Buckeye Partners’ acquisition of a 50% stake in VTTI was a primary driver for its year-over-year improvement in its adjusted EBITDA.
However, its legacy business encountered some challenges during the second quarter according to chairman, president and CEO Clark Smith.
The decline in capacity utilisation in its global marine terminals segment was due to the exit of a long-term customer from one of its facilities. Work is underway to re-contract open storage capacity within this segment.
However, its domestic pipelines and terminal segment benefits from increased pipeline tariffs and contributions from growth capital investments that drove pipeline and terminal throughput volumes.
Smith says: ‘We did, however, experience higher integrity and other project-related spending during the more temperate spring and summer months in this segment. Our merchant business continues to contribute positive returns and drive utilisation across our system, although the contribution for the quarter was impacted by lower rack margins and weaker market conditions.’