HOUSTON, Sept. 4, 2012 /PRNewswire/ -- Oiltanking Partners, L.P. (NYSE: OILT) today announced that the board of directors of its general partner has approved a $70 million expansion project to construct approximately 3.3 million barrels of new crude oil storage capacity at its Houston terminaling facility. The project, named Appelt II, will be located adjacent to Appelt I which was announced in April 2012 and is currently under construction.
Carlin G. Conner, President, CEO and Chairman of the Board, stated, "As expected, the increase in domestic crude oil production continues to create a need for additional crude storage capacity by refiners, oil producers and marketers. This new project is supported by long-term storage contracts and is further evidence of the excellent service, flexibility and optionality that our terminal provides to the marketplace."
The Partnership anticipates commencing construction by the beginning of the second quarter of 2013 when all relevant permits are in place. The additional storage capacity is expected to be placed into service during the third and fourth quarter of 2014. Once complete, the new storage capacity will bring total active storage capacity at the Partnership to over 25 million barrels.
The expansion project is expected to be accretive to distributable cash flow once the additional storage is operational and is expected to generate returns of approximately 5-7 times EBITDA, or earnings before interest, taxes and depreciation. The Partnership anticipates funding the project primarily with debt.
Oiltanking Partners is a master limited partnership engaged in independent storage and transportation of crude oil, refined petroleum products and liquefied petroleum gas. We provide our services to a variety of customers, including major integrated oil companies, distributors, marketers and chemical and petrochemical companies. Our assets are located along the Gulf Coast of the United States. For more information, visit www.oiltankingpartners.com.
This press release contains forward-looking statements, including statements as to the Partnership's expectations for the expansion of its Houston terminal. 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 www.sec.gov. 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.
Mark Buscovich, Manager FP&A and IR
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SOURCE Oiltanking Partners, L.P.