VH Global makes first investment – VH Global Sustainable Energy Opportunities has agreed to buy 100% of the equity interests in two operating terminal storage sites on the Texas Gulf Coast for a total purchase price of $61m. The fund has also committed further capital to develop and expand the sites before the end of the year. This is VH Global’s first investment since its IPO just over 2 months ago. The deal and the manager, Victory Hill’s strategic plan for the terminals’ expansion and development, was showcased to investors during the IPO. The project was included as an enhanced pipeline asset in the prospectus. The deal should close shortly.
VH Global is partnering with the newly formed Motus Energy LLC to operate and expand the two operating terminal storage assets. The green angle to the investment is that it takes high sulphur fuel oil that would otherwise be burned in Mexico producing large quantities of sulphur dioxide as a byproduct, and stores it ahead of it being processed in Texan oil refineries to reduce its sulphur content. The fuel is still fossil fuel but the sulphur content drops from 2-4% to 0.1-0.2% and the refined products also emit lower contents of CO2, NO2 and generally fewer particulates.
Key project highlights:
- Majority interest and ownerships held by VH Global with performance incentives awarded to Motus Energy
- Strategic aggregation hub for cross-border product movements
- New, high-spec. terminal assets with useful life of 35 years (31 years remaining)
- Fully availability-based contracted revenues
- Two storage terminal assets with a combined capacity of 525,000 barrels
GSEO : VH Global makes first investment