SemGroup acquires Houston Fuel Oil Terminal Company
SemGroup Corp. said this week it completed the acquisition of Houston Fuel Oil Terminal Company (HFOTCO), one of the largest oil terminals in the United States.
SemGroup also completed the initial payment for the acquisition of the 16.8-million-barrel terminal, which consisted of a $301 million cash payment provided by investment funds managed by Alinda Capital Partners. SemGroup will fund the second payment of $600 million in cash before the end of 2018.
The 16.8-million-barrel terminal establishes SemGroup’s position in the premier energy market, the Houston Ship Channel – one of the world’s most active trading centers for residual fuel oil, clean products, LPGs and crude oil. It also provides SemGroup with a strategic platform to growth in refinery-facing.
“As planned, this acquisition helps fulfill our long-term strategy to further de-risk our business by adding secure, downstream cash flow to our portfolio mix,” SemGroup President and CEO Carlin Conner said. “In addition to generating stable earnings for SemGroup on day one, this remarkably versatile asset provides an entirely new growth platform to capture opportunities within the Houston Ship Channel’s massive processing, trading and import/export complex.”
HFOTCO is located in the U.S. Gulf Coast, allowing it crude pipeline delivery connectivity to the local refining complex, deep water marine access, and inbound crude receipt pipeline connectivity. Its strategic location also allows for rail or truck loading and unloading capabilities from major producing basins.
