By Anna Louie Sussman
NEW YORK Jan 29 TransMontaigne Partners LP
has agreed to lease capacity at two oil product
terminals and a pipeline to Magellan Pipeline Company LP
under a 10-year deal, ending its current agreement with Morgan
Stanley, TransMontaigne announced on Wednesday.
The agreement with Morgan Stanley to lease these facilities
will end on Feb. 28, 2014, as the investment bank's
once-powerful trading arm reduces its physical footprint.
In December, the bank agreed to sell its physical oil
business to state-owned Russian oil company Rosneft.
Morgan Stanley's trading division, Morgan Stanley Capital
Group, owns 100 percent of TransMontaigne Inc, which controls
the general partner of Denver-based TransMontaigne Partners LP.
Morgan Stanley is also TransMontaigne's largest client.
The bank announced in December that it was seeking to sell
its TransMontaigne stake.
The agreement announced in a TransMontaigne statement on
Wednesday covers all of the aggregate 400,000-barrel capacity of
two oil product terminals in Rogers, Arkansas, and Mount Vernon,
Missouri, and the 30,000-barrel-per-day (bpd) Razorback oil
product pipeline, a TransMontaigne official said in a telephone
The terminals represent about 2 percent of the company's
total tank capacity. The Razorback Pipeline runs from Mount
Vernon to Rogers and accounts for most of the company's pipeline
TransMontaigne Partners LP is a terminal and transportation
company that services distributors and marketers of crude oil
and refined petroleum products across the United States.
Pipeline transport fees accounted for 3 percent to 4 percent
of total revenue for TransMontaigne last year, a company
official said. The bulk of its revenue comes from terminal
TransMontaigne management expects the new agreement will
generate about the same total annual revenue as the Morgan
Stanley agreement, the statement said.
The company did not give a figure for the revenue generated
by the agreement. However, in its 2012 annual report,
TransMontaigne said Morgan Stanley Capital Group accounted for
more than 60 percent of its revenues in 2010, 2011 and 2012. In
2012, TransMontaigne reported total revenue of $156.2 million.
Tulsa, Oklahoma-based Magellan owns 9,600 miles of refined
products pipelines, according to the company's website, making
it one of the longest such pipeline systems in the United
Magellan Pipeline is a wholly owned affiliate of Magellan
Midstream Partners LP.