Genesis Energy, L.P. Announces Expansion of Existing Sodium Services Operations
September 23 2019 - 9:30AM
Business Wire
Genesis Energy, L.P. (NYSE:GEL) today announced the company
plans to invest approximately $300 million to expand its existing
Granger production facility to increase soda ash production by
approximately 750k tons per year.
“We have a long history of innovation and investment in natural
soda ash production in Wyoming. This next phase of our growth will
result in Granger joining our Westvaco operation as a world-class
soda ash production facility,” said Grant Sims, Chairman and CEO of
Genesis. “We look forward to the successful completion of the
project, preserving high quality manufacturing jobs in Wyoming and
serving our customers with superior quality and supply
reliability.”
The expansion of the Granger facilities will utilize Genesis’
patented solution feed process technology that has been in utilized
at its Westvaco facility since 1995. Following the expansion, we
expect the Granger facilities will be one of the lowest cost soda
ash production facilities in the world. The increased production
will serve growing global soda ash demand and provide supply
security to strategic customers.
The construction of the expansion is scheduled to begin in the
fourth quarter of 2019. The increased production is anticipated to
be available for sale in the second quarter of 2022. During the
construction of the expansion, the Granger facility will continue
to produce soda ash at current rates.
In conjunction with the expansion, Genesis has entered into
agreements with funds affiliated with GSO Capital Partners LP
(“GSO”) for the purchase of up to $350 million of preferred
interests in an unrestricted subsidiary of Genesis holding Genesis’
alkali business. Proceeds will fund up to 100% of the anticipated
cost of the Granger expansion. Preferred holders will receive
payment-in-kind in lieu of cash distributions during the
anticipated construction period. $55 million of preferred interests
will be funded at closing.
Michael Zawadzki, Senior Managing Director and Co-Head of Energy
at GSO Capital Partners, stated, “We are delighted to further our
existing relationship with Genesis on this exciting opportunity,
which adds another strategic asset with strong cash flow
characteristics to the Genesis portfolio. We believe the Granger
expansion will be highly accretive and will be funded in a balance
sheet friendly structure.”
Genesis Energy, L.P. is a diversified midstream energy master
limited partnership headquartered in Houston, Texas. Genesis’
operations include offshore pipeline transportation, sodium
minerals and sulfur services, onshore facilities and transportation
and marine transportation. Genesis’ operations are primarily
located in the Gulf Coast region of the United States, Wyoming and
the Gulf of Mexico.
This press release includes forward-looking statements as
defined under federal law. Although we believe that our
expectations are based upon reasonable assumptions, we can give no
assurance that our goals will be achieved. Actual results may vary
materially. All statements, other than statements of historical
facts, included in this press release that address activities,
events or developments that we expect, believe or anticipate will
or may occur in the future, or are scheduled to occur, including
but not limited to statements relating to future financial and
operating results and our strategy and plans, are forward-looking
statements, and historical performance is not necessarily
indicative of future performance. Those forward-looking statements
rely on a number of assumptions concerning future events and are
subject to a number of uncertainties, factors and risks, many of
which are outside our control, that could cause results to differ
materially from those expected by management. Such risks and
uncertainties include, but are not limited to, weather, political,
economic and market conditions, including a decline in the price
and market demand for products, the timing and success of business
development efforts, that the expansion of the Granger facility may
not be completed and, if completed, we may not realize the expected
benefits of the expansion, that we may not ultimately obtain the
proposed financing or any other financing, that any financing we do
obtain may restrict the ongoing operation of our business, and
other uncertainties. Those and other applicable uncertainties,
factors and risks that may affect those forward-looking statements
are described more fully in our Annual Report on Form 10-K for the
year ended December 31, 2018 filed with the Securities and Exchange
Commission and other filings, including our Current Reports on Form
8-K and Quarterly Reports on Form 10-Q. We undertake no obligation
to publicly update or revise any forward-looking statement.
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version on businesswire.com: https://www.businesswire.com/news/home/20190923005531/en/
Genesis Energy, L.P. Ryan Sims SVP - Finance and Corporate
Development (713) 860-2521
Genesis Energy (NYSE:GEL)
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