Macquarie Capital has teamed up with petrol distributor Greenergy to create the UK’s largest bulk liquid storage company, Navigator Energy.
The move comes after the principal investment arm of the Australian asset manager agreed to purchase three terminals from Vopak, a Dutch oil and gas storage group. These are located at West Thurrock on the Thames, Seal Sands at Teesside and Windmill near Cardiff.
All three terminals have a combined capacity of 700,000 cubic metres for the storage of oil, gases and chemical products.
Navigator, which will also acquire the operational storage assets of Greenergy North Tees at Teesside, will have an initial storage capacity of about 1.5 million cubic meters upon completion of the transactions.
“Our participation in Navigator […] gives us greater flexibility at these facilities, ensuring we will be best placed to deliver low cost and resilient fuel supply for our customers in the long-term. As an infrastructure investment company, Navigator will also provide a vehicle to fund further infrastructure acquisitions,” said Andrew Owens, Greenergy chief executive, in a statement.
As part of the deal, Greenergy has signed a long-term offtake agreements with Navigator at West Thurrock, Seal Sands and North Tees, where it already stores and supplies fuel. Navigator has also pledged to build a new diesel pipeline linking the deep water jetty at North Tees with the neighbouring Seal Sands terminal.
The combined amount of the transactions, which are expected to complete by the end of this quarter, hasn’t been disclosed.
Bulk liquid storage has climbed higher on infrastructure investors’ shopping lists in recent years, with long-term contracts attached to these facilities deemed attractive for institutions seeking recurrent yield. Low oil prices have further buttressed this trend as distressed energy companies divest assets and oil traders stash the black stuff in the wait for better days.
Fund managers that have recently engaged with the sector include London-listed 3i Infrastructure, Paris-based Ardian, Australia’s QIC and New York-headquartered Morgan Stanley Infrastructure.