Martin Midstream Partners L.P. (“MMLP”) and Florida Marine Transporters, Inc. (“FMT”) announced on Thursday that MMLP has purchased from FMT affiliates six liquefied petroleum gas (“LPG”) pressure barges and two commercial push boats for approximately $50.8 million.
The newly acquired LPG barges enhance MMLP’s natural gas liquids (“NGL”) handling capabilities. The Partnership intends to use these assets to capitalize on logistical opportunities associated with NGLs on the Gulf Coast. Incremental NGL production volume from the Eagle Ford Shale is one of the primary drivers of the increasing demand for these types of assets. MMLP intends to drive margin by capitalizing on logistical opportunities in excess of the standard marine transportation services revenue. The Partnership believes it will achieve a seven times acquisition multiple based on its cash flow projections for these assets.
The LPG barges will reside in the Natural Gas Services segment of the Partnership although they will be operated by Martin Marine (Marine Transportation segment). Each LPG barge has a pressurized cargo capacity of approximately 16,000 barrels (total capacity for all LPG barges of approximately 96,000 barrels) and was constructed within the last two years. Similarly, both push boats are modern and efficient, having being built in 2007 and 2010, respectively.
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MMLP, March 4, 2013; Image: FMT