Della Guidry
February 12, 2008
Robert Mike
February 14, 2008(AP) – Petroleum pipeline operator Teppco Partners LP said last Monday it has entered the marine transportation business for refined products, crude oil and lube products by purchasing assets from Cenac Towing Inc. and Cenac Offshore LLC.
Through its Teppco Marine Services LLC unit, the company acquired 42 push boats, 89 barges and the economic benefit of certain related commercial agreements for about $500 million, including about $320 million of cash and assumed debt and about 4.85 million newly issued Teppco limited partner units.
Teppco said it funded the cash portion, and retired the assumed debt, from borrowings under its $1 billion credit facility.
The Houma-based business serves refineries and storage terminals along the Mississippi, Illinois and Ohio rivers, as well as the Intracoastal Waterway between Texas and Florida. The assets also gather crude oil from production facilities and platforms along the Gulf Coast and in the Gulf of Mexico.
Teppco President and Chief Executive Jerry E. Thompson said the company expects the acquisition to immediately add to distributable cash flow. Teppco also expects the business to provide the partnership with earnings before interest, taxes and depreciation of about $50 million to $60 million.
The fleet will continue to be operated by the nearly 400 crewmembers, support staff and management of Cenac Towing under a services agreement with Teppco Marine. The business will remain headquartered in Houma.
