Buckeye Partners LP (BPL) Q2 2012 Earnings Call August 03, 2012 11:00 am ET Executives Clark C. Smith - Chief Executive Officer of of Buckeye GP, President of Buckeye GP and Member of The Board of Directors of Buckeye GP LIC William H. Schmidt - Vice President of Buckeye GP LLC and General Counsel of Buckeye GP LLC Keith E. St.Clair - Chief Financial Officer of Buckeye GP LLC and Executive Vice President of Buckeye GP LLC Mary F. Morgan - Senior Vice President of Buckeye GP LLC and President of International Pipelines & Terminals Business Unit Analysts Brian J. Zarahn - Barclays Capital, Research Division Theodore Durbin - Goldman Sachs Group Inc., Research Division S. Ross Payne - Wells Fargo Securities, LLC, Research Division James Jampel Michael J. Blum - Wells Fargo Securities, LLC, Research Division Adam Limbach Presentation Operator
Following our prepared remarks, we'll open the call to questions. But first, I would like for Bill to provide our forward-looking statements disclaimer.William H. Schmidt Thanks, Clark. Before we begin, I'd like to remind everyone that we may make statements on the call today that could be construed as forward-looking statements as defined by the SEC. Future results are subject to numerous contingencies, many of which are outside our control, and any forward-looking statements we make are qualified by the risk factors and other information set forth in our Form 10-K for the year ended December 31, 2011, and our most recent Form 10-Q we just filed with the SEC. In addition, during the call, we will be discussing Buckeye Partners adjusted EBITDA and certain other non-GAAP measures. A reconciliation of these non-GAAP measures to the most directly comparable GAAP measures is included in the press release that we issued earlier this morning, which is posted on the Investor Center section of Buckeye's website, www.buckeye.com. With that, I'll turn the call back over to Clark. Clark C. Smith Thank you, Bill. I'd like to begin my comments by discussing Buckeye safety achievements. I'm pleased to report that Buckeye continued a strong safety performance during the second quarter of 2012, experiencing 0 OSHA recordable injuries. Overall, we've been able to reduce our OSHA recordable incident rate by 58% since 2009, and we have consistently outperformed the industry benchmark for this metric for the past 2 years. Additionally, we have experienced improvements on our API [ph] motor vehicle incident rate with a 64% reduction since 2009. And our year-to-date performance in 2012 is significantly outperforming the industry benchmark for this metric. Our operating teams across Buckeye are doing a tremendous job of ensuring the safety as our top priority, and its positive safety record reflect that achievement.
Next, I'd like to discuss some important developments for Buckeye since our last call. I'm pleased to announce that Buckeye has completed the construction of 1.1 million barrels of storage capacity and related infrastructure of BORCO on time and on budget. This storage represents the initial phase of our BORCO expansion plans, which ultimately will be adding a total of 4.7 million barrels of storage capacity to the facility. The initial 1.1 million barrels were operational on July 1 and are fully leased.We continue to see strong customer interest in crude and other product storage at our BORCO facility. We have leased over 65% of the planned 4.7 million expansion barrels, which are expected to be placed in service in phases through the third quarter of 2013. BORCO is a very strategic growth platform for Buckeye and is the hub of our marine terminal strategy. As part of our marine terminal strategy, on July 26, we completed the purchase of the Perth Amboy marine terminal from Chevron for $260 million. We are excited to be moving forward with our integration and commercialization plans for this facility. This terminal features 4 million barrels of storage, which increases Buckeye's total petroleum product storage capacity by approximately 6% to over 69 million barrels. In addition, Perth Amboy has 4 docks on the Arthur Kill, as well as pipeline, rail and truck access. Chevron will continue to be a key customer at the terminal under multiyear storage and throughput commitments. The Perth Amboy terminal provides Buckeye with both security and diversity of product supply. It will directly link our domestic pipeline and terminal network to an owned and operated marine terminal through a pipeline that we plan to build through our Linden complex. This will provide Buckeye with direct access to domestic and internationally sourced petroleum products, as well as provide our customers with storage at New York Harbor, a highly liquid NYMEX settlement point. Read the rest of this transcript for free on seekingalpha.com