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  • rlp2451 rlp2451 Jan 24, 2013 8:53 PM Flag

    Is CVRR LP better than LINE LP???

    CVRR is an independent downstream energy limited partnership with refining and related logistics assets that operates in the mid-continent region. CVRR owns two of only seven refineries in the underserved Group 3 of the PADD II region of the United States.

    CVRR owns and operates a 115,000 barrels per day ("bpd") complex full coking medium-sour crude oil refinery in Coffeyville, Kansas and a 70,000 bpd medium complexity crude oil refinery in Wynnewood, Oklahoma capable of processing 20,000 bpd of light sour crude oils (within its 70,000 bpd capacity).

    In addition, CVRR also controls and operates supporting logistics assets including approximately 350 miles of owned pipelines, over 125 owned crude oil transports, a network of strategically located crude oil gathering tank farms, and over 6.0 million barrels of owned and leased crude oil storage capacity.

    The strategic location of the refineries, combined with supporting logistics assets, provide CVRR with a significant crude oil cost advantage relative to competitors, according to CVRR.

    The Coffeyville and Wynnewood refineries are located 100 miles and 130 miles, respectively, from the crude oil hub at Cushing, Oklahoma, and have access to inland domestic and Canadian crude oils that are priced based on the price of West Texas Intermediate crude oil ("WTI"). In the nine months ended September 30, 2012, the crude oil consumed at the refineries was at a discount to the price of WTI of $2.81 per barrel.

    CVRR's refineries' complexity allows the company to optimize yields (the percentage of refined product that is produced from crude oil and other feedstocks) of higher value transportation fuels (gasoline and diesel).

    Part of what makes this a better opportunity (than ALDW and NTI) is that the main player in the IPO is Carl Icahn. Icahn Enterprises is indicated in the IPO to be taking 4 million of the 20 million offered shares without a discount to other subscribers and the underwriters have options for another 3 million.

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    • Something to be aware of re: NTI. This is from the prospectus. If you hold NTI in an IRA, you should be aware of the UBTI potential.

      "Ownership of units by employee benefit plans, other tax-exempt organizations, non-resident aliens, non-U.S. corporations and other non-U.S. persons raises issues unique to those investors and, as described below, may have substantially adverse tax consequences to them. Prospective unitholders who are tax-exempt entities or non-U.S. persons should consult their tax advisor before investing in our units. Employee benefit plans and most other tax-exempt organizations, including IRAs and other retirement plans, are subject to federal income tax on unrelated business taxable income. Virtually all of our income will be unrelated business taxable income and will be taxable to a tax-exempt unitholder."

 
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