LONDON (Alliance News) - 3i Infrastructure PLC Friday said it has signed an agreement with Oiltanking GmbH to acquire a 45% stake in two storage companies for a total of EUR111 million.
The closed-ended investment company said it signed the agreement to acquire a 45% stake in Oiltanking Terneuzen BV in the Netherlands and Oiltanking Ghent NV in Belgium.
The Oiltanking companies provide storage and related services for refined oil products, chemicals and biofuels and both companies are based in the ARA - Amsterdam, Rotterdam, Antwerp - region, which is "one of four global hubs for the oil industry", giving them benefits from their location, said 3i.
"The region benefits from its proximity to North Sea oil production and European refinery capacity, its high quality ports infrastructure and its strong connectivity, via pipeline, road, rail and inland waterway, to European consumers of refined products," said the company in a statement.
3i Infrastructure also said that the current oil environment, which has seen prices plummet from highs of over USD115 per barrel in the middle of 2014 to around USD60 per barrel on Friday, has increased demand for storage as companies seek to hold on to production in the hope of the price strengthening. The company said the two companies storage units are "almost fully let", but said they will benefit from contract renewals.
"In particular, the Oiltanking companies benefit from long-term demand fundamentals due to their location and the continuing need for storage of refined oil and chemical products," said Chairman Peter Sedgwick.
The investment in Oiltanking Terneuzen and Oiltanking Ghent is in addition to the company's acquisition of a 45% stake in three other storage terminals from Oiltanking GmbH in 2007. The terminals acquired in 2007 are in Amsterdam, Malta and Singapore, and 3i Infrastructure paid GBP108.7 million.
"Oiltanking is one of the world's leading independent storage operators, in an industry where reputation, for safety, quality and customer service, is paramount," said the company.
3i Infrastructure shares were up 0.5% to 155.52 pence per share on Friday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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3i Infrastructure (3IN)