Prostar Capital, a leading midstream energy infrastructure firm, announced that it has completed a refinancing for its portfolio company Fujairah Oil Terminal (FOT) for $280 million, according to media reports. The latest funds will replace the existing senior debt and create a capital expenditure facility to fund the connection of the terminal to the Very Large Crude Carrier (VLCC) jetty and Abu Dhabi Crude Oil pipeline, which delivers Abu Dhabi’s Murban crude to Fujairah. Banks like First Abu Dhabi Bank, Abu Dhabi Commercial Bank, and Commercial Bank of Dubai provided the new debt facilities.
FOT is a 7.4 million-barrel bulk liquid storage terminal located in the Port of Fujairah, UAE. Regarded as a major strategic energy trading centre and one of the largest bunkering ports in the world, FOT is also ranked first in an independent facility in the Port. It contributed 29 percent of the output in 2020 and represents around 12 percent of the Fujairah storage market.
Steve Bickerton, senior managing director at Prostar Capital and chairman of FOT told the media, “We’re very excited to be able to take advantage of FOT’s strong financial performance and beneficial market conditions to conduct this refinancing. Not only have we secured more favourable terms and increased liquidity, but also the capital to fund a major VLCC expansion project that will improve operational efficiency and help the facility build on its loyal customer base for years to come.”
Once the project is completed, it will connect the terminal’s crude oil tanks to the Port of Fujairah’s VLCC loading facility via Matrix Manifold 2 (MM2) and the ADCOP pipeline. This is expected to increase FOT’s competitiveness, expand its customer base and improve operating efficiency. The completion of the new project will also allow the terminal to leverage the expected growth in crude trading in the region, aided by the latest launch of the world’s first Murban futures contract, which requires physical delivery in Fujairah.
Image credit: www.fot.ae