A $40 million expansion is underway at the Bahamas Oil Refining Company (BORCO), with a New York Stock Exchange-listed company contracted for the construction of 14 oil storage tanks, set for completion in the second quarter of 2012.
The project is expected to kickoff in short order, say officials, with a team of US-based CB&I officials set to fly in for the work, valued at $40 million.
“CB&I’s scope of work includes the engineering, procurement, fabrication and construction of 14 oil storage tanks, with a total capacity of approximately 3.5 million barrels, in Freeport, Grand Bahamas,” said a statement from BORCO yesterday. “CB&I’s contract is scheduled for completion in the second quarter of 2012.”
The contract was awarded in the last two weeks, said a representative from CB&I. A statement from the company noted that CB&I has constructed some of the world’s largest energy infrastructure projects. The hiring of the firm is the latest step by BORCO, following the welcoming of its new parent company Buckeye Partners.
The new owners have outlined Buckeye’s history, strategy for growth, as well as why BORCO is an important part of Buckeye’s overall plan.
The $1.36 billion sale of BORCO was announced last December. Buckeye raised $650 million in a sale of senior secured notes to fund the purchase.
First Reserve and Vopak, the world’s largest tank terminal operator, acquired the Grand Bahama-based oil storage terminal in 2008. The equity of the company at the time was split 80:20 between affiliates of First Reserve Fund XI, L.P., a global private equity fund operated by First Reserve Corp., and Vopak. Vopak then sold its 20 percent interest in the Grand Bahama-based company last month, which gave Buckeye 100 percent interest in BORCO.
The BORCO terminal is expected to expand its capacity to 27.4 million barrels, advancing the terminal’s position as a key international hub for crude oil and petroleum products storage in the oil industry, as well as a best-in-class storage and trading platform for the region. The cost of that expansion is estimated at $350 million.
Buckeye now owns 69 refined petroleum products terminals, and operates and maintains approximately 2,400 miles of pipeline under agreements with major oil and chemical companies. It also owns a major natural gas storage facility in northern California and markets refined petroleum products in some of the geographic areas served by its pipeline and terminal operations.
NG Business Reporte