Westway Ups Base Oil Storage


Westway Terminal Co. agreed this week with an unnamed oil company to store nearly 170,000 barrels of base oil at its Port Allen, La., terminal over the next 16 months.

The agreement begins in August for 73,000 barrels of existing Westway tankage and October 2010 for 95,000 barrels of new construction.

The agreement provides for the expansion of Westways Port Allen Terminal, which currently has capacity of 387,500 barrels. The additional 100,000 barrels will be phase one of Westways expansion, President Wayne Driggers told Lube Report. The company plans additional expansion to follow.

The new base oil storage agreement is expected to add approximately $2.2 million in annual revenue when completed.

Drigger declined to identify the customer for whom Westway will store base oil. He noted that Westway has seen a long-term increase in demand for base oil storage.

Port Allen is home to two major lubricant blending operations. ExxonMobils Port Allen Lubricants Plant has throughput of over 100 million gallons of finished lubricants and base stocks yearly. BPs Port Allen lubricant facility is its largest U.S. lubricant blending plant, from which it supplies Castrol-branded and other BP lubricants to the United States and Latin America. Industry sources told Lube Report that Westways new storage agreement may or may not be related to the ExxonMobil and/or BP blend plants.

Westway Terminal Co., headquartered in New Orleans, La., is a subsidiary of ED&F Man Holdings Ltd. Last November Shermen WSC Acquisition Corp. agreed to buy ED&F Mans bulk liquid storage and liquid animal supplement businesses, including Westway Terminal. Shermen stockholders are scheduled to approve the acquisition May 26.

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