NuStar Arm Secures Commitments

Zacks

NuStar Crude Oil Pipeline LP, a subsidiary of San Antonio-based publicly traded partnership NuStar Energy LP (NS), has got sufficient binding commitments from shippers for the first phase of its South Texas-based Crude Oil Pipeline System Project. The partnership, while announcing this, added that all the committed spaces for Phase 1 of the development have been filled up.

However, in spite of continuous shippers’ interest in Phase 2 of the project, NuStar will assess the feasibility of the phase before proceeding.

Earlier, NuStar reported that the South Texas System Project will be operating in two phases. In Phase 1, the throughput capacity of the pipeline system will be increased by roughly 35,000 barrels per day. However, the committed shippers can use the pipeline only from the third quarter of 2014.

NuStar reveals that Phase 2 will be available to shippers in the first quarter of 2015 with another additional capacity of 65,000 barrels per day. However, the second phase of the pipeline project will be subject to the partnership’s evaluation result.

The South Texas Crude Oil Pipeline System is now carrying crude oil from Frio, McMullen and La Salle-based terminals to NuStar’s facility located in Corpus Christi North Beach. The partnership added that the throughput capacity of the pipeline system will be increased by roughly 100,000 barrels per day on completion of both the phases.

San Antonio, TX-based NuStar is a master limited partnership (MLP) that engages in the transportation and storage of crude oil as well as refined products in the U.S., the Netherlands Antilles, Canada, Mexico and the U.K.

NuStar currently holds a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, one can look at oil and gas production pipeline MLPs like Energy Transfer Partners LP (ETP), Kinder Morgan Energy Partners LP (KMP) and Pioneer Southwest Energy Partners LP (PSE) that offer value. All the partnerships sport a Zacks Rank #2 (Buy).

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