SemGroup to buy Houston terminal with plans for shale

By Luke Geiver | June 13, 2017

Oklahoma-based SemGroup is adding assets in Houston. SemGroup has entered into an agreement to to purchase one of the largest oil terminals in the U.S. Through $2.1 billion deal with Houston Fuel Oil Terminal Co., SemGroup will gain a 16.8 million barrel terminal in the Houston ship channel.

Carlin Conner, CEO for SemGroup, told investors the acquisition also the midstream entity to have a larger footprint and better position in the shale oil export business.

“With the addition of HFOTCO, SemGroup will be uniquely positioned to capture the future trends in exporting crude oil and refined products resulting from the near and long-term anticipated growth in U.S. shale production,” Conner said.

The terminal has pipeline connectivity to local refining complexes, deep water marine access and inbound pipeline along with rail and truck receipt capabilities from all major producing basins. Most customers that currently use the facility have been contracted for 15 years, but HFOTCO is currently executing contractually supported growth projects, the company said, including a new ship dock, a new pipeline and connections and an additional 1.45 million barrels of crude oil storage all of which could be in service by mid-2018.

SemGroup currently operates 7.6 million barrels of crude oil storage in Cushing and another 8.7 million barrels in the U.K.

In May, the company announced plans to build a natural gas pipeline for STACK play producers in Oklahoma.