Prostar Capital increases stake in UAE terminal

Private equity firm now has a 40 percent ownership interest in Fujairah Oil Terminal FZC.



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Updated on 14 Aug 2015 11:05 GMT

Prostar Capital Ltd., a private equity company that invests in the infrastructure and energy sectors, has confirmed that it has increased its ownership in Fujairah Oil Terminal FZC to 40 percent as a result of a follow-on investment.

Prostar acquired an initial 18.6 percent stake in the UAE terminal in late 2013 during the early stages of construction of the facility, which was one of the largest developments of its kind in the world at the time. Fujairah Oil Terminal commenced operations earlier this year.

Steve Bickerton, Prostar's Managing Partner, remarked: "The increased ownership stake means Prostar can be more involved in the terminal's value creation undertakings, including optimization of operations, sourcing of new customers, implementation of global best practices, as well as executing capacity expansions and upgrades.

"Fujairah Oil Terminal is one of the largest independent terminals in the region and is well placed to secure third party customers at favourable rates relative to other 'captive' or non-independent terminals.

"Its strategic link to Asia's rapidly expanding energy markets will ensure continued strong demand for storage and drive potential growth and other value enhancing opportunities."

Construction of the UAE terminal was given the green light in March 2013 after a complex loan, security and swap package for US$251,860,000 was arranged by Crédit Agricole Corporate and Investment Bank, First Gulf Bank PJSC, Maybank Investment Bank Berhad, National Bank of Fujairah PSC, Natixis, Dubai Branch and The Bank of Tokyo-Mitsubishi UFJ, Ltd, Dubai Branch.

Prior to Prostar Capital's announcement - and according to the website of Hong Kong-listed Sinopec Kantons Holdings Ltd - Sinopec Kantons had a 50 percent stake in Fujairah Oil Terminal through Sinomart KTS Development Ltd, a wholly-owned subsidiary of Sinopec Kantons. Sinomart KTS acquired the 50 percent ownership after agreeing to pay US$25.05 million in early 2013.

The facility was also owned by the government of Fujairah and Singapore-based Concord Energy Pte Ltd. As yet, it has not been disclosed how the 21.4 percent increase in Prostar Capital's ownership has altered that of the other stakeholders.

Fujairah Oil Terminal is to be used to store fuel oil, gasoil, diesel oil and jet fuel. It has a capacity of 1.155 million cubic metres.

The storage complex covers 26 hectares, and an additional 1-kilometre-long pipeline connecting to the public valve manifolds at the existing two quays of the port of Fujairah has been built to facilitate the handling of oil products.

According to Sinopec Kantons, the total cost of the project is estimated at US$342 million.