* Buckeye Pipeline buys Chevron's NJ terminal
* Buckeye to pay $260 mln cash, deal to close in Q2
By Janet McGurty
NEW YORK, Feb 10 Oil product pipeline and
terminalling company Buckeye Pipeline Partners said on
Friday it will get direct access to the New York Harbor with its
purchase of Chevron's Perth Amboy plant as the region
ups imports of gasoline and diesel to fill the demand left by
area refinery closures.
The Perth Amboy terminal is located on the Arthur Kill, the
body of water separating New Jersey from the Borough of Staten
Island, a part of New York city.
Buckeye on Friday said it will pay $260 million in cash for
the terminal and expects the deal to close in the second quarter
The New York Harbor is the delivery point of gasoline and
heating oil futures contracts on the NYMEX. Linden, New Jersey,
part of the Harbor region, is the terminus of the Colonial
Pipeline, the nation's largest product pipeline which carries
gasoline and diesel from the U.S. Gulf to the Northeast.
The Perth Amboy facility has about 4 million barrels of
tankage, with 2.7 million barrels of actively used tanks under
contract to Chevron, a Buckeye spokesman said during an earnings
The remaining 1.3 million barrels will be refurbished and
Buckeye will seek new customers for the space, the company said.
Buckeye has been seeking access to the water on the East
Coast. Sources said that the company looked at the idled
refineries in Pennsylvania.
The closure of two area refineries and the impending closure
of a third has made changed the supply logistics of the
Northeast region. Pipelines and terminals have gained in
importance as it will be necessary to bring waterborne imports
of gasoline and diesel into the area.
Buckeye, which owns over 6,000 miles of pipeline and over 100
liquid petroleum product terminals, will build a bi-directional
six-mile line to connect the Perth Amboy terminal to its
existing terminal in Linden, New Jersey.
"That's really another very important feature that will help
obviously drive volumes to the Buckeye main line system," said
Khalid Muslih, senior vice president of corporate development
and strategic planning.
Buckeye's main line system serves upstate New York as well
as western Pennsylvania.
Perth Amboy has access to pipeline and rail as well as water
access with three active marine docks currently in operation.
The acquisition also creates a link between the Northeast
storage and Buckeye's massive BORCO terminal in the the Bahamas.
In November, Buckeye Partners said it completed the first
phase of its expansion of its 14.5-million-barrel BORCO storage
facility on Grand Bahamas Island.
The planned expansion of the facility includes the completed
inland dock, which can handle vessels from small barges up to
Panamax size tankers.
BORCO has begun construction on the planned expansion of the
offshore jetty to accommodate VLCC tankers, the company said.