Macquarie Infrastructure Corporation (NYSE:MIC) has announced
investments of more than $115 million in growth projects across its four
segments.
MIC announced the completion of the acquisition of the land beneath its
Bayonne Energy Center (“BEC”) gas-fired power generation facility in
Bayonne, NJ from Hess Corporation on December 30, 2015. The purchase
includes a buyout of the remainder of the 55 year lease assumed by MIC
as a part of the acquisition of the BEC in April of 2015. The land
acquisition provides MIC with additional security associated with having
a perpetual interest in the property beneath the plant as well as the
financial benefit of avoided lease payments.
BEC is situated on 7.9 acres along approximately 290 feet of frontage on
the Kill Van Kull in Bayonne, NJ. The additional water frontage is
expected to benefit MIC’s adjacent International-Matex Tank Terminals
(“IMTT”) marine terminals business and its operations on the Bayonne
peninsula to the extent that it enables IMTT to expand its docks at the
facility.
Also related to BEC, MIC has signed an agreement to construct an
interconnection with the Spectra Energy-owned Texas Eastern
Transmission, LP (“TETLP”) natural gas pipeline. The existing TETLP
pipeline runs beneath the western portion of the property owned by IMTT
in Bayonne. The interconnection will allow for the construction of an
approximately 7000 foot long pipeline across IMTT land that is expected
to provide BEC with additional access to affordable natural gas and
facilitates the development of gas-using businesses.
MIC previously noted its intent to expand the power generating capacity
of BEC from its current 512 megawatts to at least 642 megawatts with the
installation of additional generating sets (turbine plus generator). The
expansion has been slated for vacant land already owned by IMTT next to
the existing BEC facility. Related to the proposed expansion, MIC
reported that it has signed agreements with Siemens providing it with
fixed price purchase options on two Industrial Trent generation sets of
similar size and type to those currently in service at BEC. With the
purchased land, gas pipeline development and contract for generating
sets in place, the expansion of BEC is now contingent only upon receipt
of required regulatory approvals.
MIC announced that its Hawaii Gas business has signed a purchase and
sale agreement and received regulatory approval for the acquisition of
the land beneath its synthetic natural gas plant at Campbell Industrial
Park on Oahu from BHP. The Decision and Order from the Hawaii Public
Utilities Commission allowing the transaction to proceed was received on
December 30, 2015. As with BEC, by owning the land beneath its plant,
Hawaii Gas has achieved both additional security with regard to existing
operations and avoided potential future lease rate increases. The
Company has signed additional agreements that will see it continue to
invest in clean energy projects in Hawaii including in non-utility
customer services and initiatives related to renewable natural gas.
Approximately $50 million of the announced capital deployment involves
the expansion of MIC’s Atlantic Aviation business, the owner of one of
the United State’s largest networks of fixed base operations (FBO)
serving the general aviation industry. Investment opportunities
involving Atlantic Aviation include:
-
Acquisition of an FBO at McClellan-Palomar airport in Carlsbad, CA in
a transaction closed on December 18, 2015;
-
Closing on December 8, 2015 of a transaction with Cutter Aviation in
which Atlantic Aviation acquired the Cutter owned FBO at El Paso
International Airport in El Paso, TX and Cutter acquired the Atlantic
Aviation owned FBO at Deer Valley Airport in Phoenix, AZ; and,
-
Entry into an agreement to acquire a hangar at Boeing Field in
Seattle, WA, completion of the acquisition of an additional hangar at
its FBO in Hayden, CO and breaking ground on construction for a new
hangar at its facility at Rifle, CO.
James Hooke, chief executive officer of MIC, noted that Atlantic
Aviation continued to perform well into year end, saying “The good
performance of Atlantic Aviation in the fourth quarter was pleasing.”
MIC expects that many of the growth projects completed in 2015, as well
as a portion of those to be completed in 2016 through 2019, will
constitute property eligible for bonus depreciation under the terms of
the recently enacted Protecting Americans from Tax Hikes (Path) Act of
2015. The Path Act provides for first year bonus depreciation of 50% of
the value of qualifying assets placed in service through 2017, 40% in
2018 and 30% in 2019.
“We are pleased to have ended a strong 2015 with positive fourth quarter
operating results, a full slate of growth capital projects commenced or
committed to across our four businesses and even more opportunities
under consideration,” Hooke added.
About Macquarie Infrastructure Corporation
Macquarie Infrastructure Corporation owns, operates and invests in a
diversified group of infrastructure businesses providing basic services
to customers in the United States. Its businesses consist of a bulk
liquid terminals business, International-Matex Tank Terminals, an
airport services business, Atlantic Aviation, a gas processing and
distribution business, Hawaii Gas, and several entities comprising a
Contracted Power and Energy segment. MIC is managed by a wholly-owned
subsidiary of the Macquarie Group. For additional information, please
visit the Macquarie Infrastructure Corporation website at www.macquarie.com/mic.
MIC-G
MIC is not an authorized deposit-taking institution for the purposes of
the Banking Act 1959 (Commonwealth of Australia). The obligations of MIC
do not represent deposits or other liabilities of Macquarie Bank Limited
ABN 46 008 583 542 (MBL). MBL does not guarantee or otherwise provide
assurance in respect of the obligations of MIC.
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