TransMontaigne Ramps Up Buildout of Refining Terminals on Gulf Coast

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Researched by Industrial Info Resources (Sugar Land, Texas)--Terminaling and transportation company TransMontaigne Partners LP (NYSE:TLP) (Denver, Colorado) enjoyed a prosperous 2016 as it benefited from the re-contracting of storage capacity and stronger revenues from its facilities along the U.S. Gulf Coast. The company expects to benefit from the expansion of a major terminal in Mississippi that is in its final phase. Industrial Info is tracking $423 million in active projects involving TransMontaigne.

Net earnings for 2016 were reported to be $44.1 million, a 5.8% increase from 2015. Revenues increased about $12.4 million to $164.9 million, due to revenue gains at the Gulf Coast, River and Southeast terminals; the Midwest and Brownsville terminals saw slight decreases.

TransMontaigne is part of a joint venture proposing an estimated $300 million in third-phase in additions at the BOSTCO Terminal in La Porte, Texas. Currently, the Battleground Oil Specialty Terminal Company LLC (BOSTCO) facility has a capacity of 6.5 million barrels of refined products, comprising more than 50 tanks ranging 30,000 to 320,000 barrels apiece. The addition, as designed, would involve the construction of four to 10 tanks, ranging in capacity from 80,000 to 300,000 barrels apiece. A pipeline connection also is being proposed to link BOSTCO to Kinder Morgan's terminal in Pasadena, Texas. For more information, see Industrial Info's project report.

BOSTCO is majority-owned (55%) by Kinder Morgan Incorporated (NYSE:KMI) (Houston, Texas), while TransMontaigne owns 42.5% and Tauber Oil Company (Houston) owns 2.5%. Executives noted in a quarterly press release that TransMontaigne had increased its maximum borrowing line of credit to allow for additional future joint-venture investments, "which may include additional investments in BOSTCO."

TransMontaigne's largest project under construction is $50 million in additions at the refined products terminal in Collins, Mississippi. The company, with contractor CB&I Constructors Incorporated (NYSE:CBI) (The Hague, Netherlands), is building nine tanks to supplement the existing 12, which currently have a capacity of 3.4 million barrels. TransMontaigne also seeks permits for a $35 million second phase of additions, which would add another four to six tanks. For more information, see Industrial Info's project reports for Phase I and Phase II.

"The first portion of our Phase I, $75 million fee-based and fully contracted Collins terminal expansion is now in service and earning revenue," said Fred Boutin, the chief executive officer of TransMontaigne Partners, in the press release. "The remaining portions of our previously announced Phase I expansion will be in service before the end of the second quarter of this year."

He later clarified on Phase I: "In December 2016, we placed into service 0.9 million barrels of the 2 million barrels of new tank capacity, and in February 2017 we completed construction on an additional 0.3 million barrels. Completion of the remaining 0.8 million barrels of new tank capacity will occur in various stages through the second quarter of 2017."

Permits also are being sought for $5 million in additions at a petroleum products terminal in Brownsville, Texas, which will add one more to the existing 60 tanks, which currently have a capacity of 2 million barrels. For more information, see Industrial Info's project report.

Industrial Info also is tracking $33 million in inspections and upgrades scheduled to be performed over the next three years at TransMontaigne facilities across the U.S.

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