Oiltanking (OILT) Announces $104M Expansion of Houston Facility

Oiltanking Partners, L.P. (NYSE: OILT), announced a $104 million expansion project to construct approximately 3.2 million barrels of new crude oil storage capacity at its Houston terminaling facility. The project scope includes the purchase of 95 acres of nearby land for approximately $12 million, on which the new capacity will be located. The incremental land purchase can also accommodate the construction of an additional 3 million barrels of storage capacity to meet future needs.

All environmental and internal approvals required to commence construction are in place, and the additional storage capacity is expected to be placed into service in the fourth quarter of 2013. Once complete, the new storage capacity will bring total active storage capacity at the Partnership to approximately 22 million barrels.

The expansion project is expected to be accretive to distributable cash flow once the additional storage is operational and is expected to generate returns of approximately 6-8 times EBITDA, or earnings before interest, taxes and depreciation, generally targeted for organic expansion projects. The Partnership anticipates funding the project primarily with debt.

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