Buckeye Partners to acquire 50% equity interest in VTTI for $1.15bn

US-based petroleum distributor Buckeye Partners has signed an agreement to acquire 50% equity interest in the holding company of VTTI, a unit of Vitol Group, for $1.15bn.

Upon completion of the deal, Buckeye and Vitol will each own 50% of VTTI. 

The joint shareholding is expected to strengthen VTTI's position as a provider of energy storage solutions.

Buckeye owns and operates a diversified network of integrated assets and provides midstream logistic solutions, primarily consisting of the transportation, storage, and marketing of liquid petroleum products. 

The company has about 6,000 miles of pipeline and more than 120 liquid petroleum products terminals with aggregate storage capacity of more than 110 million barrels.

VTTI chairman Chris Bake said: "We look forward to partnering with Buckeye for the next phase of VTTI's future. 

“Buckeye brings in a wealth of terminalling experience and knowledge, which will further strengthen the strategic position of VTTI as we continue to invest in its growth."

With this transaction, Buckeye will get access to VTTI's international footprint. 

Through its subsidiaries and partnership interests, VTTI owns and operates about 54 million barrels of petroleum product and crude oil storage capacity across 13 terminals on five continents. 

VTTI CEO Rob Nijst said: "We are looking forward to our cooperation with Buckeye, and we believe that their industry expertise and experience will offer great value to VTTI. 

“Through this transaction, VTTI will have two strong shareholders that will support VTTI's continued growth as an independent global terminal operator."

Subject to regulatory approvals and customary closing conditions, the transaction is expected to close in early January next year.