Oiltanking to Acquire 20 percent of Açu Port’s Oil Terminal - Porto do Açu


Oiltanking to Acquire 20 percent of Açu Port’s Oil Terminal

Owner of largest port in the Americas sells minority stake in subsidiary to form operating partnership

Prumo Logistica SA (BVSPA: PRML3), a company controlled by EIG Global Energy Partners, which owns and operates the Açu Port in Brazil, has reached agreement with Oiltanking GmbH, owned by Hamburg based Marquard & Bahls AG, whereby Oiltanking will acquire 20% of Açu Port’s crude oil terminal subsidiary for US$200 million. Oiltanking will manage the terminal’s crude-handling operations as part of the agreement. The oil terminal has licensed capacity to handle up to 1.2 million barrels per day (bpd) of crude oil and is designed to accommodate the largest class of crude oil tankers known as very large crude carriers (VLCCs).

The oil terminal, which shares existing infrastructure with Açu Port’s operational iron ore terminal, is scheduled to begin operations in August 2016 for transshipment of up to 200,000 bpd of crude oil produced by BG Group in nearby pre-salt oilfields. The transshipment contract signed in early June provides for the potential increase of up to 320,000 bpd for a term of 20 years.

“Prumo now has a world-class operating partner to service major international clients and do our part to help them meet the rigorous technical challenges of producing oil from the ultra-deepwater. As far as the implications for our investment in Prumo, the company is selling a minority stake in a subsidiary that implies a greater valuation than the current market capitalization of the entire company. This oil terminal is just one of many vocations of the Açu Port, which we like to call the workshop of the pre-salt”, said R. Blair Thomas, Chairman and CEO of EIG Global Energy Partners.

“Oiltanking is proud to have joined Prumo to develop a large scale crude oil transshipment terminal at Açu Port, that shall offer petroleum companies state of the art transshipment facilities and in the future also oil storage, blending and treatment facilities. We strongly believe that the terminal shall have a great positive impact on the logistics and economics of the petroleum sector operating in Brazil”, said Daan Vos, Managing Director of Oiltanking GmbH.

Açu Port is the largest port in the Americas with 17 kilometers of quay, over 90 square kilometers of land and channel depth designed to over 24 meters, the port is capable of receiving the largest class of oceangoing vessels. Its strategic location in proximity to the Campos Basin and Santos Basins, which account for more than 80% of Brazilian oil production, makes the port suitable to service the oil & gas industry. The oil terminal shares existing infrastructure with Açu Port’s iron ore terminal which began operations in 2014 after approximately 8 years of development and construction. This existing investment and current licensing for the oil terminal gives the project an advantage of being an advanced brownfield development.

“Prumo is moving in line with our original plan. Construction of the port infrastructure has been completed on budget, operations have started on-schedule, we have restructured the company’s balance sheet, our offshore base is officially home to Petrobras and now Açu Port’s crude oil terminal is a reality. All of this in less than two years, we are very proud of Prumo’s achievements” said Thomas.

Despite the current economic situation, Açu Port provides an opportunity for increasing efficiency and reducing costs for clients’ oil and gas operations due to its proximity to Brazil’s largest oil fields. The oil terminal transshipment operation is one example whereby an oil producing client is faced with the alternative of sailing its dynamic position shuttle tankers (DPSTs) outside of Brazil to places such as Uruguay or the Caribbean. These operations currently are performed in open-water without the emergency oil-spill protection services offered by the operation at Açu Port. The alternatives to Açu Port in this instance are both costlier and riskier for both the client and the environment.

The ship-to-ship operation at Açu Port will transfer oil from specialized DPSTs to conventional vessels, thereby reducing the export freight charge on Brazil’s crude oil by up to 60%. The operation is performed in an area sheltered and surrounded by containment barriers, which makes the operation safe for year-round operations. The requirement for this particular operation is unique to Brazil’s pre-salt whereby the challenge of operating in ultra-deep waters creates the need for DPSTs which are more technologically advanced than traditional tankers.

In addition to transshipment operations, the oil terminal at Açu Port will offer a variety of traditional land based services such as storage, blending, oil treatment and trading activities.

Workshop of the Pre-salt
With over 40 billion barrels of discoveries, the largest global discoveries in recent history, Brazil’s pre-salt fields are scheduled to continue to ramp-up despite the current commodity price environment. Another example of Prumo’s logistical advantage for the industry is Edison Chouest Offshore’s development of the largest offshore support base in the world, with 1,030 km of quay and 15 mooring berths, under construction at Açu Port. Petrobras has signed a contract with Edison Chouest for use of six berths and scheduled begin operations in November 2015. The Açu Port supply base decreases the travel time between the Campos Basin and the existing support bases, also reducing to less than one-third the current operation time, which helps decrease the number of vessels waiting to be moored. These factors represent significant cost savings on exploration and production costs in an environment which Petrobras and other producers are focused on reducing costs. It will also decrease the visual pollution of the long ques of vessels in Rio de Janeiro entering Guanabara Bay.

Global major integrated oil company BP has joined Prumo to form a 50/50 joint-venture to supply marine fuels to vessels at Açu Port which will provide clients of the port a competitive alternative to reduce fuel costs for their offshore operations. Prumo has also signed an MoU with Bolognesi Group for a joint venture to import LNG to Açu Port by commissioning a floating-storage-regasification-unit or FSRU. The LNG will provide fuel for anchor thermal power generation projects and allow Açu Port to begin offering natural gas to its industrial clients. The joint venture will offer solutions to offshore operators to land domestically produced natural gas from pre-salt, known as associated-gas, in order to monetize its production.

“This oil terminal is only the tip of the iceberg. Prumo has multiple projects for the future, another example is gas and power. Imported LNG is a reliable way of generating power in the near-term which can be substituted by cheaper domestically produced natural gas in the future. Brazil desperately needs new sources of power and the oil producers desperately need to monetize their gas, it’s a win-win. Just like the oil terminal, Açu Port has the advantage for natural gas.” according to Thomas.

About Oiltanking
Oiltanking GmbH is a subsidiary of Marquard & Bahls, a Hamburg-based family-owned company that operates in the fields of energy supply, trading and logistics. Oiltanking is the second largest independent tank storage provider for petroleum products, chemicals and gases worldwide. The company owns and operates 73 terminals in 22 countries within Europe, North and South America, Middle East, Africa, India as well as in Asia. Oiltanking has an overall storage capacity of 19.4 million cbm (122 million barrels).

Oiltanking is already active in Brazil since 2008 through its subsidiary Oiltanking terminais, servicing the fuels distribution sector and providing storage for other bulk liquids at its Vitoria, ES, terminal.

About Prumo
Prumo Logistica owns and operates Açu Port. Prumo offers infrastructure solutions for the oil & gas industry in addition to hosting a range of marine, industrial and manufacturing projects at Açu Port. Prumo has been controlled by majority shareholder EIG Global Energy Partners since 2013.

Located in Rio de Janeiro state, Açu Port started its operations in 2014 and with excellence in safety serves leading companies in their sectors. The Açu Port has two major terminals, Terminal 1 (T1) an offshore pier and Terminal 2 (T2) an inland dredged channel and an industrial area of 90 km².

T1 is dedicated to handling iron ore and crude oil with berths constructed off of a 3 kilometer pier designed for vessels with draft up to 24 meters. The terminal has been operational since October 2014 and has loaded more than 25 capesize vessels of iron ore for Anglo American in a 50/50 joint venture known as Ferroport. Oil transshipment operations at T1 are scheduled to begin in 2016 with capabilities of receiving suezmax class vessels and VLCCs. Recently, a contract was signed for oil transshipment with BG for 20 years, for handling an average volume of 200,000 barrels per day out of licensed capacity of up to 1.2 million barrels per day. T1 also consists of an oil storage project and other land-based crude oil services.

Terminal 2 is a dredged navigation channel 6.5 km in length, 300 meters wide and depth up to 14.5 meters. Technip, NOV and Wartsila manufacturing plants are currently operating at T2. Açu Port’s multicargo terminal is operating under contract with Votorantim. Edison Chouest has an operating contract with Petrobras and currently constructing an offshore supply base at T2. BP and Prumo have formed a 50/50 joint venture construct a marine fuels terminal at T2 for supply of fuel to vessels calling on the port.

Prumo privately manages 40 square kilometers of restinga´s environmental reserve area, the largest such project in Brazil. Construction and operation of the Açu Port currently employs approximately 10,000 and long term employment targets at the fully developed industrial complex exceed 40,000.​