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Buckeye Partners, L.P. announced on Tuesday that the underwriters of its recently announced equity offering have exercised in full their option to purchase an additional 1,162,500 limited partnership units (LP units) representing limited partner interests in Buckeye.

As part of Buckeye's equity offering that priced on 24th October, Buckeye provided the underwriters a 30-day option to purchase up to 1,162,500 additional LP units. Buckeye says it expects the offering of LP units, including the LP units subject to the exercise of the option, to close on 28th October, subject to customary closing conditions.

As previously announced, Buckeye intends to use the net proceeds from this offering to fund a portion of the purchase price of the previously announced investment in terminal operator VTTI B.V.

Pending such use, the net proceeds of this offering will be used to reduce the indebtedness outstanding under Buckeye's revolving credit facility and for general partnership purposes, Buckeye said.

Acquisition of VTTI

On Monday, Buckeye announced that it had signed a definitive agreement to acquire a 50 percent equity interest in VTTI, a company that will be jointly owned with Vitol for $1.15 billion. Vitol's share will be owned by Vitol and also through Vitol Investment Partnership (VIP), an investment vehicle sponsored and managed by Vitol.

VTTI is one of the world's largest independent marine terminal businesses that, through its subsidiaries and partnership interests, owns and operates approximately 54 million barrels of petroleum products storage across 13 terminals located on five continents. These marine terminals are predominately located in key global energy hubs - including Northwest Europe, the United Arab Emirates and Singapore - and offer storage and marine terminalling services for refined products, liquid petroleum gas and crude oil.

The transaction, which is subject to regulatory approvals and customary closing conditions, is expected to close in early January 2017.

Following the closing of the transaction, Buckeye and Vitol will have equal board representation and voting rights in VTTI. VTTI is to continue to operate as a standalone entity and its existing management team (including CEO Rob Nijst) and employees will remain in place to operate the assets, both owners have confirmed.