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Yo Ho Ho And A Cargo of Bunkers – Pirates of the Caribbean Terminals – Part 2

Several large deep-water terminals located strategically on Caribbean islands play an important role in the international fuel oil trade. These terminals can berth larger vessels than most Gulf Coast ports – making them ideal staging points for transshipment of ocean bound cargoes coming and going from Europe, Asia or Latin America. With its recent acquisition of the Hess East Coast terminal assets, Buckeye looks set to become a dominant player in the Caribbean terminal and storage market. Today we conclude a two-part survey of Caribbean fuel terminals.

This is the fifth installment in our series covering fuel oil infrastructure in the Gulf Coast region and part 2 of a two-part survey of Caribbean terminals. In the first episode in this series we provided definitions for some of the many types and grades of fuel oil (see Yo Ho Ho and a Cargo of Bunkers). In episode two we looked at the Houston Fuel Oil Terminal Company (HFOTCO) that has been the dominant player in fuel oil blending, storage and export on the Gulf Coast for thirty years (see The Houston Fuel Oil Terminal). In episode three we covered the brand new kid on the Houston Ship Channel block – Battlefield Oil Storage Company (see The Kinder TransMontaigne BOSTCO Terminal). Part four of the series was the first of a two-part survey of fuel oil terminals in the Caribbean (see Pirates of the Caribbean Terminals – BORCO). We discussed several advantages of the Caribbean from its deep water ports that allow transshipment of larger cargoes into smaller batches for delivery to the Gulf Coast to its strategic position on Atlantic and Pacific trade routes. We also described Buckeye’s BORCO terminal. This time we review four additional large Caribbean fuel oil terminals.

Buckeye Yabucoa Puerto Rico, and Hess St Lucia Terminals

The Buckeye Yabucoa terminal on the island of Puerto Rico was purchased from Shell in 2010 and includes 44 storage tanks with over 4MMBbl of storage capacity. The terminal has one deep water ship dock and provides blending, transshipping and terminalling operations for Puerto Rico, Caribbean and international markets. Another, smaller terminal operator on Puerto Rico is Puma Energy – a majority owned subsidiary of trading company Trafigura, that has 600 MBbl of fuel oil and diesel storage at the Caribe Bayamon terminal as well as a downstream retail distribution business on the island.

The Hess terminal on St Lucia has 10 MMBbl of crude oil and refined products storage capacity and a deep-water jetty. The terminal is used for third party storage and transshipment. Taken all together the combination of the Hess St Lucia terminal with BORCO and Yabucoa makes Buckeye the single largest player in the Caribbean fuel oil storage market with a total of 41 MMBbl of capacity. The map below is from the Buckeye investor presentation released after the agreement to purchase the Hess assets was announced in early October 2013.

Source: Buckeye Partners Investor Presentation (Click to Enlarge)

The map shows that the three terminals are distributed well to serve the whole Caribbean market and that Buckeye see the smaller terminals in Puerto Rico and St Lucia feeding into BORCO’s blending and staging (transshipment) facilities to feed US East Coast destinations. Buckeye suggested that the new assets would enhance their fuel oil marketing and bunkering business.

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