Vopak Industrial Infrastructure Americas, a 50:50 joint venture of Dutch independent tank storage company Royal Vopak and US investment firm BlackRock’s Global Energy & Power Infrastructure Fund, is to buy three major US Gulf Coast terminals from Dow Chemical for US$620 million (€523 million).
The transaction includes Dow’s chemical storage terminal in Freeport, Texas, which has 53 tanks with a capacity of 140,000 m3, the St. Charles chemical storage terminal in Louisiana, which has 73 tanks with a capacity of 409,000 m3, and a terminal in Plaquemine, Louisiana, which has 30 tanks with a capacity of 303,000 m3 and stores chemicals and refined products. Between them, the terminals also have 16.4 ha of expansion land and 36 vessel berths, along with pipeline connections, rail and truck racks.
All three terminals are next to working Dow production complexes, and as part of the deal, Vopak Industrial Infrastructure Americas will enter into long-term service agreements with Dow for storage and infrastructure services. The two firms are working together to ensure a ‘seamless transition’.
‘Today’s announcement is another demonstration of our ongoing commitment to applying a best-owner mindset, supported by rigorous benchmarking and a focus on disciplined capital allocation. The transaction will enable Dow to deploy cash towards value-enhancing opportunities in our core businesses consistent with our capital allocation priorities including ensuring safe and reliable operations and paying down additional debt. Dow is also pleased to further our longstanding relationship with Vopak who is already a key logistics partner at several Dow locations globally,’ says Jim Fitterling, chairman and CEO of Dow.
Eelco Hoekstra, Vopak chairman and CEO says: ‘This unique expansion opportunity, in which we partner with the leading global investment experts of BlackRock, fits perfectly into Vopak’s growth strategy for industrial terminals. We are very proud of our expertise and long track record of storing vital products with care for our customers and our drive to continue to invest.’
The transaction is expected to be completed by the end of 2020, subject to customary closing conditions.