Martin Resource Management Corp., Kilgore, Texas, said Jan. 11 that its board of directors has approved the construction of a new sulfuric acid plant in Beaumont, Texas. The new plant will have a total capacity of 150,000 tons per year and is scheduled for completion in late 2009. This plant will be identical in size to the sulfuric acid plant owned and operated by Martin Midstream Partners (MMLP) at its Plainview, Texas facility.
Martin says the new plant will be the only one on the U.S. Gulf Coast dedicated solely to serving the chemical industrial market, and will have no “in-house” captive requirements for production. All production output will be available for external consumption. Martin says advantages at its Beaumont facility include existing sulfur supply infrastructure, on-site sulfuric acid storage, and transportation services, including access to the facility by ship, barge, rail, and truck.
Martin says its combination of local and international sulfuric acid supply has served as a critical source of raw material for U.S. Gulf Coast consumers for over ten years. It said customers have come to rely on the service and dependability afforded by Martin’s dedicated system of trucks and barges, combined with its 50,000 tons of sulfuric acid storage in Beaumont. This investment is intended to further strengthen Martin’s role in the industrial supply chain as the premier, value-added provider of high-quality, virgin sulfuric acid. Preliminary discussions have been held with several potential subscribers, and it is anticipated the plant output will be fully subscribed well before plant completion.
In other news, earlier in the month, MMLP announced a new amended credit agreement that increases its revolver commitments to $195 million from $120 million. MMLP said the additional $75 million is intended to provide MMLP with the capital needed to execute its $100 million organic growth plan in 2008.
The 2008 organic growth budget of $100 million includes approximately $50 million for MMLP’s Terminalling & Storage segment, $40 million for its Marine Transportation segment, and $10 million for the Natural Gas Services segment. Major capital projects included in the 2008 budget include an expansion of the company’s Mont Belvieu railrack facility and new construction of marine equipment, including six inland double-hull tank barges, one offshore double-hull tank barge, and three new 2,400 horsepower inland pushboats. Other projects in the 2008 budget include various upgrades and expansions of existing assets in MMLP’s Terminalling & Storage, Marine Transportation, and Natural Gas Services segments.
In December, MMLP filed a shelf registration statement with the Securities Exchange Commission covering the offer and sale from time to time, at its discretion and as its business circumstances and market conditions warrant, of up to $400 million of its common units, its debt securities, and/or the debt securities of its operating subsidiary.