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Tickers in this Article: NU, NSH, DPM, APL
NuStar Energy L.P. (NYSE:NU) has several growth projects planned over the next two years in both the storage and transportation segment, and hopes to continue its EBITDA growth for the second straight year after bouncing back from a decline in 2009.

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Energy Storage Business
NuStar Energy owns considerable assets in the storage business including dozens of storage facilities and terminals with 93 million barrels of storage. NuStar Energy received 46% of its operating income from the storage business in 2009. During the first nine months of 2010, the storage segment had average throughput of 666,635 barrels per day and operating income of $131 million.

NuStar Energy expects demand here to be strong in 2011, but sees storage rate increases moderating relative to renewals signed in 2010. The company also has five growth projects planned in the storage segment over the next five years. These will increase EBITDA by $30 million to $40 million in 2011.

One of these projects will be built in St. James, Louisiana, where the company is planning a two-phase project. NuStar Energy will spend between $110 million and $130 million to build a 3.1 million barrel crude oil facility in phase one. The company estimates that this facility will produce annual EBITDA between $15 million and $25 million.

NuStar Energy should have phase one on service starting in August 2011, and the company plans a phase two of similar size to be in service by 2013.

NuStar's Transportation Segment
NuStar Energy owns assets in the transportation business as well, including 8,417 miles of crude oil and refined product pipelines. NuStar Energy received 38% of its operating income from the transportation segment in 2009. During the first nine months of 2010, the transportation segment had average throughput of 910,906 barrels per day and operating income of $106 million. The company's strategy here is to grow its existing pipeline assets that are located near high growth emerging unconventional resource basins. These areas include the Eagle Ford, Niobrara, Bakken and Barnett Shale plays.

NuStar Energy recently signed a connection agreement with a private company that will let the company reopen a sixty-mile pipeline in Texas. This pipeline will have a capacity of 30,000 barrels per day and will give the company access to the Eagle Ford Shale.

NuStar Energy also has a crude oil expansion planned for 2011 that will increase capacity by 6000 barrels per day. The company also has five other projects under evaluation, including one that would service the Bakken formation.

Asphalt And Fuels Marketing
The asphalt and fuels marketing business is the final part of NuStar Energy, and represented 16% of operating income in 2009. During the first nine months of 2010, the company reported $75 million in operating income from this business. NuStar Energy owns two asphalt refineries with capacity of 104,000 barrels per day.

NuStar's Ownership Structure
NuStar Energy is a limited partnership that has an ownership structure typical of these entities. NuStar GP Holdings, LLC (NYSE:NSH) is the general partner of NuStar Energy LP, and owns the 2% general partnership interest as well as 15.6% of the outstanding units of the company.

NuStar's Dividend
NuStar Energy also may appeal to income oriented investors, as the company will distribute $4.30 per unit in 2010, providing a yield of 6.35%. The company has raised its dividend every year since 2001.

Other limited partnerships also provide high yields to investors. Atlas Pipeline Partners, L.P (NYSE:APL) has a yield of 5.8%, while DCP Midstream Partners, L.P. (NYSE:DPM) has a yield of 7%.

The Bottom Line on NuStar Energy
NuStar Energy has restarted growth after a decline in 2009, and has may growth projects planned or under evaluation in the Storage and Transportation segment to maintain growth in the future. (For related reading, take a look at How Does Crude Oil Affect Gas Prices?)

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