The acquisition will make KMP the largest handler of petroleum coke (petcoke) in the
KMP will pay approximately $184 million in cash and $46 million in KMP limited partner units at closing – which is expected by the end of April – and an additional $15 million in KMP limited partner units two years after closing.
The TGS bulk terminal assets are located in
“TGS has long-term petcoke handling contracts in place with major
He added: “As we discussed at our annual investor conference in January, we believe that US refineries will process more heavy crude in the future, generating more petcoke. This should enable KMP to capture additional petcoke related opportunities.”
In 2005, TGS projects its terminals will handle about 10 million tons of petcoke, and KMP expects to handle about seven million tons of petcoke at its existing facilities. Combined, KMP will handle approximately 33 percent of the domestic petcoke market.
At closing, KMP will execute a development agreement with TGS, whereby TGS will develop new solid bulk projects, including petcoke and coal projects, which KMP will have the right to purchase.