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Dow to sell trio of US Gulf Coast tank terminals to Vopak JV for USD620 million

September 15/2020

MOSCOW (MRC) -- Dow has agreed to sell three of its chemical storage terminals on the US Gulf Coast for USD620 million to a joint venture (JV) between Vopak (Rotterdam, Netherlands) and investment firm BlackRock (New York, New York), said Chemweek.

The transaction includes marine and storage terminal operations and assets at Dow’s sites at Plaquemine and St. Charles, Louisiana; and Freeport, Texas, Dow says. The cash proceeds will be used for “value-enhancing opportunities consistent with Dow’s capital-allocation priorities” and demonstrates the company’s “continued evaluation of non-revenue-generating assets across its global portfolio,” it says.

The sale to the newly established Vopak Industrial Infrastructure Americas (VIIA) JV, owned equally by Vopak and BlackRock’s worldwide energy and power infrastructure fund, is expected to close before the end of this year, subject to regulatory approvals and other closing conditions in the US and EU.

Dow and VIIA will enter into long-term service agreements for storage and infrastructure services at the terminals. “Dow expects Vopak’s terminal expertise and capabilities will deliver additional operational efficiencies and opportunities for growth,” says Vopak. The long-term agreements will ensure “reliable and cost-advantaged services for existing Dow businesses at the in-scope sites,” according to Dow. Normal operations will continue throughout the divestment process, it says. All three terminals are situated alongside active Dow production complexes. VIIA and Dow “are working closely to ensure a seamless transition,” Vopak states.

The total storage capacity of the terminals is 852,000 cubic meters. Dow’s terminal at St. Charles is the largest with 73 chemical storage tanks with a combined capacity of 409,000 cu meters, with its terminal at Plaquemine incorporating 30 tanks with 303,000 cu meters of storage capacity for chemicals and refined products in total, Vopak says. The terminal at Freeport has 53 tanks with a total chemicals storage capacity of 140,000 cu meters, it says. The three assets also include 16.4 hectares of expansion land, 36 vessel berths, multiple pipeline connections, and rail and truck racks, Vopak adds.

The announcement demonstrates Dow’s “ongoing commitment to applying a best-owner mindset, supported by rigorous benchmarking, and a focus on disciplined capital allocation,” says Dow CEO Jim Fitterling. “The transaction will enable Dow to deploy cash towards value-enhancing opportunities in our core businesses consistent with our capital-allocation priorities including ensuring safe and reliable operations and paying down additional debt,” he says. In July, Dow announced the USD310-million sale of its rail infrastructure and assets at six sites in North America to Watco Companies (Pittsburg, Kansas). That deal is also expected to close during the fourth quarter.

Vopak already provides logistics partner services at several Dow locations worldwide. Vopak is “dedicated to contributing to the long-term success of Dow’s US Gulf Coast business,” says Vopak CEO Eelco Hoekstra. Describing the acquisition as a “unique expansion opportunity,” Hoekstra says the deal “fits perfectly into Vopak’s growth strategy for industrial terminals." Goldman Sachs acted as financial advisor to Dow, with Mayer Brown providing legal support.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.


mrcplast.com
Author:Anna Larionova
Tags:petroleum products, crude oil, PP, PE, ethylene, Dow.
Category:General News
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