Jefferson Energy, Aramco Trading Americas Execute Agreement for Bi-Directional Flow on Jefferson Southern Star Pipeline; Will Provide Access from Marketlink Pipeline to Jefferson Energy’s Beaumont Terminal
FTAI Infrastructure announced that its subsidiary, Jefferson Energy, has signed a multi-year terminal services agreement with Aramco Trading Americas. This agreement adds bi-directional flow capability to the 14-mile Jefferson Southern Star Pipeline, which currently moves crude oil from Jefferson Energy’s Main Terminal to the Motiva Port Neches Terminal. The new capacity will connect the terminal to the TC Energy Marketlink Pipeline System, enhancing access to crude oil volumes. This capability will expand Jefferson Energy’s Main Terminal, a 6.2 MMbbl storage and multimodal transloading facility in Beaumont, Texas. The terminal handles pipelines connected to major refineries and features extensive rail tracks and docks for various vessels. The new development aims to enhance service options and create value for customers.
- Execution of a multi-year terminal services agreement with Aramco Trading Americas.
- Addition of bi-directional flow capability to the Jefferson Southern Star Pipeline, increasing flexibility.
- Connection of Jefferson Energy’s Main Terminal to the TC Energy Marketlink Pipeline System.
- Enhanced access to crude oil volumes from the TC Energy Marketlink Pipeline.
- Jefferson Energy’s Main Terminal has a 6.2 MMbbl storage capacity and handles multimodal transloading.
- Terminal connectivity to 630,000 bbl/day Motiva Port Arthur Refinery and ExxonMobil Beaumont Refinery.
- The terminal's infrastructure includes significant heating and blending capabilities for heavy crude oil.
- Development will unlock potential for handling Uinta Basin wax crude, creating additional value for customers.
- The agreement does not specify the financial terms, leaving the economic impact unclear.
- There may be significant costs associated with implementing bi-directional flow capability.
- Potential risks related to the integration and operation of the new pipeline connections.
- No immediate revenue increase reported, focusing on future potential rather than current gains.
- Long-term agreement may expose the company to market volatility and changing economic conditions.
Insights
The agreement between Jefferson Energy and Aramco Trading Americas to add bi-directional flow to the Jefferson Southern Star Pipeline opens up significant opportunities. This move will allow Jefferson Energy's terminal to handle increased crude oil volumes, making it a more strategic hub in the Gulf Coast area. By enhancing the pipeline's capacity and flexibility, Jefferson Energy can attract business from major crude oil suppliers looking for efficient and reliable transport options. This improvement in infrastructure could lead to a higher utilization rate of the terminal, translating into increased revenues and potentially higher stock prices for FTAI Infrastructure.
The location of the terminal, with its extensive connectivity by rail, road and waterways, positions it as a critical node in the oil supply chain. Investors should consider the potential for increased throughput and higher margins due to the terminal's efficiency and strategic location.
The introduction of bi-directional flow capability on the Jefferson Southern Star Pipeline is a strategic enhancement for FTAI Infrastructure. This agreement with Aramco Trading Americas could lead to a significant boost in crude oil volumes handled at Jefferson Energy's Main Terminal. Given the terminal's existing connections to major refineries and its extensive storage capacity, the ability to handle more crude oil will likely result in higher throughput and terminal fees, positively impacting the company's bottom line.
Financially, this development should be seen as a positive catalyst for the company's revenue and profit margins. Increased terminal activity often correlates with improved financial performance, which could make FTAI Infrastructure a more attractive investment. Investors should also note the potential for more stable cash flows and earnings, given the multi-year nature of the agreement.
The logistical implications of adding bi-directional flow on the Jefferson Southern Star Pipeline are substantial. This capability enhances the terminal's operational flexibility, allowing for easier and more efficient handling of crude oil from various sources. The connectivity to the TC Energy Marketlink Pipeline system and other critical infrastructure means Jefferson Energy can better serve its clients with faster turnaround times and more reliable service.
From a logistics perspective, this improves the terminal's competitive edge in the Gulf Coast region, which is essential for retaining and attracting clients. The ability to handle both inbound and outbound crude oil movements with increased efficiency could lead to more stable and predictable operations, which is a key factor for investors looking at the stability and growth potential of the company.
NEW YORK, June 13, 2024 (GLOBE NEWSWIRE) -- FTAI Infrastructure Inc. (NASDAQ: FIP) (the “Company” or “FTAI Infrastructure”) today announced that a subsidiary in its Jefferson Terminal segment (“Jefferson Energy”) has executed a multi-year terminal services agreement with Aramco Trading Americas LLC. The agreement includes the future receipt of new crude oil volumes at Jefferson Energy’s Main Terminal in Beaumont, Texas by the addition of bi-directional flow capability to the 14-mile, 24” Jefferson Southern Star Pipeline, currently in service for movements of crude oil from Jefferson Energy’s Main Terminal to the Motiva Port Neches Terminal. The newly bi-directional Jefferson Southern Star Pipeline, with 400,000 bbl/day of capacity, will be directly connected to the Motiva-TC Energy Port Neches Link, opening up Jefferson Energy’s Main Terminal to crude oil volumes from the TC Energy Marketlink Pipeline System, a 750,000 bbl/day crude oil pipeline from Cushing, OK to the U.S. Gulf Coast.
Jefferson Energy’s Main Terminal is a 6.2 MMbbl storage terminal and multi-modal transloading facility situated on a 250-acre site on the Neches River, handling crude oil and refined products with pipeline connectivity to the 630,000 bbl/day Motiva Port Arthur Refinery and the 630,000 bbl/day ExxonMobil Beaumont Refinery. Jefferson Energy’s Main Terminal has three docks capable of handling barges, Aframax, and Suezmax vessels for inbound/outbound product movements, and over 23 miles of rail track, with four separate unit train rail loading systems. Significant heating and blending capabilities for heavy crude oil, including Uinta Basin wax, uniquely position Jefferson Energy’s Main Terminal as a premier multimodal facility in the U.S. Gulf Coast. For more information on Jefferson Energy, please visit www.jeffersonenergyco.com.
“We are very pleased to work with Aramco Trading Americas to develop a customized package of terminal services responsive to Aramco Trading Americas’ needs,” said Ken Nicholson, Chief Executive Officer of FTAI Infrastructure. “In particular, we look forward to the enhanced service optionality that will be opened up by bi-directional flow on the Jefferson Southern Star Pipeline. This important project will enable Jefferson Energy’s Main Terminal customers to access an additional major pipeline system for light crude, along with Jefferson Energy’s established connectivity to Delek’s Paline Pipeline. The light crude markets made readily accessible to our customers by this project will further unlock the potential represented by Jefferson Energy’s Uinta Basin wax crude blending and handling capabilities, creating value for our customer base in handling this unique, highly sought after crude oil.”
About FTAI Infrastructure Inc.
FTAI Infrastructure primarily invests in critical infrastructure with high barriers to entry across the rail, ports and terminals, and power and gas sectors that, on a combined basis, generate strong and stable cash flows with the potential for earnings growth and asset appreciation. FTAI Infrastructure is externally managed by an affiliate of Fortress Investment Group LLC, a leading, diversified global investment firm.
About Aramco Trading Americas LLC
Aramco Trading Americas LLC (ATA) is the U.S. subsidiary of Aramco Trading Company and is part of the Aramco group, a global leader in energy and chemicals. Located in Houston, ATA provides world-class products and services, and contributes to societies around the world by connecting customers and markets. ATA is recognized as a valued trading partner of refiners, shipping companies, financial institutions, and end-users. More information about ATA is available at www.aramcotrading.com.
Cautionary Note Regarding Forward-Looking Statements
Certain statements in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding the future implementation of, and potential outcomes associated with, bi-directional flow capability on the Jefferson Southern Star Pipeline. These statements are based on management’s current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements, many of which are beyond the Company’s control. The Company can give no assurance that its expectations will be attained, and such differences may be material. Accordingly, you should not place undue reliance on any forward-looking statements contained in this press release. For a discussion of some of the risks and important factors that could affect such forward-looking statements, see the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which are available on the Company’s website (www.fipinc.com). In addition, new risks and uncertainties emerge from time to time, and it is not possible for the Company to predict or assess the impact of every factor that may cause its actual results to differ from those contained in any forward-looking statements. Such forward-looking statements speak only as of the date of this press release. The Company expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto or change in events, conditions or circumstances on which any statement is based. This release shall not constitute an offer to sell or the solicitation of an offer to buy any securities.
The information contained on, or accessible through, any websites included in this press release is not incorporated by reference into, and should not be considered a part of, this press release.
For further information, please contact:
Alan Andreini
Investor Relations
FTAI Infrastructure Inc.
(646) 734-9414
aandreini@fortress.com
FAQ
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