“The acquisition of 50% interest in VTTI is a key element in developing the company's global tank terminal business, in line with MISC's strategy to expand its service offerings across the value chain,” president and chief executive officer Amir Hamzah Azizan said in the statement yesterday.
VTTI owns and operates a network of petroleum product terminals in 11 countries with a gross combined capacity of nearly six million cu m.
This gross combined capacity is set to expand to nearly seven million cu m by 2013.
Its major terminals are located in Amsterdam and Rotterdam in the Netherlands, Fujairah in the United Arab Emirates and Port Canaveral in the US.
VTTI is a wholly-owned unit of Netherland-based Vitol Group, one of the largest independent energy trading companies in the world.
MISC said the tank terminal business was an “attractive investment that will provide stable returns”.
The company's participation in the business would give it the edge over traditional shipping competitors through marketing opportunities and cross selling in both business segments.
“Upon completion of this sale and purchase transaction, MISC and Vitol will enter into a shareholder agreement to reflect the long-term relationship and strategic cooperation between MISC and Vitol in relation to their interest in VTTI,” the statement said.
MISC owns and operates more than 100 vessels, and is the leading energy transporter in the world in the liquefied natural gas, petroleum and chemical industry.
MISC and Vitol first entered into a partnership last year when the two companies started a joint venture to build and operate an oil blending terminal in Tanjung Bin, Johor. The 841,000 cu m oil blending terminal was scheduled to commence operation in 2012.
With the acquisition of the 50% stake in VTTI, the joint venture deal will be terminated and MISC's shares in the Tanjung Bin joint venture called Asia Tank Terminal Ltd will be sold to VTTI Tanjung Bin SA at cost.
The sale and purchase agreement to acquire the 50% stake in VTTI was signed yesterday in Kuala Lumpur.
MISC was represented by Amir Hamzah, while Vitol was represented by its president and CEO Ian Taylor.