NuStar Energy L.P. (NYSE: NS) today announced that it has closed on a joint venture with Turkish companies S-Oil and Aves that gives NuStar majority ownership and operational control of two petroleum terminals in Turkey. NuStar will acquire a 75 percent ownership stake in the joint venture for a price of approximately $54 million. The transaction is expected to be immediately accretive to NuStar Energy's distributable cash flow per unit.
NuStar Energy L.P. (NYSE: NS) today announced that it has closed on a
joint venture with Turkish companies S-Oil and Aves that gives NuStar majority
ownership and operational control of two petroleum terminals in Turkey. NuStar
will acquire a 75 percent ownership stake in the joint venture for a price of
approximately $54 million. The transaction is expected to be immediately
accretive to NuStar Energy's distributable cash flow per unit.
The two terminals, which are now wholly owned by the joint venture, are located
in
Mersin
,
Turkey
. One
of the terminals, previously owned by S-Oil, has 606,000 barrels of storage
capacity in 20 tanks, primarily for gas oil and distillates. A newer terminal
that was owned by Aves began operations in August and has 740,000 barrels of
storage capacity in 24 tanks, mostly for oil products. The joint venture plans
to expand the combined storage capacity of the terminals by approximately
930,000 barrels by the end of 2011.
Both terminals are connected via pipelines to the new SAVKA offshore platform
located approximately three miles off the
Mediterranean Sea
coast. The platform can simultaneously offload product from two Aframax-size
vessels that weigh up to 80,000 dead weight tons (dwt) each. Both terminals
receive product via the platform and discharge via truck rack to the regional
market or via the platform for export. The joint venture is also evaluating
additional terminal construction projects in different parts of
Turkey
.
"We are fortunate to have such outstanding partners as S-Oil and Aves in
this endeavor, and we look forward to working with them to develop world-class
operations in
Turkey
that
will be very profitable for our companies and all of our stakeholders,"
said Curt Anastasio, president and CEO of NuStar. "These are new,
well-built and well-run facilities with outstanding employees, and we will
invest to expand and optimize their operations and enhance their profitability.
And
Turkey
is an
exciting new market for us because the country has a booming economy with
strong and growing petroleum demand."
The joint venture will be overseen by a four-person board of directors, and as
majority owners of the joint venture, NuStar will appoint top management and
oversee daily operations.
"We could not ask for a better partner in this endeavor than NuStar
because they are a proven and respected leader in the global oil storage
industry," said Senan Idin, Chairman of Aves. "They have a strong
history of investing in their facilities and in their employees, and we are
excited about their plans for further expanding and improving our terminals and
operations. And by making new investments we intend to cover the oil storage
capacity gap in Turkey that is the result of ever-increasing domestic demand
for oil products and the country's obligation to comply with International
Energy Agency (IEA) strategic stock-keeping policies."
"We also continue to believe that the partnership is an important stepping
stone for reaching Turkey's long-term goal to become an energy corridor country
as it is a key country for transportation of Iraqi, Russian and FSU Countries'
tremendous oil and natural gas resources to world markets," Idin added.
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