News bulletin – storage terminals

NEWS BULLETIN

STORAGE TERMINALS

KOOLE CONSOLIDATED

Institutional investors advised by JP Morgan Asset Management have taken full ownership of Koole Terminals Holding BV after acquiring the 49.99 per cent of the company owned by Canadian investment funds.

“A wholly owned structure will give us a clear mandate to execute the Koole Terminals’ strategy while maintaining our commitment to delivering a high level of customer service and safety performance,” says Koole CEO John Kraakman.

Meanwhile, in anticipation of the introduction of restrictions on the sulphur content of marine fuels from 1 January 2020 – the ‘IMO 2020’ rule – Koole Terminals and Maersk Oil Trading have announced an agreement to produce low-sulphur bunker fuel at Koole’s Rotterdam terminal. Production of IMO 2020-compliant fuel will take place in the petroleum industrial distillation (PID) unit at the site (above), which Koole acquired from Odfjell in September 2018.

“Koole Terminals continues to explore opportunities to contribute to a sustainable society,” says Kraakman. “One of the initiatives is to utilise our PID unit for producing environmentally friendly transportation fuels. We are proud to partner with Maersk and produce a low sulphur bunker fuel to support the reduction of sulphur emissions in order to reduce air pollution.”

Annual production is expected to cover between 5 and 10 per cent of Maersk’s annual fuel demand. “Our activities with Koole will be an important driver in ensuring stable, reliable services for Maersk’s customers during a potentially volatile period for global shipping,” says Niels Henrik Lindegaard, head of Maersk Oil Trading at AP Moller–Maersk. koole.com

FIRM HALF FOR RUBIS

Rubis has announced first-half EBIT from its Rubis Terminal operation of €24m, an 11 per cent increase over the first half of 2018. “Storage operations are proving very resilient in 2019 and business has stabilised after a difficult year in 2018,” says the company, although its operations in Turkey have been hampered by disruption to Iraqi oil flows and the absence of contango.

Rubis notes that it spent €29m in capital projects during the first half of 2019, adding to chemical capacity in Rotterdam and adapting capacity for bitumen at its Dunkirk site in northern France. rubis.fr

LBC IN GOOD HANDS

LBC Tank Terminals has appointed Frank Erkelens as its new Group CEO. Erkelens has outstanding international leadership experience in the tank terminals and logistics sector, most recently as CEO of Odfjell Terminals. He will take up the reins on 15 October, succeeding Walter Wattenbergh, who retired from LBC on 30 September.

Haroun van Hövell, chairman of LBC Tank Terminals, comments: “During nearly five years with the company, Walter has successfully led LBC through a significant turnaround by streamlining the business and refocusing on growth initiatives in order to better serve client needs. We are very grateful to Walter for the many contributions he has made. Having known Frank for many years, I am delighted that he will be joining us as the new CEO. His vast experience, track record and strong reputation will be of great value to LBC. Frank will build on Walter’s legacy and steer the business through the next phase of its strategic development.”

Frank Erkelens says: “It is a privilege and I am very excited to lead LBC into the next phase of its development and to deliver long-term growth and value creation. Under the leadership of Walter, LBC underwent a substantial

turnaround and the company is well positioned to capture the growth opportunities in the markets it is serving. With the support of LBC’s strong shareholders and together with the team at LBC the focus will be on delivering value for LBC’s customers, shareholders, partners and employees, as this will continue to drive LBC’s success and growth in the future.” www.lbctt.com

OFFER FOR TALLGRASS

Tallgrass Energy LP has received a non-binding proposal from Blackstone Infrastructure Partners and affiliates to take full ownership; Blackstone and the other sponsors currently own 44.2 per cent of Tallgrass Energy shares. Tallgrass is to set up a conflicts committee to consider the offer, noting that the proposal is only preliminary and does not constitute a binding agreement. www.tallgrassenergylp.com

KMI OUT OF CANADA

Kinder Morgan (KMI) has agreed to sell its 70 per cent holding in Kinder Morgan Canada Ltd (KML) to Pembina Pipeline Corp in exchange for some 25m shares in Pembina, equating to just under 5 per cent of Pembina’s common equity. The deal also includes the US portion of the Cochin Pipeline and is expected to close late this year or early in 2020. KML operates an integrated network of crude storage and rail terminals in Edmonton, Alberta, and the Vancouver Wharves Terminal in British Columbia.

“We believe KML’s assets will be a great fit with Pembina’s business and this transaction is highly beneficial to KML’s shareholders,” says KMI chairman/CEO Steve Kean. It will also allow Kinder Morgan to reduce debt and create additional value for shareholders.

Kinder Morgan has meanwhile announced a $170m investment in a series of projects to increase efficiency, add product liquidity and enhance blending capabilities at its Pasadena and Galena Park terminals on the Houston Ship Channel. The work focuses on butane blending at both sites, MTBE blending at Pasadena, and new inbound pipeline connections. The work at Pasadena, due for completion in second quarter 2020, is supported by a long-term agreement with a major refiner for approximately 2.0m bbl of refined petroleum products storage capacity at the terminal (below).

“These projects speak to Kinder Morgan’s continued commitment to excellence and to improving our already best-in-class facilities along the Houston Ship Channel,” says John Schlosser, president of terminals for KMI. “The announced improvements only serve to enhance our position as the market-leading refined petroleum products storage hub on the US Gulf Coast. This offers our customers unmatched supply optionality and liquidity and modal efficiencies as they aim to maximise storage and blending economics and access domestic and global energy markets in the most cost-effective manner possible.” www.kindermorgan.com

MARATHON CONNECTION

MPLX has finalised the acquisition of Andeavour Logistics, creating a large and diversified midstream company. The general partners of both master limited partnerships (MLPs) are owned by Marathon Petroleum.

“The combined entity will have an expanded geographic footprint which we believe enhances our long-term growth opportunities and the sustainable cash flow profile of the business,” says chairman/CEO Gary R Heminger. “We are confident about the midstream growth and value-creation opportunities that exist across this combined platform in the best basins in the US.” www.mplx.com

MORE FOR JOHOR

Local reports say that the Johor Port Authority has signed a deal with Smart Crest to build a 1.2m-m³ oil terminal in Tanjung Pelepas. The ‘Bunker Island’ terminal will be equipped with 61 storage tanks, two jetties and seven berths and will offer both oil storage and bunkering capacity.

The project, which was originally mooted some 17 years ago, has the support of Malaysia’s transport ministry. It also appears to replace Smart Crest’s Asia Petroleum Hub project, announced in 2016. The Bunker Island terminal is expected to be fully operational in four years’ time, although it could start operations in two years once the first phase of development is complete. www.johorport.com.my