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TransMontaigne Partners L.P. says that it expects storage tanks for its new 900,000-barrel ultra-low sulphur diesel (ULSD) expansion on the Houston Ship Channel to be in commercial operation before the end of the third quarter of this year.

As of the beginning of August 2014, all 51 of the initial phase storage tanks at Battleground Oil Specialty Terminal Company (BOSTCO) have been placed into service and are said to be earning revenue. Work on the 900,000-barrel ultra-low sulphur diesel expansion commenced in the second quarter of 2013 and is nearing completion, with commercial operations expected to begin in the latter half of the third quarter of 2014, Transmontaigne said.

"We have received our initial distributions from BOSTCO in February and May of 2014, and we expect our distributions from BOSTCO to increase throughout 2014 as the remaining tanks come on-line," the company stated.

BOSTCO is a new black oil terminal under construction on the Houston Ship Channel designed for the handling of residual fuel, feedstocks, distillates and other black oils.

In October of 2013, Transmontaigne announced the commencement of commercial operations of BOSTCO, the joint venture project the company has with Kinder Morgan Energy Partners, L.P., of which Transmontaigne holds a 42.5 percent ownership interest.

In its latest financial results, posted on August 7, 2014, Transmontaigne reported an increase in earnings from investments in unconsolidated affiliates of approximately $1.3 million, which was attributable to the BOSTCO terminal.

"The construction of BOSTCO continues to come on line with most of its operating costs, but only limited amounts of revenue being generated. We expect the revenues and profits of BOSTCO to increase throughout 2014 as the remaining tanks are placed into service," Transmontaigne said.

Commenting on its existing credit facility, Transmontaigne said: "Our credit facility provides for a maximum borrowing line of credit equal to $350 million. The credit facility allows us to make up to $225 million of investments in BOSTCO and to make an additional $75 million of 'other permitted joint venture investments', which may also include additional investments in BOSTCO. The terms of the credit facility also permit us to issue senior unsecured notes. The credit facility became effective March 9, 2011 and expires on March 9, 2016. At June 30, 2014, our outstanding borrowings were $234 million."

Transmontaigned added: "We have funded our investments in the BOSTCO construction project utilizing additional borrowings under our credit facility. Upon completion of the initial phases of the project, we expect our total payments for the project to be approximately $235 million. At June 30, 2014, our capital investment in the BOSTCO project was approximately $210 million."