Odfjell Expands US Chemicals Terminal
2020-06-30    [Source:CHEManager]
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PUdaily, Shanghai —— Odfjell Terminals US (OTUS) is investing about $140 million to expand its chemicals terminal in Houston, Texas, USA. The company, owned 51% by Norwegian shipping and storage group Odfjell and 49% by Canadian investor Northleaf Capital Partners, refinanced its debt facility in March 2020, enabling the terminal to “execute on its growth potential.”

    “This is an important milestone for our terminal portfolio in the US, as it positions the company to expand its terminal footprint in Houston, one of the strongest growth areas and key hubs for petrochemicals in the world,” said chief financial officer Terje Iversen. “The financing ensures that OTUS can embark on accretive growth opportunities and remain self-funded.”

    The investment is being split into three phases. In the first phase, the company is bringing three tanks back into service by end 2020 at a capital cost of $1.8-2.5 million. Phase two will see the addition of new specialty chemicals tanks with a total planned capacity of 30,000-35,000m3, serving truck, rail, ship and barge transport modes. Construction is planned for 2021-2022, and Odfjell said a final investment decision will be concluded “shortly.” Expenditure for this phase is in the range of $23-25 million.

    The third and final phase will see more specialty chemicals tanks installed with a proposed total capacity of 150,000-165,000m3 as well as two deepwater docks. Construction is expected to take place during 2022-2026, with anticipated investment costs of $88-113 million. OTUS said a final investment decision will be made when it has signed an anchor customer and secured attractive returns.

    Odfjell added that any future accretive growth plans for its global terminal network will be considered on a case-by-case basis as it focuses on reducing debt and break-even levels.

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