Wed 30 Apr 2008, 09:16 GMT

BORCO terminal acquisition is completed


Vopak and First Reserve announce completion of BORCO oil storage terminal acquisition.



Vopak and First Reserve Corporation today announced the completion of the acquisition of the Bahamas Oil Refining Company (BORCO) oil storage terminal in Freeport, Bahamas. The equity value of the new company amounted to $550 million, split 80%-20% between affiliates of First Reserve Fund XI, L.P. and Vopak, respectively. The acquisition was financed in part by a senior secured credit facility fully underwritten by ABN AMRO Bank N.V. and DnB Nor Bank ASA, and received all regulatory approvals from the Government of the Bahamas. Full terms of the transaction were not disclosed.

Speaking about the acquisition, William E. Macaulay, Chairman and CEO of First Reserve Corporation said "The partnership with Vopak at BORCO is an exciting opportunity to support the growth of the world's major oil companies by providing long-term access to facilities for storage and distribution services in a strategic part of the world. The facility will provide significant value for our strategic partners while also providing tremendous growth opportunities to the Bahamas."

Vopak is the world's largest independent tank terminal operator specializing in the storage and handling of liquid and gaseous chemical and oil products, whilst First Reserve Corporation is the leading private equity firm that specializes in the energy industry.

In February 2008, First Reserve announced its intention to acquire the facility and form a strategic joint venture with Vopak to operate the terminal, which will be renamed Vopak Terminal Bahamas, and which will be operated as an integral part of the Vopak global network.

Vopak Terminal Bahamas is an independent storage terminal with a capacity of three-million cubic meters, or 20 million barrels, with the possibility of expansion up to five million cubic meters for the storage and handling of crude oil, fuel oil and clean petroleum products. In addition, Vopak Terminal Bahamas offers blending, transhipment and bunkering services. The terminal is located in Freeport, Bahamas, just 80 miles of the coast of Florida, and is the largest storage terminal in the Caribbean. Its deepwater jetties can berth the largest-sized vessels.

Venezuelan state oil company PDVSA, which purchased the facility from Chevron in 1990 and has been running its bunkering operations from the Bahamas and taking enquiries for Freeport up until last week, stopped commercial bunkering activities yesterday as it prepares to exit the Bahamas marine fuels market.

The BORCO acquisition is part of an ongoing strategic effort by First Reserve to develop energy-related infrastructure businesses that will help build long-term growth opportunities with its partners and is a continuation of its 25-year track record of developing long-term sustainable businesses; a significant number of First Reserve companies have grown into leading energy companies.

Under the new ownership of First Reserve Corporation and Vopak, the terminal is expected to become a key international hub for crude oil and petroleum products for major oil companies and will be positioned as a leading storage and trading platform for the region, while providing economic development and jobs for the Bahamas and the region.


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