US terminal operator Buckeye Partners will add to its 69 terminals following a majority stake purchase in the Caribbeans largest oil terminal.
Buckeye agreed to buy a majority 80% stake in Bahamas Oil Refining Company International (Borco) from First Reserve for $1.36 billion (1.033 billion) in cash and stock, expanding its storage capacity.
Buckeye plans to spend $400 million to expand capacity by 35% to more than 29 million barrels at the Borco terminal.
First Reserve will get $400 million of new partnership units, cash raised from sale of $425 million of new units to institutional investors and as much as $775 million. Buckeye expects the deal to close in Q1 2011, subject to Bahamian government approval.
Koninklijke Vopak, based in Rotterdam, has the right to sell its 20% stake at the First Reserve terms. That would bring the total transaction value to $1.7 billion.
The stake in the Bahamas Oil Refining Company International will add 10% to Buckeyes cash for distribution to unit holders immediately on closing.