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Oiltanking Partners, L.P. (OILT)
Q1 2013 Earnings Call
May 09, 2013 10:00 am ET
Anne-Marie Ainsworth - Chief Executive Officer of OTLP GP LLC, President of OTLP GP LLC and Director of OTLP GP LLC
Robert J. McCall - Senior Vice President of Commercial and Business Development - OTLP GP LLC
Kenneth F. Owen - Chief Financial Officer of OTLP GP, LLC and Vice President of OTLP GP, LLC
Brian J. Zarahn - Barclays Capital, Research Division
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Thank you, operator. Good morning, everyone, and welcome to today's conference call to discuss Oiltanking Partners' first quarter 2013 results. On the call with me this morning is: Anne-Marie Ainsworth, President and CEO of the partnership's general partner; Bo McCall, Senior Vice President of Commercial and Business Development; and Ken Owen, Vice President and Chief Financial Officer; as well as other members of the management team.
After the market closed yesterday, we issued a press release announcing our financial results, which is available on our website at www.oiltankingpartners.com. You can also access a replay of today's call from the Investor Relations section of the partnership's website or via recorded replay until May 15, 2013. Information on how to access the replay is provided in yesterday's earning release. Information reported on the call speaks only as of today, Thursday, May 9, 2013. And therefore, you're advised that any time-sensitive information may no longer be accurate as of the time of any replay.
Before I turn the call over to Anne-Marie, I would like to remind you that certain statements made by management during the conference call will include the use of statements that are forward-looking in nature. And the statements made during this call that refer to the management's expectation or future predictions are forward-looking statements and reflect management's current expectations, opinions, views or beliefs with respect to future events are based on what we believe are reasonable assumptions. No assurance can be given, however, that these events will occur. And therefore, many factors could cause results to differ from management's expectations. And actual results may differ materially from those projected in any forward-looking statements.
Material factors that could cause our actual results to differ from our projected results are described in our filings with the SEC. We expressly disclaim any obligations to update or revise any forward-looking statements made during this call, and request that you refer to the forward-looking statements made in our earnings release for additional information. With that, I'll turn the call over to Anne-Marie.
Thank you, Mark. Good morning, everyone. We appreciate you joining us on the conference call today. Last quarter, we delivered another record quarter for the partnership, both operationally and financially. The strong results were driven by continued growth in our storage fee revenues and higher throughput volumes of LPG, or liquified petroleum gas, primarily for export.
The partnership also saw record quarter for throughput volumes with approximately 80 million barrels of crude oil, refined products and LPG handled during the first quarter. This increase in throughput volumes is due to the expansion of Enterprise Products Partners' LPG refrigeration facility at our Houston terminal that came online in the first quarter. In Houston, we also brought online 3 tanks with a total storage capacity of 825,000 barrels that is backed by long-term fixed fee contracts. The fourth tank in this 1.1 million barrel expansion project is projected to come online in the second quarter of 2013.
Also in the first quarter, the partnership brought online expansions to our current pipeline infrastructure, increasing connectivity to local refiners and pipeline systems. During the first quarter, the partnership's Beaumont terminal also brought online 2 new refined product tanks with a combined storage capacity of 320,000 barrels. We continue to invest in our connectivity and infrastructure, and we are pleased with our first phase of growth. But we believe the lion's share of growth is still ahead of us.
Construction is going well at our Appelt property, on-time and on-budget. The first phase of our Appelt expansion consists of 10 tanks totaling 3.2 million barrels of additional storage capacity, and construction on all tanks has begun. As of today, 6 390,000 barrel storage tanks have complete external shell construction. The external geodesic domes have been raised on 3 of these thanks, and we have successfully hydro-tested the first tank. The 4 remaining 210,000 barrel tanks in the first phase of the Appelt expansion are at varying states of external shell and roof construction, and we continue to project the first tanks to come online in the third quarter of 2013 with the final tanks coming online by the end of this year.
We are also pleased with the progress on the second phase of the Appelt expansion. Environmental permitting and grading for all 11 tanks is complete. The construction for the first 4 tanks has begun with ring walls being poured. These projects are being driven by customer demand for greater storage and handling services in the crude oil, refined petroleum products and LPG value chain. This demand is amplified by our best-in-class dock system, superior connectivity and a track record of exceeding customer expectations.