NYSE:ANDV) to develop a new deep-water, open access marine terminal in Ingleside, Texas. The South Texas Gateway Terminal will be constructed on a 212 acre waterfront parcel at the mouth of Corpus Christi Bay. The facility is positioned to serve as the primary outlet for crude oil and condensate volumes delivered off of the planned Gray Oak pipeline from the Permian Basin. The terminal, to be constructed and operated by Buckeye, will offer 3.4 million barrels of crude oil storage capacity, connectivity to the Gray Oak pipeline and two deep-water vessel docks capable of berthing Very Large Crude Carrier (“VLCC”) petroleum tankers as part of the initial scope of construction. The facility can ultimately be expanded to include over 10 million barrels of storage capacity as well as multiple additional docks and other inbound pipeline connections. The initial construction of the terminal is supported by long-term minimum volume throughput commitments from credit-worthy customers, including Phillips 66 and Andeavor, and is scheduled to commence initial operations by the end of 2019. Buckeye will own a 50% interest in the newly formed joint venture and Phillips 66 Partners and Andeavor will each own a 25% interest.
“The South Texas Gateway Terminal will serve as a premier open-access deep-water marine terminal in the Port of Corpus Christi,” said Khalid Muslih, Executive Vice President of Buckeye and President of Buckeye’s Global Marine Terminals business unit. “The terminal will provide customers with logistics solutions that connect the region’s rapidly growing crude oil production with advantaged access to global markets. Buckeye is extremely pleased to be partnering with two other leading integrated energy firms in Phillips 66 Partners and Andeavor and believes this partnership offers tremendous opportunity for future development and growth of the South Texas Gateway Terminal.”
“This project expands our presence in the important Corpus Christi market, which we believe offers strong competitive advantages for waterborne shipments of crude oil and other petroleum products from the fast growing Permian and Eagle Ford shale plays. Recently announced improvements to our existing flagship Buckeye Texas Partners terminal, which sits along the ship channel in the Port of Corpus Christi, have expanded its leading marine terminalling capabilities. This combined marine terminal presence in Corpus Christi will provide our customers with advantaged last mile solutions, including unmatched connectivity to two recently announced Permian Basin pipeline expansions. We believe that these assets represent a competitive advantage for Buckeye and position us at the forefront of the fast-growing U.S. crude oil export movement,” said Mr. Muslih.
About Buckeye Partners, L.P.
Buckeye Partners, L.P. (NYSE:BPL) is a publicly traded master limited partnership which owns and operates, or owns a significant interest in, a diversified global network of integrated assets providing midstream logistic solutions, primarily consisting of the transportation, storage, processing and marketing of liquid petroleum products. Buckeye is one of the largest independent liquid petroleum products pipeline operators in the United States in terms of volumes delivered, with approximately 6,000 miles of pipeline. Buckeye also uses its service expertise to operate and/or maintain third-party pipelines and perform certain engineering and construction services for its customers. Buckeye’s global terminal network, including through its interest in VTTI B.V. (“VTTI”), comprises more than 135 liquid petroleum products terminals with aggregate tank capacity of over 176 million barrels across our portfolio of pipelines, inland terminals and marine terminals located primarily in the East Coast, Midwest and Gulf Coast regions of the United States as well as in the Caribbean, Northwest Europe, the Middle East and Southeast Asia. Buckeye’s global network of marine terminals enables it to facilitate global flows of crude oil and refined petroleum products, offering its customers connectivity between supply areas and market centers through some of the world’s most important bulk liquid storage and blending hubs. Buckeye’s flagship marine terminal in The Bahamas, Buckeye Bahamas Hub, is one of the largest marine crude oil and refined petroleum products storage facilities in the world and provides an array of logistics and blending services for the global flow of petroleum products. Buckeye’s Gulf Coast regional hub, Buckeye Texas Partners, offers world-class marine terminalling, storage and processing capabilities. Through its 50% equity interest in VTTI, Buckeye’s global terminal network offers premier storage and marine terminalling services for petroleum product logistics in key international energy hubs. Buckeye is also a wholesale distributor of refined petroleum products in certain areas served by its pipelines and terminals. More information concerning Buckeye can be found at www.buckeye.com.
This press release includes forward-looking statements that we believe to be reasonable as of today’s date. Such statements are identified by use of the words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “should,” and similar expressions. Actual results may differ significantly because of risks and uncertainties that are difficult to predict and that may be beyond our control. Among the forward-looking statements set forth in this press release are statements regarding our expectation of increasing quarterly distributions in the future. These statements are subject to, among other risks, (i) changes in federal, state, local, and foreign laws or regulations to which we are subject, including those governing pipeline tariff rates and those that permit the treatment of us as a partnership for federal income tax purposes, (ii) terrorism and other security risks, including cyber risk, adverse weather conditions, including hurricanes, environmental releases, and natural disasters, (iii) changes in the marketplace for our products or services, such as increased competition, changes in product flows, better energy efficiency, or general reductions in demand, (iv) adverse regional, national, or international economic conditions, adverse capital market conditions, and adverse political developments, (v) shutdowns or interruptions at our pipeline, terminalling, storage, and processing assets or at the source points for the products we transport, store, or sell, (vi) unanticipated capital expenditures in connection with the construction, repair, or replacement of our assets, (vii) volatility in the price of liquid petroleum products, (viii) nonpayment or nonperformance by our customers, (ix) our ability to integrate acquired assets with our existing assets and to realize anticipated cost savings and other efficiencies and benefits and (x) our ability to successfully complete our organic growth projects and to realize the anticipated financial benefits. You should read our filings with the U.S. Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2017, for a more extensive list of factors that could affect results. We undertake no obligation to revise our forward-looking statements to reflect events or circumstances occurring after today’s date except as required by law.
Kevin J. Goodwin
Vice President and Treasurer