HOUSTON, March 6, 2013 /PRNewswire/ -- Oiltanking Partners, L.P. (NYSE: OILT) (the "Partnership") today announced an expansion of the Partnership's relationship with Enterprise Products Partners, L.P. ("Enterprise") and plans to significantly increase its ability to import/export liquefied petroleum gas ("LPG") at its terminal on the Houston Ship Channel. In connection with the agreement with Enterprise, which runs through 2026, the Partnership will construct a new vessel dock and add infrastructure to existing docks with the capability of handling significantly more LPG vessels at multiple docks. The $44 million expansion is expected to be completed by the end of the fourth quarter of 2014.
"Oiltanking has enjoyed a successful relationship with Enterprise at our Houston terminal for over 20 years," said Anne-Marie Ainsworth, President and Chief Executive Officer of the Partnership's general partner. "Since the inception of the relationship, both parties have kept pace with import/export demand by continuing to add the necessary infrastructure to become the preferred LPG import/export facility throughout the Gulf Coast.
"In conjunction with Enterprise's most recent expansion at our facility, the loading capacity for low-ethane propane will increase from the current rate of almost 4 million barrels per month to approximately 7.5 million barrels per month. This dock expansion project will provide incremental loading capacity and position us well to capitalize on the robust international demand for LPGs," added Ainsworth.
Under the amended agreement, Oiltanking has agreed to provide vessel-based LPG import and export services on the Houston Ship Channel exclusively to Enterprise, and Enterprise has agreed to exclusively use Oiltanking's facility for its vessel-based imports and exports of LPGs on the Houston Ship Channel.
The dock expansion project and amended agreement is expected to be accretive to distributable cash flow once operational and is expected to generate returns of approximately 5-6 times EBITDA, or earnings before interest, taxes and depreciation, with upside potential. 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
Dennard - Lascar / (713) 529-6600
Jack Lascar / Lisa Elliott
SOURCE Oiltanking Partners, L.P.