Inter Pipeline to acquire NuStar

The transaction provides an attractive entry into the Port of Amsterdam. Historically, the NuStar Europe business has experienced a high contract renewal rate with its customers with storage utilisation rates averaging approximately 90% in the first half of 2018

Inter Pipeline’s European storage subsidiary, Inter Terminals has entered into an agreement to acquire 100% of the issued share capital of NuStar Energy, L.P.’s European bulk liquid storage business, NuStar Europe for cash consideration of USD$270 million, or approximately CAD$354 million.

The transaction is expected to close in the fourth quarter of 2018 and is subject to customary closing conditions.

“The addition of NuStar Europe is an exciting step forward for our European bulk liquid storage business,” commented Christian Bayle, Inter Pipeline’s president and chief executive officer.

“The acquisition materially increases our overall storage capacity and establishes Inter Terminals as the UK’s largest independent storage operator.

Furthermore, the transaction provides an attractive entry into the Port of Amsterdam. The Port is the world’s largest gasoline blending hub and has experienced significant storage growth over the years.”

NuStar Europe consists of seven coastal terminals totaling 9.1 million barrels of storage. One terminal is located in Amsterdam, Netherlands with the remaining facilities located in the United Kingdom (UK) near London, Runcorn, Eastham, Grangemouth, Clydebank and Belfast.  The acquisition will increase Inter Terminal’s storage capacity by approximately 33% to 37 million barrels.

In the UK, the 1.9 million barrel Grays terminal is strategically located on the river Thames and serves the greater London area. Grays is responsible for handling approximately 17 million barrels of refined products per year, and provides cost effective access to London’s fuel distribution network. The 49-tank terminal has averaged approximately 100 percent utilisation over the past three years.

The smaller terminals at Belfast, Eastham, Grangemouth, Runcorn and Clydebank in the UK primarily support the distribution of petrochemicals, gasoline, diesel and sulphur to regional demand centres.

The 3.8 million barrel state-of-the-art terminal in Amsterdam plays a key role in the Port of Amsterdam with approximately 10% of the independent storage capacity. The terminal provides gasoline, gas oil and fuel oil storage, and blending services, including those required to produce IMO 2020 compliant marine fuels. The 44-tank facility has averaged approximately 100% utilisation over the past three years.

Cash flow in the business is supported by cost-of-service and fixed-fee contracts with major integrated oil companies, petrochemical companies and petroleum traders with terms typically ranging from one to five years. Additional revenue is generated through ancillary services such as product blending and throughput fees.

www.interterminals.com

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