A Miami-based private equity firm announced Tuesday that it's set to acquire the Zenith Energy fuel terminal on the Willamette River in Northwest Portland.
I Squared Capital, specializing in global infrastructure investments, has entered into a legally binding contract to purchase 100% of the Portland terminal, the company announced.
I Squared manages $50 billion in assets in over 70 countries, including natural gas companies, solar, wind and battery storage facilities and fiber-optic networks.
Company officials did not say how much the firm plans to pay for the Portland terminal. Both I Squared and Zenith are privately held, so neither company must disclose the transaction's financial terms to the U.S. Securities and Exchange Commission. The transaction is expected to close within the next few months.
I Squared said it will abide by the terminal's current obligations, including the transition from crude oil and other fossil fuel storage to renewable fuels by October 2027 - in line with Zenith's pledge to the city and state regulators. Renewable fuels include biodiesel, renewable diesel and sustainable aviation fuel.
"We see significant opportunity for the Portland facility," Gautam Bhandari, the firm's global chief investment officer and managing partner, said in a press release. "We believe the terminal is uniquely positioned to become one of the West Coast's leading renewable fuel hubs, supported by strong structural demand for low-carbon fuels and a broad shift toward sustainable transportation solutions."
The firm also said the terminal is "essential to helping Portland and the State of Oregon meet their clean fuel policy goals," echoing statements made in recent months by Zenith officials.
In recent years, Portland has adopted a policy to transition to renewable fuels, also known as biofuels, to reach greenhouse gas emission reduction mandates and improve air quality. City officials have said they are still committed to electrification of cars and trucks but it will take decades.
Zenith's acquisition comes in the wake of a major regulatory win for the fuel terminal, which stores fuels and loads them onto barges, trucks and rail cars. In October, Oregon's Department of Environmental Quality approved Zenith's new air quality permit, securing its continued operations on the river. Under the permit, Zenith is required to fully transition to renewables within two years.
The approval came despite years of fierce opposition from environmental groups and some residents worried about Zenith's history of violations and the earthquake-related safety risks at the Critical Energy Infrastructure Hub, where Zenith is one of 11 companies with fuel terminals and the only one still storing crude oil.
The Houston-based Zenith purchased the Portland terminal - a former asphalt refinery - in 2017 from Arc Logistics. Within a few months, long trains from Canada and North Dakota began bringing large amounts of tar sands oil to store at the terminal, surprising regulators and incensing local activists.
Zenith has been shifting from crude oil to renewable fuels in recent years. By the end of 2024, the company reported that 66% of its contracted storage capacity was dedicated to renewable fuels.
A previous analysis by The Oregonian found that Zenith's new air quality permit is likely to pave the way for the company to significantly expand the amount of liquid fuel it stores at the Portland terminal because renewable fuels produce less pollution, allowing the company to store more of them without going over the permit limits.
DEQ's spokesperson Michael Loch said a change in ownership does not change the requirements of the air quality permit.
"The permit applies to the facility and its operations, and any new owner would be responsible for complying with all permit conditions," Loch said.
A permit modification may be required if the new owner proposes changes to operations or the facility name, said Loch, but the DEQ has not received any such requests at this time.
It's likely the terminal's name will change because Zenith Energy will continue to own other terminals across the U.S.
Opponents said they will continue to oppose the terminal and its expansion.
"No matter who owns this facility, Portlanders will continue to fight the expansion of dangerous liquid fuel storage on this site," said Nick Caleb, an attorney with the Breach Collective, a statewide climate justice advocacy organization that has opposed Zenith for years.
At the collective's urging, Portland is still investigating whether Zenith violated its franchise agreement by installing and using new pipes at an additional dock without reporting it. City officials expect to conclude the investigation by year's end.
Environmental groups also have challenged the city's land-use approval for Zenith before the Oregon Land Use Board of Appeals. In November, the Oregon Court of Appeals reversed the board's initial decision concerning Portland's Zenith approval, sending the case back to the board for a full review.