United Maritime Group LLC has entered into a definitive agreement to sell U.S. United Bulk Terminal LLC, which handles coal transloading on the Lower Missisissippi River, to Bulk Handling USA Inc., an affiliate of Oiltanking Holding Americas Inc.
Located in Davant, La., United Bulk Termal is the largest dry bulk terminal on the Lower Mississippi, with over 11 million tons of annual throughput capacity, providing storage, blending and transfer services to major producers of coal and petcoke products for the domestic and export markets. United Maritime Group bought the facility four years ago from TECO Energy (NYSE: TE), with TECO’s Tampa Electric unit still a major user of the facility for coal moving by barge to its Big Bend power plant in Florida.
“In the four years since acquiring UBT, we have developed the business into a leading independent provider of terminal and transfer services to the domestic and export markets for coal and petroleum coke,” said UMG Chairman and CEO Steven Green. “Our UBT team members have maintained a continued focus on safety and customer service while delivering impressive operating and financial performance. Oiltanking is a leading provider of terminal and storage services for liquid petroleum and chemical products globally and is an excellent successor to continue to grow and enhance UBT’s position in the market.”
The transaction is expected to close in the second quarter of 2012, subject to receipt of applicable regulatory approvals and satisfaction or waiver of other customary closing conditions.
Based in Tampa, UMG has subsidiaries that operate in the dry bulk transportation and logistics industry, including U.S. United Ocean Services LLC, the largest Jones Act coastwise shipping company by deadweight tonnage, and U.S. United Barge Lines LLC (UBL), an inland hopper barge and boat fleet. On April 19, UMG announced an agreement to sell UBL to Ingram Barge Co. of Nashville, Tenn., subject to receipt of applicable regulatory approvals and satisfaction or waiver of other customary closing conditions.
Oiltanking Holding Americas, Inc., is a wholly owned subsidiary of Oiltanking GmbH, which is a subsidiary of Marquard & Bahls AG, a leading privately-owned German petroleum company. Oiltanking is the second largest independent tank storage provider for petroleum products, chemicals and gases worldwide. The company owns and operates 72 terminals in 22 countries in Europe, North and South America, the Middle East, India and Asia.
In addition to an active, on-going business that handled over 11 million tons in 2011, the UBT facility has ample land for further expansion and development, Oiltanking noted in its own May 11 announcement. The facility offers a full suite of ground-based service capabilities including storage, blending and sampling and has a market leading dry bulk barge fleeting operation as well as the ability to accommodate multiple vessels simultaneously.
“We are excited to add this premier set of assets to our growing dry bulk platform, and we believe that UBT will serve as the foundational asset to drive further organic opportunities and acquisitions for us going forward,” said Carlin Conner, CEO and President of Oiltanking Holding Americas. “We anticipate significant growth at this terminal over the next two years and plan to spend approximately $70 million to increase throughput capacity, improve handling flexibility and develop world-class blending capabilities.”
Conner added: “This strategic acquisition will give OTA access to a large, diversified customer portfolio of producers, refiners, traders and utilities that will complement our existing asset base in North America which consists of terminals in Texas City and Port Neches, Texas; Joliet, Illinois; our 71% combined general partner and limited partner interests in Oiltanking Partners, L.P. (NYSE: ‘OILT’); and Bulk Handling USA, Inc., which through a joint-venture currently operates two petroleum coke handling facilities.”
UMG was acquired from TECO Energy in December 2007 by an investment group, including: Greenstreet Equity Partners LLC, an affiliate of Greenstreet Partners LP, a private investment company; Jefferies Capital Partners, a middle-market private equity investment group; and AMCI Capital LP, a joint venture between the owners of privately held American Metals and Coal International Inc., a global coal and resources firm, and affiliates of First Reserve Corp., a leading investment firm specializing in the energy industry.
TECO Energy sold these operations due at least in part to critics who over a period of years said repeatedly in fuel review cases at the Florida Public Service Commission that Tampa Electric wasn’t necessarily getting the best haul rates for its coal moves by using an affiliated transportation company. Coal moves by barge to Big Bend on Tampa Bay, with some of that coal then transported inland by truck to the Polk coal/petcoke gasification unit.
Said UMG’s March 30 annual Form 10-K report: “We have enjoyed an over 50-year relationship with our largest customer, Tampa Electric, a regulated utility operating two coal-burning power plants in Florida. We have also enjoyed an over 15-year relationship with our second largest contracted customer, The Mosaic Company (‘Mosaic’), a leading producer and marketer of concentrated phosphate rock and potash crop nutrients. However, beginning in the third quarter of 2010, Mosaic dramatically reduced the amount of cargo it shipped with us and issued a claim of alleged force majeure under its agreement with us. We commenced arbitration proceedings against Mosaic and those proceedings are ongoing. Additionally, on February 21, 2012 Mosaic announced a settlement with Sierra Club which may result in the resumption of their shipments.”