Prostar Capital, an investment firm focused on midstream energy infrastructure assets, recently completed the acquisition of NuStar Energy’s oil storage terminal facility in St Eustatius, a Dutch island in the Caribbean.
The $250 million transaction first was announced in May.
Prostar said the terminal is a complementary acquisition for its existing storage terminal platform, Global Terminal Investments, which also owns Fujairah Oil Terminal FZC and GTI Fujairah FZC, both located in the Port of Fujairah, UAE. The St Eustatius terminal was rebranded 'GTI Statia' under Prostar’s ownership.
The GTI Statia terminal is strategically located along major shipping lanes serving US crude import and export markets, as well as the regional markets for fuel oil and refined petroleum products in the Caribbean and Latin America. The terminal consists of 60 commercial tanks with a total storage capacity of 2.3 million cubic meters (14 million barrels) and extensive marine infrastructure.
The transaction is Prostar’s second in the region followinga 2017 investment in Eureka Midstream, a gas gathering business in the heart of the Marcellus and Utica shale basins.
“We are excited to be acquiring one of the largest independent storage terminals in the region,” said Steve Bickerton, senior managing director of Prostar. “This transaction is consistent with Prostar’s strategy of identifying assets that are strategically positioned to serve their customers, and where opportunities exist to de-risk the business’s cash flows and grow shareholder value. Prostar actively looks to augment its portfolio companies through expansion capital, and we see several paths to do that with GTI Statia.”
Dave Noakes, another senior managing director of Prostar, said the new terminal increases the underlying capacity of the company’s business to more than 3.4 million cubic meters (22 million barrels) of storage.
“We will continue to build and diversify the platform through future acquisitions of terminals located in key global energy storage and trading hubs,” Noakes said.
Brad Barron, NuStar’s president and CEO, said the divestiture allows NuStar to focus on building its core asset base.
“We are pleased that this sale allows us to re-deploy the sales proceeds to continue to lower our leverage and to fund growth projects in our core North American business,” he said.
“And while it was a very difficult decision to divest the terminal given that it is such a high-quality asset with outstanding employees, we are pleased to hand over the reins to a company with a business model that is better aligned to take advantage of the terminal’s location and operational strengths.”