First Reserve buys $900m Bahamas oil storage facility

The private equity firm is looking to capitalize on opportunities from increasing global demand for the natural resource.

Energy specialist First Reserve Corporation has purchased the Bahamas Oil Refining Company (BORCO) oil storage terminal from Venezuela’s state-owned oil company, Petroleos de Venezuela SA, for approximately $900 million (€618 million).

The BORCO oil terminal, located in Freeport, Bahamas, has a storage capacity of 20 million barrels (over three million tons) encompassing crude oil, fuel oil and multiple petroleum products. The site also offers blending, transshipment and bunkering capabilities.

Greenwich, Connecticut-based First Reserve is targeting opportunities in the oil storage space with increasing global demand driving the need for strategically located storage centers.

“The flows of hydrocarbons around the world are increasing in their velocity,” said Thomas Sikorski, managing director of First Reserve. “Partly because on the supply side places that produce oil are increasingly remote–so they’re places like Russia, Nigeria, Saudi Arabia and Venezuela. On the demand side, the demand centers have shifted as well. The bulk of the increases are in places like India and China where you’ve got increasing populations and increasing demand for commodities. The storage is in the middle of all that and if you can get something strategic then that’s a good thing for investors.”

The BORCO terminal acquisition will be financed in part by a senior secured credit facility fully underwritten by ABN Amro.