US terminal and pipeline operator NuStar Energy has bought a stake in two petroleum terminals and an offshore loading facility in Turkey.
The company entered into a joint venture with Turkish companies S-Oil and Aves, giving it majority ownership and operational control of the two terminals.
NuStar will acquire a 75% ownership stake in the joint venture for a price of $50-60 million (37.7-45.2 million). The transaction, which is expected to be immediately accretive to NuStar Energy's distributable cash flow per unit, is expected to close in October.
The two terminals, which will be wholly owned by the joint venture, are located in Mersin, Turkey. An existing terminal owned by S-Oil has 606,000 barrels of storage capacity in 20 tanks, primarily for gas oil and distillates.
The new Aves terminal, which will begin operations this month, 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 newly christened SAVKA offshore platform located approximately three miles off the Mediterranean Sea coast.
The platform, 67% of which will be owned by the joint venture, can simultaneously offload product from two Aframax-size vessels that weigh up to 80,000 dead weight tonnes (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.
As we have said previously, petroleum supply and demand imbalances in the Mediterranean region present strong logistics opportunities, NuStar president and CEO Curt Anastasio says. All of the terminal employees will be retained, and we look forward to having them on our team.
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, Senan Idin, chairman of Aves and S-Oil, comments.
S-Oil is has over 190 retail fuel outlets in Turkey, and it is the 8th largest importer of fuel into the Turkish market.
Aves has been engaged in international commodity trading since 2004, and today the company is a well-known operator in Mediterranean gasoil and diesel markets.
