LONDON (Reuters) - Morgan Stanley has launched a formal effort to sell control of its U.S. oil pipeline and terminal business TransMontaigne, sources said on Wednesday.
Joining other Wall Street banks in yielding to intense regulatory pressure to dump commodity-trading assets, Morgan Stanley is floating the possible sale of its general partner in the master limited partnership (MLP) entity TransMontainge Partners LP , as well as certain other assets.
TransMontaigne Inc., the parent group, was ranked the 17th largest privately owned company in the United States by Forbes magazine last year, with revenues estimated over $14 billion.
A series of long-term deals with Morgan Stanley's commodity arm provides roughly 60 percent of TransMontaigne's revenues, according to filings. That is down from more than 80 percent in previous years after the bank severed some contracts.
Below are a selection of key facts about the group, based on company filings:
TRANSMONTAIGNE DATE OF PURCHASE BY MORGAN STANLEY: June 2006 PRICE: estimated at $630 million in 2006 after outbidding SemGroup CURRENT MARKET CAP OF MLP: Around $650 million. HEADQUARTERS: Denver, Colorado
KEY CUSTOMERS * Morgan Stanley * Mexico's state oil company, PEMEX * Valero Energy Corp * Marathon Petroleum Corp * The U.S. Government
NEW INVESTMENTS * Owns a 42.5 percent stake in the Battleground Oil Specialty Terminal Company (BOSTCO) joint venture with Kinder Morgan. TransMontaigne will invest approximately $215 million during the first two stages of the project. * BOSTCO will add 7.1 million barrels of storage capacity in the Houston Ship Channel and aims to capitalize on growing exports of diesel and other so-called "black oils" from the Gulf Coast * Commercial operations started in October 2013 for first stage of project * A further stage of the BOSTCO project is being planned that would add another 3 million barrels of capacity and cost approximately $250 million
TERMINALS * Total storage capacity - 23.6 million barrels, not including the firm's 42.5 percent stake in the 7 million barrel BOSTCO investment. * South East - Twenty-two refined product terminals in the South East with 10 million barrels capacity (42 percent of total). The South East terminals stretch along the Colonial and Plantation pipelines, the main conduit for gasoline and diesel supplies from Gulf Coast refineries to the East Coast. * Florida - Eight terminals on Florida's Gulf and Atlantic coasts with 6.9 million barrels of capacity (29 percent of total). * River System - Twelve terminals on the Mississippi and Ohio rivers with 2.7 million barrels of capacity (12 percent of total). * Mexican Border - Two terminals in Brownsville, Texas, near the Mexican border with 2.4 million barrels of capacity (10 percent of total). Includes 1.5 million barrels joint venture with Frontera. * Cushing and the Midwest - Four terminals in the Midwest with 1.6 million barrels of capacity (7 percent of total). Includes storage at Cushing, Oklahoma, delivery point of the U.S. crude oil futures contract.
PIPELINE * Razorback pipeline, a 67-mile interstate refined products pipeline between Missouri and Arkansas, which connects two of the firm's Midwest terminals (Mt Vernon and Rogers)
(Reporting by David Sheppard; Editing by Leslie Adler)
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