June 11, 2014
Oiltanking Partners, L.P.
(NYSE: OILT) (the "Partnership") today announced that the board of directors of its general partner has approved an expansion project to construct new crude storage, pipelines, and dock infrastructure at its terminal in
, Texas. The multi-phase crude expansion will have a total capacity of up to 6.2 million barrels of storage at a total cost of approximately
when all currently planned phases have been completed. The initial phase of the project is fully supported by customer commitments. In addition, the Partnership has received strong commercial interest in storage commitments with other potential customers that exceed the remaining project capacity.
The expansion project is designed to meet the growing needs of Oiltanking's customers in the
market. This market currently has refining capacity of 1.5 million barrels per day. In addition, several new long-haul pipelines, including the TransCanada Gulf Coast Project, Shell's
-to-Houma or "HoHo" Pipeline and the Port Arthur Extension of the Seaway Pipeline, have recently been completed or are under development. As much as three million barrels of crude per day could flow to the
market once these and other pipeline projects are in service, driving strong demand for additional storage, pipeline connectivity and deep water access.
"We are very excited to be moving forward with the crude initiative in
, President and CEO. "We believe the market opportunity there is similar to the one we saw a few years ago in
when we announced our
and Appelt terminal expansions. As with those projects, we plan to provide the best-in-class connectivity, dock capabilities and service and reliability that our customers have come to expect from Oiltanking."
Based on current contracts, the Partnership expects to begin delivering initial tanks to customers during the third quarter of 2015, with the balance of the tanks coming online as they are completed through the first half of 2016. Upon completion of the announced crude storage expansions, the
terminal is expected to have 11.7 million barrels of total capacity, bringing the Partnership's combined capacity to nearly 35 million barrels of storage.
The first phase cost includes required pipeline connections and manifold infrastructure, as well as the cost of constructing a new finger pier with two new deep water docks. The new docks will be configured to load and unload crude and feedstocks at high rates to accommodate both the announced crude expansions and other growth opportunities. The
crude expansions are expected to be accretive to distributable cash flow once operational. In addition, it is expected that future potential expansions would utilize the newly constructed dock and pipeline infrastructure that will support this project. The Partnership will provide additional information regarding the project during its Analyst Day on
June 24, 2014
Oiltanking Partners, L.P.
is a growth-oriented master limited partnership engaged in independent storage and transportation of crude oil, refined petroleum products and liquefied petroleum gas. We are the logistics provider of choice to major integrated oil companies, distributors, marketers and chemical and petrochemical companies. Our core assets are strategically located along the Gulf Coast of
the United States
on the Houston Ship Channel and in
, Texas. For more information, visit
This press release contains forward-looking statements, including statements as to the Partnership's expectations for the expansion of its
terminals. These forward-looking statements reflect Oiltanking Partners' current views with respect to future events, based on what it believes are reasonable assumptions. No assurance can be given, however, that these events will occur. These statements are subject to risks and uncertainties as described in Oiltanking Partners' filings with the Securities and Exchange Commission, available at the SEC's website at
. By issuing forward looking statements based on current expectations, opinions, views or beliefs, Oiltanking Partners has no obligation and, except as required by law, is not undertaking any obligation, to update or revise these statements or provide any other information relating to such statements.