By VERNON CLEMENT JONES, Guardian Business Editor, vernon@nasguard.com

Vopak and First Reserve Corp. announced the completion of their joint acquisition of BORCO yesterday, while offering little new information on the millions of dollars in upgrades government officials argue have been pledged.

"Vopak is enthusiastic regarding the opportunity to team up with First Reserve," said John Broeders, First Reserve chairman, in a written statement. He could not be reached directly Tuesday.

"This terminal has the potential to serve a greater number of customers, with a focus on the large nearby US market for petroleum products and aligns perfectly with our strategy to grow our terminal network worldwide."

The equity value of the new company amounts to $550 million, with an 80/20 split between First and Vopak, respectively. The new relationship also heralds the departure of former BORCO owner Petróleos de Venezuela, S.A. — Venezuela's state-owned oil company — from the Bahamian landscape.

The deal was financed in part by a senior secured credit facility fully underwritten by ABN AMRO Bank N.V. and DnB Nor Bank ASA. The full terms of the transaction were not disclosed Tuesday, although the last of regulatory approvals from the government have been received.

Vopak is seen as the world's largest independent tank terminal operator, specializing in the storage and handling of liquid and gaseous chemical and oil products. First Reserve bills itself as the leading private equity firm focused on the energy industry.

It was last February, the latter announced its intention to acquire the facility and form a strategic joint venture with Vopak to operate the terminal, which will be renamed Vopak Terminal Bahamas.

This new entity, an "independent" storage terminal, boasts of a three-million cubic meter capacity.

In Tuesday's release, Vopak also points to the possibility of expansion up to five-million cubic meters in order to widen the operation's storage and handling of crude and fuel oils. It will also deal in "cleaner" petroleum products.

Broeders did not pin a dollar amount to that proposed redevelopment, although the government has floated an impressive sum.

Speaking as a member of the Bahamas Economic Council, Sea Breeze MP Carl Bethel asserted BORCO's new owners will pump hundreds of millions of dollars into the local economy in addition to paying a $40 million stamp tax tab.

"Further, the buyers have committed to investing an additional $300 to $600 million in redeveloping the BORCO facility," said Bethel, from the floor of the House of Assembly.

Formalizing a schedule for that work may be uppermost in the minds of Freeport residents hard hit by a slowdown in visitor arrivals to the destination.

The terminal is located in Grand Bahama, just 80 miles off the coast of Florida. It remains the largest in the Caribbean, with deepwater jetties allowing the largest of tankers entry.

Vopak intends to leverage that deep water access as well as BORCO's proximity to the U.S. mainland.

The acquisition is, in fact, part of an ongoing strategic effort by First Reserve to build long-term growth opportunities in a hemisphere hungry for fossil fuels. It has not yet indicated whether rehabilitating BORCO's aging refinery or rebuilding it altogether is part of those future plans.