The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas Oil Refining Company (BORCO) has retained its largest storage customer through a long-term agreement that will yield higher rates, its parent has revealed.

Clark Smith, president and chief executive of New York Stock Exchange (NYSE) listed Buckeye Partners, told investment analysts during a 2014 first quarter conference call that infrastructure investments - including some $330 million at BORCO over the past three years - were paying dividends when it came to customer retention.

“These efforts have recently culminated with the re-contracting of our largest storage customer at BORCO on a major, multi-commodity, long-term storage arrangement at higher rates,” Mr Smith said.

Looking ahead, the Buckeye chief said BORCO’s position as a strategic storage/blending hub off the US east coast made it an invaluable part of its global logistics chain.

Noting the link between BORCO and Buckeye’s Perth Amboy facility in New York, Mr Smith said the Grand Bahama-based facility gave it “ability to increase market share”.

“The strong demand for clean product blending and handling capability has accelerated our plans to repurpose existing capacity currently in fuel oil services at BORCO,” Mr Smith added.

“We continue to experience increasing demand for clean product blending and storage capacity across our New York hub and Caribbean installations.

“Prior investment decisions around infrastructure enhancements at Perth Amboy and BORCO have positioned us to provide superior and cost-effective service to support increasing demand centres across the east coast.”

Mr Smith said Buckeye was also aiming to “complement” the growth in Canadian crude oil supply “with potential blending and aggregation facilities at BORCO”.

Buckeye executive also confirmed that the recent US Customs ruling, which allows “certain gasoline components” to leave the US for transhipment to BORCO in a non-US flagged vessel, did not apply to crude oil products and was specific to gasoline.

These “components” can then be blended at BORCO into “new and finished gasoline”, before being returned to the US on a non-US flagged vessel.