Macquarie Infrastructure Corporation (NYSE:MIC) has announced investments of more than $115 million in growth projects across its four segments.

MIC announced the completion of the acquisition of the land beneath its Bayonne Energy Center ("BEC") gas-fired power generation facility in Bayonne, NJ from Hess Corporation on December 30, 2015. The purchase includes a buyout of the remainder of the 55 year lease assumed by MIC as a part of the acquisition of the BEC in April of 2015. The land acquisition provides MIC with additional security associated with having a perpetual interest in the property beneath the plant as well as the financial benefit of avoided lease payments.

BEC is situated on 7.9 acres along approximately 290 feet of frontage on the Kill Van Kull in Bayonne, NJ. The additional water frontage is expected to benefit MIC's adjacent International-Matex Tank Terminals ("IMTT") marine terminals business and its operations on the Bayonne peninsula to the extent that it enables IMTT to expand its docks at the facility.

Also related to BEC, MIC has signed an agreement to construct an interconnection with the Spectra Energy-owned Texas Eastern Transmission, LP ("TETLP") natural gas pipeline. The existing TETLP pipeline runs beneath the western portion of the property owned by IMTT in Bayonne. The interconnection will allow for the construction of an approximately 7000 foot long pipeline across IMTT land that is expected to provide BEC with additional access to affordable natural gas and facilitates the development of gas-using businesses.

MIC previously noted its intent to expand the power generating capacity of BEC from its current 512 megawatts to at least 642 megawatts with the installation of additional generating sets (turbine plus generator). The expansion has been slated for vacant land already owned by IMTT next to the existing BEC facility. Related to the proposed expansion, MIC reported that it has signed agreements with Siemens providing it with fixed price purchase options on two Industrial Trent generation sets of similar size and type to those currently in service at BEC. With the purchased land, gas pipeline development and contract for generating sets in place, the expansion of BEC is now contingent only upon receipt of required regulatory approvals.

MIC announced that its Hawaii Gas business has signed a purchase and sale agreement and received regulatory approval for the acquisition of the land beneath its synthetic natural gas plant at Campbell Industrial Park on Oahu from BHP. The Decision and Order from the Hawaii Public Utilities Commission allowing the transaction to proceed was received on December 30, 2015. As with BEC, by owning the land beneath its plant, Hawaii Gas has achieved both additional security with regard to existing operations and avoided potential future lease rate increases. The Company has signed additional agreements that will see it continue to invest in clean energy projects in Hawaii including in non-utility customer services and initiatives related to renewable natural gas.

Approximately $50 million of the announced capital deployment involves the expansion of MIC's Atlantic Aviation business, the owner of one of the United State's largest networks of fixed base operations (FBO) serving the general aviation industry. Investment opportunities involving Atlantic Aviation include:
  • Acquisition of an FBO at McClellan-Palomar airport in Carlsbad, CA in a transaction closed on December 18, 2015;
  • Closing on December 8, 2015 of a transaction with Cutter Aviation in which Atlantic Aviation acquired the Cutter owned FBO at El Paso International Airport in El Paso, TX and Cutter acquired the Atlantic Aviation owned FBO at Deer Valley Airport in Phoenix, AZ; and,
  • Entry into an agreement to acquire a hangar at Boeing Field in Seattle, WA, completion of the acquisition of an additional hangar at its FBO in Hayden, CO and breaking ground on construction for a new hangar at its facility at Rifle, CO.

James Hooke, chief executive officer of MIC, noted that Atlantic Aviation continued to perform well into year end, saying "The good performance of Atlantic Aviation in the fourth quarter was pleasing."

MIC expects that many of the growth projects completed in 2015, as well as a portion of those to be completed in 2016 through 2019, will constitute property eligible for bonus depreciation under the terms of the recently enacted Protecting Americans from Tax Hikes (Path) Act of 2015. The Path Act provides for first year bonus depreciation of 50% of the value of qualifying assets placed in service through 2017, 40% in 2018 and 30% in 2019.

"We are pleased to have ended a strong 2015 with positive fourth quarter operating results, a full slate of growth capital projects commenced or committed to across our four businesses and even more opportunities under consideration," Hooke added.

About Macquarie Infrastructure Corporation

Macquarie Infrastructure Corporation owns, operates and invests in a diversified group of infrastructure businesses providing basic services to customers in the United States. Its businesses consist of a bulk liquid terminals business, International-Matex Tank Terminals, an airport services business, Atlantic Aviation, a gas processing and distribution business, Hawaii Gas, and several entities comprising a Contracted Power and Energy segment. MIC is managed by a wholly-owned subsidiary of the Macquarie Group. For additional information, please visit the Macquarie Infrastructure Corporation website at MIC-G

MIC is not an authorized deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of MIC do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542 (MBL). MBL does not guarantee or otherwise provide assurance in respect of the obligations of MIC.

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